[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]




              THE LONG-TERM COSTS OF THE CURRENT CONFLICT

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

                                HEARING

                               before the

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 17, 2007

                               __________

                           Serial No. 110-54

                               __________

       Printed for the use of the Committee on Veterans' Affairs






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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     RICHARD H. BAKER, Louisiana
Dakota                               HENRY E. BROWN, JR., South 
HARRY E. MITCHELL, Arizona           Carolina
JOHN J. HALL, New York               JEFF MILLER, Florida
PHIL HARE, Illinois                  JOHN BOOZMAN, Arkansas
MICHAEL F. DOYLE, Pennsylvania       GINNY BROWN-WAITE, Florida
SHELLEY BERKLEY, Nevada              MICHAEL R. TURNER, Ohio
JOHN T. SALAZAR, Colorado            BRIAN P. BILBRAY, California
CIRO D. RODRIGUEZ, Texas             DOUG LAMBORN, Colorado
JOE DONNELLY, Indiana                GUS M. BILIRAKIS, Florida
JERRY McNERNEY, California           VERN BUCHANAN, Florida
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.


                            C O N T E N T S

                               __________

                            October 17, 2007

                                                                   Page
The Long-Term Costs of the Current Conflict......................     1

                           OPENING STATEMENTS

Chairman Bob Filner..............................................     1
    Prepared statement of Chairman Filner........................    41
Hon. Steve Buyer, Ranking Republican Member......................     2
    Prepared statement of Congressman Buyer......................    42
    Prepared statement of Hon. Stephanie Herseth Sandlin.........    42
    Prepared statement of Hon. Harry E. Mitchell.................    43
    Prepared statement of Hon. Ginny Brown-Waite.................    43

                               WITNESSES

Congressional Research Service, Library of Congress, Amy Belasco, 
  Specialist in U.S. Defense Policy and Budget...................     4
    Prepared statement of Ms. Belasco............................    44
Congressional Budget Office, Matthew S. Goldberg, Ph.D., Deputy 
  Assistant Director for National Security.......................     6
    Prepared statement of Dr. Goldberg...........................    50
U.S. Department of Veterans Affairs:
  Hon. Michael J. Kussman, M.D., MS, MACP, Under Secretary for 
    Health, Veterans Health Administration.......................    30
    Prepared statement of Dr. Kussman............................    62
  Hon. Daniel L. Cooper, VADM (Ret.), Under Secretary for 
    Benefits, Veterans Benefits Administration...................    32
    Prepared statement of Admiral Cooper.........................    64

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:
  Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
    Daniel P. Mulhollan, Director, Congressional Research 
    Service, Library of Congress, letter dated November 27, 2007, 
    and Memorandum response from Amy Belasco, Specialist in U.S. 
    Defense Policy and Budget, Congressional Research Service, 
    Library of Congress..........................................    66
  Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
    J. Michael Gilmore, Assistant Director for National Security, 
    Congressional Budget Office, letter dated November 27, 2007..    69
  Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
    Hon. Gordon H. Mansfield, Acting Secretary, U.S. Department 
    of Veterans Affairs, letter dated November 27, 2007, also 
    transmitting questions from the Hon. Michael H. Michaud......    71

 
              THE LONG-TERM COSTS OF THE CURRENT CONFLICT

                              ----------                              


                      WEDNESDAY, OCTOBER 17, 2007

            U. S. House of Representatives,
                    Committee on Veterans' Affairs,
                                                    Washington, DC.

    The Committee met, pursuant to notice, at 10:03 a.m., in 
Room 334, Cannon House Office Building, Hon. Bob Filner 
[Chairman of the Committee] presiding.

    Present: Representatives Filner, Brown of Florida, Michaud, 
Herseth Sandlin, Mitchell, Hall, Hare, Rodriguez, Donnelly, 
McNerney, Space, Walz, Buyer, Moran, Brown of South Carolina, 
Boozman, Brown-Waite, Lamborn, and Buchanan.

              OPENING STATEMENT OF CHAIRMAN FILNER

    Mr. Chairman. Good morning. This meeting of the House 
Committee on Veterans' Affairs is called to order.
    We thank the witnesses for being here to help us understand 
the long-term costs of the current conflict.
    In my view, just as we were unprepared for the aftermath of 
the war in a military sense in Iraq, we have gone into the war 
unprepared to deal with the consequences for our veterans, 
their physical and mental health, their employment, their 
education, their reintegration into civilian life.
    Over a million and a half servicemembers have now been 
deployed in Iraq and Afghanistan. We know the death and injury 
rate not only to Americans but to Iraqis and those numbers are 
increasing every day.
    Half of those deployed, and that is over 800,000 as I 
understand the testimony, have already been separated and are 
veterans. One-third of them have, in fact, sought U.S. 
Department of Veterans Affairs (VA) medical care or made 
benefit claims since the war began.
    So not only do we have the increasing needs of an aging 
veterans' population stretching back to World War II, but 
heavily dominated presently by Vietnam-era veterans and their 
needs, we have the needs of our new veterans. It is up to us to 
deal with both. That is our obligation as a nation. That is our 
obligation here in Congress.
    And as we try to struggle still with the older veterans, we 
have to have a commitment that although the country is divided 
over the war in Iraq, we have a difference of opinion, we are 
united in saying that every young person that comes back from 
that war is going to get all the care and attention that we can 
give as a nation.
    So whether it is traumatic brain injury (TBI), whether it 
is post traumatic stress disorder (PTSD), we must deal with 
these issues and we know what happens if we do not get this 
right. We look at our Vietnam veterans who were not treated 
with honor and respect, who did not get their healthcare in a 
timely fashion. It has been estimated that about half of the 
homeless on the street tonight, 200,000, are Vietnam vets.
    I think it is a tragedy and unacceptable to us as a nation 
that many Vietnam veterans have now died by suicide than were 
killed in the original war. That means we did something wrong 
as a nation and we have got to do it right with these young men 
and women coming back while we still struggle getting it right 
for our older veterans.
    We know about the backlog in claims. We know the 
frustration of having to deal with those claims whether it is 
monetary and losing a house or it is the psychological problems 
of fighting a bureaucracy for so many years.
    So how are we going to deal with this? How are we going to 
meet the demands of our older veterans and our new veterans?
    There have been a variety of estimates about the cost. I 
have seen costs as high as $60 billion a year for the next 
decade for our new veterans. I mean, that is 60 percent of our 
total budget now. How are we going to do that if that is true?
    The Congressional Budget Office (CBO), I think, estimates a 
lot less, but we should figure out what that number is. The 
Department of Veterans Affairs must, even though it is a little 
late, even though we have had some success, but we are still 
straining to the breaking point with these new demands.
    Walter Reed was not a VA hospital, but it showed that we 
were not taking care of the veterans the way the American 
people thought we should and that we must do. And we have heard 
similar horror stories at VA installations around the country.
    So we have to take this very seriously. We have to prepare 
in a way that has not been done. And we want to thank both the 
Congressional Research Service (CRS) and the CBO for being here 
this morning to help us understand that, to give us the 
background for the discussion, and we look forward to Dr. 
Kussman and Admiral Cooper's testimony to give us the VA 
perspective.
    We have to know the truth here. And I will say now to the 
VA panel, we need to know what you need, not that everything is 
all right. We always hear everything is fine, we do not need 
help and, yet, horror stories come to our attention every 
single day.
    So we look forward to a frank hearing. We look forward to 
giving us the understanding because every Member of this 
Committee and every Member of this Congress wants to do this 
job right and we need your help to do it.
    Mr. Buyer, you are recognized for an opening statement.
    [The prepared statement of Chairman Filner appears on pg. 
41.]

   OPENING STATEMENT OF HON. STEVE BUYER, RANKING REPUBLICAN 
                             MEMBER

    Mr. Buyer. The British philosopher and political theorist 
John Stuart Mill once wrote, ``War is an ugly thing, not the 
ugliest of things. The decayed and degraded state of moral and 
patriotic feelings which thinks that nothing is worth war is 
much worse. A man who has nothing for which he is willing to 
fight, nothing he cares about more than his own personal safety 
is a miserable creature who has no chance of being free unless 
made and kept so by the exertions of better men than himself.''
    We are here today to discuss the cost of taking care of 
those better men and women. In the current environment, some 
become lost in the heated political rhetoric and complexities 
of the war in Iraq and Afghanistan, thereby emotionally using 
veterans' issues to pull people into the trap of just simply 
feeling sorry for the men and women who fight. For many, this 
is easier than understanding their military duties and the 
realities of soldiers' lives after they return home.
    To my colleagues I would say our men and women in uniform 
who fight are not victims of the current conflict. Each and 
every one of them is a volunteer who swore and took an oath to 
defend this country. As one officer stated recently, ``I am a 
warrior, it is my job to fight.'' This is the statement of a 
hero, not a victim.
    As we look to take care of our returning military 
personnel, we need to admire and respect them for who they are 
and what they have done, not view them through a prism as 
though they are a victim class who require the Nation's pity.
    Our duty here today is to explore the cost and the options 
for taking care of these heroes. At the end of the day, that is 
the primary bipartisan mission of this Committee. It has always 
been so.
    In 2005, during my Chairmanship, we discovered a 
significant budget shortfall at the VA and rapidly moved to 
eliminate that shortfall. As the Chairman said, things were not 
included in those budgets that should have been and we had some 
very stale data and inputs.
    Today, however, the funding in the VA MilCon Appropriations 
Bill is being held up for what I believe to be partisan 
purposes and to use that bill as leverage to pass other 
appropriations bills or to put more pork in the legislation.
    We are now 16 days past the new fiscal year. I would urge 
the Chairman and my colleagues to rapidly move to encourage our 
leaders to move the VA MilCon Appropriations Bill in an 
expeditious manner so that our veterans can get the funding 
they need for fiscal year 2008.
    The Republicans have now appointed conferees and Democrats 
should do the same.
    Today we have a new challenge before us. The current 
compensation disability system needs to be reformed. This is 
the message we have heard from our veterans and confirmed by 
the findings of the Dole-Shalala Commission and the Disability 
Commission. These reforms cannot wait.
    Yesterday, the White House officially submitted their 
recommendations to Congress and it is our turn to act. The 
House and Senate Armed Services Committees are prepared to act 
and have said that they will take many parts of these 
recommendations to be incorporated in the Wounded Warrior 
provisions of the bill that is presently in conference.
    In CQ Today, it states, and I would appreciate for the 
Chairman to clarify, that you intend not to take up these 
measures from the commissions this year, but to delay and to 
take it up in a single bill next year. The first I heard 
anything like that was in today's CQ. So I am anxious to hear 
your response.
    In war, passivism and defeatism have never been America's 
values. Neither should we give in to defeat and sit passively 
by in the face of the challenge before us.
    Mr. Chairman, I urge you and all my colleagues to move 
ahead with reforming the compensation and disability systems 
this year and not wait until next year. The ``better men and 
women among us'' deserve no less.
    I yield back.
    [The prepared statement of Mr. Buyer appears on pg. 42.]
    Mr. Chairman. Let us get started on our first panel. I 
welcome Amy Belasco from the Congressional Research Service. 
Amy is a Defense Budget and Policy Expert with 25 years of 
Legislative and Executive Branch experience. And after Amy, we 
will hear from Matthew Goldberg from the Congressional Budget 
Office. Matthew is the Deputy Assistant Director for the 
National Security Division and has been a Defense Analyst since 
1980.
    We welcome you both. Your experience, I hope, will help us, 
and we look forward to your opening remarks.

 STATEMENTS OF AMY BELASCO, SPECIALIST IN U.S. DEFENSE POLICY 
    AND BUDGET, CONGRESSIONAL RESEARCH SERVICE, LIBRARY OF 
  CONGRESS; AND MATTHEW S. GOLDBERG, PH.D., DEPUTY ASSISTANT 
  DIRECTOR FOR NATIONAL SECURITY, CONGRESSIONAL BUDGET OFFICE

                    STATEMENT OF AMY BELASCO

    Ms. Belasco. Chairman Filner, Mr. Buyer, and other Members 
of the Committee, my name is Amy Belasco and I appreciate your 
asking CRS to testify about the important issue the Committee 
is considering, the long-term cost of the current conflicts in 
Iraq and Afghanistan.
    I would like to provide some context for the discussion by 
making several points. About 60 percent of the 1.6 million 
individuals who have been deployed to the Afghan and Iraq 
theaters of operation are in their first tour.
    To date, Congress has provided about $615 billion to the 
Department of Defense (DoD), the State Department, and the 
Department of Veterans Affairs for the cost of the conflicts in 
Iraq and Afghanistan and enhanced security at defense bases.
    Future costs will depend on the number of troops deployed, 
how long they stay, the intensity of conflict, and other 
factors.
    Thus far, DoD has spent about $300 million for the 
treatment of the two signature illness of these conflicts, post 
traumatic stress disorder, PTSD, and traumatic brain injury.
    And, finally, predicting future costs is difficult partly 
because of unexplained discrepancies in DoD information.
    So, first, before turning to costs, I would like to give a 
profile of the 1.6 million individual servicemembers who have 
been deployed to Iraq and Afghanistan in the 6 years of 
operation since 9/11.
    The typical deployed servicemember has been a young, white 
male, first term enlisted personnel, a profile similar to the 
active-duty force. Some 60 percent have been between the ages 
of 17 and 30 and are in their first tour.
    Because of frequent turnover, how often individual 
servicemembers have been deployed may be a better way to 
measure stress on the force than how often a unit is deployed. 
About 90 percent of those deployed thus far have been in their 
first or second tour of duty. The remaining personnel have been 
deployed three or more times including some like Air Force 
pilots for brief periods.
    Now turning to costs. CRS developed estimates of war cost 
because DoD's estimates have been incomplete and do not include 
the breakdown by operation of all the funds received to date.
    Concerned about the accuracy of its war cost reporting, DoD 
has asked a private accounting firm to conduct an audit.
    CRS estimates that Congress has provided a total of about 
$615 billion to date as of the fiscal year 2008 Continuing 
Resolution for Iraq, Afghanistan, and other counter-terror 
operations and enhanced security at U.S. bases generally 
referred to by the Bush Administration as the Global War on 
Terror (GWOT).
    DoD has received over 90 percent of the funds. The $615 
billion includes $573 billion for DoD, $41 billion for the 
State Department's foreign aid and reconstruction programs and 
for building and operating new embassies, and $1.6 billion for 
VA medical care for veterans of these conflicts.
    On a monthly basis, CRS estimates that DoD is spending 
about $11.7 billion for all three GWOT, Global War on Terror, 
operations, well above the $8.8 billion in fiscal year 2006 and 
the $7.7 billion in fiscal year 2005.
    These increases reflect both higher spending for new weapon 
systems and higher operating costs, though explanations for the 
increases are fairly limited.
    CRS estimates that Congress has provided about $455 billion 
just for Iraq with average monthly spending running about $9.7 
billion a year, well above previous years. Only a small amount 
of the increase in fiscal year 2007 reflects the surge or 
increase in troop levels in Iraq this year. For Afghanistan, 
CRS estimates about $127 billion with monthly obligations 
running about $1.7 billion, again higher than previous years.
    One way to put Iraq and Afghanistan war costs into 
perspective is to compare them to those of previous wars. Based 
on estimates by CRS Specialist Stephen Daggett of military 
costs in inflation adjusted dollars, the cost of all three GWOT 
operations after 6 years equals about 90 percent of the cost of 
the 12-year Vietnam War and about double the cost of the Korean 
war. Looking only at Iraq, the cost thus far is 65 percent of 
the cost of Vietnam and 50 percent more than the cost of the 
Korean war.
    Just briefly, the Administration has requested $152.4 
billion for war costs in fiscal year 2008. This total does not 
include $42.3 billion for defense and possibly additional State 
AID funds that Secretary of Defense Gates announced in late 
September would be requested shortly. If these additional funds 
are requested, the fiscal year 2008 total would reach $194.7 
billion or more.
    Estimating future war costs. Future costs, as I mentioned, 
will depend on how long the wars last, the number of troops, 
the intensity of conflict, facing strategies, the items that 
DoD and Congress consider to be war related, and the scope of 
post war costs.
    CBO recently estimated the 10-year costs of several draw-
down scenarios. If current troop levels fall to 30,000 troops 
by 2010, CBO estimates suggest that war costs would total $1.1 
trillion to $1.2 trillion by 2017. If troop levels fell more 
gradually to 75,000, costs would reach a total of $1.5 trillion 
to $1.6 trillion after 10 years.
    Looking at annual costs just to get some sense of what you 
are talking about once the steady status is reached, CBO 
estimates suggest that 30,000 troops would cost about $22 
billion, 55,000 troops about $33 billion, and 75,000 troops 
about $61 billion.
    Now I would like to turn briefly to DoD spending and 
experience with post traumatic stress disorder and traumatic 
brain injuries. Estimating the cost of these two signature 
medical problems may be difficult. But looking at DoD's initial 
costs may give a window into what to expect into the future.
    Based on DoD data, about 60,000 troops or about 4 percent 
of all servicemembers deployed have been diagnosed with either 
PTSD or TBI including some with both conditions. Treating those 
patients has cost $291 million over the past 5 years and annual 
costs per patient have averaged about $1,850 for PTSD and 
$5,500 for TBI.
    In the fiscal year 2007 Supplemental, Congress provided DoD 
with $600 million for treatment of these conditions over 2 
years and also permitted the Secretary of Defense to transfer 
any funds in excess of requirements to the VA for the same 
purposes. It is not clear whether DoD will need all of these 
funds.
    Finally, I would just like to talk briefly about problems 
in identifying deployed troop levels which raise some oversight 
questions. Predicting future cost depends on accurate 
information about current costs and the factors that drive 
costs. Yet, even in the sixth year of operations, figures for 
troop levels in the Iraq and Afghan theater of operations range 
from 160,000 for those personnel in country to 320,000 for all 
those dedicated to the two operations.
    DoD has not publicly explained the differences between 
these numbers. When Congress lacks a clear picture of something 
as basic as deployed troop levels either in the past or today, 
predication of future cost becomes problematic whether 
estimating the cost of PTSD or TBI or assessing weapons 
replacement costs.
    Thank you for inviting CRS to testify. I am happy to answer 
questions.
    [The prepared statement of Ms. Belasco appears on pg. 44.]

            STATEMENT OF MATTHEW S. GOLDBERG, PH.D.

    Dr. Goldberg. Good morning, Chairman Filner, Congressman 
Buyer, and other distinguished Members of the Committee. I 
appreciate the invitation to represent Congressional Budget 
Office and talk to you today about some of the challenges our 
Nation faces in caring for veterans returning from Operation 
Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF).
    I will be talking about the number of troops who have 
served in those operations, the numbers who have been injured, 
and some measures of the severity of their injury. I will also 
talk about the extent to which those veterans have sought care 
from the VA and the types of care they have received.
    And, finally, I will talk about the CBO's projections of 
the resources that VA may require over the next 10 years to 
continue providing medical care and some of the other major 
benefits that key off of deployments to those two theaters, 
disability compensation for disabled servicemembers and also 
Dependency and Indemnity Compensation (DIC) benefits paid to 
survivors of servicemembers.
    The U.S. Military has been engaged in OEF since 2001 and 
OIF since 2003. As was said earlier, over a million active-duty 
military personnel have been to one or the other operation and 
over 400,000 Reservists as well.
    The casualty rates, we have had 3,800 troops who have died 
in OIF and 400 who have died in OEF and a total of almost 
30,000 who have been wounded in one or the other operation.
    Now, the good news, if there is any, is that with advances 
in body armor as well as battlefield medicine and some 
remarkable advances in air medical evacuation, the survival 
rates are better in this conflict than they were, for example, 
in Vietnam. The survival rate among troops wounded was 86 
percent during Vietnam and it is over 90 percent in OIF and 
OEF.
    The downside of that is we have a lot of troops, as is well 
known, who survive what might otherwise have been fatal 
injuries to the chest and abdomen due to body armor, but they 
suffer injuries to the limbs often resulting in amputation.
    As far as the amputations, DoD keeps what I believe is a 
pretty complete census. There have been about 800 amputations 
from the two operations combined as of the beginning of this 
year. The amputation rate is 3.3 percent among all wounded 
troops.
    Regarding the other two injuries that get a lot of 
attention, the so-called signature injuries, traumatic brain 
injuries and post traumatic stress disorder, let me say a 
little bit about each of those.
    Traumatic brain injuries are difficult to tally because 
some of them go undiagnosed, but the number that have been 
diagnosed by DoD is about 2,700, 2,700 traumatic brain injuries 
or TBIs. That is about 8 percent of all wounded troops.
    An important distinction among the TBIs is that 
neurologists classify them as either mild, moderate, or severe. 
And about two-thirds of the diagnoses have been for mild TBIs. 
According to the medical evidence that we have examined, most 
mild TBIs result in natural recovery. The patient will recover 
in a matter of weeks or months even if untreated and 
particularly if treated, although there is a small fraction of 
patients with mild TBIs who will have long-run persistent 
symptoms.
    One of the problems with TBIs is that because the helmets 
are so good, you can sustain a concussion and not know about 
it. One of the advances that is currently being practiced is 
whenever any soldier is evacuated to Landstuhl in Germany for 
any reason, they are screened for TBI.
    Post traumatic stress disorder, PTSD, is also difficult to 
diagnose. Based on data from the VA, it appears that the 
veterans and the Reservists who have sought care at the VA, 
which is about a third of all those who have come home, a third 
of them who have come home and sought care from the VA, and 
among those, 37 percent have had some kind of mental health 
diagnosis and 17 percent have had some kind of diagnosis for 
PTSD.
    I qualify that a little because the diagnosis for PTSD, the 
17 percent is a preliminary number. Some of those individuals, 
it is later determined they are rule-outs. They had a visit 
with a psychiatrist who determined they did not have PTSD.
    So we really do not know with great precision what the PTSD 
rate is. Perhaps in the second panel, they will have some 
better numbers. But the number I am using is about 17 percent 
of those who have come back and been seen at VA.
    As far as the utilization and costs, the natural question 
is, how much of the resources and how much of the workload at 
the VA is being accounted for by the veterans and the 
Reservists who are getting care, particularly under the two-
year special eligibility that applies for troops returning from 
the combat theater.
    Well, of the about 700,000 returning servicemembers who are 
eligible for VA care, as I mentioned, a third of them have 
actually presented and demanded care at the VA. The VA keeps an 
account of how much of their budget goes toward treating those 
OIF and OEF veterans.
    In 2007, the number that the VA used was $573 million to 
treat that particular group of veterans in 2007. In the 2008 
budget request, the number they were using was $750 million, 
three-quarters of a billion. That includes dental care, 
readjustment counseling, mental health initiative, and any 
other care that those veterans will require at the VA.
    The 230,000 patients, veterans of those two operations who 
have been seen at the VA have constituted about 3 percent of 
the total veterans workload at the VA. So, in other words, as 
severe as the problems are, the numbers of veterans who have 
come back and sought care at the VA have not, from the numbers 
I have looked at, overwhelmed the system numerically.
    And in addition, the average cost of care for the OIF or 
OEF veterans has been about $2,600 per veteran per year as 
opposed to the average for all veterans who have been seen of 
nearly $6,000 per year. And that is partly a reflection of the 
fact that the veterans who come back, many of whom are severely 
injured, most of whom are not severely injured and are younger 
than the Vietnam and Korean era veterans that were mentioned 
earlier who were at a stage in their life where they are more 
expensive to treat.
    What CBO has done, if I can turn to our projections of 
future costs, is we have taken two scenarios. Of course the 
costs will be keyed off of how many troops are wounded in 
action, come back home, seek care in the VA. So we have some 
models that do the arithmetic there.
    But you need a scenario for how long the conflict will 
last, how many troops are exposed, and that will determine our 
forecast of how many troops will be injured and in turn the 
cost of care for them.
    So we have two scenarios. I believe they are the same two 
that Ms. Belasco mentioned earlier. We have one scenario where 
the troop levels would decline. Current levels of about 210,000 
decline to 30,000 by 2010 and remain at that level through 
2017, which is our 10-year projection window. However, the 
second scenario in which the withdrawal is more gradual, so 
75,000 were there in 2013 and remain at that level through 
2017.
    We are not saying that either of those are what will 
actually happen. No one knows, but we are trying to bracket 
some high and low cases.
    In the first case, actually in the lower case, we are 
projecting that VA's cost to treat the veterans returning from 
OEF and OIF would be about $7 billion over that 10-year window, 
2008 through 2017. And in the higher case where troop levels 
remain higher for longer, we are projecting it would take about 
$9 billion to treat those same veterans. So the range is $7 to 
$9 billion.
    In addition, we looked at some of the other benefits that 
might change in a significant way based on the number of troops 
who remain in those two theaters. The two we looked at 
specifically where the numbers are the largest are disability 
compensation and survivors' benefits and those could add 
another $3 to $4 billion to those totals.
    So what we are talking about in total for the major 
programs that VA runs, we are talking between $10 and $13 
billion in total over the ten-year period that we looked at.
    That concludes my remarks and I would be happy to take your 
questions. Thank you.
    [The prepared statement of Dr. Goldberg appears on pg. 50.]
    Mr. Chairman. Thanks to both of you.
    I will recognize Ms. Brown for questions.
    Ms. Brown of Florida. Thank you, Mr. Chairman, for holding 
this hearing.
    It is important for us to continue to remember the warriors 
when debating this war. I have opposed this war from the 
beginning and will continue to oppose it until every last 
American soldier is taken out of harm's way. However, I have 
supported each and every funding bill that would make the job 
of these men and women easier and safer.
    The military is doing the job they were sent to do. There 
was a flaw in the mission from the beginning and the flaw lies 
with us.
    I just want, as always, to remind us of the words of the 
first President of the United States, George Washington. These 
words are worth repeating at this time: ``The willingness with 
which our young people are likely to serve in any war, no 
matter how justified shall be directly proportional as to how 
they perceive the veterans of earlier wars are treated and 
appreciated by their country.''
    And so I go to my question. I am very interested, Ms. 
Belasco, in how you were able to pull out the VA funding 
numbers for Iraq and Afghanistan and the Global War on Terror 
since Congress and the VA do not make a difference when passing 
the funding bills. Can you please explain that a little bit?
    Ms. Belasco. Yes. I believe that actually CBO and I, and 
CRS, are using the same numbers. There are, in fact, figures 
within the VA's budget justification material where they 
separate out the funding for OIF and OEF vets. So those are the 
figures that I use.
    Ms. Brown of Florida. The VA had a budget shortfall of $1.5 
billion a few years ago because the formula they used did not 
take into account the war and the veterans returning from it. 
Do you see the VA and the Bush Administration continuing to 
underestimate the effects of the war on their service, the 
returning vets, the cost?
    Ms. Belasco. I cannot really address that question because 
I am a defense budget person, not VA. CBO might have a better 
take on that.
    Dr. Goldberg. I have some visibility into the process that 
VA uses to build the budget request. I do not have perfect 
visibility. But they have shared some of their modeling with 
me.
    And the best answer I can say is I know they are very 
cognizant of this issue. I know they have been improving the 
models every year for the three or 4 years that I have been 
following them. So I cannot guarantee you that they have got it 
right this time, but I think they will probably be closer now 
than they were when we had the problems 2 years ago.
    Ms. Brown of Florida. Well, tell me, do the VA or the 
Secretary have the last word or does the Office of Management 
and Budget (OMB) have the last word on the budget that actually 
comes out and comes to Congress?
    Dr. Goldberg. My understanding is that OMB has the last 
word.
    Ms. Brown of Florida. That is the problem.
    What do you believe are some of the greatest misconceptions 
that the general public have regarding the costs that we have 
incurred in this war and the future costs that VA may be forced 
to meet? For example, we talk about the coalition of the 
willing. How much does the American people pay of the cost of 
this war or do other countries actually make any major 
contributions? I am talking to Ms. Belasco.
    Ms. Belasco. I do not have those figures at the top of my 
head, but the overwhelming share of the costs are U.S. costs 
because we have almost all of the troops. I believe there are 
maybe 10,000 from other countries. I could look it up and get 
back to you, but, you know, it is really very small.
    Ms. Brown of Florida. Well, when some of the other 
countries actually send soldiers, do we pay that cost?
    Ms. Belasco. No. I mean, you know, when the British have 
had about 5,000 troops, I mean, they pay those costs. The only 
costs of other nations that we pay is there is a category 
called coalition support.
    So that, for example, we pay, if I remember correctly, 
about a billion dollars to Pakistan a year and that covers some 
of the costs of their troops and we pay it because they are 
helping us with counter-terror operations on the border. So I 
mean, coalition costs in those cases, and it is mostly Pakistan 
and Jordan, those are costs where we do, in fact, pay the cost 
of other soldiers.
    Ms. Brown of Florida. I understand. We are the coalition of 
the willing.
    I yield back my time.
    Mr. Chairman. Thank you, Ms. Brown.
    Mr. Brown.
    Mr. Brown of South Carolina. Thank you, Mr. Chairman.
    I was just curious, Dr. Goldberg, I guess. You mentioned 
that of the injured warriors coming back, 3 percent or a little 
over three percent actually have some form of amputation. Is 
that the number?
    Dr. Goldberg. I will check the number for you, sir. I 
believe the number was three percent. 3 percent, yes, sir.
    Mr. Brown of South Carolina. Okay. And that has been a 
fairly constant percentage, I guess?
    Dr. Goldberg. It has been constant.
    Mr. Brown of South Carolina. So you can use that projected, 
I guess, through the next 10 years or whatever that timeline?
    Dr. Goldberg. That is precisely what I do.
    Mr. Brown of South Carolina. Okay. That is how you came up 
with those numbers.
    Okay. And where do we get the 30,000?
    Dr. Goldberg. I am sorry. Could you repeat that?
    Mr. Brown of South Carolina. We have an estimated force of 
some 30,000 that will be needed through that last cycle. Is 
that----
    Dr. Goldberg. We have two cases that run through 2017. In 
one case, in the lower case, the force levels will bottom out 
at 30,000. In the higher case, they bottom out at 75,000. And 
so the numbers of amputations and casualties in general would 
be proportional to those force levels.
    Mr. Brown of South Carolina. Okay. All right. Thank you 
very much.
    And thank you, too, Ms. Belasco.
    Mr. Chairman. Thank you, Mr. Brown.
    The Chairman of our Health Subcommittee, Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman, for having 
this hearing.
    And I want to thank both the panelists for your excellent 
testimony and for your estimates.
    PTSD and TBI are frequently called the signature wounds of 
this war. Capturing all the treatment costs associated with 
these conditions, I think, can be very difficult. For instance, 
substance abuse or depression, that is related.
    When the cost of treatment was calculated, were these costs 
included in the calculation as well?
    Dr. Goldberg. I have to tell you that on my side, we did 
not calibrate those costs as precisely as I would like to 
capture everything that you are asking for. What we did is took 
a coarser look based on the total number of casualties and the 
number of those folks who would return to the U.S., separate 
from the military, and end up in the VA.
    But at this point, we are trying to refine our modeling to 
bring in more precise estimates of the cost of PTSD and TBI in 
particular and we are not quite there yet. So the numbers are a 
bit approximate.
    Mr. Michaud. And do you have the estimates for the cost of 
treating severe TBI or PTSD over the lifetime of a veteran from 
OEF or OIF?
    Dr. Goldberg. I do not have those.
    Mr. Michaud. Is that something that you can pull out or----
    Dr. Goldberg. I can take that question for the record and 
coordinate with the VA and if you would like, I will try to 
provide that.
    [The following was subsequently received from Dr. 
Goldberg:]

    Question: What assumptions did CBO make in projecting the 
number of veterans who would require VA healthcare, 
particularly those with traumatic brain injuries (TBIs)? How 
much does it cost to treat veterans with TBIs?

    Answer: CBO projects future VA medical costs in a ``top-
down'' rather than a ``bottom-up'' fashion. A ``bottom-up'' 
analysis would consider every medical condition that could 
possibly afflict an OIF/OEF veteran, project the number of 
veterans likely to develop that condition, and multiply that 
number of veterans by the year-to-year costs of treating a 
representative patient having that condition. The bottom-up 
approach is impractical because there are (depending on the 
specificity with which diseases are classified) thousands of 
conceivable medical conditions, some very rare and difficult to 
forecast, and others with widely varying treatment paths (and 
corresponding costs) depending on the individual patient. Also, 
a bottom-up approach might not capture the fixed and overhead 
costs of running the VA medical system that are unrelated to 
the treatment of specific diseases.

    By contrast, CBO's ``top-down'' approach starts with VA's 
costs to treat OIF/OEF veterans in the base year of the 
analysis, 2007. CBO then grows that base-year cost to reflect 
two factors: medical inflation and the growing cumulative 
number of veterans who have returned wounded from OIF/OEF. 
Regarding inflation, CBO applies projections of per capita 
growth in national health expenditures developed by the Center 
for Medicare and Medicaid Services (CMS). CBO projects the 
number of wounded troops under the assumption that historical 
casualty rates (per deployed servicemember per year) for 
operations in Iraq and Afghanistan over the 2003-2006 period 
will continue into the future. Applying those casualty rates to 
CBO's two illustrative scenarios for the force levels in 
theater yields a projected stream of annual casualties. CBO 
recognizes that the wounded are not the only OIF/OEF veterans 
who use VA medical care, but CBO uses the number of wounded as 
an index of the overall number of medical problems attributable 
to the two combat operations.
    The top-down approach does not require projections of the 
numbers of veterans likely to develop specific conditions (like 
TBI), nor the pattern of treatment costs for those specific 
conditions. However, the approach does implicitly assume that 
the mix of medical conditions remains roughly constant through 
time. For example, data from the Defense and Veterans Brain 
Injury Center imply that about 8 percent of troops wounded 
during OIF/OEF have been diagnosed with a TBI, of which over 
two-thirds were classified as mild. CBO's estimates implicitly 
carry that percentage forward into the future, as well as 
assuming that the cost to treat that condition will inflate at 
the same rate as other medical conditions (i.e., at the CMS 
rate). Those assumptions seem reasonable except, perhaps, in 
the event that veterans with specific conditions (like TBI) 
experience delayed onset and will eventually present to the VA 
at rates exceeding the historical averages.
    Mr. Michaud. Okay. Thank you.
    Mr. Goldberg, your colleague earlier in the year, Allison--
is it Percy----
    Dr. Goldberg. Allison Percy.
    Mr. Michaud [Continuing]. Percy testified in February 
before the Appropriations Subcommittee and the CBO's estimate 
was that then over a ten-year period, VA's cost for medical 
care related to Iraq and Afghanistan could be between $5 and $7 
billion depending on U.S. troop strength in the region. That 
was this past February.
    Your estimates today said that could be anywhere from $7 to 
$9 billion. What factors caused that increase? What was the 
different scenario?
    Dr. Goldberg. Well, we are seeing troop levels being 
sustained a bit longer in the scenarios and that in turn drives 
the cost. So longer details in the U.S. presence in turn drive 
higher costs, more years.
    Mr. Michaud. And not much has changed since February, 
though, because the surge was already----
    Dr. Goldberg. The surge is pretty much winding down. We are 
starting off with the 210,000 troops that are currently in 
theater and we have them going out for 12 months. So basically 
February to February and then you start to draw down from there 
and it does bump out the cost a bit. That is the main 
difference.
    [The following was subsequently received from Dr. 
Goldberg:]

    Question: Why have the 10-year projected medical, 
disability and survivors' costs to the VA associated with OIF/
OEF veterans increased from the $6 to $8 billion as detailed in 
CBO's ``Estimated Costs of U.S. Operations in Iraq Under Two 
Specified Scenarios'' (July 2006) testimony to the current 
estimate of between $9.7 and almost $13 billion?

    Answer: Two factors have been instrumental to the upward 
revision in costs. First and most importantly, the original 
projections assumed significantly lower troop levels deployed 
in and around Iraq than the most recent ones. The former 
assumed that either all troops would be withdrawn from the 
Iraqi theater of operations by the end of calendar year 2009, 
or that troop levels would decline to 40,000 by the end of 
calendar year 2010 and would remain at that lower level through 
2016. The latter projections assume a surge in troop levels for 
2007 and part of 2008 with declines thereafter. However, troop 
levels are assumed to bottom-out at 30,000 in 2010 and remain 
at that level thereafter, or alternatively to decline to 75,000 
by 2013 and stay at that level.
    Second, VA treated significantly larger numbers of OIF/OEF 
veterans (and at higher cost) in 2006 than it had in 2005 and 
than it had anticipated for 2006. Because CBO uses VA's 
spending as its base for its projections, CBO's projections 
correspondingly increased.

    Mr. Michaud. Okay. Ms. Belasco, in your written statement, 
you wrote, and I quote, ``That Congress lacks a clear picture 
of the number of or allocation of all military personnel 
dedicated to Iraq and Afghanistan either in the past or today 
makes prediction of future cost, whether future operational or 
medical cost, problematic. For example, troop location may be 
important engaging the likelihood that servicemembers face 
intensive combat and, hence, have a higher risk of developing 
PTSD or TBI.''
    Are there any types of data that you would like to see the 
Department of Defense and the VA for that matter compile so 
that you can look at this in a more comprehensive manner?
    Ms. Belasco. Yes, I think so. And I think the very 
discussion we have had this morning gives some sense of this 
because, you know, Matt was saying, well, CBO estimates started 
from a level of 210,000 which is different, of course, from 
320,000 and different from 160,000.
    Now, I can piece together where some of those other people 
are from other data sources, but I think it would be very 
useful for Congress, you know, it could be very useful in terms 
of knowing the population you are dealing with if Congress had 
figures from the Defense Department that explained what the 
numbers are.
    And, for example, in the 320,000 figure that they use in 
their budget justification material for fiscal 2007 and fiscal 
2008 war costs, they only break them down between 140,000 in 
Iraq and 20,000 in Afghanistan. And it is not even clear 
whether the 320,000 includes the 20,000 or so surge. I think it 
does, but I am not sure.
    Now, you know, where are the rest of those 160,000 people? 
Well, as near as I can tell from some other data sources, some 
of them are in neighboring countries, a fair number of them are 
in Kuwait as you would expect because a lot of people come 
through Kuwait en route to Iraq, some of them in Qatar, some of 
them are in the neighboring countries, some of them are 
activated Reservists serving at home, and there are about 
30,000 from one database I have where they do not know where 
they are.
    It seems to me that it would be appropriate for the Defense 
Department to resolve these discrepancies so that, you know, it 
would help in a lot of ways. I mean, I could give you four 
different sources for troop levels, all of them Defense 
Department sources. And I think resolving this would be very 
good. And, you know, after 6 years, you have to ask yourself 
why do we not know the answers to these questions.
    Mr. Michaud. Thank you very much. Appreciate it.
    Mr. Chairman. Thank you for that chilling question.
    Ms. Brown-Waite?
    Ms. Brown-Waite. I just have a follow-up question. If you 
do not know, if you are not sure the DoD figures included the 
surge, did you ask that question?
    Ms. Belasco. Yes, I did. And they were not sure either.
    Ms. Brown-Waite. So DoD was not sure if those figures 
included those troops in the surge as of the time period that 
you did your study; is that correct?
    Ms. Belasco. Well, I asked that question obviously of only 
one office within the Pentagon. You know, the Pentagon is a 
very large place obviously. They thought that the 20,000 was in 
there.
    You have to sort of cast your mind back to the timing. The 
justification material is prepared in January and presented in 
February. And the President announced the surge in January. So 
there may be some uncertainty whether the numbers were adjusted 
for that.
    But within their justification, they said there were 
140,000 troops in Iraq. Well, you know, if you consider the 
surge, it would have been more like 160,000. So, like I said, 
you know, they were not too sure themselves.
    Ms. Brown-Waite. But you did ask that question?
    Ms. Belasco. Oh, yes.
    Ms. Brown-Waite. I appreciate that. Thank you.
    Dr. Goldberg, in your opinion, what has led to the higher 
projected cost for this conflict compared with previous 
conflicts? Is it TBI? Is it PTSD? Is it the loss of limbs? What 
would you say is the major cost driver here?
    Dr. Goldberg. I think part of it is just the fact that the 
VA has been so open and made the space for everybody coming 
back. I know there have been a lot of complaints about veterans 
trying to get ratings for disability payments. But this is a 
different issue. You do not have to have a disability rating to 
come back and get seen in the VA. And the VA has been----
    Ms. Brown-Waite. Because you get that care for 2 years 
after you serve.
    Dr. Goldberg. Two years. And, of course, there is 
legislation that would extend that to five.
    With your indulgence, if I could go back to the question 
you asked Amy----
    Ms. Brown-Waite. Absolutely.
    Dr. Goldberg [Continuing]. We got numbers from the Joint 
Chiefs and the numbers we are looking at are 210,000 troops 
including the surge which is 30 to 40,000 higher than the pre-
surge number. So we have one source we use that we think is 
reliable. I know there are multiple sources in the Department. 
It depends how you ask the question.
    For example, there are Air Force troops who will do a 
mission in theater and then return to another base. For some 
purposes, you say, yes, they have been in theater, but they 
have not actually been stationed on the ground. So it is not 
necessarily that the people in the Pentagon do not know what 
they are doing. It depends what question you are trying to 
answer.
    We tend to look at troops on the ground and we have gotten 
a reliable set of data from the Joint Chiefs. Pretty much month 
by month, we talk to them and we have seen that the surge is 
numbered at 30,000 troops. Not all of that is Army and Marines 
as you might expect because now they have a lot of Air Force 
personnel and Navy are doing what they call ``in lieu of '' 
missions. They are taking the missions that might ordinarily be 
handled by the Army because the Army is so stretched.
    Ms. Brown-Waite. Thank you very much for that 
clarification.
    Yes, a further clarification.
    Ms. Belasco. I was just going to say, you know, there are a 
lot of different ways to look at these numbers. I asked the 
Defense Department, one of their data collectors to put 
together the number for something called average strength, 
which in terms of cost is probably the best number because, 
after all, what average strength does is it counts everybody 
over a period, everybody as one person-year just like full-time 
equivalents. And, for example, for 2007, the figure is likely 
to end up being around 255,000 roughly which, again, you know, 
it is 40,000 larger.
    Again, I have asked people in the Defense Department to 
resolve the discrepancy and we are working on it. But, you 
know, I find average strength to be a very good measure. It 
does not measure those in country, but it does capture people 
in terms of person-years.
    Ms. Brown-Waite. With troops coming and going, that has to 
be a very fluid figure.
    Ms. Belasco. Right. But the thing is the average strength 
figure, in fact, captures that because the way it is calculated 
is for every month, it looks at how many people are there for 
that month so that it captures all the comings and goings. And, 
in fact, part of the difference between the figures may be that 
there are a lot of people on temporary duty.
    Ms. Brown-Waite. So the average strength per month is what 
you were looking at and it would not include those on temporary 
duty?
    Ms. Belasco. It would.
    Ms. Brown-Waite. It would? And those, for example, that Dr. 
Goldberg pointed out who may be Air Force who were really just 
flying over and/or there for a day?
    Ms. Belasco. No. But it would include the Air Force people 
as only 1 day.
    Ms. Brown-Waite. Okay.
    Ms. Belasco. And, actually, the average I mentioned is an 
average for the year for 2007, an estimated average of all the 
months for the year.
    Ms. Brown-Waite. Thank you. Thank you very much. My time is 
up.
    Mr. Chairman. Thank you.
    The Chairman of our Oversight Investigations Subcommittee, 
Mr. Mitchell. You pass.
    Mr. Walz? Mr. Walz, you are recognized.
    Mr. Walz. Thank you, Mr. Chairman.
    And thank you to both of you for coming. This issue of 
trying to get the data and trying to put a matrix to this is 
critically important, so we appreciate the work that you have 
done. And I understand that it is so difficult.
    I would like to also mention the Ranking Member has always 
been so kind. He gave me a really good history lesson once on a 
1946 testimony on the Merchant Marines. So I think in response 
to the Ranking Member's testimony, I think it should be 
interesting to point out that although this entire body is 
disappointed that we have not passed the MilCon VA 
Appropriations, it has not passed on time in 10 years. And, in 
fact, in the 2 years under the Ranking Member's Chairmanship, 
it did not pass on time and we passed a continuing resolution.
    So no one cares more about this than this group here, but 
this idea that we are going to inject some of that into this is 
a bit disarming to me and I think that setting that straight, 
it is nothing to be proud of that we have been late 12 of the 
last 13 years. But that is the fact on this.
    And we simply, and the question I have to you is, for the 
last 3 years, the President has had to come back, Mr. Goldberg, 
and ask for this. Now, this is the CEO President, the one that 
is supposed to put the best practice and the matrix to this. 
You just testified to us here that 3.3 percent of the VA's 
budget is caring for, the health budget is caring for OEF and 
OIF veterans. Okay.
    How do you explain then if it was not an overwhelmingly 
unexpected number that came here that this Administration so 
poorly projected and the VA so poorly projected the needs if 
there was not, by your account is what it seems like you are 
telling me, not an unexpected surge here in terms of cost? Can 
you explain that to me?
    Dr. Goldberg. Well, my understanding is this, Mr. Walz, 
that a big reason that the VA has had budget problems in the 
last 2, 3 years is not so much the inability to plan for the 
veterans returning from Iraq and Afghanistan. It is much more 
so the difficulty in projecting the veterans from previous 
conflicts who are aging and many of whom are having problems 
maintaining their civilian healthcare, the healthcare provided 
by employers, and are turning to the VA because the VA is 
attractive to them, the copayments are less.
    And so it is not so much the younger veterans coming back. 
It is a lot of the older veterans who are reaching that stage 
where they need help and they are turning to the VA.
    Mr. Walz. With that being the case and some independent 
budget projections like the ``Independent Budget'' by the 
veterans service organizations (VSOs), the DAV and so forth, 
they were able to much more accurately predict the need than 
the VA.
    Now, my question to you is, I guess, what matrix are they 
using? At what point does CBO have a responsibility to talk as 
they just answered to Ms. Brown on this? When does CBO have a 
responsibility to tell the VA Secretary your projections are 
not realistic and you are going to be going back to Congress 
and ask for more money? Do you have a responsibility in that?
    Dr. Goldberg. Well, the closest responsibility that we have 
is when there is legislation, for example, the MilCon VA 
Appropriation, that we do an assessment of that legislation, an 
independent assessment of how much it would cost, whether there 
are mandates on the private sector, et cetera.
    It is not really within our charter to go back to the VA 
and critique their budgeting process. I do not really have the 
authority to do that. That would be more of a U.S. Government 
Accountability Office (GAO) type of engagement.
    Mr. Walz. Okay. And I am noticing, and I am going back to 
that question again, does CBO have any, I guess as you are 
looking at this and you are seeing the cost, maybe this is a 
GAO question again, this year's appropriation that we will get 
passed and hopefully sooner than later, are we getting closer 
to the total needs based on what your analysis is?
    Dr. Goldberg. I would have to take that for the record and 
take a closer look.
    [The following was subsequently received from Dr. 
Goldberg:]

    Question: Is there adequate funding for VA medical care in 
the VA-Military Construction appropriation bills that have been 
passed by the House and Senate for fiscal year 2008?

    Answer: CBO cannot evaluate the adequacy of funding without 
being given a standard for defining ``adequate.'' One possible 
perspective is to compare the proposed funding level for 2008 
to the enacted level for 2007 increased by healthcare 
inflation. VA's 2008 Budget Submission projects an increase in 
outlays for medical care of OIF/OEF veterans from $573 million 
in fiscal year 2007 to $752 million in fiscal year 2008 (31 
percent). Given that VA expects an increase in the number of 
OIF/OEF patients from 209,000 to 263,000 (26 percent), their 
requested funding would allow an increase in annual cost per 
patient from $2,735 to $2,860, or 4.4 percent. In January 2007, 
the Centers for Medicare and Medicaid Services (CMS) issued a 
projection of a 6.6 percent increase in national per-capita 
healthcare expenditures.[1] If that projection is 
correct and if it applies to VA medical care, a full allowance 
for both inflation and increases in the number of OIF/OEF 
patients would require dedicated funding of $768 million in 
2008 (as opposed to the $752 million contained in VA's Budget 
Submission).

    [1] As noted in House Report 110-186 to 
accompany the Military Construction, Veterans Affairs, and 
Related Agencies Appropriation Bill, 2008, p. 43.

    Mr. Walz. All right. Very good. Well, thank you.
    And I yield back.
    Mr. Chairman. Thank you, Mr. Walz.
    Mr. Boozman.
    Mr. Boozman. I do not have any questions. Thank you, sir.
    Mr. Chairman. Mr. Hare?
    Mr. Hare. Thank you, Mr. Chairman.
    I think this hearing today is very important as we continue 
to be involved in the two conflicts because the cost of this 
war is going to be with us for generations to come. And I must 
say that based upon the testimony of the first panel, I am 
deeply troubled because of the reoccurrence of such words as 
unknown and problematic.
    And I think everyone here can agree that budget projections 
are complicated on their merits, but this goes beyond the 
general complications and to the fact that we simply do not 
know what kind of long-term effects injuries will have or how 
many servicemembers will come into the system and what the cost 
of the wounds such as TBI and PTSD are going to be.
    But I would like to ask this panel. I am trying to get a 
sense of how you determine what the care for veterans would 
cost. You know, what sort of factors do you use in determining 
the 10-year projections of the VA health system of $7 to $9 
billion for OEF and OIF?
    Dr. Goldberg. As I mentioned earlier, we do not have great 
accuracy in the cost of particular disorders such as PTSD or 
TBI. And I am being candid about that. But what we do is we 
take sort of a higher level look at the number of troops who 
are in theater under the two scenarios that run out through 
2017 and we have the historical casualty rates, you know, how 
many folks get injured and we know how many folks get evacuated 
to Landstuhl, Germany. We know how many folks get evacuated 
back to the U.S., sort of an indication of severity. And based 
on that kind of coarse classification of what severity of 
wounds, we have applied historical factors to try to project 
the cost forward.
    We have not built it from the bottom up. I do not really 
have the data, the wherewithal, the staff to do this, to build 
from the bottom up and look at every particular illness and 
disability and cost it out separately. But I will concede that 
we need to take a closer look at the TBI and the PTSD and we 
have ongoing efforts at CBO to improve that aspect of our 
projection.
    Mr. Hare. I appreciate that.
    There were two different numbers used in both your 
testimonies relating to TBIs diagnosed by the Department of 
Defense.
    Ms. Belasco, you said that 26,000 troops have been 
diagnosed by the DoD of TBI between fiscal year 2003 and fiscal 
year 2007. Mr. Goldberg stated that through December 2006, only 
1,950 TBIs have been diagnosed by DoD physicians. I was 
wondering if you could explain the discrepancies in those 
numbers, a pretty significant difference?
    Ms. Belasco. The 26,000 figure that I used, I got from the 
Department of Defense. I asked them to pull the data together 
for all those OIF/OEF people who had been treated for TBI or 
PTSD. And what I did is I gave them the codes for TBI that the 
VA uses so that there would be some comparability.
    What they did is they provided me figures both in terms of 
the number of patients and the cost under three conditions. One 
table showed the cost if, and this was true for both PTSD and 
TBI, showed the cost if the primary diagnostic code was TBI. 
The second version of the cost showed how much it would be if 
TBI was one of the several codes used by a doctor or medical 
practitioner when they treated someone. And the third version 
was any care that was provided to someone who was initially 
diagnosed with TBI or PTSD.
    And the cost figures that I used reflect the middle. In 
other words, it covers anyone who was diagnosed by the medical 
practitioner where TBI was a symptom. And they gave me the 
number of patients, patient loads for each year, and then they 
also gave me the number of those who were eligible for care 
that year because, you know, DoD unlike VA, people are treated 
and then they leave. You know, their enlistments are up and 
they leave.
    So that, for example, all the 26,000 TBI patients between 
fiscal 2003 and May of 2007, by the end of that period, only 
about 13,000 of them were, in fact, eligible for care at that 
point because the rest of them have left the system.
    Dr. Goldberg. To give you the other side of the equation, 
today was the first time I had heard those higher numbers and I 
would like to speak to Ms. Belasco about her source and try to 
reconcile.
    I can tell you my source. I actually have two numbers in my 
testimony. The one I may have mentioned today verbally was the 
1,950 TBIs that have been diagnosed through January of this 
year. And through July, I just got an update of 2,700. Still a 
much smaller number.
    My source is the Defense and Veterans Brain Injury Center 
which is a joint endeavor of the two departments, DoD and VA, 
and it is housed up at Walter Reed. We have been up there and 
we have spoken to the folks there.
    They purport to have not a complete census but a nearly 
complete census of the number of traumatic brain injuries and 
their numbers, they said, are running now at 2,700. They claim 
to have 80 to 90 percent coverage, so maybe the number is 3,000 
by that source total. So I am frankly mystified that there is 
another source within DoD and I am very curious to track down--
--
    Mr. Hare. I would be interested. I know my time is up, but 
I would just be very interested once you two confer on it, if 
you could get back me with me, I would be very interested.
    Thank you, Mr. Chairman.
    [The following was subsequently received from Dr. 
Goldberg:]

    Question: What factors explain the difference between CBO's 
and CRS's estimates of the number of TBIs incurred during OIF/
OEF?

    Answer: Different organizations with DoD and VA use 
different criteria to estimate the number of TBIs.
    Military and VA hospitals assign an ICD-9 (International 
Classification of Disease, version 9) code to each patient 
discharge. Those codes are assigned not by the examining 
physicians, but rather by coding specialists upon discharge for 
the purpose of billing third-party insurance (a more important 
issue for certain family members and retirees than for active-
duty personnel).
    ICD-9 codes are often used to estimate the number of TBI 
cases diagnosed; however, neurologists have not agreed on a 
standard set of codes that correspond to a TBI. (There is no 
single code or set of codes specific to TBI.) The data that CRS 
requested used a broad definition of TBIs in an attempt to 
capture mild TBI cases that may not have been treated at major 
DoD or VA centers. However, CRS's counts include facial 
injuries as well as injuries to the optic nerve that may have 
had very different transmission mechanisms and may not 
correspond to TBIs. CRS is also subject to double-counting 
because they include ICD-9 code 310 (post-concussive syndrome), 
a psychological condition that is assigned later, not as an 
initial diagnosis.
    CBO's cited counts of TBIs diagnosed by the Defense and 
Veterans Brain Injury Center (DVBIC), a joint activity of the 
two departments with multiple sites and with headquarters at 
Walter Reed Army Medical Center. DVBIC's counts of TBIs are 
based on medical diagnoses made by physicians, not financial 
codes assigned by coding specialists. CBO considers DVBIC's 
data more reliable than the ICD-based data used by CRS.

    Mr. Chairman. Thank you.
    Let me just put 5 minutes on for my questioning. We 
appreciate the testimony. Numbers sometimes allow one to be 
more removed, and provide a supposedly more objective picture. 
I think your numbers have really disguised the real issues 
here.
    You paint a picture with your numbers of systems that are 
adequate to meet all the needs, low percentages here and there, 
although the 50,000 missing soldiers or whatever that you 
calculated, maybe they are in Pakistan, maybe they are in Iran. 
You know, maybe we just discovered something that we should 
know.
    But they do not tell us the human story that all of us have 
to deal with every single day. And even on their own, just to 
take the figures on their own distorts the picture, I think, 
because, you know, there is a systematic dismissal of PTSD as 
an illness in the military.
    We have stories of people who say their questionnaires were 
turned in, came back to them because real Marines do not admit 
mental illness. We have people scared to say they have problems 
because of promotions. There is a whole range of things we do 
not have to go into now which you are aware of which would 
change the nature of your figures.
    But, more important, I think sometimes our anecdotal or 
human picture is more real. We have people who cannot get into 
our VA facilities because there is no room to treat them. They 
have PTSD. We have stories of people going home and committing 
suicide because they could not get in. We have waiting lists.
    I do now know. Four percent of the DoD claims of PTSD, I 
mean, that is a ridiculous figure given all the information we 
have. Something is wrong with the way DoD gives the figure if 
they are saying 4 percent. We know that. So why are we even 
using that as a basis?
    Even the percentages, I do not know how you got 3 percent 
of an impact on the VA. I mean, I just took 300,000 OEF/OIF 
versus 5 million enrolled patients and that comes out double 
your 3 percent, but it does not even matter.
    I think we are vastly, systemically, underestimating the 
issues that we come into contact with every single day. There 
is a difference between your numbers and the reality that our 
constituents face and these veterans face. And I am not sure 
that these numbers today are going to be very helpful.
    We have had a vast, what shall I say, difference in 
estimates from other sources. I have seen estimates as high as, 
as I said in my opening statement, $60 billion a year for the 
next 10 years. Why do we have 60 versus 1? I mean, that is not 
just a difference in source.
    I mean, there is something going on here that your figures 
produce such low numbers compared to everybody else in the 
world. Why is that?
    Dr. Goldberg. Well, there are other studies out there. And 
I did not really come here with the intention of fighting with 
people who are not here to defend themselves. But I tried to be 
very careful in rather than just saying, you know, there was a 
newspaper article that said 20 percent of troops have TBIs, for 
example, that there was an article in Boston Globe, and a lot 
of folks would go and say, well, let us just take 20 percent of 
everybody and cost them out as though they have lifetime of, 
you know, bedridden, around-the-clock care. And there simply 
are not tens of thousands of people, to my knowledge, who are 
in that situation.
    Every one of these cases is tragic and I am not here to 
deny. You know, I have been to Walter Reed as I am sure you 
have, Mr. Chairman. But the fact is, I am a numbers guy and I 
am trying to give you the numbers to best inform the 
deliberations on what appropriations are necessary and other 
legislation that might be needed. And the human tragedy is 
undeniable, but the numbers----
    Mr. Chairman. Yes. But why is there such a difference 
between a $1 billion a year and $60 billion a year? I mean, 
what is going on here?
    Dr. Goldberg. I do not know that $60 billion, but, I mean, 
$60 billion, it is twice the capacity of the entire--it is 
twice the entire VA health budget what it is now and, yet, only 
3 percent of the patients.
    If I could make one correction, Mr. Chairman, 229,000 
veterans have been seen for care, but many of them are young. 
Only 3 percent of them have ever been in for a hospitalization 
at the VA. Most of them come in for outpatient care and they 
are simply not consuming the resources on the whole. Most of 
their care is much more routine. It is handled on an outpatient 
basis.
    I should also mention to be candid about it that these 
numbers do not include, my numbers do not include the care that 
is provided at DoD, at Walter Reed, and the other facilities, 
Walter Reed, Bethesda, Wilford Hall before these injured 
veterans get to the VA. That is a different matter and I do not 
have those estimates today.
    Mr. Chairman. I think the human picture is so much 
different than we have painted here and I think it is more real 
because we are dealing with--I mean, Sunday's paper and The 
Washington Post talked about this one soldier, but there are 
thousands like him with PTSD. He is not getting enough money 
from the disability system. His wife had to quit everything to 
take care of him 24 hours a day.
    And we hear stories. This is not an isolated incident. 
Every one us can tell you a story of somebody that we know 
someone in our district that is facing this stuff and it is 
just not a real picture to say we have this covered.
    Mr. Buchanan, do you have any questions?
    Mr. Buchanan. No.
    Mr. Chairman. Mr. Donnelly?
    Mr. Donnelly. Thank you, Mr. Chairman.
    And I want to thank both of you for being here today.
    There are also a number of contractors in Iraq and what I 
was wondering is if a contractor suffers a significant injury, 
is our government on the hook at any point for those costs 
later on, 5, 10 years later, whether in the VA budget or in 
another budget?
    Dr. Goldberg. My understanding, and I am not absolutely 
certain on this--perhaps the VA officials could correct me--but 
DoD will provide care in theater at some level, but I do not 
believe that they will provide the care in the VA years out 
unless we are talking about someone who happens to be a veteran 
which many of the contractors are.
    Mr. Donnelly. That was going to be my next question was 
many of the contractors are veterans and when they come back, 
those injuries that they may suffer in Iraq as they go back to 
VA care when they come home, does the VA system then assume the 
cost of those additional injuries as well?
    Dr. Goldberg. It would depend on the classification, which 
of the eight priority groups they fall into. Again, correct me, 
the second panel, if I am wrong, but I do not believe those 
would be considered service-connected injuries because at this 
point, we are speaking of contractors who have separated or 
retired from the military. And they would have to gain entry 
notwithstanding the freeze on priority eight veterans. So they 
may be able to get into the VA or they may not be depending on 
their income and whether or not they had prior service-
connected disabilities that would provide their entry.
    Mr. Donnelly. Okay. And one other question I had is in 
regards to TBI. There has been some discussion about using 
other facilities as well like the Rehabilitation Institute of 
Chicago, for instance, not far from where I live, as vets 
separate from the service, at that point where they become 
nonactive, that they be given a year where they can choose 
either using the VA facility or one of those facilities.
    If we provided that in veteran services as an alternative, 
would that increase our costs?
    Dr. Goldberg. I would suspect it would and I do not have 
estimates of those costs. I know the VA does work and has some 
sharing arrangements now. The question is were those sharing 
arrangements augmented, how much would it increase the cost. I 
do not have an estimate of that.
    Mr. Donnelly. Okay. Thank you very much.
    Ms. Herseth Sandlin [Presiding]. Mr. Hall, you are now 
recognized.
    Mr. Hall. Thank you, Madam Chairwoman.
    And thank you, Ms. Belasco and Mr. Goldberg, for your 
testimony. I have a couple of questions. Many of mine have 
already been covered by other Members.
    But do you know what the average age of separation is at 
this point from these conflicts OIF/OEF so far?
    Dr. Goldberg. It is probably on the order of 25, but I 
would have to check that for you.
    Mr. Hall. That was my guess. And average age of deployment 
or enlistment?
    Ms. Belasco. The average age of those deployed?
    Mr. Hall. That is correct.
    Ms. Belasco. Well, what I have is some figures that say 60 
percent of those deployed are between the ages of 17 and 30.
    Mr. Hall. Okay. So if you take the 60 percent as being 
representative, then, you know, somewhere in the early 
twenties?
    Ms. Belasco. Yeah. I mean, as I said, if you were to look 
at what the typical servicemember deployed, it would be someone 
who was young, white, male, first-term enlistee.
    Mr. Hall. So maybe 22 on average? Of course, the other 40 
percent, I am not sure if that would skew it upward more. I 
know there have been several men who----
    Ms. Belasco. Not terribly much.
    Mr. Hall [Continuing]. Deployed at the age of 56 that I 
know of, but----
    Ms. Belasco. I think there are another 25 percent who are 
between 30 and 40.
    Mr. Hall. Right.
    Ms. Belasco. So, therefore, 40 and over is----
    Dr. Goldberg. Mr. Hall, the Reservists tend to be a little 
older.
    Mr. Hall. Right. I am trying to get at what the life 
expectancy is for the average person who separated from the 
military after serving in these conflicts.
    And I am guessing that you are talking about, depending, of 
course, on the injuries they suffer, it sounds to me like you 
are describing a universe of people in whom the injuries, the 
real serious ones are not that bad, so you are maybe looking at 
70, 75 years life expectancy in this country at this point for 
men which would seem to indicate that you might want to 
multiply by five in order to get the lifetime care is what I am 
trying to figure out.
    So far, the expense incurred by the American people for the 
lifetime care of those who need it, whatever level of care that 
is. Some of them, it is round-the-clock, 24-hour nursing or 
supervision and some of them, it is periodic visits to a 
doctor. But you may be talking about, using your figures, about 
another $40 billion or so added on top of the $7 to $9 billion 
medical care for the years 2008 to 2017.
    Dr. Goldberg. Are you asking my reaction to that?
    Mr. Hall. Yeah.
    Dr. Goldberg. My reaction to that is I think 50 years of 
additional life is probably a fair average number. I think it 
might be a little bit high to just do a straight multiplication 
and the reason is that a lot of the veterans who come back will 
either get cured, the ones who have lesser severity illnesses, 
or they will find that they will transition back to their 
civilian jobs and pick up healthcare through their employer and 
over time, fewer and fewer will rely on the VA. So the costs on 
the VA budgets will come down.
    Now, later in their life, they may return to the VA when 
they retire and they no longer have that civilian sector 
healthcare.
    Mr. Hall. Right. The way Vietnam vets now are coming in in 
big numbers because they reach an age where their injuries, you 
know, or the exposures to certain chemicals or substances that 
cause disease start to crop up like prostate cancer, for 
instance, and Agent Orange exposure.
    Dr. Goldberg. Exactly.
    Mr. Hall. So there could be a bump later on as they get 
older and need more care?
    Dr. Goldberg. I think that is fair. But I think going out 
beyond the 10 years and you are talking about someone 40 years 
old, many of them, like I said, will be back in civilian jobs 
where they have their own healthcare and would rely less on the 
VA.
    In fact, we make that assumption even in our 10-year window 
that some of the veterans come back, the ones who do not have 
the horrific injuries, many of them will transition out of VA.
    Mr. Hall. Okay. But it is safe to assume, though, that 
there is beyond the year 2017, there are going to be 
substantial costs for continuing care?
    Dr. Goldberg. Oh, absolutely. I did not mean that to be 
interpreted as zero, simply that we have a 10-year window.
    Mr. Hall. Okay. And have you heard, either of you, stories 
that are seen on news articles about diplomats, U.S. diplomats 
who claim to be suffering from PTSD from serving in Iraq and 
Afghanistan?
    Dr. Goldberg. I have seen the articles and it is quite 
possible. And those numbers are not reflected here.
    Mr. Hall. Of course, I am only saying that to raise the 
suggestion that perhaps the PTSD numbers that are being given 
by DoD or VA for the reason that the Chairman gave may be low.
    I mean, I have heard stories directly from families and 
also read articles about family members, children, not that 
they are covered under the VA in the same way that a veteran 
is, but that peripheral contact and exposure repeatedly to the 
deployments that this war has involved and the dangers involved 
have caused psychological damage, you know, to those people so 
that, well, we get back to the anecdotal versus the numerical 
which is, you know, your world.
    And, anyway, I am over my time. Thank you very much for 
your testimony.
    I yield back.
    Ms. Herseth Sandlin. Thank you, Mr. Hall.
    Mr. McNerney, you are recognized for 5 minutes.
    Mr. McNerney. Thank you, Madam Chairwoman.
    The Capital Asset Realignment for Enhanced Services (CARES) 
report that is being used to justify closure of VA facilities 
uses such figures as the CBO's projection earlier this year 
that the number of veterans is supposed to decline between now 
and the year 2025.
    Could you address what impact that OEF and OIF will have on 
that trend.
    Dr. Goldberg. I think the trend will continue despite the 
fact that we still have people coming back adding to the pool 
of veterans. The larger numerical effect is that the World War 
II veterans and now increasingly the Korean war veterans are 
heading up to the age where many of them are starting to die. 
And we still see a trend where the overall population will be 
declining.
    Mr. McNerney. Well, you have presented a terrific amount of 
information. I mean, there is a ton of data here to sort 
through and it is going to take me a while to absorb it all. I 
am sure you can appreciate that.
    The numbers that were thrown out here this morning, $7 to 
$9 billion cost for veterans of this war between now and 2017, 
this compares to the roughly $30 billion VA budget for this 
year. It seems unrealistically low. The $7 to $9 billion seems 
unrealistically low compared to the yearly budget that we are 
putting into the Veterans Administration.
    Dr. Goldberg. The VA budgets, depending which categories, 
is on the order of $34, $35 billion, I believe. But, again, I 
would remind you that only about 3 percent of the patient load 
at the VA hospitals is comprised of the veterans of OEF and 
OIF. So even if those numbers are growing, they do not 
overwhelm the care that is being given to the veterans of 
previous conflicts.
    Mr. McNerney. Well, we have, using that number of $7 to $9 
billion and the projection for the war cost, this $1.2 trillion 
to $1.6 trillion, that is only about six-tenths of a percent of 
the cost of the war.
    Is that comparable to prior conflicts? Is that six-tenths 
of a percent? Can either one of you address that?
    Dr. Goldberg. I have not looked at it in precisely those 
terms. But I would point out, you know, in defense of your 
calculation that, again, as I mentioned earlier in response to 
a question, much of the care is received in DoD and I do not 
have those numbers.
    And also, when you look at the cost of military operations, 
we are talking about cost of activating Reservists, we are 
talking about special pays for being in the war zone, we are 
talking about all the fuel costs to run all the vehicles and 
all the transportation to and from the theater. So those costs 
are staggering compared to the cost of treating 229,000 
veterans in the VA.
    Mr. McNerney. So the $7 to $9 billion, does that include 
facilities? I mean, what all does that include and what does it 
not include?
    Dr. Goldberg. It includes an apportionment, a share of the 
facilities, the overhead that would go toward treating these 
veterans, their share in the mental health initiatives, the Vet 
Centers that provide rehabilitation, and a few other things.
    And, again, I might defer to the experts on the second 
panel, but my understanding is it was in the budget 
justification. It is intended to be a pretty complete picture 
of a portion of all the programs, healthcare and other programs 
that are devoted to this particular group of veterans.
    Mr. McNerney. Thank you.
    I am going to reserve back the balance of my time.
    Ms. Herseth Sandlin. The gentleman yields back.
    I would now recognize the Ranking Member, Mr. Buyer, for 
questions he may have of our witnesses.
    Mr. Buyer. Thank you.
    Dr. Goldberg, would you say that you have an extensive 
knowledge with regard to the VA budget modeling system that is 
used to finance?
    Dr. Goldberg. I would not say extensive. I have worked with 
the VA staff, some of whom are here today, and they have shared 
with us the documentation on the model and they have answered 
specific questions, but I have never had the opportunity to 
actually sit down and run the model and gain the kind of 
firsthand knowledge that they have at VA.
    Mr. Buyer. Do you have working knowledge of the flaws that 
were discovered in the model back in 2005?
    Dr. Goldberg. I have some knowledge of the flaws. And in 
particular, I know the GAO and others have reported on the 
flaws, so you probably know as much or more than I do about 
that.
    Mr. Buyer. Well, I should say not the flaws on the model. 
It was really the flaws of the inputs into the model. There was 
no error in the model itself.
    Dr. Goldberg. One of the problems that we face, and it is 
the same in other agencies, it is the same in DoD, for example, 
I know a bit about the DoD budgeting process----
    Mr. Buyer. Well, hold on. Hold on. I do too.
    Dr. Goldberg. Okay.
    Mr. Buyer. I do not have a lot of time. So I just want to 
make sure that I have got the right witness. I was exhausted 
every year we would go through this process with the DoD and 
have to come in and do supplementals because of their health 
model. And so that is why back in 2005, we got into the VA 
model so I could better understand their inputs and then we 
discovered all of the stale data.
    Now, as I understand the shortfall back then, it was 
attributed to underestimated VA long-term care costs, greater 
than expected workload growth in priorities one through six, 
the OIF/OEF workload and expense, utilization of services by 
those already in the system, contract medical care to reduce 
the waiting list, energy costs, and CHAMPVA workload.
    Now, that was back in the 2005. I then asked the GAO to 
look into the VA's flawed budgeting process. Back on September 
20, 2006, these were the GAO findings: unrealistic assumptions, 
errors in estimates, insufficient data, and an unresponsive 
budget model.
    The GAO recommendations were do a better job of linking 
policy changes with their effects on their budgets, strengthen 
internal controls, improve budget calculations, and improve 
budget reporting to Congress.
    So my question to you, as you were formulating your work 
product for the Committee, do you have an opinion or a comment 
relative to the GAO's recommendations to the VA that, in fact, 
they are being carried out and you have better confidence today 
than what you had in 2005?
    Dr. Goldberg. In my professional opinion on that, I cannot 
certify that VA has done everything that GAO recommended, but 
my opinion is that VA has taken a lot of steps each year in 
each generation of the budget model to make it better. They are 
aware of the stale data problem. They have tried very hard to 
improve their methods. And I cannot certify they have done 
everything they should have, but I think they made a lot of 
steps.
    Mr. Buyer. I compliment your work product, Dr. Goldberg. 
You went right in on somebody else's study how they calculated 
lifetime costs for all amputations and you said, well, wait a 
minute, 14 percent of those are toes, fingers, things that 
would not require those types of costs.
    So you went into specific detail, but I have to come back 
to you because I have one item that I need some help with. At 
the very end of your report, on page 18, we are going to talk 
compensation and pension.
    Dr. Goldberg. Yes.
    Mr. Buyer. We focus on healthcare. I guess that is what 
gets all the attention. But when I look at one of the cost 
drivers, it is going to be compensation----
    Dr. Goldberg. Yes.
    Mr. Buyer [Continuing]. and the pension costs. Now, your 
counsel to us is that at the very end, you are saying CBO 
applied projections to the annual payments to people with 
varying disability ratings to estimate total cost for 
disability compensation.
    CBO assumed that approximately three times the number of 
claims associated with medical evacuations would eventually be 
made by a veteran who incurred service-connected conditions as 
a result of operations in Iraq and Afghanistan that are not 
severe enough to require medical evacuations from theater.
    So you are assuming then, even though they come out of that 
theater and are not as severe, you go ahead and plug in that 
through that lifetime, they will incur 40 percent. How do you 
get to that?
    Dr. Goldberg. What is the basis for that?
    Mr. Buyer. Yes. What is the basis for that?
    Dr. Goldberg. The basis for that is looking at previous 
conflicts and data we have gotten from the VA that a lot of 
folks who get disability ratings and who will get compensation 
or qualify for care at the VA hospitals were never actually 
wounded.
    They were never shot, but they come back and, for example, 
they have strained their back, their knee goes out. We know the 
conditions in Iraq are very intense, carrying very heavy 
backpacks and the heat, getting dehydrated. Some of these, as 
we mentioned in response to an earlier question, some of these 
are Reservists who are older, in their forties, fifties even, 
and you may never have been shot, but when you come back, you 
find that your health has deteriorated and you can legitimately 
apply for a VA disability and receive that disability rating.
    And so we project there will be more of those folks showing 
up than the ones who were actually reported as wounded in the 
theater.
    Mr. Buyer. Wow. That is a very large and alarming number.
    Can I ask one----
    Ms. Herseth Sandlin. Certainly.
    Mr. Buyer. You are saying that you do this and you are 
relying upon past wars?
    Dr. Goldberg. Yes. If you look at the number of folks who 
have been seen at the VA, Vietnam era, for example, and look at 
how many were actually wounded, there are a lot more people 
coming in now who were never wounded.
    For example, it was mentioned earlier by one of the 
Committee Members, I think it was by the Chairman, of the 
number of homeless people, many of whom are Vietnam veterans, 
and some of them were wounded and many of them were not and, 
yet, here they are.
    Mr. Buyer. All right. Well, thank you very much.
    We will be able to ask the VA in the next panel whether 
they are taking that into account in their prospective budgets.
    Thank you. I yield back.
    Ms. Herseth Sandlin. Thank you.
    Let me pick up from there. Ms. Belasco, you state on page 
four of your written testimony that CRS estimates do not, 
however, include any VA disability benefits for Iraq and 
Afghanistan veterans since CRS was not able to get figures from 
the VA.
    When did you request those figures from the VA and were you 
given any reasons for why this information was not provided?
    Ms. Belasco. Yes. I asked for the figures last week 
sometime and they told me that they do not have cost figures 
and that their figures for the number of disability, those who 
apply for disability benefits, which they did give me, includes 
both those who requested disability payments before they were 
deployed and those who requested disability payments benefits 
after they were deployed.
    So I asked them to give me the figures for only those who 
requested disability benefits after coming from a deployment 
because I figured if you wanted to capture just Iraq and 
Afghanistan veterans, you would only want someone who had been 
deployed. And they said they could not do it. I do not know 
why.
    Ms. Herseth Sandlin. We will follow-up with the witnesses 
on the second panel on some of those same questions.
    But then, Dr. Goldberg, do you, based on the questions 
posed by the Ranking Member and some of what you state in the 
last few pages of your report, did you get any information from 
the VA in making those projections?
    It sounds like you did, but it sounds like maybe one of the 
reasons you are plugging in making some of the projections you 
are making may not be based on some of the information you are 
getting from the VA.
    Let me start with, do you have the information from the VA 
that Ms. Belasco requested?
    Dr. Goldberg. We do not have that information directly from 
the VA. We have done our own projections. Now, part of the 
reason, of course, you might want to ask this question of the 
next panel, but part of the reason is I know it is the VA 
philosophy to treat what they call the whole veteran.
    And if a veteran has a disability rating, it could be the 
composite of many disabilities that add up to, say, a 70-
percent rating. And some of those disabilities may have been 
incurred in this conflict and some of them may have been 
incurred in the first Persian Gulf War and they do not make 
that distinction. They are treating the whole veteran.
    And so I find it entirely plausible that the VA does not 
separate out the disabilities by unique single periods of 
conflict.
    Ms. Herseth Sandlin. Okay. I think that is a good point. I 
also think we need to keep in mind when we are utilizing our 
experiences from past wars for the VA for your projections, for 
example, I know of a number of individuals who did not actually 
go to the VA to get a disability rating until 20 years after 
they were home and were diagnosed with PTSD.
    So I think we have some other complicating factors, but I 
appreciate your response. And we will pursue that with the 
second panel.
    One final question and, again, this may be more appropriate 
for the next panel as well, but I would be interested to get 
each of your perspectives based on the information you are 
getting either from DoD or VA.
    If we have active-duty servicemembers that are wounded, say 
traumatic brain injury, and they are getting treatment in a VA 
facility, say a polytrauma center, who is paying and when are 
they paying? Is it DoD and then DoD reimburses the VA? Is the 
VA paying up front and then gets reimbursed later? I mean, do 
you know how that is happening? Are costs being transferred and 
then who is accounting for what cost? Do you see what I am 
getting at?
    Dr. Goldberg. I understand the question. And I would have 
to tell you that my own knowledge of that is a little fuzzy and 
I would like to take that for the record and investigate it for 
you.
    [The information was requested from the VA witnesses, Dr. 
Kussman, Colonel Kearns, and Admiral Cooper, during their 
question and answer session of the hearing. The information has 
been provided for the record from VA.]
    Ms. Herseth Sandlin. Okay. Thank you, Dr. Goldberg.
    Ms. Belasco. As near as I understand it, the figures that I 
got reflect that DoD treatment costs are for those who are 
eligible for DoD treatment costs which means they would still 
be in the military. There may be some transitional periods when 
or maybe sharing of facilities like the Defense Veterans and 
Brain Injury Center which I believe receive funding from both 
DoD and VA. So those may be murky things.
    I would like to just very briefly say that, you know, one 
of the difficulties with doing budget stuff is budget and 
budgets and figures are sort of inherently heartless kinds of 
things. And as my husband warned me before I testified before 
today, he said stories trump numbers every time. And I can 
certainly understand that.
    I think the thing is with figures, what you are trying to 
get at is where to focus money, whereas sometimes people do not 
get care that they need because the processes make it very 
difficult and then it is a matter of dealing with, you know, 
how agencies operate and what the criteria are and all of those 
other things. And those are really not dollar figures.
    Mr. Buyer. Will the gentlelady yield?
    Ms. Herseth Sandlin. Mr. Buyer, yes.
    Mr. Buyer. I think your question is right on the mark. Just 
as you are sensitive about testifying relative about people and 
emotions and you put it in numbers, we also like a holistic 
approach, but we also understand our jurisdiction.
    So when that active-duty soldier ends up at the VA, it 
seems a little harsh that we have got to say, okay, who is 
going to pay and when do they pay. But that is our budgetary 
responsibility.
    And so you are hitting it right on the point and I think 
hopefully on our next panel, Dr. Kussman will be able to share 
some insight further. So thank you for your inquiries.
    Ms. Herseth Sandlin. Well, I thank the Ranking Member, and 
we will pursue that.
    Ms. Belasco, I thank you for your observations as well, and 
thank you both for coming this morning for your testimony.
    This does conclude the first panel. So I would like to ask 
the witnesses on the second panel to come forward. And as they 
make their way to the table, I would ask unanimous consent that 
all Members have five legislative days to revise and extend 
their remarks and that written statements be made part of the 
record. Hearing no objection, so ordered.
    Joining us from the Department of Veterans Affairs is Dr. 
Kussman, the Under Secretary for Health, and Admiral Cooper, 
who is the Under Secretary for Benefits.
    Gentlemen, welcome back to the Committee. Thank you both 
for being here today. You will each be given 10 minutes for 
your oral remarks and your written statement in its entirety 
will be included in the hearing record.
    So, Dr. Kussman, please proceed with your statement.

 STATEMENTS OF HON. MICHAEL J. KUSSMAN, M.D., MS, MACP, UNDER 
  SECRETARY FOR HEALTH, VETERANS HEALTH ADMINISTRATION, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY COLONEL W. PAUL 
  KEARNS, III, USA (RET.), CHIEF FINANCIAL OFFICER, VETERANS 
HEALTH ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; AND 
    HON. DANIEL L. COOPER, VADM (RET.), UNDER SECRETARY FOR 
BENEFITS, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
VETERANS AFFAIRS; ACCOMPANIED BY JIMMY NORRIS, CHIEF FINANCIAL 
 OFFICER, VETERANS BENEFITS ADMINISTRATION, U.S. DEPARTMENT OF 
                        VETERANS AFFAIRS

      STATEMENT OF HON. MICHAEL J. KUSSMAN, M.D., MS, MACP

    Dr. Kussman. Thank you, Ms. Chairman and Mr. Ranking Member 
and other Members of the Committee. It is a pleasure to be here 
today. And my testimony focuses on how the VA is meeting the 
needs of our newest generation of veterans.
    Since 2002, 751,273 OEF/OIF veterans who left active duty 
have become eligible for VA healthcare. Thirty-five percent or 
263,909 of the total separated veterans have come to the VA to 
obtain healthcare.
    VA is adapting and creating new services to meet the 
medical needs of the returning OEF/OIF veterans. A very visible 
example exists in our polytrauma system of care.
    In 2003, recognizing a need to address injuries caused by 
the improvised explosive devices led the initiative to adapt 
and change our already existing four traumatic brain injury 
lead centers into state-of-the-art polytrauma rehabilitation 
centers.
    These centers provide acute medical and rehabilitation care 
to veterans suffering from severe TBI and one or more major 
traumatic injury such as amputations of a limb or blindness.
    In addition, we have created a polytrauma system of care 
that provides a continuum of care when these heroes are able to 
move from the acute care to less intensive levels of care. 
These are located throughout the VA's 21 networks, one in each 
VISN. The polytrauma system provides three levels of care for 
acute to less intensive outpatient care.
    To give this Committee a sense of the magnitude of the 
severe injuries in the OEF/OIF population, there have been 681 
patients with amputations and 110 patients with spinal cord 
injuries. VA has accepted 436 transfers from military treatment 
facilities to our polytrauma centers.
    The Secretary of Veterans Affairs recently announced a 
decision to locate a fifth polytrauma center in San 
Antonio,Texas.
    There are mild to moderate forms of TBI that exist as well 
outside the polytrauma centers. VHA now screens all returning 
veterans seeking care at VHA facilities for symptoms of TBI. 
Veterans who screen positive are referred to a specialist for a 
complete and in-depth neurocognitive assessment.
    We have developed a thorough training program on screening 
and follow-up evaluation for all our providers. VHA has 
developed new programs to provide transition assistance and 
case management for OEF/OIF veterans.
    In 2007, the VHA this year hired a hundred transition 
patient advocates (TPAs). These TPAs serve as veteran advocates 
when severely injured veterans transition to the VA from the 
military treatment facility. These specialized case managers 
are located in VA medical centers. Annually, VA distributes 
approximately $19 million among the networks to cover these TPA 
services.
    Vet Centers provide veterans and their families 
professional readjustment counseling. From fiscal year 2003 
through the end of the third quarter of fiscal year 2007, the 
Veterans Centers provided services to 183,030 veterans in their 
outreach program and clinical services to 58,504 veterans.
    During the same period, more than 1,570 family members have 
been referred to the Vet Centers for bereavement counseling.
    Moreover, starting in 2003, the Vet Centers recruited the 
first 50 of the total of 100 Global War on Terror veteran 
outreach specialists to conduct a focused outreach campaign to 
their fellow veterans returning from OEF/OIF. The second 50 
GWOT outreach specialists were hired in 2005. The associated 
recruitment costs for the 100 GWOT veterans was approximately 
$5 million.
    In February 2007, the VA announced plans to increase the 
number of Vet Centers from 209 to 232 and to augment the staff 
at its 61 existing vet centers. The expansions will be 
completed in 2008 and will increase the Vet Centers program 
annual recurring budget by approximately $14 million.
    Of the OEF/OIF veterans who sought care from the VA, about 
38 percent have received at least a preliminary diagnosis of a 
mental health condition and 18 percent have received a 
preliminary diagnosis for PTSD making it the most common but by 
no means the only mental health condition related to the stress 
of deployment.
    To meet the specific mental health needs of these returning 
veterans, VHA has developed new and enhanced existing mental 
health programs and services. General and psycho-geriatric 
mental health services are also being integrated into the 
primary care clinics.
    We have also initiated an aggressive recruiting campaign 
with the goal of hiring over 4,000 new mental health providers. 
So far, we have successfully hired approximately 3,600 of that 
goal.
    In late July of this year, VHA implemented a national toll-
free suicide prevention hotline housed at the Canandaigua, New 
York, VA Medical Center. The call center is integrated with the 
VA's mental health services through suicide prevention 
coordinators at each medical center.
    Care initiated through the hotline is handed off to the 
coordinators who work with the patients to help them engage in 
mental healthcare or if they are already in treatment, to 
address any problems with their care.
    The cost of mental health services and programs 
specifically dedicated to OEF/OIF veterans has increased 
fourfold from fiscal year 2005 to fiscal year 2007. Presently 
OEF/OIF veterans represent approximately ten percent of all 
veterans with a mental health diagnosis and, therefore, the 
cost of their mental healthcare can be estimated at ten percent 
of the over $3 billion of expenditures in this area.
    Ms. Chairman, this concludes my statement. Thank you very 
much.
    [The prepared statement of Dr. Kussman appears on pg. 62.]
    Ms. Herseth Sandlin. Thank you, Dr. Kussman.
    Admiral Cooper, please proceed whenever you are ready.

        STATEMENT OF HON. DANIEL L. COOPER, VADM (RET.)

    Admiral Cooper. Madam Chairman, Members of the Committee, I 
appreciate the chance to be here today to describe the budget 
formulation process used to project the long-term costs of our 
Veterans Disability Compensation Program.
    I am accompanied by Mr. Jimmy Norris, Chief Financial 
Officer for VBA. VBA is responsible for administering a wide 
range of benefits and services for veterans, their families, 
and their survivors. At the heart of our mission is the 
Disability Compensation Program. It provides monthly benefits 
to veterans who are disabled as a result of injuries or 
illnesses incurred or aggravated during their military service.
    Today, there are over 2.8 million veterans of all periods 
of service receiving VA compensation benefits. This is a net 
increase of more than 500,000 veterans since the year 2000. In 
2007, these veterans were paid $29 billion in compensation 
benefits.
    To predict the changing trends in veterans' compensation 
benefits payments, VBA developed a benefits project forecasting 
model. The model uses a combination of historical data, current 
experience, and workload and performance projections. This 
model was developed in 2004 in conjunction with OMB, CBO, VA's 
Office of the Actuary, and other internal VA offices.
    The basis for projecting both the total caseload and the 
average amount of benefits to be paid for the next 10 years is 
the detailed historical data which we have accumulated. Our 
model incorporates specific data for approximately 99 percent 
of the beneficiaries dating back to 1992.
    By comparing data from 1 year to the next, we are able to 
recognize developing changes in our recurring caseload and to 
predict trends for both accessions and terminations.
    To forecast obligations, we must also estimate the average 
dollar amount for benefits that will be paid to each 
beneficiary. The average degree of disability for these 
beneficiaries increased 26 percent over the last 10 years from 
30.9 percent in 1996 to 38.9 percent at the end of 2006. That 
is the average for the individual veteran on our books. And 
then there are the concomitant increases in average benefit 
payments as a result of that.
    Projections of incoming claims are one of the keys in the 
formulation of our mandatory budget request. Disability claims 
from veterans from all periods of service increased from 
578,000 claims in 2000 to 838,000 incoming claims in 2007.
    It should be realized that resubmitted claims for increased 
benefits from veterans who are already on our books continue at 
about 54 percent of our total claims volume.
    The budget model analyzes changes to individual benefit 
payments. This method has been determined to be reliable for 
projecting total compensation costs. However, it does not 
provide long-term cost projections for veterans of a specific 
era or conflict.
    As a result of VA and DoD's current efforts to enhance data 
sharing, we now have a means to identify GWOT, that is OIF/OEF 
combat veterans, and are able to begin to analyze their usage. 
This latest match identified 223,000 veterans who have filed 
claims for disability benefits either prior to or following 
their deployment. That represents approximately 30 percent of 
the OIF/OEF veterans separated through May 2007.
    Of these claims, that is the 30 percent of the veterans who 
have filed claims, 89 percent have received decisions on their 
claims. Of those veterans who have received decisions, 91 
percent have been awarded service connection for at least one 
of the issues that they designated on their claim.
    Projecting future demand and long-term costs for the OIF/
OEF conflict remains extremely difficult for a number of 
reasons. First, many of those veterans served in earlier 
periods and their injuries or illnesses could have incurred 
either prior to or subsequent to their present deployment. We 
are unable to identify which OIF/OEF veterans filed a claim for 
disabilities only during their actual overseas recent 
deployment.
    Second, we have significantly expanded our outreach to 
separating servicemembers. Over the last 5 years, we conducted 
over 38,000 briefings attended by 1.5 million active-duty and 
Reserve personnel.
    Additionally, through the Benefits Delivery at Discharge 
Program, servicemembers are encouraged to file and are assisted 
in filing for disability claims prior to their separation and 
that allows them to start their compensation payments earlier. 
Many servicemembers with disabilities are submitting disability 
claims earlier than they have historically.
    And, third, VBA lacks historical data for claims activity 
by veterans of prior wars on which to base projections of 
benefits usage for the OIF and the present war. The only data 
available that we have are numbers and percentages of veterans 
currently receiving benefits separated by the era of their 
service.
    We continue to add veterans to our compensation rolls many 
years after their service. Many of these are the result of 
additional conditions presumed to be related to service in 
Vietnam.
    PTSD claims have also increased dramatically for Vietnam 
veterans. We have no basis for determining if service in Iraq 
and Afghanistan will result in similar claims patterns.
    Madam Chairman, this concludes my statement. I will be 
happy to answer all questions.
    [The prepared statement of Admiral Cooper appears on pg. 
64.]
    Ms. Herseth Sandlin. Admiral, thank you very much.
    I would now like to recognize Mr. Brown for 5 minutes if he 
has questions.
    Mr. Brown of South Carolina. Thank you very much, Madam 
Chair.
    I certainly appreciate the service of both of you gentlemen 
and for your testimony today and for your insight in looking 
out for our warriors that have come back with some terrible, 
terrible inflictions of injuries.
    And I do not have any questions. I just want to thank you 
for coming and being part of this discussion.
    Dr. Kussman. Thank you.
    Admiral Cooper. Thank you, sir.
    Ms. Herseth Sandlin. Mr. Michaud, you are recognized.
    Mr. Michaud. Thank you very much, Madam Chair.
    One of my biggest concerns is to ensure that we have 
adequate, safe, and quality healthcare for veterans who reside 
in rural areas. And as you know, about 40 percent of the 
returning veterans are from rural areas.
    In your testimony, you state that the VA continues to 
promote the recruitment and retention of mental health 
professionals. Could you elaborate specifically on new 
recruitment efforts in rural areas on mental health professions 
and what difficulties do you foresee VHA experiencing in 
recruitment in rural areas?
    Dr. Kussman. Thank you for the question.
    If you would not mind, I just want to introduce Retired 
Colonel Kearns who is the Chief Financial Officer (CFO) for 
VHA. I neglected to introduce him and I apologize. So do not 
hold it against me.
    To specifically answer your question, obviously services 
across the board including mental health are very important to 
us in rural health. And as you know, we have set up an office. 
We are recruiting a Director for that.
    Our effort is to push community-based outpatient clinics as 
far forward as we can to put them into where the veterans live. 
But as you alluded to, sir, that there have been challenges 
that the infrastructure in many rural areas really does not 
exist whether it is the VA or in the civilian community, 
particularly in mental health.
    And there are challenges hiring people or getting them to 
come or stay in the rural areas and we are trying very hard to 
push that service as far forward to where the veterans live. We 
have at all our Community Based Outpatient Clinics either 
mental health people or contracts with local people to provide 
the services where they are, but that is a continuing challenge 
for us.
    Mr. Michaud. Without objection, since we just got called 
for votes, Madam Chair, I would ask permission to submit my 
additional questions for the record.
    [The post hearing questions for the record for VA from Mr. 
Michaud appear on pg. 72.]
    Ms. Herseth Sandlin. Okay. Thank you, Mr. Michaud.
    We do have votes. I believe we are trying to clarify. I 
think that we may have three votes, one 15-minute followed by 
two 5-minute votes. So we do have some additional time before 
we need to head over. I know it may be hard for some of the 
other Members to come back. I would encourage them to do so if 
they can.
    But, Mr. Boozman, I think we can get to you and maybe one 
other Member before we head down.
    Mr. Boozman. I will pass in the interest of time, Madam 
Chair.
    Ms. Herseth Sandlin. Okay.
    Mr. Boozman. Thank you all.
    Ms. Herseth Sandlin. Mr. Mitchell?
    Mr. Mitchell. Thank you, Madam Chair.
    I just have a couple questions of Admiral Cooper. One, you 
mentioned in trying to figure out the model for which you are 
going to base all of these benefits on was the VA's Office of 
the Actuary. What does that office do?
    Admiral Cooper. Well, basically that will tell us the time 
line for a person's lifetime. So as you try to project out, you 
try to project how long you will be paying those individuals 
for the disabilities they have.
    What we have seen in our pension program is that people are 
leaving the program faster than they are coming in. But, the 
situation in compensation is that we are now, increasingly 
getting people. There are more being added to the rolls than 
those from World War II or previous eras who are dying.
    Mr. Mitchell. So this office is not looking at future 
veterans, but only those that are in the program already?
    Admiral Cooper. Those in the program, yes, sir.
    Mr. Mitchell. We had a hearing yesterday on the 
discrepancies for benefits State-by-State. And one of the 
things I see on page four of your testimony, you mentioned that 
54 percent of the total claims volume was based on those who 
resubmitted their claims. Is there a way that you can cut this 
down?
    One of the things that was brought out yesterday in the 
hearing that we had was that those veterans who are represented 
by counsel do much better than those who try to do it on their 
own. And I would think that when you resubmit and 54 percent of 
the claims are based on resubmittals that this is really a lot 
of duplication and that there could be some real improvement in 
this area.
    Admiral Cooper. There are several factors. One factor is 
these gentlemen and ladies are getting older. And as they get 
older, there are some diseases, diabetes is a primary one, that 
cause other conditions and more and more things happen to you. 
You can come back in with a claim for increased benefits and we 
would determine the degree of disability that you have as a 
result. That should, in fact, increase the compensation. That 
is one thing.
    Secondly, some conditions are presumed to be related to 
exposure to Agent Orange in Vietnam. And about 5 years ago, 
type two diabetes became a presumptive and so that represents a 
large increase.
    But it is a fact that people do get worse, whether they 
have a bad knee and it gets worse as it goes. And there is no 
time limit on a person filing a claim. We occasionally have 
claims from people who would be considered quite elderly.
    Mr. Mitchell. Just as an example real quickly, I know we 
have to go, but yesterday's testimony, there was a gentleman 
who contracted Hepatitis C and he tied that into an injection 
he got.
    Another person came along with Hepatitis C and he filed a 
claim for benefits believing that it was because he had some 
surgery and they used a blood transfusion. Well, they found 
that that was not the case, but he did have Hepatitis C as a 
result and he had to refile because in the initial filings, 
they did not include all the possibilities.
    But I understand as people get older, they get different 
diseases, but it seems to me that the proof has been shown that 
if you are represented by counsel, you have a much better 
chance of getting your----
    Admiral Cooper. You do because the VSO or counsel--and we 
have lots of veterans service organizations who do this--helps 
the veteran look at the record to understand what disabilities 
might be there. Now, we may find that they are not valid, but 
the VSO helps the veteran to identify those for which he should 
be compensated.
    He helps if a veteran comes in and we determine that we 
will accept two but not all four of the disabilities claimed. 
Then, the VSO will look and will say, well, wait a minute, you 
can appeal. So the VSOs understand. They have gone through it.
    The veteran maybe never has gone through this and so it is 
brand new. It is a difficult system and that is the reason it 
takes this long to process a claim. You have to understand a 
lot of different things about the rating schedule.
    Mr. Mitchell. Well, just one last thing. I would think it 
would really be a way to cut the cost and time by looking at 
how you can take care of those resubmittals. Fifty-four percent 
is a big number.
    Admiral Cooper. The ``Veterans Claims Assistance Act,'' 
passed about six years ago, requires that, when we do get a 
claim from you, for instance, and you only list a couple 
things, we still are required to go through that record to see 
if there are other things that we might cite.
    And, again, that is one of those things that lengthens the 
time to do it, but it requires that we look at your record and 
determine if there are valid issues that we should at least 
consider.
    Mr. Mitchell. Thank you.
    One last thing I just thought. I would hope that you would 
look at the testimony given yesterday as to the discrepancies 
State-by-State. There were huge discrepancies on the benefits.
    Admiral Cooper. Let me assure that I am very aware of that 
whole problem. Part of the discrepancy is the percentage of 
veterans of each State who file claims. If you look at the 
average across the United States, about 11 percent of the 
veterans per State come in with a claim. But in the low States, 
it will be in the single figures, 7 percent, 8 percent, and 
that makes a big difference.
    Ms. Herseth Sandlin. Admiral, I am going to interject. I 
thank Mr. Mitchell for his line of questioning and we will 
continue to work on this issue.
    I know Mr. Hall has some questions. He has been kind enough 
to submit those for the record and we will get those to you in 
writing.
    And the Ranking Member and I are going to share the next 5 
minutes, but we will have other questions that we will also 
submit. But as I am sure you can anticipate, there are a couple 
of areas we want to pursue just briefly based on some of the 
questions we posed to the first panel.
    So let me start on this issue of active-duty servicemembers 
being treated in a VA facility and the VA having the authority 
to do that. But, again, the reimbursement by the DoD, is there 
a memorandum of understanding (MOU)? What is the current 
estimate of the DoD pending reimbursement balance for VA's 
treatment of active-duty servicemembers? Dr. Kussman, could you 
shed some light on that?
    Dr. Kussman. Yes. Thank you.
    We have an understanding. A lot of times, somebody will 
come to us before they get their DD-214. They are not really a 
veteran. They are still on active duty. And TRICARE reimburses 
us for that care on an agreement that we have with DoD.
    Ms. Herseth Sandlin. In a timely way?
    Dr. Kussman. I have not recently heard any real complaints 
about that, but I cannot swear to you what the timeframe is. 
But we do get reimbursed.
    Ms. Herseth Sandlin. Okay. If you could check on that----
    Dr. Kussman. Sure.
    Ms. Herseth Sandlin [Continuing]. And get us the 
information if there have been any delays in payment. And what 
was the date that the MOU was negotiated?
    Dr. Kussman. I would have to get that for you. It has been 
going on for a number of years with them. When they get their 
DD-214----
    Ms. Herseth Sandlin. Even prior to OIF and OEF, was there 
an MOU?
    Dr. Kussman. I believe that they----
    Ms. Herseth Sandlin. Okay.
    Dr. Kussman [Continuing]. Reimbursed us regularly for that 
when we did it. But once they transition and get their DD-214, 
then they have options. As you know, they can use their TRICARE 
benefit and go some place else or use the VA, but we would not 
bill DoD anymore when they have transitioned to being a 
veteran.
    Ms. Herseth Sandlin. Well, how are the active-duty episodes 
of care tracked, in terms of billing DoD, in terms of getting 
the reimbursement from TRICARE? Is there a way in which the VA 
is tracking that care?
    Dr. Kussman. Well, there are local sharing agreements that 
are done facility by facility with the TRICARE entity in the 
region of the country. And so I am not sure if we track it 
nationally, but we can try to get that information for you.
    Ms. Herseth Sandlin. Please do because that raises some 
concerns for me because, for example, in my region of the 
country, we do not have as many TRICARE providers. So I want to 
make sure that we do not have delays in reimbursement in 
certain regions versus other regions.
    Mr. Buyer.
    Mr. Buyer. The Chairwoman is asking great questions.
    When you view the patient in your holistic manner, do you 
also view the reimbursement as a Federal dollar that is 
fungible?
    Dr. Kussman. We look at the full patient and do whatever we 
think is right clinically and do not worry about who is paying 
for it.
    Mr. Buyer. Okay. Right answer.
    Second question, though, is, now let us worry about who is 
paying for it. Okay? Now let us put on the business hat. That 
is what we are having to do in this hearing.
    So now with regard to the CFO over here and you have to get 
your reimbursements, we want to know how is DoD doing as a bill 
payer to the VA and/or do you ever write that off?
    Colonel Kearns. To my knowledge, we do not write it off, 
sir. I will have to get for the record the timeliness. We have 
it going both ways.
    [The following were all related to the questions on DoD 
reimbursement for VA-provided care:]

    Question 1: What is the timeframe for payments from DoD 
(TRICARE)? Are DoD (TRICARE) payments ever delayed?

    Response: TRICARE contractors are required to process 95 
percent of claims within 30 days from date of receipt. One 
hundred percent of claims are required to be processed within 
60 days of receipt. The TRICARE Management Activity (TMA) 
government performance assessment staff track these 
requirements monthly. VA has not received reports of systemic 
problems in receiving payment.
    TMA reports that since April 2005 TriWest, the TRICARE 
contractor for western United States (including South Dakota), 
has consistently processed over 99 percent of retained claims 
in 30 days, and 100 percent within 60 days. TriWest has also 
consistently met the standard for processing of 100 percent of 
``excluded'' claims within 120 days. ``Excluded'' claims are 
those in which the contractor needs some additional information 
for processing, and represent significantly less than one 
percent of total volume.

    Question 2: What is the mechanism for tracking and billing 
DoD (TRICARE) for VA care for service members--is it done 
nationally? Is there a way VA is tracking care?

    Response: VA uses its VistA billing software to process and 
submit claims for care provided to service members. TRICARE's 
Managed Care Support Contractors (MCSCs) are required to 
process 95 percent of VA claims within 30 days from date of 
receipt and a hundred percent of these VA claims within 60 days 
of receipt. The TRICARE Management Activity (TMA) government 
performance assessment staff track these requirements on a 
monthly basis. National VA Reimbursable Earnings reports are 
available that break out DoD/Sharing and TRICARE 
reimbursements.

    Question 3: Provide details on arrangements (MOU's et 
cetera) for DoD (TRICARE) reimbursement. What was the date the 
MOU was negotiated?

    Response: There are two sets of broad agreements which 
cover VA DoD/TRICARE arrangements:

     LVA and DoD signed a Memorandum of Understanding 
(MOU) in 1995, which established broad policies. These policies 
were included in the TRICARE Policy Manual. It is currently 
being updated
     LVA approved ``boilerplate'' agreements with the 
three TRICARE MCSCs. These agreements cover procedures for VA 
Medical Centers to provide services to TRICARE beneficiaries. 
VA Medical Centers use these agreements as the basis for 
providing services. All but six VA Medical Centers have signed 
these agreements

    Mr. Buyer. Are these transfers directly from TRICARE 
contractors or does it come from DoD health affairs?
    Colonel Kearns. It would be a combination and it is very 
often done locally based on the agreements that we have 
locally.
    Mr. Buyer. All right. So we have got an individual 
transferred from Landstuhl to a polytrauma center. When does it 
kick in for the VA? As soon as the plane lands and the medical 
team hands off? When does the TRICARE reimbursement begin for 
us?
    Dr. Kussman. Sir, generally speaking, they would go to 
Landstuhl to a military treatment facility and then transition 
to us.
    Mr. Buyer. Right.
    Dr. Kussman. But that transfer takes place when the person 
is transferred and then they are in the VA facility. Then if 
they are already a veteran and they have been discharged, we 
pay for it. If they are still on active duty, then the military 
health system pays for it.
    But there are two ways of TRICARE and I would have to go 
back. I do not want to give you the wrong information. But it 
can be through the contractor or directly if there is a sharing 
agreement with the facility.
    Mr. Buyer. All right. We will have follow-up questions for 
the record in detail with regard to this.
    The only other question I have is, what was your carry-over 
figure for VHA healthcare for fiscal year 2007 to 2008?
    Dr. Kussman. The only reason I was hesitating, as you know, 
we got a significant supplement in 2007. And so without the 
supplement, the carryover was $498 million. But the total 
carry-over is larger than that because of the supplement that 
we got. And it is around $830 million.
    Mr. Buyer. All right. And, Admiral Cooper, I will send a 
question to you, if you could explain the difference between 
the last sentence of your testimony and the last paragraph of 
CBO's testimony. They do say that there is a baseline based on 
previous wars. You say there is no basis. So I will give you a 
written question if you could explain that for the record. 
Thank you, Admiral.
    Admiral Cooper. Yes, sir.
    [The information from VBA follows:]

    Question: Explain the difference between the last sentence 
of Admiral Cooper's testimony and the last paragraph of the 
CBO's testimony. CBO says that there is a baseline based on 
previous wars. Admiral Cooper stated there is no basis.

    Response: We believe the question refers to the following 
excerpts:
    CBO's Testimony: CBO has more recently constructed long-
term scenarios in which the United States maintains a military 
presence of about 55,000 troops in Iraq, similar to the level 
of U.S. forces in the Republic of Korea and the Northeast Asia 
region; see Congressional Budget Office, The Possible Costs to 
the United States of Maintaining a Long-Term Military Presence 
in Iraq (September 2007). However, the current testimony, which 
focuses on the next 10 years, does not provide projections of 
VA's costs under those alternative long-term scenarios.
    Admiral Cooper's Testimony: VBA lacks historical data on 
benefits claims activity by veterans of prior wars or conflicts 
on which to base projections of benefits usage for OIF/OEF 
veterans. VBA does not have data to show how many veterans of 
prior wars or conflicts ever filed claims or received benefits 
specifically due to service in combat theatres. The only 
comparative data available are the numbers and percentages of 
veterans currently receiving benefits by era of service (e.g. 
World War II Era or Vietnam Era). First-time claimants continue 
to be added to our compensation rolls many years after military 
service, primarily as a result of diseases added to the list of 
conditions presumed to be related to exposure to Agent Orange 
while serving in Vietnam and post-traumatic stress disorder. We 
do not have a basis for determining whether service in Iraq and 
Afghanistan will result in similar claims patterns.

    Response: The above paragraph from the CBO's testimony 
indicated that scenarios were constructed in which the United 
States maintained a military presence of about 55,000 troops in 
Iraq, similar to the historical troop levels maintained in the 
Republic of Korea and the Northeast Asia region. On page 12 of 
the CBO's testimony, additional information was provided about 
the assumptions made projecting VA disability compensations 
costs related to operations in Iraq and Afghanistan. The 
testimony states that the number and VA disability ratings of 
service members who were injured in and evacuated from Iraq and 
Afghanistan and who later separated from the military were used 
in developing the projected costs. CBO applied projections of 
annual payments to people with varying disability ratings to 
estimate total costs for disability compensation. In addition, 
CBO assumed that approximately three times the number of claims 
associated with medical evacuation would eventually be made by 
veterans who incur service-connected conditions as a result of 
operations in Iraq and Afghanistan that are not severe enough 
to require medical evacuation from the theater. CBO assumed 
that those additional veterans would, on average, receive a 40 
percent disability rating.
    The CBO used historical troop levels in developing 
projections of force levels, to which various assumptions about 
benefits usage were applied. In developing these scenarios, it 
does not appear that the CBO was stating that there is a 
baseline based on prior wars. We therefore do not believe that 
the CBO testimony is in conflict with the testimony of Admiral 
Cooper, which states that we do not have baseline historical 
data to show how many veterans of prior wars or conflicts ever 
filed claims or received disability benefits specifically due 
to service in combat theatres.

    Mr. Buyer. Thank you to both of you.
    I yield back.
    Ms. Herseth Sandlin. Thank you, Mr. Buyer. And we are going 
to hustle down and vote.
    But is the $498 million carryover, is that the two-year 
money?
    Colonel Kearns. Most of it is no year money, ma'am. And we 
had a total of $498 million plus $830 million from the 
supplemental.
    Ms. Herseth Sandlin. Okay. Thank you.
    Colonel Kearns. And the $498 million regular was the lowest 
we have had in the last 8 years.
    Ms. Herseth Sandlin. Okay. Thank you again.
    Sorry. They will hold the vote open a little while, but not 
necessarily that long, so I am going to try to go with the 
Ranking Member so that we are both in the same boat.
    So, again, thank you, Dr. Kussman, Admiral Cooper. Thank 
you both. And we will look forward to following up with you.
    The hearing is now adjourned.
    [Whereupon, at 12:01 p.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement By Hon. Bob Filner, Chairman,
     and a Representative in Congress from the State of California
    The Committee on Veterans' Affairs will come to order. I would like 
to thank the Members of the Committee, our witnesses, and all those in 
the audience for being here today.
    On October 7, 2001, almost exactly six years ago, we commenced 
military operations in Afghanistan, and this coming March will be the 
four year anniversary of the start of Operation Iraqi Freedom.
    1.6 million servicemembers have been deployed. According to the 
Defense Manpower Data Center, as of Saturday, 4,261 have died and 
29,958 have been wounded. Sadly, these numbers increase nearly every 
day.
    According to the Congressional Budget Office, nearly half of those 
deployed have separated from the active component or have become 
eligible for VA care as reservists. One-third of these have sought VA 
medical care since 2002.
    As the VA is facing increased demand from an aging veterans' 
population, it must also meet the challenges of caring for 
servicemembers returning from Iraq and Afghanistan.
    In VA's budget submission for FY 2008, it estimated that it will 
treat 5.8 million veterans out of an enrolled population of 7.9 
million. There are approximately 24 million veterans alive today. VA 
estimated that it will treat 263,345 OEF/OIF patients.
    We are concerned with the extent of post-traumatic stress disorder 
(PTSD) and traumatic brain injuries among our returning servicemembers. 
We are concerned over the ability to treat these veterans in the coming 
years while not forgetting the needs of veterans from previous 
conflicts.
    We wish to learn not only what these costs might be, but what the 
VA is doing--planning-wise--to meet all the challenges it faces not 
only today, but in the coming years.
    We are also faced with a crisis when it comes to disability claims, 
with a backlog of claims that numbers more than 400,000. We must 
address this crisis not only for our returning servicemembers, but for 
all of our veterans who are seeking benefits and having to wait longer 
and longer for a decision.
    CRS estimates that we have provided over $600 billion so far for 
Iraq, Afghanistan, and other costs associated with the War on Terror, a 
figure that equals 90 percent of what we spent in Vietnam over a 12-
year period and double the cost of the Korean War. CBO estimates that 
it may cost $7 to $9 billion over the next decade to provide health 
care for our returning servicemembers, and roughly $3 to $4 billion for 
disability compensation and survivors' benefits.
    Our hearing today will explore the costs we have incurred so far, 
and begin the process of exploring the costs we may face in the future. 
We also look to the VA to provide us with the estimates they have made, 
and, more importantly, what extra steps they are taking today, if any, 
to meet the needs of our returning servicemembers in terms of 
infrastructure, staffing, and the provision of health care and benefits 
over the coming years.
    We look forward to an informative hearing, and a frank exchange. We 
wish to thank Mr. Goldberg and Ms. Belasco on our first panel for 
coming before us today to provide us with the background we need to 
begin this discussion, and we thank Dr. Kussman and Admiral Cooper for 
joining us to give us the VA's perspective on this important topic.
    I believe that once we know the costs we must incur to care for our 
veterans, that this Congress, and the American people, will gladly bear 
the burden.
    No matter where we stand on the war in Iraq, we all stand together 
in our desire to make sure that our returning servicemembers get the 
health care they need, and the benefits they have earned. We cannot 
fund the war, but fail to fund the warriors.
                                 

      
Prepared Statement By Hon. Steve Buyer, Ranking Repubican Member, and a 
          Representative in Congress from the State of Indiana
    Thank you Mr. Chairman,
    The British philosopher and political theorist John Stuart Mill 
once wrote:
    ``War is an ugly thing, not the ugliest of things, the decayed and 
degraded state of moral and patriotic feeling which thinks that nothing 
is worth war, is much worse. A man who has nothing for which he is 
willing to fight, nothing he cares about more than his own personal 
safety is a miserable creature who has no chance of being free, unless 
made and kept so by the exertions of better men than himself.''
    We are here today to discuss the cost of taking care of those 
``better men.'' In the current environment, some become lost in the 
heated political rhetoric and complexities of the war in Iraq and 
Afghanistan, thereby emotionally using veterans' issues to pull people 
into the trap of just simply feeling sorry for the men and women who 
fight.
    For many, this is easier than understanding their military duties 
and the realities of soldier's lives after they return home.
    To my colleagues I would say our men and women in uniform who fight 
are not victims of the current conflict. Each and every one of them is 
a volunteer who swore an oath to defend this country. As one Army 
officer stated recently ``I'm a warrior. It's my job to fight.'' This 
is the statement of a hero--not a victim. As we look to take care of 
our returning military personnel, we need to admire and respect them 
for who they are and what they have done--not treat them like a victim 
class who require our pity.
    Our duty here today is to explore the costs and the options for 
taking care of these heroes.
    At the end of the day, that is the primary, bipartisan mission of 
this Committee. It has always been so. In 2005 during my chairmanship, 
we discovered at significant budget shortfall at the VA and rapidly 
moved to eliminate that shortfall. This year, our current chairman 
worked to increase VA discretionary spending. Today, however, that 
funding in the VA-MILCON Appropriations Bill is being held up for 
partisan purposes and used as leverage to pass other appropriations 
bills. Seventeen days past the fiscal New Year, I would urge the 
Chairman and his colleagues to rapidly move to pass the VA-MILCON 
Appropriations bill in an expeditious manner so that our veterans can 
get the funding they need for FY 2008--Republicans have appointed 
conferees.
    Today, we have a new challenge before us. The current compensation 
and disability system needs to be reformed. This is the message we've 
heard from our veterans and confirmed by the findings of the Dole-
Shalala Commission and the Disability Commission. These reforms cannot 
wait. Yesterday, the White House officially submitted their 
recommendations to the Congress. It is out turn to act.
    The House and Senate Armed Services Committees are prepared to act 
and have many parts incorporated in the Wounded Warriors provisions of 
the bill. In CQ Today, it states, Mr. Chairman, you intend to do it 
next year in a separate bill. Please explain?
    In war, pacifism and defeatism have never been American values. 
Neither should we give in to defeat and sit passively by in the face of 
the challenge before us. Mr. Chairman, I urge you and all my colleagues 
to move ahead with reforming the compensation and disability system 
this year and not wait until next year. The ``better men'' and women 
among us deserve no less.
    Thank you, I yield back.

                                 
Prepared Statement By Hon. Stephanie Herseth Sandlin, a Representative 
               in Congress from the State of South Dakota
    Thank you to everyone for being here. I congratulate Chairman 
Filner and Ranking Member Buyer for holding today's hearing to examine 
the long-term costs of the current conflicts in Iraq and Afghanistan.
    Now, as the wars in Iraq and Afghanistan are producing a new 
generation of sick and wounded veterans, it is important that Congress 
evaluate what has been provided thus far to care for the servicemembers 
of Operation Iraqi Freedom and Operation Enduring Freedom. We must also 
evaluate the future costs that will be incurred when these 
servicemembers return home and seek care and benefits from the 
Department of Veterans Affairs.
    All too often, we consider the cost of the war, but ignore the cost 
of caring for the warrior. Congress has a responsibility to shine a 
light on the long-term costs of these conflicts, so that in future 
years, when the wars are over, we are prepared and committed to ensure 
the brave men and women who each day endure the cost of freedom are not 
left behind.
    I am pleased that we have the opportunity to hear from today's 
panelists and am grateful to have the opportunity to hear their 
suggestions and answers to the critical issues involved. I look forward 
to hearing their testimonies.
    Again, I want to thank everyone for taking the time to be here and 
discuss these important matters.

                                 
   Prepared Statement By Hon. Harry E. Mitchell, a Representative in 
                   Congress from the State of Arizona
    Thank you Mr. Chairman.
    I appreciate you calling this hearing today.
    When I was elected to Congress last November, my fellow Arizonans 
told me that we need to start watching our spending in Washington.
    One of the biggest expenses we have today is the war in Iraq. But 
even when the conflict comes to an end, we will continue to have a 
financial commitment. We will continue to have an obligation to provide 
the best care possible for to those that served so bravely.
    We took a big step earlier this year by passing a VA appropriations 
bill which made the single-largest investment in veterans' health care 
in the 77-year history of the agency.
    I think we can all agree that more needs to be done.
    This war has not been like others in the past. Advancements in 
field medicine and body armor have saved thousands of lives. However, 
new weapons, like IEDs, have inundated the VA with disabilities like 
Traumatic Brain Injury and Post Traumatic Stress Disorder.
    At last count, nearly 30,000 servicemen and women have been wounded 
in action, and the VA has estimated that it will treat more than 
260,000 veterans of this war in the years to come.
    Yesterday, the Subcommittee on Oversight and Investigation held a 
hearing on disability claims disparities. In this hearing, we learned 
how the VA is not prepared to handle disability ratings, especially 
related to PTSD.
    Improving this system will cost more time and more money, but these 
expenses are necessary to ensure that all veterans, regardless of age 
and period of service, receive the best and most fair disability 
benefits.
    I believe that if we are willing to spend 12 billion dollars a 
month on war, we ought to be able to provide the highest level of 
assistance to those who fought and suffered.
    I am looking forward to hearing from our distinguished panelists on 
how we can do this, and I yield back.

                                 
   Prepared Statement By Hon. Ginny Brown-Waite, a Representative in 
                   Congress from the State of Florida
    Thank you Mr. Chairman.
    I want to thank you for testifying before this Committee today.
    The Veterans' Disability Benefits Commission was established by the 
National Defense Authorization Act of 2004, to consider the 
appropriateness of benefits and services administered by the Department 
of Veterans Affairs and the Department of Defense. Through its hard 
work, the Commission has compiled 113 recommendations to improve care 
for veterans across the nation.
    This is the second Commission report that this Committee has 
received on ways to improve the benefits and services provided to 
veterans. I eagerly await your testimony on the Commission's findings 
and look forward to working with you to improve the lives of veterans 
across the country.
    Once again, I welcome you to the hearing and look forward to 
hearing your thoughts on the issue before us today.

                                 
 Prepared Statement of Amy Belasco, Specialist in U.S. Defense Policy 
    and Budget, Congressional Research Service, Library of Congress
    Chairman Filner, Congressman Buyer and distinguished members of the 
committee, my name is Amy Belasco, and I'm a Specialist in U.S. Defense 
Policy and Budget at the Congressional Research Service (CRS). Thank 
you for asking me to testify about the important issue the Committee is 
considering: the long-term costs of the current conflicts in Iraq and 
Afghanistan. This testimony is based on my work on defense budget 
issues at CRS as well as on over 25 years of experience working in the 
executive and legislative branches.
    As you requested, my testimony is designed to set the stage for 
this hearing on long-term costs by addressing the cost-to-date as well 
as future estimates of costs for the three operations that make up what 
the Bush Administration refers to as the ``global war on terror'' 
(GWOT):

      Operation Iraqi Freedom: the war in Iraq;
      Operating Enduring Freedom: predominantly Afghanistan but 
also including DOD's counter-terror operations from the Philippines to 
Djibouti; and
      Operation Noble Eagle: enhanced security for Department 
of Defense (DOD) bases.

    This testimony will also briefly discuss DOD costs for Post-
Traumatic Stress Disorder (PTSD) and Traumatic Brain Injury (TBI), two 
signature medical problems of these wars. Finally, I'll suggest 
oversight issues that Congress may want to address.
PROFILE OF SERVICE MEMBERS DEPLOYED SINCE 9 /11
    Before discussing costs, I would like to cite several DOD figures 
that can give committee members a profile of the demographic 
characteristics of the 1.6 million individual service members who have 
been deployed for Operation Iraqi Freedom (OIF) or Operation Enduring 
Freedom (OEF) since the 9/11 attacks.\1\ Since most of the troops and 
costs are for Iraq and Afghanistan and little is known about DOD's 
other counter-terror operations, I'll refer to the two operations as 
simply Iraq or Afghanistan.
---------------------------------------------------------------------------
    \1\ This DOD figure does not include additional activated guard and 
reservists who backfilled positions of those deployed or provided 
enhanced security at U.S. bases since 9/11. Defense Manpower Data 
Center, Contingency Tracking System, ``Profile of Service Members Ever 
Deployed as of August 31, 2007.''
---------------------------------------------------------------------------
    Of the 1.6 million service members who have been deployed thus far, 
72% have been active-duty personnel and 28% have been activated 
reservists and National Guardsmen. Nine out of ten have been male. Not 
quite half have been single and the rest married. Some 72% have been 
white and the remainder black, Hispanic, other minority, or unknown.\2\
---------------------------------------------------------------------------
    \2\ Ibid.
---------------------------------------------------------------------------
    About 60% of all those deployed have been between the ages of 17 
and 30, another 25% between 30 and 40 years old and the remaining 13% 
between the age of 40 and 60. And over 60% of those deployed have been 
in their first tour of duty. Finally, enlisted personnel have accounted 
for about 85% and officers about 15%.\3\ Thus, the typical deployed 
service member has been a young, white, male, first term enlistee, 
demographic characteristics that are similar to the make-up of the 
active-duty force.
---------------------------------------------------------------------------
    \3\ Ibid.
---------------------------------------------------------------------------
CONCERNS ABOUT DEPLOYMENTS
    Many observers have raised concerns about how many military 
personnel have been deployed for more than one or two tours. Press 
accounts typically report that a particular unit has been deployed for 
the third or fourth time implying that this applies to all members of 
that unit. But because of high turnover as service members change 
assignments, complete enlistments, or retire, military personnel in a 
particular unit are often not the same individuals who were previously 
in that unit. Thus, the frequency of a unit's deployment does not 
necessarily tell us how often an individual has been deployed.
    A better measure of potential stress on the force is the number of 
individual service members who have been deployed more than once or 
twice within the past six years of operations. According to DOD data, 
about two-thirds or one million of all the 1.6 million individuals who 
have been deployed thus far are in their first tour of duty. Another 
25% have been deployed twice. Another 10% have been deployed three or 
more times, including many Air Force pilots with brief tours. As would 
be expected, active-duty personnel are more likely than reserve 
component members--which includes both reservists and National 
Guardsmen--to deploy more than once.\4\
---------------------------------------------------------------------------
    \4\ Analysis by CRS of Defense Manpower Data Center, Contingency 
Tracking System, ``Total Number of Deployment Events by Service and 
Component,'' August 2007.
---------------------------------------------------------------------------
    Another frequently voiced concern has been the extent of DOD's 
reliance on the reserve component in these conflicts. Since 9/11, DOD 
has deployed a total of 443,000 in the reserve component. In the past 
two years, DOD has called up about 100,000 National Guard and 
reservists, a level that is well below the 150,000 activated each year 
between FY2003 and FY2005. Some of those activated have been deployed 
and some have served in the United States filling the positions of 
those deployed or providing enhanced security at bases. The decrease in 
activations may reflect the fact that many of those in the reserve 
component have bumped up against the DOD policy cap of 24 months 
deployed.\5\
---------------------------------------------------------------------------
    \5\ Data from Defense Manpower Data Center, Report 17523, Monthly 
Average Deployed Personnel and Activated Reservists, from September 
2001 through July 31, 2007. DOD has a longstanding policy that places a 
cumulative cap of 24 months on activations of those in the reserve 
component.
---------------------------------------------------------------------------
COST-TO-DATE OF IRAQ AND AFGHANISTAN
    Now to costs. There are several ways to look at the cost of the 
current conflicts in Iraq and Afghanistan. DOD witnesses often cite the 
current ``burn rates'' or monthly obligations as of a particular date. 
While this figure reflects current spending, it does not reflect 
overall costs.
    DOD's war cost reporting system captures the amounts that have been 
obligated for Iraq, for Afghanistan, and for enhanced security and 
hence shows how funds have been allocated after the fact or once 
contracts or purchase orders are signed and military or civilian 
personnel are paid. DOD's figures do not reflect the total amount that 
Congress has appropriated to date which includes funds that remain to 
be obligated in later years.
    Nor does DOD's reporting system capture some intelligence funding 
that DOD does not administer and it may not include some funds that are 
not strictly war-related such as moneys to restructure Army and Marine 
Corps units. Nor does DOD capture amounts that have actually been 
spent.\6\ Concerned about the accuracy of its reporting, DOD asked a 
private firm to conduct an audit on war cost tracking.\7\ Although 
DOD's current FY2008 request identifies the funds for Iraq vs. those 
for Afghanistan, DOD has not presented a breakdown by operation of all 
funds received to date.\8\
---------------------------------------------------------------------------
    \6\ DOD's financial systems do not segregate ``amounts spent'' or 
outlays for war expenses from its regular or baseline budget because 
the funds are mixed in the same account.
    \7\ CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other 
Global War on Terror Operations Since 9/11 by Amy Belasco. For example, 
DOD does not consider the ten C-17 aircraft added by Congress in the 
FY2007 supplemental to be war-related.
    \8\ See Table 1a. In DOD, FY2008 Global War on Terror Request, 
February 2007 http://www.dod.mil/comptroller/defbudget/fy2008/
fy2007_supplemental/FY2008_Global_War_On_Terror _Request.pdf.
---------------------------------------------------------------------------
    To present a more complete picture, CRS has estimated how all funds 
appropriated-to-date are split between Iraq, Afghanistan and enhanced 
security relying on DOD and other data. In addition, CRS includes not 
only DOD appropriations but also State Department funds for its 
diplomatic operations, AID funds for reconstruction and aid programs, 
and Department of Veterans Affairs (VA) funds for medical care of 
veterans of these two conflicts. CRS estimates do not, however, include 
any VA disability benefits for Iraq and Afghan veterans since CRS was 
not able to get figures from the VA. About 90% of total funds 
appropriated to date have been for DOD military operations in theater 
as well as to train Iraq and Afghan security forces.
    Total Cost-To-Date. CRS estimates that Congress has provided a 
total of about $615 billion for Iraq, Afghanistan and other counter-
terror operations, and enhanced security at U.S. bases, often referred 
to by the Bush Administration as the global war on terror (GWOT). This 
total includes about:

      $573 billion for DOD;
      $41 billion for foreign aid, reconstruction, and building 
and operating embassies in Iraq and Afghanistan; and
      $1.6 billion for VA medical care for veterans of these 
conflicts.

    On a monthly basis, CRS estimates that DOD is spending about $11.7 
billion for the three GWOT operations. This year's average monthly 
spending for Iraq and Afghanistan is running substantially higher than 
the $8.8 billion in FY2006 and the $7.7 billion in FY2005. These 
increases reflect both higher spending by the services to buy new 
weapon systems to replace and upgrade war-worn equipment and higher 
operating costs--particularly in Iraq--much of it unexplained.\9\
---------------------------------------------------------------------------
    \9\ Table 6, Ibid.
---------------------------------------------------------------------------
    Cost of Iraq. CRS estimates that Congress has provided about $455 
billion for Iraq including:

      $423 billion for DOD;
      $31 billion for State/AID; and
      $1.5 billion for VA medical care.

    Average monthly spending for Iraq is running about $9.7 billion, 
well above the $7.4 billion in FY2006 and the $6.5 billion in FY2005. 
Only a small amount of the increase in FY2007 reflects the ``surge'' in 
troops in Iraq.\10\
---------------------------------------------------------------------------
    \10\ CRS estimates that the increase of 30,000 troops in Iraq cost 
between $3.5 billion and $4 billion in FY2007, adding about $300 
million to monthly spending and accounting for 13% of the increase.
---------------------------------------------------------------------------
    Cost of Afghanistan. CRS estimates that Congress has provided a 
total of about $127 billion for Afghanistan including about:

      $117 billion for DOD;
      $10 billion for State/AID; and
      $100 million for VA Medical costs.

    Average monthly obligations are running about $1.7 billion for 
Afghanistan, again substantially more than the $1.4 billion in FY2006 
and the $1.1 billion in FY2005. The increase may reflect higher troop 
levels and operating costs.
    Enhanced Security and Other. CRS estimates that Congress has 
appropriated about $28 billion for enhanced security at DOD bases. 
Average monthly obligations for enhanced security now run about $30 
million a month, less than half of last year's level.
    Of the $615 billion total for the three missions appropriated thus 
far, CRS was unable to allocate about $5 billion in war-related 
appropriations that appear not to have been captured by DOD's tracking 
system, a problem also identified by GAO.\11\
---------------------------------------------------------------------------
    \11\ The $615 billion includes the $5.2 billion provided to DOD in 
Sec. 123, H.J. Res 52, P.L. 110-92, FY2008 Continuing Resolution, Sept. 
29, 2007. See also, Table 3 in CRS Report RL33110, The Cost of Iraq, 
Afghanistan, and Other Global War on Terror Operations Since 9/11 by 
Amy Belasco.
---------------------------------------------------------------------------
COMPARISONS TO OTHER MAJOR WARS
    One way to put Iraq and Afghanistan war costs into perspective is 
to compare them to those of previous wars. Looking strictly at military 
costs and using estimates prepared by CRS Specialist, Stephen Daggett 
that are adjusted for inflation, the discussion below compares the 
cost-to-date after six years of operations to previous wars.\12\
---------------------------------------------------------------------------
    \12\ Calculations prepared by CRS Specialist, Stephen Daggett of 
DOD costs, relying on a variety of data and converted to FY2007 
dollars.
---------------------------------------------------------------------------
    First, let's first compare the cost of all funds appropriated thus 
far for the three GWOT operations. That total now equals about 90% of 
the 12-year war in Vietnam ($670 billion) and about double the cost of 
the Korean war ($295 billion).\13\
---------------------------------------------------------------------------
    \13\ Ibid.
---------------------------------------------------------------------------
    The cost of all three operations thus far is now over six times as 
large as the cost of the first Persian Gulf War ($94 billion). 
Comparisons to that war are problematic, however, because the United 
States paid some $7 billion or about 7% of the cost of the war because 
our allies, principally Kuwait and Saudi Arabia, reimbursed the United 
States for most of the cost.\14\
---------------------------------------------------------------------------
    \14\ Department of Defense, Annual Report to Congress for Fiscal 
Year 1994, January 1993; converted to FY2007 dollars by CRS.
---------------------------------------------------------------------------
    Some would prefer to look only at the cost of the Iraq war. On that 
basis, Iraq has thus far cost about 65% as much as Vietnam. On the 
other hand, Iraq has cost about 50% more than Korea to date and about 
four and a half times more than the costs incurred for the first 
Persian Gulf War.
STATUS OF FY2008 REQUEST
    Congress has not yet acted on the Administration's FY2008 request 
for war funding with one exception. As of today, the Administration has 
requested $152.4 billion for war-related activities in Iraq and 
Afghanistan including DOD costs, State and AID, and VA medical.\15\ 
This figure also includes an additional request of $5.2 billion for 
Mine Resistant Ambush Protected (MRAP) vehicles, trucks with a V-shaped 
hull that have proven more effective against attacks from Improvised 
Explosive Devices than uparmored HMMWVs. Congress provided funds for 
MRAP vehicles in the FY2008 Continuing Resolution.\16\
---------------------------------------------------------------------------
    \15\ This figure includes $141.7 billion for DOD, $4.6 billion for 
State/AID and $800 million for VA Medical costs that was requested in 
the Administration's FY2008 budget in February within agencies baseline 
request and as additional emergency requests. It also includes an 
additional $5.3 billion for DOD for Mine Resistant Ambush Protected 
(MRAP) vehicles requested on July 31, 2007 in a budget amendment.
    \16\ See Sec. 123, H.J. Res 52, P.L. 110-92 enacted September 29, 
2007.
---------------------------------------------------------------------------
    The total of $152.4 billion does not include the $42.3 billion and 
possibly additional State/AID funds that Secretary of Defense Robert 
Gates stated in late September would be requested shortly.\17\ If those 
additional funds are requested, the total for FY2008 will reach $194.7 
billion.
---------------------------------------------------------------------------
    \17\ See Senate Appropriations Committee, Transcript of hearing, 
``Fiscal 2008 War Supplemental,'' September 26, 2007.
---------------------------------------------------------------------------
    Senior appropriators have said that they may not consider the 
FY2008 supplemental request until January or February of 2008, though 
some interim or bridge funding may be included in DOD's FY2008 regular 
Defense Appropriations bill which has been passed by the House and 
Senate.\18\ When DOD receives its regular or baseline appropriations, 
it is expected to finance war costs until a supplemental is passed by 
using regular funds slated to be needed at the end of the year and any 
interim funds provided.
---------------------------------------------------------------------------
    \18\ Conferees to H.R. 3222, the FY2008 DOD Appropriations bill 
have been appointed by the House but not the Senate.
---------------------------------------------------------------------------
ESTIMATING FUTURE WAR COSTS
    Future war costs depend on several factors:

      the duration of the wars in Iraq and Afghanistan;
      the number of troops deployed each year;
      the intensity of conflict;
      the number, size, and location of bases; and,
      the scope of post-war costs.

    DOD's current plans call for ending the current ``surge'' in troops 
by June 2008, and Secretary of Defense Gates has suggested that troop 
levels could be reduced to 100,000 in Iraq by the end of 2008.\19\ DOD 
has not, however, provided Congress with any estimates of future costs 
beyond its FY2008 request and a $50 billion ``placeholder'' figure for 
FY2009.\20\ Since 2003, the Congressional Budget Office has estimated 
future war costs over 10-year periods based on assumptions specified by 
members of Congress. Typically, DOD has requested larger amounts than 
CBO has predicted even when troop levels are similar, in part, because 
DOD has included many expenses as war costs that could be considered 
part of its baseline budget.\21\ Since there are no DOD requests, CRS 
is unable to identify or assess potential differences between CBO and 
DOD.
---------------------------------------------------------------------------
    \19\ Philadelphia Inquirer, ``Bush Says U.S. Will Shift More Troops 
To Support Role,'' September 16, 2007.
    \20\ See Table 3 in CRS Report RL33999, Defense: FY2008 
Authorization and Appropriations by Pat Towell, Stephen Daggett, and 
Amy Belasco, updated September 28, 2007.
    \21\ For example, CBO recently estimated that 40% of the Army's 
request for reset to repair and replace war-worn equipment was not war-
related; see CBO, Replacing and Repairing Equipment Used in Iraq and 
Afghanistan: The Army's Reset Program, September 2007; http://
www.cbo.gov/ftpdocs/86xx/doc8629/09-13-ArmyReset.pdf
---------------------------------------------------------------------------
    This year, CBO estimated the cost over the next ten years of 
several different scenarios for Iraq and Afghanistan which, at least, 
lays out a range of future costs depending on various troop levels. 
These scenarios assume:

      a draw down of current troop levels to 30,000 by 2010;
      a more gradual draw down to 75,000 troops by 2013; and
      a steady-state ``Korea'' like scenario with 55,000 
troops.\22\
---------------------------------------------------------------------------
    \22\ Testimony of Robert A. Sunshine before the House Budget 
Committee, ``Estimated Costs of U.S. Operations in Iraq and Afghanistan 
and of Other Activities Related to the War on Terrorism,'' July 31, 
2007; and CBO, Letter to Senator Conrad, ``The Possible Costs to the 
United States of Maintaining a Long-Term Military Presence in Iraq,'' 
September 20, 2007; http://www.cbo.gov/ftpdocs/86xx/doc8641/09-20-
ConradLTpresenceinIraq.pdf.

    CBO's Ten-Year Cost of Two Drawdown Scenarios. CBO estimates the 
U.S. government would incur additional costs of $481 billion to $603 
billion for Iraq and Afghanistan over the next ten years, assuming 
troop levels in Iraq and Afghanistan are drawn down to 30,000 troops by 
2010 and remain at that level. The range in the estimate reflects 
different assumptions about how long the Administration's current troop 
increase continues and when a draw down would begin.\23\ With these 
assumptions, CBO estimates would total between $1.1 and $1.2 trillion 
by 2017 including all funds appropriated to-date and future estimated 
costs.\24\
---------------------------------------------------------------------------
    \23\ The low end of the CBO estimate assumes the draw down begins 
in FY2008 and the high end that the draw down does not begin until 
FY2009; see Table 5 in Ibid.
    \24\ Testimony of Robert A. Sunshine before the House Budget 
Committee, ``Estimated Costs of U.S. Operations in Iraq and Afghanistan 
and of Other Activities Related to the War on Terrorism,'' July 31, 
2007, p. 6-p. 7 and Table 1.
---------------------------------------------------------------------------
    Assuming a more gradual draw-down scenario in which troop levels 
drop to 75,000 by 2013, CBO estimated that costs over the next ten 
years could total between $924 billion and $1.010 trillion, again with 
the range again reflecting how long the current troop ``surge'' is 
maintained. Under that scenario, costs would reach a total of between 
$1.5 trillion and $1.6 trillion by 2017. Under both scenarios, CBO 
includes not only DOD's operational and investment costs but also $50 
billion to train and equip Afghan and Iraqi security forces, $16 
billion for diplomatic operations and foreign aid and $9 billion to $13 
billion for veterans' benefits and medical care.\25\
---------------------------------------------------------------------------
    \25\ Testimony of Robert A. Sunshine before the House Budget 
Committee, ``Estimated Costs of U.S. Operations in Iraq and Afghanistan 
and of Other Activities Related to the War on Terrorism,'' July 31, 
2007, p. 7-p. 8 and Table 1.
---------------------------------------------------------------------------
    Alternative Steady State Annual Cost. Another way to look at future 
costs is the annual spending when the troop draw down reaches a steady-
state level. CBO estimates that the annual steady-state cost of would 
be about $22 billion for 30,000 troops and $61 billion for 75,000 
troops. These figures include not only the cost of DOD's military 
operations and support but also the cost of training Iraqi and Afghan 
security forces, State Department diplomatic costs, and aid programs, 
and VA medical costs.\26\ These levels are considerably lower than the 
FY2007 appropriation of $173 billion.\27\
---------------------------------------------------------------------------
    \26\ Ibid, Table 1.
    \27\ CRS Report RL33110, The Cost of Iraq, Afghanistan, and Other 
Global War on Terror Operations Since 9/11 by Amy Belasco.
---------------------------------------------------------------------------
    In a new analysis, CBO estimates the annual cost of maintaining a 
long-term presence of 55,000 troops in Iraq, characterized as a 
``Korea'' option. With this troop level, CBO estimates the cost would 
be $25 billion in a ``combat'' scenario similar to today's Iraq.\28\ 
This estimate, however, does not include State, AID, and VA medical 
costs. Making a rough adjustment for those costs based on CBO figures, 
the cost to maintain 55,000 troops in combat conditions would be about 
$33 billion a year.\29\
---------------------------------------------------------------------------
    \28\ CBO also estimates the cost of keeping 55,000 troops in Iraq 
in a ``non combat'' scenario with low-intensity operations and troops 
remaining at established bases for extended tours; see CBO, Letter to 
Senator Conrad, ``The Possible Costs to the United States of 
Maintaining a Long-Term Military Presence in Iraq,'' September 20, 
2007.
    \29\ See Testimony of Robert A. Sunshine before the House Budget 
Committee, ``Estimated Costs of U.S. Operations in Iraq and Afghanistan 
and of Other Activities Related to the War on Terrorism,'' July 31, 
2007; CRS adds $7.7 billion, the annual average of CBO's 10-year 
estimate that covers the cost to train security forces, support 
diplomatic operations and foreign aid and provide VA benefits and 
services.
---------------------------------------------------------------------------
POST-WAR COSTS: POST-TRAUMATIC STRESS DISORDER AND TRAUMATIC BRAIN 
        INJURY
    There are many challenges in estimating not only future costs but 
also post-war costs--those that could be incurred after the conflicts 
in Iraq and Afghanistan have ended. For DOD, the largest unknown may be 
reset costs, the amount needed to repair and replace war-worn 
equipment. In the case of military personnel, however, the greatest 
unknown may be future medical treatment costs for those injured.
    For DOD, war-related medical costs are generally short-lived 
because many of those injured complete their enlistments and leave the 
service.\30\ At that point, they may turn to the Department of 
Veterans' Affairs for treatment. Nevertheless, it may be useful to look 
at the number of patients and costs that DOD has experienced to date 
for two of the signature medical problems of these wars--Traumatic 
Brain Injury or TBI and Post-Traumatic Stress Disorder or PTSD. 
Although this may give a window into the incidence and cost of TBI and 
PTSD in the first few years, it does not necessarily capture those 
whose symptoms are not caught or which appear later on, or the 
difficulties faced by individuals.
---------------------------------------------------------------------------
    \30\ For example, as of May 2007, about 44% of those patients 
diagnosed with either TBI or PTSD between FY2003 and May 2007 were 
still eligible for DOD medical care; see DOD data provided to CRS by 
the Office of the Secretary of Defense, Health Affairs, May 31, 2007.
---------------------------------------------------------------------------
    Based on DOD data, about 60,000 troops have been diagnosed with 
either PTSD or TBI. This total includes about 34,000 with PTSD and 
26,000 with TBI between FY2003 and FY2007.\31\ Based on these figures, 
about 4% of the 1.6 million service members who have deployed to Iraq 
and Afghanistan have been diagnosed with these conditions while in the 
service. As an overall average, this figure does not capture the 
likelihood for those deployed multiple times or for longer periods or 
for those personnel on the ground--primarily Army and Marine Corps 
soldiers--who would be expected to be more likely to experience these 
conditions.
---------------------------------------------------------------------------
    \31\ DOD data for FY2003-May 2007 provided to CRS by the Office of 
the Secretary of Defense (OSD), Health Affairs.
---------------------------------------------------------------------------
    Treating these patients has cost about $291 million over the past 
five years counting all care associated with TBI or PTSD symptoms. Some 
might argue that all costs for the care of those individuals should be 
counted even if the symptoms were not related to the diagnosis. If that 
broader definition were used, treatment costs have been $782 million 
over the past several years.\32\
---------------------------------------------------------------------------
    \32\ DOD provided data showing the number eligible as well as the 
number of patients each year.
---------------------------------------------------------------------------
    The annual DOD cost per person has averaged about $1,850 for PTSD 
and $5,500 for TBI, counting all treatment, mental health and pharmacy 
costs related to those conditions. Using the broad definition of all 
care provided to those patients including care not related to either 
condition, the cost would be $6,600 for those with PTSD and $11,200 for 
those with TBI.\33\
---------------------------------------------------------------------------
    \33\ CRS calculations based on DOD data from the OSD, Health 
Affairs, May 31, 2007.
---------------------------------------------------------------------------
    During the past several years, annual costs for both TBI and PTSD 
have increased rapidly from $18 million in FY2003 to $90 million in 
FY2006, which may reflect higher patient loads as the wars have 
continued. Each year, DOD has requested emergency funds to cover the 
costs of war-related medical care including the cost of treating PTSD 
and TBI.
    Concerned about these conditions, Congress recently appropriated 
$900 million in the FY2007 Supplemental (P.L. 110-28) specifically for 
TBI and PTSD, including $600 million for treatment and $300 million for 
research. These funds will be available in FY2007 and FY2008. The 
language in the act permits the Secretary of Defense to transfer any 
funds that are ``in excess of DOD requirements'' to the Department of 
Veterans' Affairs for the same purpose.\34\
---------------------------------------------------------------------------
    \34\ See section, ``Defense Health Program,'' Title III, Chapter 3, 
P.L. 110-28 May 25, 2007.
---------------------------------------------------------------------------
    It is not clear whether DOD will need all the funds appropriated in 
the next two years. Recently, the 2-year cost of TBI and PTSD has been 
running about $170 million including costs related to these conditions. 
If all care for individuals diagnosed with either condition is counted, 
total treatment costs have been about $500 million.\35\
---------------------------------------------------------------------------
    \35\ CRS calculation using FY2005 and FY2006 cost, the two most 
recent complete years of data.
---------------------------------------------------------------------------
PROBLEMS IN IDENTIFYING THOSE DEPLOYED AND OVERSIGHT ISSUES
    Predictions of future costs depend on accurate information about 
current costs as well as understanding the factors that drive costs. 
Yet even in the sixth year of conflict, some basic information remains 
in dispute and explanations for the rapid increase in DOD costs are 
few. One good example is the various figures identifying the number of 
service members deployed to the Iraq and Afghanistan theaters of 
operations.
    In justification material for the FY2007 and FY2008 supplementals, 
the Defense Department estimated that some 320,000 military personnel 
were dedicated to Iraq and Afghanistan operations including most of the 
increase or ``surge'' in troops this summer.\36\ This figure is almost 
twice as large as the total of 160,000 including some 140,000 troops in 
Iraq and another 20,000 troops in Afghanistan that is commonly reported 
in the press, and sometimes referred to as ``boots on the ground.''
---------------------------------------------------------------------------
    \36\ DOD, FY2007 Emergency Supplemental Request for the Global war 
on Terror, Feb. 2007, p. 16; http://www.dod.mil/comptroller/defbudget/
fy2008/fy2007_supplemental/FY2007_Emergency 
_Supplemental_Request_for_the_GWOT.pdf; and DOD, FY2008 Global War on 
Terror Request, February 2007,p. 12; http://www.dod.mil/comptroller/
defbudget/fy2008/fy2007_supplemental/ 
FY2008_Global_War_On_Terror_Request.pdf.
---------------------------------------------------------------------------
    The increase in troop levels in Iraq (as well an increase in 
Afghanistan) could account for some but by no means all of the 
difference. Assuming an additional 30,000 for the ``surge'' would still 
leave unaccounted for another 130,000 troops of those identified by DOD 
in its justification material. DOD has not publicly explained the 
mission or location of these other personnel or allocated these 
personnel between Iraq and Afghanistan.
    From other DOD data sources, it appears that some of these other 
military personnel are deployed or training up in neighboring countries 
such as Kuwait, Bahrain, Qatar, and the United Arab Emirates, some may 
be backfilling positions for those in the United States, and about 
30,000 are in unknown locations.\37\ Earlier years pose the same 
problem.
---------------------------------------------------------------------------
    \37\ Defense Manpower Data Center, DRS 11280, Country Analysis, 
September 2001 through April 2007; this data series includes some 
double-counting as service members move from one location to another 
such as those who go to Kuwait before going to Iraq.
---------------------------------------------------------------------------
    That Congress lacks a clear picture of the number or allocation of 
all military personnel dedicated to Iraq and Afghanistan either in the 
past or today makes prediction of future costs--whether future 
operational or medical costs--problematic. For example, troop location 
may be important in gauging the likelihood that service members face 
intensive combat and hence, a higher risk of developing PTSD or TBI.
    Similarly, the cost of future operations and the extent of stress 
on the force depend on how many troops are dedicated to Iraq and 
Afghanistan operations. Thus far, however, DOD has not resolved this 
basic discrepancy and has provided little analysis of the factors that 
drive cost trends whether for medical costs or operating tempo. While 
there is considerably more detail in DOD's latest justification 
materials, there is little transparency about the assumptions and 
rationale for requests for funding for reset, operating tempo, 
procurement or medical costs, gaps which may limit Congressional 
oversight.

                                 

  Prepared Statement of Matthew S. Goldberg, Ph.D., Deputy Assistant 
      Director for National Security, Congressional Budget Office
    Chairman Filner, Ranking Member Buyer, and other distinguished 
Members of the Committee, I appreciate the invitation to appear before 
you today to discuss the challenges that our nation faces in caring for 
veterans returning from Operation Iraqi Freedom (OIF) and Operation 
Enduring Freedom (OEF). My testimony will focus on the numbers of 
troops who have served in those operations and the numbers who have 
sustained injuries and provide some indication of the severity of those 
injuries. I will also address the extent to which veterans of those 
operations have sought medical care from the Department of Veterans 
Affairs (VA) and the types of care they have received. Finally, I will 
discuss the Congressional Budget Office's (CBO's) projections of the 
resources that VA may require over the next 10 years not only to 
continue providing that medical care, but also to provide associated 
benefits such as disability compensation paid to veterans with service-
connected disabilities and dependency and indemnity compensation (DIC) 
paid to survivors of service members.\1\
---------------------------------------------------------------------------
    \1\ This testimony does not address issues that veterans face in 
obtaining disability ratings from the Departments of Defense and 
Veterans Affairs or the coordination of medical care and other benefits 
between those two departments. Many of those issues were recently 
studied in the following report: President's Commission on Care for 
America's Wounded Warriors, Serve, Support, Simplify: Report of the 
President's Commission on Care for America's Wounded Warriors, cochairs 
Bob Dole and Donna Shalala (July 2007).
---------------------------------------------------------------------------
Summary
    CBO's analysis to date indicates the following:

      As of December 2006, more than 1 million active-duty 
military personnel and over 400,000 reservists had deployed to combat 
operations in the Iraq and Afghanistan theaters. Of those, 690,000 have 
either separated from the active component or become eligible for VA 
health care as reservists. In turn, one-third of those personnel 
(numbering 229,000) have sought VA medical care since 2002.
      About 3,800 U.S. troops have died while serving in OIF, 
and over 400 have died in OEF. A total of almost 30,000 troops have 
been wounded in action during those two operations.
      The survival rate among all wounded troops has averaged 
90.2 percent during OIF and OEF combined. By comparison, the survival 
rate during the Vietnam conflict was 86.5 percent. Among seriously 
wounded troops, the survival rate was lower--76.4 percent--during the 
Vietnam conflict and has also been lower--80.6 percent--for OIF and OEF 
combined. Higher survival rates during OIF and OEF reflect the 
widespread use of body armor, as well as advances in battlefield 
medical procedures and aeromedical evacuation.
      A census conducted by the Department of Defense (DoD) 
indicates 749 amputations from OIF and 42 amputations from OEF through 
January 2007. The amputation rate is 3.3 percent among all wounded 
troops.
        Through December 2006, DoD physicians had diagnosed a 
total of 1,950 traumatic brain injuries (TBIs), of which over two-
thirds were classified as mild.\2\ The rate of TBI diagnosis is 8.2 
percent among all wounded troops. Some TBIs, however, are difficult to 
diagnose and may go unrecognized unless screening is performed after a 
soldier returns to the United States from deployment.
---------------------------------------------------------------------------
    \2\ The classification is based on the length of time a patient 
remains unconscious immediately after an injury, the duration of post-
traumatic amnesia (loss of memory of events immediately following the 
injury), and the patient's score on the Glasgow Coma Scale. For 
example, a mild TBI would involve loss of consciousness for less than 
one hour and post-traumatic amnesia of less than 24 hours.
---------------------------------------------------------------------------
      Post-traumatic stress disorder (PTSD) is also difficult 
to diagnose. Among OIF and OEF veterans who have received VA medical 
care, about 37 percent have received at least a preliminary diagnosis 
of mental health problems, and about half of those (17 percent) have 
received a preliminary diagnosis of PTSD. The overall mental health 
incidence rate may be lower to the extent that OIF and OEF veterans who 
have not sought VA medical care do not suffer from those conditions. On 
the other hand, some veterans with PTSD or other mental health problems 
may not seek care because they fear being stigmatized.
      Of the total 229,000 OIF/OEF patients seen by the VA, 3 
percent (fewer than 8,000) have been hospitalized in a VA facility at 
least once since 2002; the other 97 percent were seen on an outpatient 
basis only. Not all of those patients visit VA medical facilities in 
any single year; in 2006, for example, 155,000 OIF/OEF patients were 
treated by VA, accounting for 3 percent of the total veteran patient 
load. VA estimates an average annual cost of $2,610 per OIF/OEF veteran 
who used VA health care in 2006, versus an overall average of $5,765 
per year for all VA patients.
      VA's medical budget is discretionary (that is, lawmakers 
appropriate funds on an annual basis); it is not possible to project 
definitively VA's future medical appropriations because they depend on 
future acts of the Congress. However, depending on the future force 
levels deployed to OIF and OEF, if the Congress chooses to fully fund 
medical care for veterans of those operations, VA medical costs 
explicitly associated with those operations could total between $7 
billion and $9 billion over the 10-year period 2008 through 2017, CBO 
projects. The costs of disability compensation and survivors' benefits 
could add another roughly $3 billion to $4 billion over the same 
period.
VA's Health Care System
    The Department of Veterans Affairs, through the Veterans Health 
Administration, operates a system consisting of 153 medical centers, 
882 ambulatory care and community-based outpatient clinics (CBOCs), 207 
Vet Centers, 136 nursing homes, 45 residential rehabilitation treatment 
programs, and 92 comprehensive home-care programs providing medical 
services to eligible veterans.\3\ Those facilities provide inpatient 
hospital care, outpatient care, laboratory services, pharmaceutical 
dispensing, rehabilitation for a variety of disabilities and 
conditions, mental health counseling, and custodial care provided in 
either VA or contracted nursing homes. In total, VA facilities employ 
about 200,000 full-time-equivalent employees, including over 13,000 
physicians and nearly 55,000 nurses.
---------------------------------------------------------------------------
    \3\ Vet Centers provide readjustment counseling, postwar 
rehabilitation, and other social services to help improve veterans' 
postwar work and family lives.
---------------------------------------------------------------------------
    VA estimates that in 2006 there were about 24 million living 
veterans of the U.S. military. In that year, VA provided medical 
services to over 5 million veterans and more than 400,000 other 
patients.\4\ An additional 2.9 million veterans were enrolled in the VA 
medical system in 2006 but did not seek care from VA facilities that 
year.
---------------------------------------------------------------------------
    \4\ Nonveteran patients include employees (who receive services 
such as tests and vaccinations required for employment at VA 
facilities); dependents and survivors of disabled veterans who are 
eligible for the Civilian Health and Medical Program of the Department 
of Veterans Affairs (CHAMPVA); and patients seen through sharing 
agreements with other providers, including DoD's TRICARE program.
---------------------------------------------------------------------------
    To better care for the injuries suffered by veterans returning from 
OIF and OEF, VA, in 2005, established a Polytrauma System of Care, 
which includes four Polytrauma Rehabilitation Centers and additional 
secondary sites and support.\5\ Those facilities provide rehabilitation 
and treatment for veterans or returning service members recovering from 
polytraumas and traumatic brain injuries. VA also provides readjustment 
services and counseling through its Vet Centers. In addition, in recent 
years, VA has added about 3,000 new mental health professionals to its 
staff as part of a mental health initiative.
---------------------------------------------------------------------------
    \5\ VA defines polytrauma as injury to the brain in addition to 
other body parts or systems resulting in physical, cognitive, 
psychological, or psychosocial impairments and functional disability.
---------------------------------------------------------------------------
    Under funding provided by continuing resolution in 2007, VA 
expected to obligate $573 million that year for veterans of OIF and OEF 
before considering any supplemental funding. VA received additional 
supplemental appropriations in 2007 for medical administration costs, 
medical and prosthetics research, medical services for veterans of OIF 
and OEF, and other related purposes.\6\
---------------------------------------------------------------------------
    \6\ U.S. Troop Readiness, Veterans' Care, Katrina Recovery, and 
Iraq Accountability Appropriations Act, 2007 (Public Law 110-28).
---------------------------------------------------------------------------
    The President's budget proposal for 2008 requests budget authority 
of $34.6 billion for VA health care services and research (excluding 
construction costs and net of collections), an increase of 5.9 percent 
over 2007 levels (the latter excluding supplemental appropriations). 
The vast majority of the 2008 obligations, $29.7 billion, would be 
allocated to providing health care services such as ambulatory care, 
inpatient acute care, and pharmacy services.\7\ The remainder is 
allocated for long-term care ($4.6 billion), other health care programs 
such as the Civilian Health and Medical Program of the Department of 
Veterans Affairs (CHAMPVA) and dental care ($2.1 billion), and the 
mental health and other initiatives ($0.4 billion). The portion of VA's 
2008 budget request specifically designated for the health care needs 
of service members returning from OIF and OEF--including their share of 
VA's total obligations for dental care, readjustment counseling, and 
VA's mental health initiative--is $752 million.
---------------------------------------------------------------------------
    \7\ An obligation is a commitment that creates a legal liability on 
the part of the government to pay for goods and services ordered or 
received. Such payments may be made immediately or in the future.
---------------------------------------------------------------------------
Service Members' Eligibility for VA Medical Care
    More than 1 million active-duty military personnel have deployed to 
either the Iraq or Afghanistan theaters of operation. Of the current 
Army force, more than half have deployed in support of those operations 
at least once, and 15 percent have deployed to those theaters on two or 
more occasions. In addition to the active-duty troops, reserve 
personnel have been mobilized in large numbers--a total of 580,000 
reservists had been mobilized through March 2007. Of those, more than 
410,000 reservists had deployed to combat operations through December 
2006. Troop levels in Iraq have climbed by between 30,000 and 40,000 
over the past six months, in turn increasing the number of service 
members who may qualify for VA medical care in the future.
    As of April 2007, about 320,000 active-duty veterans of Operation 
Iraqi Freedom and Operation Enduring Freedom had separated from 
military service and become eligible for health care provided by VA. In 
addition, about 370,000 members of the Reserve or National Guard have 
returned from OIF or OEF and become eligible for VA health care, even 
though many of them continue to affiliate with the military.\8\
---------------------------------------------------------------------------
    \8\ Between April 2007 and July 2007, the total number of returning 
service members eligible for VA medical care increased from 690,000 to 
717,000. However, the smaller number will be used in the subsequent 
discussion because the timeframe through April 2007 more closely 
matches the timeframe for other types of data used in CBO's analysis.
---------------------------------------------------------------------------
    Traditionally, reserve-component personnel who return from a 
deployment but remain on the military rolls would not qualify for VA 
health care until some later date when they were discharged from the 
service. However, legislation enacted in 1998 (the Veterans Programs 
Enhancement Act, Public Law 105-368) gave veterans and demobilized 
reservists returning from combat operations a special two-year period 
of eligibility for VA health care, waiving any requirements for them to 
satisfy a means test or demonstrate a service-connected disability. VA 
provides health care under that authority for free for medical 
conditions potentially related to military service in combat 
operations.\9\ VA has established three criteria that indicate 
noncombat-related conditions, in which case VA will continue to provide 
health care but may charge a veteran copayments or bill the veteran's 
third-party insurance:
---------------------------------------------------------------------------
    \9\ Pending legislation would increase the special eligibility 
period from two years to five years. See H.R. 1585, National Defense 
Authorization Act for Fiscal Year 2008, Section 1708, passed by the 
House of Representatives on May 15, 2007.

        Congenital or developmental conditions (such as 
scoliosis),
        Conditions that are known to have existed before 
military service, or
        Conditions that begin after military combat service 
(such as bone fractures that occur after a service member's separation 
from the military).

    Casualty Statistics for U.S. Military Forces
    The number of fatalities among troops serving in Operation Iraqi 
Freedom reached 3,000 in January 2007. Those deaths in Iraq were 
accompanied by 22,834 troops who were wounded in action. Wounded troops 
can be classified in two ways: whether or not they return to their 
units for duty within 72 hours; and, among those who do not return to 
duty, whether or not they require aeromedical evacuation (see Table 1). 
Troops wounded in action are distinct from those with nonhostile 
injuries or disease; the latter are often combined as disease/nonbattle 
injuries (DNBI). The total number of troops medically evacuated 
includes those who were wounded as well as others with nonhostile 
injuries or disease.
    Through January 2007, wounded-to-fatality counts stood at a ratio 
of 7.6 to 1. That oft-cited ratio is higher than the ratios recorded 
during earlier U.S. military conflicts, reflecting the effects of the 
widespread use of body armor in Iraq as well as advances in battlefield 
medical procedures and aeromedical evacuation. However, differences in 
statistical treatment have hindered some comparisons between the 
wounded-to-fatality ratio for OIF and those for the Vietnam conflict or 
other previous conflicts.\10\
---------------------------------------------------------------------------
    \10\ One author asserted a wounded-to-fatality ratio as high as 16 
to 1. See Linda Bilmes, ``Soldiers Returning from Iraq and Afghanistan: 
The Long-Term Costs of Providing Veterans Medical Care and Disability 
Benefits'' (Working Paper RWP07-001, Harvard University, Kennedy School 
of Government, January 2007), p. 3; and ``The Battle of Iraq's Wounded: 
The U.S. Is Poorly Equipped to Care for the Tens of Thousands of 
Soldiers Injured in Iraq,'' Los Angeles Times, January 5, 2007. In the 
latter, she states, ``for every fatality in Iraq, there are 16 
injuries.'' The statistic of 16 to 1 is also quoted in the graphic 
(``The Human Cost of War'') on p. 43 of Newsweek, April 2, 2007. That 
statistic is too high because it includes among the ``wounded'' troops 
who were medically evacuated because of nonhostile injuries or disease.
---------------------------------------------------------------------------
Table 1.
U.S. Military Casualties Sustained in Operation Iraqi Freedom and in 
        the Vietnam Conflict

------------------------------------------------------------------------
                                  Operation Iraqi      Vietnam Conflict
                                      Freedom       --------------------
                              ----------------------
                                             Rates                Rates
                                              per     Number of    per
                                Number of   100,000  Casualties  100,000
                                Casualties   Person               Person
                                             Years                Years
------------------------------------------------------------------------
Person-Years of Exposure       721,220      n.a.     2,608,650   n.a.
========================================================================
Deaths
========================================================================
Hostilea                       2,417        335                  .......
========================================================================
Other                          584          81
========================================================================
Total deaths                   3,001        416
========================================================================
Wounded in Action
========================================================================
Returned to duty (Within 72    12,643       1,753    150,332     5763
 hours)
========================================================================
Not returned to duty (Within
 82 hours)
========================================================================
Medical evacuation required    6,670        925
========================================================================
Total not returned to duty     3,521        488
========================================================================
Total wounded in action        10,191       1,413    153,30      35,877
========================================================================
Memorandum:                                 3,166    303,635     11,640
========================================================================
Medical Evacuations
========================================================================
Wounded                        6,670        925
========================================================================
Nonhostile injuriesb           6,640        921
========================================================================
Disease                        18,183       2,521
========================================================================
Total medical evacuations      31,493       4,367
------------------------------------------------------------------------
Source: Congressional Budget Office based on data obtained from the
  following Department of Defense Web site: For casualties in Iraq (as
  of January 6, 2007), http://siadapp.dmdc.osd.mil/personnel/CASUALTY/
  castop.htm and (as of January 10, 2007) www.defenselink.mil/news/
  casualty.pdf. For casualties in Vietnam, http://siadapp.dmdc.osd.mil/
  personnel/CASUALTY/vietnam.pdf and http://siadapp.dmdc.osd.mil/
  personnel/CASUALTY/WCPRINCIPAL.pdf.

Notes: Estimates of casualties sustained in Operation Iraqi Freedom are
  from the start of that operation (March 19, 2003) through January 10,
  2007. (The Iraq theater of operations includes the Arabian Sea,
  Bahrain, Gulf of Aden, Gulf of Oman, Iraq, Kuwait, Oman, Persian Gulf,
  Qatar, Red Sea, Saudi Arabia, and United Arab Emirates) Casualties
  suffered by Department of Defense civilian personnel and contractors
  are excluded from the table. Estimates of the number of casualties
  that occurred during the Vietnam conflict cover an 11-year period
  (1964 to 1975).
Person-years to exposure in Vietnam are taken from Samuel H. Preston and
  Emily Buzzell, ``Mortality of American Troops in Iraq'' (working
  paper, University of Pennsylvania, Population Studies Center, 2006),
  Person-years of exposure in Iraq were computed by th Congressional
  Budget Office using methods similar to those used by Preston and
  Buzzell.
n.a. = not applicable.
a. Hostile deaths are synonymous with troops killed in action.
b. Nonhostile injuries describe those not sustained in combat.

    There are several ways to calculate both the numerator and 
denominator of the wounded-to-fatality ratio. Because only troops 
wounded in action are included in the numerator--not those suffering 
nonhostile injuries or disease--it could be argued that the denominator 
should include hostile deaths only, not deaths characterized as 
nonhostile (in other words, those resulting from vehicle accidents, 
disease, or other causes). Substituting the 2,417 hostile deaths in 
Iraq (through January 10, 2007) for the 3,001 total deaths results in a 
higher ratio of 9.4 to 1 (see Table 2).
Table 2.
Wounded-to-Fatality Ratios for U.S. Troops in Recent Military 
        Conflicts.

------------------------------------------------------------------------
                                          Operation  Operation
                                Vietnam     Iraqi     Enduring   OIF and
                                Conflict   Freedom    Freedom      OEF
                                            (OIF)      (OEF)    Combined
------------------------------------------------------------------------
Number of Wounded Compared     5.2        7.6        3.1        7.1
 with Total Number of Deaths
 (Hostile and Nonhostile)a
------------------------------------------------------------------------
Number of Wounded Compared     16.4       9.4        5.6        9.2
 with Number of Hostile
 Deaths
------------------------------------------------------------------------
Number of Wounded (Not         3.2        4.2        3.3        4.2
 Returned to Duty) Compared
 with Number of Hostile
 Deaths
------------------------------------------------------------------------
Source: Congressional Budget Office.
Note: Operation Iraqi Freedom includes operations in the Arabian Sea,
  Bahrain, Gulf of Aden, Gulf of Oman, Iraq, Kuwait, Oman, Persian Gulf,
  Qatar, Red Sea, Saudi Arabia, and United Arab Emirates. Operation
  Enduring Freedom includes operations in and around Afghanistan.
a. Hostile deaths are synonymous with troops killed in action.
  Nonhostile deaths describe those that occur as a result of injury not
  sustained in combat or disease.

    If policymakers' objective is to measure U.S. troops' ability to 
survive serious wartime wounds, it can be argued that, if the 
denominator is restricted to hostile deaths, the numerator should be 
restricted to wounds of such severity that the soldier could not return 
to duty within 72 hours. Because only 45 percent of the wounds in Iraq 
have met that criterion (a factor that has remained remarkably constant 
throughout the duration of OIF), the wounded-to-fatality ratios are cut 
by more than half using that method of computation (see Table 2).
    Computed by any of those methods, the wounded-to-fatality ratios 
are higher in Iraq than they were in Vietnam--indicating a greater 
possibility of surviving a wound in the current conflict--but the 
margin is not as large as is sometimes supposed. In addition to the 
well-known roughly 58,000 deaths that occurred in Vietnam (of which 
about 47,000 were the result of hostile action), the 153,000 serious 
wounds imply a ratio of 3.2 wounds per hostile death. Put differently, 
among troops seriously wounded in Vietnam, 76.4 percent survived their 
wounds; the corresponding survival rate has been 80.8 percent in Iraq 
(and 80.6 percent when OEF is included).\11\
---------------------------------------------------------------------------
    \11\ Considering all hostile wounds, whether or not they are 
classified as serious and whether or not wounded service members return 
to duty within 72 hours, the survival rates were 86.5 percent in 
Vietnam, 90.4 percent in Iraq, and 90.2 percent for all of OIF and OEF.
---------------------------------------------------------------------------
Classification of Injuries Among Surviving Wounded Veterans
    The protection afforded by body armor has enabled many soldiers to 
survive what might otherwise have been fatal injuries to the chest or 
abdomen. However, the same incidents (for example, detonation of 
improvised explosive devices, or IEDs) have led to numerous injuries to 
the extremities, some resulting in immediate or subsequent surgical 
amputation. Other writers have referred to traumatic brain injury as 
the ``signature injury'' of the current conflict. The psychological 
syndrome known as post-traumatic stress disorder has also received 
considerable attention in media coverage of the war.
    Amputations. Amputees receive their initial care at DoD medical 
facilities, many at Walter Reed Army Medical Center after having been 
medically stabilized at Landstuhl Regional Medical Center in Germany. 
Patients may stay at Walter Reed for an extended period (typically 
months), receiving prosthetic limbs with attendant physical and 
occupational therapy as well as any other required medical care. Some 
amputees petition to return to active military service, but most are 
eventually discharged from the military and transition to the VA 
medical system.
    A census conducted by DoD indicates that, through January 2007, 749 
amputations had occurred during OIF and 42 during OEF. The incidence 
rates are 3.3 percent among all troops wounded in OIF and 3.8 percent 
among all troops wounded in OEF. Further, of the 671 amputations from 
either conflict that were attributable to combat injury, 95 (14 
percent) involved fingers or toes only (albeit sometimes multiple 
fingers or toes), not hands, feet, or entire limbs. Although those 
injuries are still serious and partially disabling, the costs to care 
for patients losing finger or toes are much lower because most such 
patients do not receive prosthetic devices.
    Traumatic Brain Injuries. The number of traumatic brain injuries 
attributable to service in OIF or OEF is much more difficult to 
measure; although DoD has compiled estimates, a complete census does 
not exist. Some TBIs are identified in-theater (for example, 
immediately after an IED attack), in which case the soldier would most 
likely be medically evacuated to Landstuhl Regional Medical Center. 
Other TBIs may escape initial diagnosis because they are associated 
with closed wounds rather than with obvious penetration wounds (such as 
gunshot or shrapnel wounds). Those TBIs often arise in polytrauma 
victims in which the head injury is a comorbidity (secondary to some 
other injury). Current medical practice is for military doctors to 
screen 100 percent of patients evacuated to Landstuhl for any types of 
injuries for TBI.
    The military conducts post-deployment health-assessment surveys at 
the major U.S. bases to which service members return after an overseas 
deployment (for instance, Ft. Bragg, Ft. Carson, or Camp Pendleton). 
TBIs sustained, but undiagnosed, in-theater would not generally be 
evident from neuroimaging conducted months later in the United States. 
Instead, initial screening of a TBI is based on a soldier's responses 
to post-deployment survey questions related to:

        The injury-causing event itself (for example, proximity 
to an explosion);
        Loss of consciousness or altered consciousness 
immediately following the injury-causing event; or
        Subsequent physical, cognitive, or emotional 
consequences, including:
            memory problems or lapses,
            balance problems or dizziness,
            ringing in the ears,
            sensitivity to bright light,
            irritability,
            headaches, or
            sleep problems.

    Between October 2001 and December 2006, DoD physicians diagnosed 
1,950 TBIs among the wounded in action from OIF and OEF combined. 
Neurologists classify TBIs as mild, moderate, or severe. Of the 1,950 
total TBIs, some 1,322 (or just over two-thirds) were considered mild. 
Those figures imply that 8.2 percent of wounded troops suffered a TBI, 
of which 5.5 percent suffered a mild case and the remainder either a 
moderate or severe case. (A data update indicates 2,669 TBIs through 
July 2007, although the split by severity level was not provided.) \12\ 
Some TBIs may go undiagnosed, but absent obvious penetration wounds or 
other indications that acute care is required, those TBIs are likely to 
have been mild. Those patients may already be asymptomatic by the time 
their units return to the United States, although a small portion may 
have lingering effects.
---------------------------------------------------------------------------
    \12\ It has also been reported that among patients medically 
evacuated to Walter Reed Army Medical Center for battle-related 
injuries, 28 percent were diagnosed with a TBI. However, the 28 percent 
incidence rate applies only to patients at Walter Reed, not to the much 
larger (and, on average, less seriously wounded) pool of all wounded 
troops, over half of whom return to duty within 72 hours. See Deborah 
L. Warden and others, ``The Defense and Veterans Brain Injury Center 
(DVBIC) Experience at Walter Reed Army Medical Center (WRAMC),'' 
Journal of Neurotrauma 22 (2005), p. 1178; and Deborah L. Warden, 
``Military TBI During the Iraq and Afghanistan Wars,'' Journal of Head 
Trauma Rehabilitation 21 (2006), pp. 398-402.
---------------------------------------------------------------------------
    Post-traumatic Stress Disorder and Other Mental Health Problems. An 
oft-quoted statistic is that 37 percent of the 229,000 OIF/OEF veterans 
(some 84,000) were seen for mental health problems; many of those same 
veterans were seen for other medical conditions as well.\13\ It is 
difficult to estimate the long-run costs stemming from those mental 
health diagnoses. VA states that some of the visits were ``rule-outs,'' 
during which the physician determined that the veteran did not have a 
mental health problem; other mental health diagnoses were provisional 
(pending further evaluation). Some veterans with confirmed mental 
health diagnoses may simply require limited counseling sessions or 
prescription medicine management.
---------------------------------------------------------------------------
    \13\ The source for that statistic is Veterans' Health 
Administration, Office of Public Health and Environmental Hazards, 
Analysis of VA Health Care Utilization Among U.S. Southwest Asia War 
Veterans (April 2007).
---------------------------------------------------------------------------
    One-third of OIF/OEF veterans (229,000 out of 690,000) have sought 
VA medical care since 2002. If veterans who suspect they have mental 
health or other medical problems are more likely than other veterans to 
seek VA medical care, it would be incorrect to extrapolate and reach 
the conclusion that 37 percent of all OIF/OEF veterans have mental 
health problems. For example, the overall mental health incidence rate 
may be lower because OIF and OEF veterans who have not sought VA 
medical care do not suffer from those conditions. However, some 
veterans with mental health problems may not seek care out of concern 
for being stigmatized. Reservists, in particular, might fear that their 
deactivation (and return to their hometowns) could be delayed until 
treatment was completed.
    With regard to post-traumatic stress disorder, 39,000 of the 84,000 
veterans who were seen for mental health problems received a diagnosis 
of PTSD (albeit sometimes a provisional diagnosis); some were diagnosed 
with other mental health conditions as well. Based on those data, the 
incidence rate of PTSD is 17 percent among the 229,000 OIF/OEF veterans 
who have sought VA medical care since 2002. The PTSD incidence rate 
among the entire OIF/OEF veteran population could be either higher or 
lower. A 2004 study in the New England Journal of Medicine (NEJM) 
reported PTSD rates of 12 percent for soldiers and Marines three to 
four months after returning from deployment to Iraq with infantry 
units, and a rate of 6 percent for infantry soldiers returning from 
Afghanistan (where the intensity of combat has been lower).\14\ The 
rates for soldiers in combat-support or combat-service-support units 
could be lower than in the infantry because those units have less 
direct exposure to combat situations. However, the deployments studied 
in the NEJM article were for durations of between six and eight months, 
whereas current deployments for Army units may be as long as 12 or even 
15 months, increasing the potential combat exposure.
---------------------------------------------------------------------------
    \14\ Charles W. Hoge and others, ``Combat Duty in Iraq and 
Afghanistan, Mental Health Problems, and Barriers to Care,'' New 
England Journal of Medicine, vol. 351, no. 1 (July 1, 2004), pp. 13-22. 
A more recent study reports that between 4.8 percent and 9.8 percent of 
soldiers and Marines screen positive for PTSD on the post-deployment 
health-assessment survey that DoD administers one or two weeks after 
units return to the United States; see Charles W. Hoge and others, 
``Mental Health Problems, Use of Mental Health Services, and Attrition 
from Military Service After Returning from Deployment to Iraq or 
Afghanistan,'' Journal of the American Medical Association, vol. 295, 
no. 9 (March 1, 2006), pp. 1023-1032.
---------------------------------------------------------------------------
    If the Congress seeks projections of VA's future resource needs, 
then the costs of treating all current and future TBI patients are 
relevant. However, to estimate costs specifically associated with OIF 
and OEF, it is important to exclude an estimate of the number of TBIs 
that might have been experienced in a comparably sized military 
population during peacetime. In 1999, incidence rates in the Army per 
100,000 soldiers were as follows: mild TBIs, 34.0; moderate TBIs, 6.1; 
severe TBIs, 10.6; and TBIs of unknown severity, 11.6.\15\ Given a 
deployed force that has averaged about 180,000 troops on the ground 
(including Marines as well as Army soldiers), one would expect to see 
annual counts of about 110 TBIs in Iraq and Afghanistan, of which at 
least 60 would be classified as mild.\16\ TBIs in those theaters have 
been diagnosed at the rate of about 500 per year, but about one-fifth 
of that total might have occurred even in a peacetime environment.
---------------------------------------------------------------------------
    \15\ Brian J. Ivins and others, ``Hospital Admissions Associated 
with Traumatic Brain Injury in the U.S. Army During Peacetime: nineties 
Trends,'' Neuroepidemiology, vol. 27, no. 3 (2006), pp. 154-163.
    \16\  The total number of soldiers and Marines has averaged about 
160,000 in the Iraq theater (including Kuwait and other nearby 
countries) and 20,000 in Afghanistan. The recent surge in forces in 
Iraq was achieved largely by deploying troops sooner than was 
previously planned and by extending the deployment of forces already in 
that theater. The surge has increased the U.S. military presence in 
Iraq by between 30,000 and 40,000, but a force that large was not on 
the ground during the period in which the wartime casualty statistics 
were generated.
---------------------------------------------------------------------------
    The cost of treating a TBI patient must take into account the 
severity of the injury. A 2005 paper by Wallsten and Kosec reported:
    ``We made the conservative assumption that only those with severe 
brain injuries and amputations would require lifetime care. Estimates 
commonly used by medical experts suggest a lifetime cost of care for 
brain injuries ranging from $600,000 to $4,000,000 per person and about 
$45,000 to $57,000 for amputees, plus the cost of prosthetic limbs 
ranging from about $12,500 to about $100,000.'' \17\
---------------------------------------------------------------------------
    \17\ Scott Wallsten and Katrina Kosec, ``The Economic Costs of the 
War in Iraq,'' Working Paper No. 05-19 (Washington, D.C.: AEI-Brookings 
Joint Center for Regulatory Studies, September 2005), p. 22.
---------------------------------------------------------------------------
    Despite their stated attempt to estimate costs conservatively, 
Wallsten and Kosec did not take into account the fact that about two-
thirds of the TBIs from OIF and OEF have been classified as mild. While 
some have expressed concern that there may be lingering effects from 
mild TBIs, medical evidence suggests that the most common path is for 
natural recovery within a matter of weeks or at most months, although a 
small percentage of patients with mild TBIs exhibit persistent 
symptoms.\18\ Instead, Wallsten and Kosec equated all TBIs (regardless 
of severity) to ``severe head injuries'' sustained in automobile 
crashes, as defined and calibrated by the National Highway 
Transportation Safety Administration. On the basis of that equation, 
Wallsten and Kosec estimated between $600,000 and $4 million for 
lifetime care of a brain-injured victim.
---------------------------------------------------------------------------
    \18\ See H.S. Levin and others, ``Neurobehavioral Outcome Following 
Minor Head Injury: A Three-Center Study,'' Journal of Neurosurgery, 
vol. 66, no. 2 (February 1987), pp. 234-243; and M.P. Alexander, ``Mild 
Traumatic Brain Injury: Pathophysiology, Natural History, and Clinical 
Management,'' Neurology 45 (1995), pp.1253-1260.
---------------------------------------------------------------------------
    The two types of injuries--TBIs sustained in combat and severe head 
injuries sustained in automobile crashes--are actually quite different. 
All U.S. soldiers are issued Kevlar helmets that are capable of 
deflecting some bullets and shrapnel, or at least significantly 
reducing their velocity upon penetration. Motorists do not generally 
wear helmets, and not all wear seat belts (although many vehicles are 
equipped with air bags); therefore, their head injuries are much more 
likely to affect the brain directly.\19\
---------------------------------------------------------------------------
    \19\ Similarly, Wallsten and Kosec applied their ``lifetime care'' 
estimate to all amputations, even though 14 percent of amputations from 
OIF and OEF have involved only fingers or toes, obviating the need for 
prosthetic limbs.
---------------------------------------------------------------------------
    Linda Bilmes and Joseph Stiglitz present arguments similar to those 
offered by Wallsten and Kosac:

           ``There is a special category of health care expenditures 
that go beyond those included in the above calculation--for those with 
brain injuries. To date, 3213 people--20% of those injured in Iraq--
have suffered head/brain injuries that require lifetime continual care 
at a cost range of $600,000 to $5 million. The government will be 
required to commit resources through intensive care facilities, round-
the-clock home or institutional care, rehabilitation and assisted 
living for these veterans. For the conservative estimate, we have used 
a midpoint estimate of a net present value of $2.7 million over a 20 
year expected survival rate for this group, which is about $135,000 per 
year, yielding a cost of $14 billion. This amount seems low for brain-
injured individuals who will require round-the-clock care in feeding, 
dressing and daily functioning. For the moderate estimate, we use a 
higher cost estimate ($4m) and assume longer life duration for a total 
cost of $35 billion. In both cases we assume that the number injured 
will rise in a manner consistent with the duration of the conflict.'' 
\20\
---------------------------------------------------------------------------
    \20\ Linda Bilmes and Joseph Stiglitz, ``The Economic Costs of the 
Iraq War: An Appraisal Three Years After the Beginning of the 
Conflict,'' Working Paper No. 12054 (Cambridge, Mass.: National Bureau 
of Economic Research, February 2006), p. 9. The authors' research was 
originally presented at the Allied Social Sciences Association Annual 
Conference, Boston, January 2006.

    On the basis of the DoD medical census, 1,950 TBIs had been 
diagnosed through December 2006 and 2,669 through July 2007, but still 
not the 3,213 that Bilmes and Stiglitz assert had occurred as early as 
January 2006. More important, two-thirds of the diagnoses were for mild 
TBIs, from which most patients should recover naturally, especially if 
given prompt treatment. The scenario of ``lifetime continual care'' 
applies to a group of wounded soldiers numbering perhaps in the 
hundreds but not to the vast majority of those diagnosed with TBIs. To 
further illustrate the implausibility of Bilmes and Stiglitz's cost 
estimates, note that in 2007 VA obligated $573 million for medical care 
(for all injuries and illnesses) of veterans of OIF and OEF. Yet Bilmes 
and Stiglitz's low estimate implies annual expenditures averaging about 
$900 million, and their high estimate implies average annual 
expenditures of $1.6 billion extending for decades to treat just the 
brain-injured veterans.\21\
---------------------------------------------------------------------------
    \21\ Bilmes and Stiglitz's estimate of a 20 percent incidence rate 
of brain injuries was adopted from the earlier paper by Wallsten and 
Kosec. That estimate, in turn, was based on a misinterpretation of a 
research paper by an Air Force ear-nose-and-throat specialist (or 
otolaryngologist) and head-and-neck surgeon who had been was stationed 
at Landstuhl Regional Medical Center: Lt. Colonel Michael S. Xydakis 
and others, ``Analysis of Battlefield Head and Neck Injuries in Iraq 
and Afghanistan,'' Otolaryngology--Head and Neck Surgery, vol. 133, no. 
4 (October 2005), pp. 497-504. The paper was originally presented at 
the American Academy of Otolaryngology Head and Neck Surgery Annual 
Meeting, New York, September 2004. Lt. Colonel Xydakis and his 
colleagues found that among 2,483 battle-injured patients evacuated 
from Iraq or Afghanistan and treated at Landstuhl through March 19, 
2004, some 21 percent had head or neck trauma. However, neck injuries 
affect the area below the helmet line and are distinct from brain 
injuries; TBIs (as a primary diagnosis) would be treated by 
neurologists rather than otolaryngologists. Moreover, the 21 percent 
incidence rate would at most apply only to those patients evacuated to 
Landstuhl and classified as ``battle-injured,'' not to the much larger 
(and, on average, less-seriously wounded) pool of all wounded troops, 
over half of whom return to duty within 72 hours.
---------------------------------------------------------------------------
Utilization of VA Medical Care
    Of the 320,000 active-duty veterans of OIF and OEF who have 
separated from military service through April 2007, 112,000 have 
received health care from VA. In addition, 370,000 members of the 
Reserve or National Guard have returned from OIF or OEF and become 
eligible for VA health care, of which 117,000 have received care. Among 
that total of 229,000 patients, 3 percent (fewer than 8,000) have been 
hospitalized at least once in a VA facility since 2002; the other 97 
percent were seen on an outpatient basis only.
    Not all of the 229,000 OIF/OEF patients visit a VA medical facility 
during any single year. In 2006, for example, VA treated over 5 million 
veterans, including 155,000 OIF/OEF veterans, who accounted for 3 
percent of the total veteran patient load (see Table 3).
Table 3.
Number of Veterans of OIF and OEF Treated at VA Medical Facilities and 
        the Average Annual Cost of Treatment

------------------------------------------------------------------------
                                    2005      2006      2007      2008
------------------------------------------------------------------------
Number of OIF/OEF Veterans        101,000   155,000   209,000   263,000
 Treated
========================================================================
Annual Cost per OIF/OEF Patient   2,860     2,310     2,610     2,740
 (Dollars)
------------------------------------------------------------------------
Source: Department of Veterans Affairs (VA) based on budget submissions
  for fiscal years 2007 and 2008.
Notes: OIF = Operation Iraqi Freedom; OEF = Operation Enduring Freedom.
Numbers for 2005 are from VA's fiscal year 2007 budget submission.
Numbers for 2006 through 2008 are from VA's fiscal year 2008 budget
  submission.

    VA is treating a certain number of recent veterans for the 
amputations and severe brain injuries discussed above, as well as for 
other serious injuries, although those veterans may be treated for many 
months by DoD (for example, at Walter Reed Army Medical Center) before 
being released to VA. VA estimates an average annual cost of $2,610 per 
OIF/OEF veteran who used VA health care in 2006, versus an overall 
average of $5,765 per year for all VA patients.
Projections of VA's Costs for Medical Care, Disability Compensation, 
        and Survivors' Benefits
    CBO has developed projections of VA's costs to treat all veterans 
of OIF and OEF who are eligible for VA medical care and who demand that 
care. However, some of those veterans would have been eligible for such 
care and would have used the VA medical system even if they had not 
deployed to Iraq and Afghanistan (for example, for treatment of normal 
age--or training-related injuries to the musculoskeletal system). Those 
costs that are not specifically attributable to deployments to Iraq or 
Afghanistan should be subtracted from the gross cost estimates. 
Conversely, some veterans may develop service-connected conditions 
during their tours in Iraq and Afghanistan, yet not present for VA 
medical care until many years after they separate from active duty. CBO 
is continuing to refine its projection model to account for those 
possibilities.\22\
---------------------------------------------------------------------------
    \22\ The projections in this testimony update those reported in the 
statement of Allison Percy, Principal Analyst, Congressional Budget 
Office, Future Medical Spending by the Department of Veterans Affairs, 
before the Subcommittee on Military Construction, Veterans Affairs, and 
Related Agencies, House Committee on Appropriations (February 15, 
2007), and Congressional Budget Office, Potential Growth Paths for 
Medical Spending by the Department of Veterans Affairs (July 2006).
---------------------------------------------------------------------------
    Along with medical care, the Department of Veterans Affairs 
provides compensation and various other benefits, including life 
insurance and educational benefits, to veterans. Calculations of the 
cost of the war to VA should include the costs of these other benefits 
over and above the costs that would have been incurred had the war not 
been fought. The two programs most likely to be significantly affected 
by the current operations are disability compensation paid to veterans 
with service-connected disabilities, and dependency and indemnity 
compensation benefits paid to survivors of service members.\23\
---------------------------------------------------------------------------
    \23\ The current testimony does not include the costs of any 
increases in veterans' pensions or vocational rehabilitation provided 
by VA. Nor does it include the costs of disability retirement pay, 
disability severance pay, or Survivor Benefit Plan payments provided by 
DoD, which would be largely offset by VA benefits. Finally, the 
testimony excludes payments from the Servicemembers' Group Life 
Insurance or Traumatic Servicemembers' Group Life Insurance programs. 
DoD pays the additional costs incurred by those insurance programs for 
claims related to operations in Iraq and Afghanistan.
---------------------------------------------------------------------------
    Disability compensation is a monetary payment made to veterans who 
have became disabled as a result of a medical condition incurred or 
aggravated during their active-duty service. The level of a veteran's 
disability is rated between 0 and 100 percent, in increments of ten 
percent. Compensation is based on the veteran's disability rating, with 
special payments for the most severely injured veterans. In 2007, those 
tax-free payments ranged from $115 per month for veterans with a ten 
percent disability to $2,471 per month for those rated 100 percent 
disabled. Special payments could range up to $7,070 per month. CBO 
estimates that VA paid a total of $26.6 billion in disability 
compensation in 2007, of which $126 million was paid to veterans of OIF 
and OEF.
    DIC, or survivors', benefits are monthly payments made to survivors 
of certain deceased veterans, including those who died while on active 
duty and those who died of service-connected disabilities. In 2007, 
surviving spouses were awarded a base monthly payment of $1,067, 
although additional payments could be made depending on the 
circumstances. CBO estimates that VA paid a total of $4.4 billion in 
survivors' benefits in 2007, of which $35 million went to survivors of 
veterans of OIF and OEF.
    CBO has projected VA's potential costs for medical care, disability 
compensation, and survivors' benefits under the assumption that 
historical casualty rates (per deployed service member per year, see 
Table 1) for operations in Iraq and Afghanistan over the 2003-2006 
period will continue into the future and that the necessary funds are 
appropriated. CBO presents two broad illustrative scenarios for the 
force levels in-theater over the coming years. Under the first 
scenario, the number of deployed troops would decline from an average 
of approximately 210,000 active-duty, Reserve, and National Guard 
personnel on the ground in fiscal year 2007 to 30,000 in 2010 and would 
remain at that level over the 2010-2017 period, though not necessarily 
in Iraq and Afghanistan. In the second scenario, the number of deployed 
troops would decline more gradually over a 6-year period, until 75,000 
remained overseas in 2013 and each year thereafter.\24\
---------------------------------------------------------------------------
    \24\ The two scenarios are described in more detail in the 
Statement of Robert A. Sunshine, Assistant Director for Budget 
Analysis, Congressional Budget Office, Estimated Costs of U.S. 
Operations in Iraq and Afghanistan and of Other Activities Related to 
the War on Terrorism, before the House Committee on the Budget (July 
31, 2007). CBO has more recently constructed long-term scenarios in 
which the United States maintains a military presence of about 55,000 
troops in Iraq, similar to the level of U.S. forces in the Republic of 
Korea and the Northeast Asia region; see Congressional Budget Office, 
The Possible Costs to the United States of Maintaining a Long-Term 
Military Presence in Iraq (September 2007). However, the current 
testimony, which focuses on the next 10 years, does not provide 
projections of VA's costs under those alternative long-term scenarios.
---------------------------------------------------------------------------
    Because VA's costs could also depend on how long DoD sustains the 
increase in force levels currently in the Iraq theater, CBO estimated 
the costs for both scenarios under the assumption that the current 
force level in Iraq would be sustained for periods of, respectively, 12 
or 24 months. CBO found that the costs to VA over the 10-year period 
would not vary substantially with the number of months that deployed 
forces were maintained at the current level before troop levels began 
to decline. Consequently, in this testimony, CBO presents solely the 
estimates for VA's costs based on the larger troop presence lasting 12 
months.
    Under the first scenario, in which the number of deployed troops 
drops to 30,000 by 2010, VA would incur costs of about $9.7 billion 
over the 2008-2017 period for medical care, disability compensation, 
and survivors' benefits. Alternatively, if deployed forces declined 
more slowly to 75,000 by 2013, as in the second scenario, VA's costs 
would reach almost $13 billion for those purposes over the next 10 
years, CBO estimates (see Table 4).

                                                                        Table 4.
                  Estimated Spending by the Department of Veterans Affairs on Veterans of OIF and OEF Under Two Scenarios, 2008 to 2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              10-Year Projections, 2008-
                                              2008    2009    2010    2011    2012    2013    2014    2015    2016    2017               2017
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Low Option with 12-Month Surge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medical Care                                   692     741      796     745     669     621     607     622     660     712  6,866
--------------------------------------------------------------------------------------------------------------------------------------------------------
Disability                                     166     188      197     207     218     228     239     251     263     275  2,233
Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dependency and                                  43      47       50      52      54      57      59      62      64      67  555
Indemnity Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total                                          901     976    1,043   1,005     940     906     906     935     987   1,055  9,654
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     High Option with 12-Month Surge
--------------------------------------------------------------------------------------------------------------------------------------------------------
Medical Care                                   692     741      833     892     940     970     980     996   1,038   1,106  9,187
--------------------------------------------------------------------------------------------------------------------------------------------------------
Disability                                     166     202      237     267     292     314     336     359     382     407  2,962
Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Dependency and                                  43      50       57      64      69      74      78      83      88      93  699
Indemnity Compensation
--------------------------------------------------------------------------------------------------------------------------------------------------------
Total                                          901     993    1,127   1,223   1,302   1,358   1,394   1,437   1,508   1,606  12,849
--------------------------------------------------------------------------------------------------------------------------------------------------------
Source: Congressional Budget Office.

Notes: OIF = Operation Iraqi Freedom; OEF = Operation Enduring Freedom.

Costs for Medical Care
    Under the assumptions in the first scenario, CBO estimates, VA's 
costs would reach almost $7 billion from 2008 through 2017 for medical 
care for veterans with service-connected conditions incurred in Iraq 
and Afghanistan. Under the second scenario, VA's costs would be over $9 
billion.\25\
---------------------------------------------------------------------------
    \25\ CBO's projection of $692 million in OIF/OEF medical costs for 
2008 compares to the figure $752 million that VA included in its 2008 
budget request.
---------------------------------------------------------------------------
    For 2008 through 2017, CBO projects that VA's costs to treat 
veterans of OIF and OEF will be related to the number of service 
members wounded in action, with most veterans presenting for care at VA 
medical facilities shortly after they separate from active duty. 
Because the majority of veterans return to work and obtain employer-
sponsored insurance that they may prefer to use, CBO anticipates that 
those veterans will move out of the VA medical system over time, 
although some will continue to seek part or all of their care from VA. 
CBO projects that VA's per capita cost of care will grow at the same 
rate as national health expenditures, with nominal growth rates at 
about 7 percent per year from 2008 through 2017.
Costs for Disability Compensation
    According to CBO's projections, VA's spending on disability 
compensation related to operations in Iraq and Afghanistan would total 
$2.2 billion under the first scenario and $3.0 billion under the second 
scenario over the 2008-2017 period.
    DoD provided data on the number and VA disability ratings of 
service members who were injured in and evacuated from Iraq and 
Afghanistan and who later separated from the military. CBO applied 
projections of annual payments to people with varying disability 
ratings to estimate total costs for disability compensation. In 
addition, CBO assumed that approximately three times the number of 
claims associated with medical evacuation would eventually be made by 
veterans who incur service-connected conditions as a result of 
operations in Iraq and Afghanistan that are not severe enough to 
require medical evacuation from the theater. CBO assumed that those 
additional veterans would, on average, receive a 40 percent disability 
rating.
Costs for Dependency and Indemnity Compensation
    For the 10-year period from 2008 through 2017, CBO projects 
spending on DIC payments made to the dependents of service members who 
die in the current operations at about $550 million under the first 
scenario and $700 million under the second. To construct those 
estimates, CBO assumed that 60 percent of service members dying in OIF 
and OEF would have dependents eligible for DIC and that payment amounts 
would rise at about 2.2 percent per year in the future.

                                 

     Prepared Statement of Hon. Michael J. Kussman, M.D., MS, MACP
    Under Secretary for Health,
    Veterans Health Administration, U.S. Department of Veterans Affairs

    Mr. Chairman and members of the Committee, thank you for this 
opportunity to discuss how Veterans Affairs (VA) is addressing medical 
care costs for the Operation Enduring Freedom/Operation Iraqi Freedom 
(OEF/OIF) population. Today, my testimony will focus on how VA 
continues to enhance its programs and projects its annual budget in 
order to meet the needs of this newest generation of veterans.
    Since the onset of combat operations in Iraq and Afghanistan, VA 
has demonstrated flexibility in its ability to create new services and 
to adapt resource allocations to meet the unique medical need of 
returning OEF/OIF veterans. We continue to have confidence in our 
planning and budgeting processes and we are committed to utilizing all 
necessary resources to provide timely and quality health care to all 
our veterans.
    VA has grown from four Traumatic Brain Injury Centers into an 
entire Polytrauma System of Care, expanded its Readjustment Counseling 
Services by establishing new Vet Centers across the country and 
enhanced our mental health system to more robustly address Post 
Traumatic Stress Disorder (PTSD) and suicide, among other mental health 
issues. Mr. Chairman, we would like to thank this Committee for its 
continued support in our efforts to provide the best health care for 
all veterans.
Planning and Utilization
    Since 2002 thru the end of the 3rd quarter of fiscal year (FY) 
2007, 751,273 OEF/OIF veterans who left active duty have become 
eligible for VA health care. Thirty-five percent (263,909) of the total 
separated OEF/OIF veterans have come to VA to obtain VA health care. We 
follow and analyze trends and other data to ensure that VA is ready and 
able to meet future demands for medical care, particularly for our OEF/
OIF veterans.
Polytrauma System of Care
    Prior to FY 2002, Traumatic Brain Injury (TBI) Lead Centers 
provided acute medical and rehabilitation care to veterans suffering 
from severe TBI and one or more other major traumatic injuries such as 
amputation of a limb(s), or blindness. Due to the unique and severe 
injuries caused by improvised explosive devices, VHA created the 
Polytrauma System of Care that provides a continuum of care when these 
heroes are able to move from acute care to less intensive levels of 
care. The networks provide three levels of care from acute to less 
intensive outpatient care. These less intrusive care levels are 
provided at facilities throughout the 21 Veteran Integrated Systems 
Network (VISNs). To give this Committee a sense of the magnitude of 
severe injuries in the OEF/OIF population, there have been 681 patients 
with amputations, and 110 patients with spinal cord injuries. VA has 
accepted 436 transfers from Military Treatment Facilities to the 
polytrauma centers.
    This system of care consists of four regional Polytrauma 
Rehabilitation Centers (PRC) and provides acute intensive medical and 
rehabilitation care for complex and severe polytraumatic injuries. The 
Secretary of Veterans Affairs recently announced the decision to locate 
a fifth Polytrauma Center in San Antonio, TX. The PRCs serve as hubs 
for acute medical and rehabilitation care, research, and education 
related to polytrauma and TBI.
Transition Patient Advocates
    VHA developed new programs to provide additional transition 
assistance and case management for OEF/OIF veterans. In 2007, VA hired 
100 Transition Patient Advocates (TPAs). TPAs serve as veteran 
advocates when severely injured veterans transition to VA from a 
Military Treatment Facility. The TPA works closely with the VA Social 
Work Liaison to ensure a smooth health care transition. These 
specialized case managers are located in VA medical centers and the 
number assigned to a specific VAMC is based on the number of OEF/OIF 
veterans treated by the medical center. Annually, VA distributes 
approximately $19 million among the Veteran Integrated Service Networks 
to cover TPA salaries.
Vet Centers
    Vet Centers serve veterans and their families by providing 
professional readjustment counseling. Currently, there are 209 VA Vet 
Centers located in all 50 states, the District of Columbia, Guam, 
Puerto Rico and the U.S. Virgin Islands. The Vet Centers operate in the 
community outside of larger medical facilities. With the onset of the 
hostilities in Afghanistan and Iraq, the Vet Centers stepped up to 
actively outreach and extend services to the OEF/OIF veterans. From 
early FY 2003 through the end of the third quarter FY 2007, the Vet 
Centers provided services to 183,530 veterans and clinical services to 
58,504 veterans. During the same time period, more than 1,570 family 
members have been referred to the Vet Centers for bereavement 
counseling.
    From 2001 through 2003, the Vet Center program operated with a 
total of 206 Vet Centers and 943 total staff nationwide. The program's 
annual operation budget was flat except for annual cost of living 
increases. However, investments in Vet Centers became a higher priority 
in 2003. Starting in 2003, the Vet Centers recruited the first 50 of a 
total of 100 Global War On Terror (GWOT) veteran outreach specialists 
to conduct a focused outreach campaign to their fellow veterans 
returning from OEF/OIF. The second 50 GWOT outreach specialists were 
hired in 2005. The associated recruitment cost for the 100 GWOT 
veterans was approximately $5 million. Also in 2005, the Readjustment 
Counseling Service (RSC) established a new four-person Vet Center in 
Nashville, TN, at a recurring cost of approximately $350,000. In 2006, 
RCS established two new four-person Vet Centers in Atlanta, GA, and 
Phoenix, AZ, and augmented the staff of 11 existing Vet Centers by one 
position each. This initiative added 19 permanent positions to the Vet 
Center program with a cost of approximately $1.5 million.
    Today, the Vet Center program is undergoing the largest expansion 
since the early days of the program's founding. The planned expansion 
complements the efforts of the Vet Center outreach initiative by 
ensuring sufficient staff resources are available to provide the 
professional readjustment services needed by the new veterans as they 
return home. In February 2007, VA announced plans to increase the 
number of Vet Centers from 209 to 232, and to augment the staff at 61 
existing Vet Centers. The expansions, started in 2007 and planned for 
completion in 2008, will increase the Vet Center program's annual 
recurring budget by approximately $14 million.
    In May 2007, VA announced that it planned to add yet an additional 
100 new staff positions to the Vet Center program in FY 2008. VHA has 
also targeted an additional 100 positions for FY 2009, which will 
further augment the Vet Centers' ability to address the readjustment 
needs of combat veterans and their families. These staff augmentations 
will result in an annual recurring increase of approximately $8.3 
million. Collectively, starting from the first 50 GWOT veterans in 
2004, the Vet Center program will realize a total of 473 new positions 
by the end of 2009, or a 50-percent increase over pre-2004 staffing 
levels.
Mental Health
    Of the OEF/OIF veterans who sought care from VA, about 38 percent 
have received at least a preliminary diagnosis of a mental health 
condition, and 18 percent have received a preliminary diagnosis for 
PTSD, making it the most common, but by no means the only, mental 
health condition related to the stress of deployment. To meet the 
specific mental health needs of these returning veterans, VHA has 
developed new and enhanced existing mental health programs and 
services. For example, veterans with a serious mental illness are seen 
in specialized programs, such as mental health intensive case 
management, day centers, work programs and psychosocial rehabilitation. 
General and psychogeriatric mental health services are also being 
integrated into primary care clinics.
    VA continues to promote the recruitment and retention of mental 
health professionals. At the local level, opportunities have been 
developed for VA facilities to engage in local advertising and 
recruitment activities and to cover interview-related costs, relocation 
expenses, and provide limited hiring bonuses for exceptional 
applicants. VA employs full- and part-time psychiatrists and 
psychologists who work in collaboration with social workers, mental 
health nurses, counselors, rehabilitation specialists, and other 
clinicians to provide a full continuum of care for mental health 
services for veterans.
    The cost of mental health services and programs specifically 
dedicated for OEF/OIF veterans was $2.4 million in FY 2005, $11.7 
million in FY 2006, and $19.0 million in FY 2007. Most returning 
veterans receive mental health services in programs serving veterans of 
all eras. At present, OEF/OIF veterans represent approximately 10 
percent of all veterans with a mental health diagnosis, and, therefore, 
the costs of their mental health care can be estimated at 10 percent of 
VHA's $3 billion of expenditures in this area.
    Mr. Chairman, this concludes my statement. I am pleased to respond 
to any questions you or the members may have.
    Thank you.

                                 

    Prepared Statement of Hon. Daniel L. Cooper, VADM (Ret.), Under 
    Secretary for Benefits, Veterans Benefits Administration, U.S. 
                     Department of Veterans Affairs
    Mr. Chairman and members of the Committee, it is my pleasure to be 
here today to describe the budget formulation process used to project 
the long-term costs of our veterans compensation program. I am pleased 
to be accompanied today by Mr. Jimmy Norris, Chief Financial Officer of 
the Veterans Benefits Administration (VBA).
    VBA is responsible for administering a wide range of benefits and 
services for veterans, their families, and their survivors. At the 
heart of our mission is the Disability Compensation Program, which 
provides monthly benefits to veterans who are disabled as a result of 
injuries or illness incurred or aggravated during their military 
service. VBA's role in serving the veteran population is extensive and 
complex. Our budget formulation process ensures sufficient resources to 
provide the benefits to those who have sacrificed so much in defense of 
our freedom.
    Our Compensation and Pension Model has proven to be a reliable 
method for projecting veterans' compensation benefits. I will discuss 
our mandatory budget process, including the primary methods and data we 
use in estimating the costs of compensation benefits.
Disability Compensation Benefit Model
    As of the end of FY 2007, over 2.8 million veterans of all periods 
of service were receiving VA compensation benefits. This is a net 
increase of more than 500,000 veterans since 2000. In 2007, these 
veterans were paid $29 billion in compensation benefits, an increase of 
$13.5 billion over the 2000 level.
    To adapt to the changing trends in veterans' compensation benefit 
payments, VBA developed a benefits budget forecasting model for 
veterans of all periods of service. The model uses a combination of 
historical data, current experience, and workload and performance 
projections. Our current model was developed in 2004 in conjunction 
with the Office of Management and Budget, the Congressional Budget 
Office, VA's Office of the Actuary, and several other internal VA 
offices. The working group established to develop the current model 
determined that the most effective means of forecasting must be based 
on veterans' historical degree-of-disability statistics.
    Detailed historical data is the basis for projecting both the 
caseload and the average amount of benefits to be paid for the next ten 
years. Our model incorporates specific data for approximately 99 
percent of the beneficiaries dating back to 1992. By comparing data 
from one year to the next, we are able to recognize developing changes 
in our recurring caseload and predict trends for both accessions and 
terminations from the compensation benefit program. It is important to 
note that 95 percent of VA's compensation payments is issued in 
recurring monthly payments to veterans; the remaining 5 percent 
encompasses retroactive and one-time benefit payments.
    To project future compensation obligations, observed trends in 
historical data are combined with educated forecast assumptions. Two of 
the more important assumptions used to estimate future caseload are 
projected workload and accession rates. Projected workload comes from 
the discretionary budget formulation process and begins with an 
estimate of incoming workload (new claims). Projected incoming claims, 
anticipated inventory, future performance assumptions and productivity 
targets are used to derive the volume of both original and reopened 
cases expected to be completed each year. The accession rate is the 
percent of completed cases that are awarded benefits and is applied to 
projected workload to estimate new compensation cases.
    To forecast obligations, we must also estimate the average amount 
of benefits that will be paid to each beneficiary. A portion of the 
increases in average payments can be specifically attributed to annual 
COLAs. However, the total increase is also impacted by significant 
increases in the average degree of veterans' disabilities, the number 
of veterans determined to be individually unemployable and receiving 
benefits at 100-percent rate, and veterans receiving Special Monthly 
Compensation. The average degree of disability for all beneficiaries 
increased 26 percent over the past ten years, from 30.9 percent in 1996 
to 38.9 percent at the end of 2006, with resultant increases in average 
benefit payments.
    Once the mandatory benefits projection is developed, it is adjusted 
based on recent program changes, which might include newly enacted 
legislation, regulations, or recent court decisions. Our latest 10-year 
plan projects annual veterans' compensation payments to increase by $27 
billion over the next ten years, continuing the trend of the past 
decade and nearly doubling our current obligations for the compensation 
program by the year 2017.
Projections of Current Conflict
    Projections of incoming claims workload is one of the key 
assumptions in the formulation of our mandatory budget requests. The 
number of veterans filing disability compensation claims has increased 
every year since 2000. Disability claims from returning Afghanistan and 
Iraq conflict veterans, as well as from veterans of earlier periods of 
war, increased from 578,773 in FY 2000 to 838,141 in FY 2007. For FY 
2007 alone, this represents an increase of over 259,000 claims or 45 
percent over the 2000 base year. Claims workload itself is a function 
of a number of variables, such as the size of the active duty force. It 
should be noted that resubmitted claims for increased benefits from 
veterans already on our disability compensation rolls represent about 
54 percent of the total claims volume.
    The budget model analyzes changes to individual benefit payments. 
It does not forecast by war period or specific area of military 
assignment. This method has been determined to be reliable for 
projecting total compensation costs, but does not allow us to provide 
long-term disability compensation cost projections specifically for 
OIF/OEF veterans.
    As a result of VA's current efforts to enhance data sharing with 
DoD, we now have a means to identify OIF/OEF combat veterans and are 
able to begin to analyze their benefits usage. The most recent data 
file from DoD includes veterans separated through May 2007. This data 
file was compared to VA records through September 2007. This match 
identified 223,564 OIF/OEF veterans who have filed claims for 
disability benefits either prior to or following their OIF/OEF 
deployment (approximately 30 percent of the 754,911 OIF/OEF 
servicemembers separated through May 2007). Of these 223,564 veterans, 
198,522 have received decisions on their claims (89 percent) and 25,042 
have claims pending (11 percent). Of the 198,522 OIF/OEF veterans who 
have received decisions, 181,151 were found to have service-connected 
disabilities (91 percent).
    Projecting future demand and long-term costs for the OIF/OEF 
conflict, or any specific period of service, remains extremely 
difficult for a number of reasons.

      Many OIF/OEF veterans had earlier periods of service, and 
their injuries or illnesses could have been incurred either prior to or 
subsequent to their OIF/OEF deployment. VA does not maintain data that 
would allow us to attribute veterans' disabilities to a specific period 
of service or deployment. Therefore we are unable to identify which 
OIF/OEF veterans filed a claim for disabilities incurred during their 
actual overseas OIF/OEF deployment.
      VA has significantly expanded its outreach efforts to 
separating servicemembers to ensure they are fully informed about their 
VA benefits. Over the last five years, VBA military services 
coordinators conducted over 38,000 briefings attended by over 1.5 
million active duty and reserve personnel and their family members. 
Additionally, through the Benefits Delivery at Discharge Program, 
servicemembers are assisted in filing for disability benefits prior to 
separation. We believe these efforts have been very successful in 
encouraging separating servicemembers with disabilities to submit 
disability compensation claims. However, the impact of these additional 
efforts on future application trends and benefits usage is not known.
      VBA lacks historical data on benefits claims activity by 
veterans of prior wars or conflicts on which to base projections of 
benefits usage for OIF/OEF veterans. VBA does not have data to show how 
many veterans of prior wars or conflicts ever filed claims or received 
benefits specifically due to service in combat theatres. The only 
comparative data available are the numbers and percentages of veterans 
currently receiving benefits by era of service (e.g. World War II Era 
or Vietnam Era). First-time claimants continue to be added to our 
compensation rolls many years after military service, primarily as a 
result of diseases added to the list of conditions presumed to be 
related to exposure to Agent Orange while serving in Vietnam and post-
traumatic stress disorder. We do not have a basis for determining 
whether service in Iraq and Afghanistan will result in similar claims 
patterns.
Conclusion
    The compensation budget formulation process is based on a complex 
combination of historical data, current experience, workload 
assumptions, external influences, and program judgment. The budget 
evolves as these factors and inputs are refined, revised, and 
revisited. But, throughout all this complexity and change, the prime 
motivation is fulfilling our mission to help disabled veterans receive 
the benefits they have earned through their service to our nation.
    Mr. Chairman, this concludes my statement. I will be happy to 
respond to any questions that you or other members of the Committee 
might have.

                                 
          POST-HEARING QUESTIONS AND RESPONSES FOR THE RECORD
                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                  November 27, 2007

Daniel P. Mulhollan, Director
Congressional Research Service
The Library of Congress
101 Independence Avenue, SE
Washington, DC 20540-7500

Dear Dan:

    In reference to our Full Committee hearing on ``The Long-Term Costs 
of the Current Conflicts'' on October 17, 2007, I would appreciate it 
if you could answer the enclosed hearing questions by the close of 
business on January 8, 2008.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively and single-spaced. In 
addition, please restate the question in its entirety before the 
answer.
    Due to the delay in receiving mail, please provide your response to 
Debbie Smith by fax at 202-225-2034. If you have any questions, please 
call 202-225-9756.

            Sincerely,
                                                         BOB FILNER
                                                           Chairman
                               __________
                                     Congressional Research Service
                                                Library of Congress
                                                     Washington, DC
                                                  February 13, 2008

    MEMORANDUM

    TO: The Honorable Bob Filner, Chair, House Committee on Veterans' 
Affairs

    FROM: Amy Belasco,\1\ Specialist in U.S. Defense Policy and Budget, 
Foreign Affairs, Defense, and Trade Division

    \1\ This memo was prepared with the help of CRS analysts Christine 
Scott, Sidath Panangala, Richard Best, and Charles Henning.

---------------------------------------------------------------------------
    SUBJECT: Data that would be useful in determining future war costs

    As a follow-up to the hearing held by the House Committee on 
Veterans' Affairs on October 17, 2007, on ``The long-term Costs of the 
Current Conflicts,'' the Committee on Veterans' Affairs asked the 
Congressional Research Service (CRS) to specify the types of data, not 
currently provided to Congress by DOD and the Department of Veterans 
Affairs (VA), that would be helpful in determining long-term war costs 
(see attached). It is my understanding that the Committee's interest is 
in those costs likely to be addressed by the Veterans Administration.
Gaps in Current Knowledge about Future War Costs
    One of the most significant gaps in data and discrepancies that 
became apparent during the Committee's hearing was the potential size 
and scale of near-term and long-term costs of health care and 
disability claims for veterans of the conflicts in Iraq and 
Afghanistan, particularly for types of medical problems like mental 
illness that may not arise immediately and may persist for long periods 
of time. For the Department of Veterans Affairs to plan and budget 
adequately for such costs, greater accuracy and transparency in the 
likely cost of caring for veterans of Operation Iraqi Freedom (OIF) and 
Operation Enduring Freedom (OEF) is important.
Differing Estimates of the Cost of Disability Claims and Medical Costs
    During the hearing, the Committee was provided with substantially 
different estimates of likely VA costs for OIF/OEF veterans from the 
Congressional Budget Office (CBO) and Professor Linda Bilmes of the 
Kennedy School of Government. CBO projected that over the next ten 
years, the cost of VA medical care and disability claims for veterans 
of Iraq and Afghanistan could range from an average of about $1 billion 
per year if troop levels declined to 30,000 by 2010 to an average of 
$1.3 billion per year if troop levels declined to 75,000 by 2013.\2\
---------------------------------------------------------------------------
    \2\ Congressional Budget Office, Statement of Matthew S. Goldberg, 
``Projecting the Costs to Care for Veterans of U.S. Military Operations 
in Iraq and Afghanistan,'' October 17, 2007, pp. 16-17.
---------------------------------------------------------------------------
    In a study submitted for the record, Professor Bilmes estimated 
that the lifetime costs of disability claims and medical costs for OIF/
OEF veterans could range from $349.8 billion to $662.8 billion 
depending on how long the wars last.\3\ This estimate is not comparable 
to the CBO's estimate for the next ten years, however, because it 
covers a period of about 40 years, includes discounting of future 
costs, and relies on very different assumptions, including some that 
appear to be questionable or erroneous.\4\
---------------------------------------------------------------------------
    \3\ Linda Bilmes, ``Soldiers Returning from Iraq and Afghanistan: 
The Long-term Costs of Providing Veterans Medical Care and Disability 
Benefits,'' Faculty Research Working Papers Series, RWP07, John F. 
Kennedy School of Government, Harvard University, January 2007, p. 17; 
http://ksgnotes1.harvard.edu/Research/wpaper.nsf/rwp/RWP07-001/$File/
rwp_07_001_bilmes.pdf.
    \4\ Ibid, p. 14 and 17.
---------------------------------------------------------------------------
    For example, Professor Bilmes assumes in her estimates that about 
48% of OIF/OEF veterans will seek medical care every year at an average 
cost of $5,000, assumptions that she claims reflect the Persian Gulf 
War experience.\5\ In fact, VA experience has been that Gulf War 
veterans sought treatment from the VA in only some years at an average 
cost of a couple of hundred dollars per year.\6\ In a long term 
estimate like the one by Professor Bilmes, the effect of underlying 
errors in assumptions is magnified, as, for example, her reliance on 
overly high assumptions about usage rates and average costs like that 
cited above.
---------------------------------------------------------------------------
    \5\ Ibid, p. 13.
    \6\ Email communication from Matt Goldberg, CBO, Feb. 12, 2008.
---------------------------------------------------------------------------
    Another way to see the differences in estimates by CBO, VA, and 
Professor Bilmes is compare annual cost estimates over the next few 
years. In a January 2007 study, Professor Bilmes estimated that in 
2006, annual war-related VA disability claims and medical care would 
reach about $1.9 billion, including $940 million in disability claims 
and $1 billion in medical costs.\7\
---------------------------------------------------------------------------
    \7\ Ibid, p. 10 and p. 14.
---------------------------------------------------------------------------
    In FY2006, the VA reported that medical costs for OIF/OEF veterans 
were $405 million or less than half of the Bilmes estimate.\8\ 
Professor Bilmes estimates that these costs would rise to over $10 
billion annually by 2012. In their October 17, 2007 testimony, CBO 
estimates that the cost of VA medical costs and disability would range 
from $940 million to $1.4 billion in 2012 depending on future troop 
levels.\9\ Based on an ``apples-to-apples'' comparison, then, Professor 
Bilmes' estimate would be roughly seven to nine times larger than the 
CBO estimate.
---------------------------------------------------------------------------
    \8\ Department of Veterans Affairs, Fiscal Year 2008 Budget 
Estimate, Medical Care, p. 9-14, February 2007.
    \9\ Congressional Budget Office, Statement of Matthew S. Goldberg, 
``Projecting the Costs to Care for Veterans of U.S. Military Operations 
in Iraq and Afghanistan,'' October 17, 2007, p. 16-17.
---------------------------------------------------------------------------
    The differences in the CBO, VA and Bilmes' estimates appear to 
spring primarily from widely divergent projections about the average 
cost of medical treatment and disability claims by OIF/OEF veterans. To 
address these differences, Congress could use better information about:

      the incidence or frequency and severity of particular 
types of injuries and illnesses among OIF/OEF veterans (e.g., Traumatic 
brain injury and Post Traumatic Stress Disorder);
      the frequency and types of disability claims among OIF/
OEF veterans;
      the types and length of treatment likely to be needed; 
and hence,
      the current and longer-term costs associated with 
illnesses and injuries experienced by OIF/OEF veterans.
Requiring New Analysis Of Past and Current Data Sources within DOD and 
        VA
    To get a better sense of the costs likely to be faced in the next 
several years and for the longer term, it could be useful to require 
that the Department of Defense and the Department of Veterans Affairs 
pool their data and jointly analyze patient information data and 
disability claims for OIF/OEF military personnel and veterans over the 
past six years. Such a joint analysis could:

      compare the first Gulf War and OIF/OEF experience to date 
in the frequencies and severity of different types of war-related 
injuries and illnesses sustained thus far, using DOD and VA's ICD-9 
medical codes that range from muscular/skeletal injuries to mental 
health problems;
      compare initial and later disability ratings in the first 
Gulf War with those in the Iraq and Afghanistan wars and the effect on 
costs;
      determine the average cost of medical care received by 
military personnel and veterans who have served in the OIF/OEF theaters 
including splits by active-duty and reserve personnel, and career vs. 
short-term enlistees to capture the fact that the make-up of the force 
is significantly different for OIF/OEF and the first Gulf War;
      determine the lag between time of service and when 
injuries, illnesses, or disabilities first appear, when claims or 
medical care are received, and how long treatment is required;
      estimate the effect of Sec. 1707, Title 17, of the FY2008 
National Defense Authorization Act (P.L. 110-181), which provides 
automatic eligibility to VA care for five years for OIF/OEF veterans, 
on the number and cost of treating OIF/OEF veterans eligible for VA 
medical care in the short and longer term;
      estimate annual, ten-year, and longer-term costs based on 
assumptions that reflect experience to date.

    In addition, such an analysis would need to make some illustrative 
projections of future levels of troops deployed in Iraq, Afghanistan 
and surrounding areas. Given the uncertainty, the study might best run 
several different scenarios.
    DOD and VA could analyze the data sources that both agencies have 
collected, exploiting their respective expertise, to estimate likely 
future costs of medical care, annually, in the next ten years and 
further into the future based on several alternate scenarios about 
troop levels. With such information, both agencies could better plan 
and estimate their requirements, and perhaps, reconcile some of the 
discrepancies in other estimates to date.
    It would also be very useful for CBO and CRS to have access to the 
data and methodology in order to make an independent assessment of the 
projected cost and numbers of veterans who now, and may in the future 
rely on VA medical care or qualify for VA disability benefits.
Current Sources of Cost Data
    Although the Wounded Warrior Act included in the FY2008 National 
Defense Authorization Act (H.R. 4986/P.L. 110-181) requires DOD and the 
VA to develop plans and coordinate the care of OIF/OEF veterans for 
transition services and treatment (e.g. for Post Traumatic Stress 
Disorder and Traumatic Brain Injury), and includes various reporting 
requirements, the Act does address the issue of the current and future 
cost of health and disability benefits. So, requiring an analysis like 
that suggested above would not appear to duplicate current 
requirements.
    To fund the study, VA and DOD could tap funds in the Joint 
Incentive Fund, a program established to encourage ``collaboration and 
new approaches to problem solving that mutually benefits both VA and 
DOD.'' \10\
---------------------------------------------------------------------------
    \10\ Title 38, section 8111 (d)(4), U.S. Code amended.
---------------------------------------------------------------------------
    I would be happy to answer additional questions and can be reached 
at (202) 707-7627.

    Enclosure

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                  November 27, 2007

J. Michael Gilmore
Assistant Director for National Security
Congressional Budget Office
Ford House Office Building, 4th Floor
Washington, DC 20515-6925

Dear Michael:

    In reference to our Full Committee hearing on ``The Long-Term Costs 
of the Current Conflicts'' on October 17, 2007, I would appreciate it 
if you could answer the enclosed hearing questions by the close of 
business on January 8, 2008.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively and single-spaced. In 
addition, please restate the question in its entirety before the 
answer.
    Due to the delay in receiving mail, please provide your response to 
Debbie Smith by fax at 202-225-2034. If you have any questions, please 
call 202-225-9756.
            Sincerely,
                                                         BOB FILNER
                                                           Chairman
                               __________
    Responses to Chairman Filner's Questions From October 17, 2007, 
       Hearing, ``The Long-Term Costs of the Current Conflicts''
   Dr. J. Michael Gilmore, Assistant Director for National Security 
                      Congressional Budget Office
      1.  CBO's testimony in February before the Appropriations 
Committee stated that the number of veterans is expected to decline 
through 2025.

      What effect on the overall demographic trends in the 
veterans' population will veterans of OEF/OIF have? Do you still 
estimate that this population will continue to decline through 2025?
      Are there any long-term scenarios that CBO has looked at 
regarding U.S. presence in Iraq that would have a demonstrable effect 
on the long-term demographic trends affecting the veterans' population?

    CBO estimates that the population of living veterans will continue 
to decline with the aging of veterans who served in World War II, the 
Korean War, and the Vietnam War. Neither the activation of additional 
reservists to serve in Iraq and Afghanistan, nor the Administration's 
plan to increase the size of the active Army and Marine Corps, is large 
enough in magnitude to reverse the decline in the size of the veterans 
population.
    The Department of Veterans Affairs' (VA's) Veteran Population Model 
projects the size and demographic characteristics of the future 
population of veterans. In preparation for briefing the House 
Appropriations Committee, CBO obtained data that VA generated using 
that model. To estimate the future population of veterans, the model 
combines data from the current population with historical and projected 
numbers of deaths as well as separations from active duty. CBO used the 
projections from the 2004 version of the Veteran Population Model 
(documentation released in 2007).
    The VA model projects that the population of veterans will decline 
from roughly 24 million in 2007 to about 16.5 million by 2025. Almost 
700,000 veterans died in 2007, with deaths expected to decline to just 
over 500,000 by 2025; an average of 600,000 veterans will die each year 
between 2007 and 2025. Most of those deaths reflect the aging 
population of veterans who participated in World War II, the Korean 
War, or the Vietnam War.
    Conversely, the number of new veterans entering the population is 
relatively low, largely because the size of the military is 
considerably smaller now than it had been in the past. The active force 
peaked at over 12 million service members in 1945, but averaged about 3 
million in the 1960s and fell to under 1.5 million members by the late-
1990s. The VA model projects that the number of separations from active 
duty (among both reservists and active-component members) will drop 
from a recent high of 290,000 in 2003 to 212,000 in 2009, then 
stabilize at about the latter value through 2025.
    Higher activation levels of reservists due to wartime personnel 
demands have and will continue to increase the number of new veterans 
who subsequently qualify for veterans' benefits after deactivation, but 
not enough to close the excess of deaths over separations from active 
duty. The number of reservists deployed in support of OIF/OEF has 
totaled 450,000 through 2007 (with some additional reservists activated 
to backfill positions in the United States vacated by active-component 
members who, in turn, deployed overseas). However, over half of the 
activated reservists had prior active service, so they would have 
qualified for veterans' benefits anyway, notwithstanding their service 
in OIF/OEF. Thus, the incremental number of additional veterans due to 
OIF/OEF is around 200,000. Noting that about 200,000 service members 
left active duty in 2000 and again in 2001, operations in Iraq and 
Afghanistan have accounted for a total of about one years' worth of 
additional separations.
    The higher-end force levels that CBO has considered to sustain 
operations in Iraq and Afghanistan would not affect substantially the 
decline in the number of veterans. Reversing that trend would require 
either more than 300,000 additional annual separations of active-
component personnel, or that number of additional federal activations 
of reservists without prior service. The Administration has announced a 
plan that would, by 2011, increase the size of the active-duty Army by 
65,000 personnel and the Marine Corps by 27,000 personnel. Sustaining 
the additional 92,000 personnel would generate about 15,000 additional 
annual separations, CBO estimates--not nearly enough to reverse the 
declining population of veterans. Force levels would have to increase 
by about 2 million personnel--more than doubling relative to current 
levels--in order to generate the 300,000 additional annual separations 
necessary to offset the deaths of World War II, Korean war, and 
Vietnam-era veterans over the next decade and a half.
      2.  Please specify what types of data, that is not currently 
provided by DOD and VA, would be useful in determining costs.
    DoD and the VA periodically update several reports that CBO would 
find helpful in determining the costs of health care and other benefits 
that OIF/OEF veterans receive. Those reports include:

      ``GWOT Major Trauma Report''--formerly known as the 
``Deployment Health Report'' and compiled by DoD. The report details 
the numbers of traumatic brain injuries (TBIs) and amputations.
      ``Defense and Veteran Brain Injury Center (DVBIC) Fact 
Sheets.'' These releases detail the number of TBIs treated at DVBIC 
sites.
      Tabulations from DoD's post-deployment health assessment 
surveys of veterans returning from OIF/OEF.
      ``Analysis of VA Health Care Utilization Among U.S. GWOT 
Veterans,'' Veterans Health Administration, Office of Public Health and 
Environmental Hazards, Department of Veterans Affairs
      ``Gulf War Veterans Information System (GWVIS) Quarterly 
Reports,'' Veterans Benefits Administration, Department of Veterans 
Affairs
      ``Veterans Benefits Activity Report: Veterans Deployed to 
GWOT,'' Veterans Benefits Administration, Office of Performance 
Analysis and Integrity, Department of Veterans Affairs

    CBO does not currently receive on a routine basis the updates 
prepared to these reports.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                  November 27, 2007

Honorable Gordon H. Mansfield
Acting Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Secretary:

    In reference to our Full Committee hearing on ``The Long-Term Costs 
of the Current Conflicts'' on October 17, 2007, I would appreciate it 
if you could answer the enclosed hearing questions by the close of 
business on January 8, 2008.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all full 
committee and subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively and single-spaced. In 
addition, please restate the question in its entirety before the 
answer.
    Due to the delay in receiving mail, please provide your response to 
Debbie Smith by fax at 202-225-2034. If you have any questions, please 
call 202-225-9756.
            Sincerely,
                                                         BOB FILNER
                                                           Chairman
                               __________
                  The Honorable Bob Filner, Chairman,
House Veterans' Affairs Committee, October 17, 2007, Long-Term Costs of 
                         the Current Conflicts

    Question 1: OEF/OIF Estimates--Your FY 2008 budget request included 
an estimate of OEF/OIF patients of 209,308 for FY 2007 and 263,345 for 
FY 2008. Your testimony states that through the end of the 3rd quarter 
of FY 2007, your have treated 263,909 OEF/OIF veterans, 35 percent of 
the total number of those separated. In light of this, what are your 
current estimates as to FY 2007 and FY 2008? What additional costs will 
the VA incur in FY 2008 for OEF/OIF veterans that were not included in 
your FY 2008 budget submission?
    Response: The 263,939 Operation Enduring Freedom/Operation Iraqi 
Freedom (OEF/OIF) patients treated is the cumulative total of separated 
OEF/OIF veterans that have obtained health care from the Department of 
Veterans Affairs (VA) since fiscal year (FY) 2002. The numbers in the 
budget (209,308 in FY 2007 and 263,345 in FY 2008) represent the 
estimate of the number of unique patients treated in that particular 
year. The current number of OEF/OIF patients treated in FY 2007 was 
approximately one percent lower than the budget estimate.
    Question 2: Infrastructure/Personnel Needs--The GAO released a 
report in March 2007 that recommended the VA should better monitor 
implementation of its Capital Asset Realignment for Enhanced Services 
(CARES) decisions and the impact of CARES. GAO stated that the 
``challenge now is to ensure that CARES becomes an ongoing and 
effective part of [the VA's] capital management efforts and that CARES 
decisions are carried out.''
    Question 2(a): Has the VA modified any of its capital asset advance 
planning to incorporate increased demand from returning service 
members?
    Response: Yes. Capital initiatives use 20-year workload projections 
for developing strategies to address anticipated workload. OEF/OIF 
veterans are included within these workload projections; subsequently, 
the increased service member demand is part of all capital planning. 
Specific to construction planning for both Major and Minor projects, 
the prioritization of construction project submissions has been 
modified due to the anticipated returning service members to give a 
heavier emphasis to such issues as poly trauma, seriously mentally ill, 
and post traumatic stress disorder (PTSD) patients to ensure 
infrastructure needs are available upon their anticipated need.
    Question 2(b): What has the VA done to integrate or modify the 
impact of returning servicemembers on its CARES projections or 
decisions? Response: The health care needs of OEF/OIF veterans are 
included in the actuarial projections that are used to identify and 
plan appropriate capital projects to ensure timely, high quality care 
to these returning service members.
    Question 2(c): What specific steps is the VA taking now to deal 
with any possible increased infrastructure or personnel costs that it 
will face as a result of OEF/OIF?
    Response: Medical center staff use anticipated workload based on 
workload projections as the basis for analyzing capital needs, which 
includes leases, renovation and new construction. Depending on the size 
and type of capital initiative, medical center staff are able to 
immediately address the smaller increased infrastructure demands 
through leases or renovations of existing medical space. Larger 
initiatives are part of the planning cycle and need additional funding 
or approval. Lease and project submissions for FY 2009 and FY 2010 have 
been based on anticipated workload projections, which include the 
increased service member demands. A number of these submissions have 
been through the Minor Construction program. With the additional 
funding for the Minor Construction program in FY 2007 and FY 2008, 
infrastructure demands are in process to meet the increased workload. 
Personnel costs associated with providing care to OEF/OIF veterans are 
also being addressed by each veterans integrated service network 
(VISN), medical center and program office.
    Question 3: Long Term Benefits Impact: Admiral Cooper, I was struck 
by your testimony regarding the difficulty of isolating the effects on 
VBA of OEF/OIF veterans, especially when you state that ``first-time 
claimants continue to be added to compensation rolls many years after 
military service''. Are there any trends based upon VBA's past 
experience that may be important in attempting to get a handle as to 
what we might expect in the future regarding OEF/OIF claims?
    Response: Projecting future demand for the OEF/OIF conflict remains 
difficult, largely due to the issues I identified in testimony. 
However, with the full implementation of VETSNET and through the use of 
the RBA 2000 application, VA will be able to collect long-term trend 
data on OEF/OIF veterans and other specific categories of veterans. The 
data available through the VETSNET system will allow VA to compile 
additional information on current veterans and make more confident 
projections of future needs.

                    The Honorable Michael H. Michaud
   For Michael J. Kussman, M.D., MS, MACP, Undersecretary for Health
    Question 1: Your testimony states that OEF/OIF veterans represent 
approximately 10 percent of all veterans with a mental health 
diagnosis. Do you have a professional opinion or projection as to how 
high you expect that percentage to rise in the next five 2 years? Is VA 
tracking cost differences in treating severe PTSD as opposed to less 
severe PTSD?
    Response: There is no reliable basis for making long term 
projections of the proportion of OEF/OIF veterans among all VA patients 
with mental disorders. There is no definitive differentiation of 
``severe'' PTSD from other levels of the diagnosis. VA is tracking the 
cost difference between treating PTSD, which requires inpatient care 
(one meaningful index of severity), as compared to PTSD that can be 
managed on an outpatient basis (which can be considered ``less 
severe''). In the past several years, there have been fewer than 10,000 
veterans admitted for inpatient care annually for PTSD, as opposed to 
over 300,000 veterans treated as outpatients for PTSD. The average cost 
for a mental health admission in FY 2006 was approximately $15,000, 
while the average outpatient costs was about $2,500 per patient per 
year. It would be expected that a veteran who required inpatient care 
would also require outpatient care as well, raising the cost for severe 
PTSD according to this definition to $17,500 per patient per year. 
(Estimates based on data from VA databases described in Northeast 
Program Evaluation Center [NEPEC] Reports: Long Journey Home XIV PTSD 
FY 2006 Service Delivery & Performance and National Mental Health 
Program Performance Monitoring System FY 2006 Report)
    Question 2: There will be 473 new positions in the Vet Center 
program by the end of FY 2009 which equates to a 50-percent increase 
over pre-2004 staffing levels. Do you know what mix of staff positions 
this represents? In other words, are they all outreach specialists or 
are there some Social Workers, Psychologists and psychiatrists in that 
increase?
    Response: The total number of additional staff includes the 100 
OEF/OIF veteran outreach specialists hired in FY 2004 and FY 2005 to 
promote early intervention through an aggressive outreach campaign by 
contacting new veterans and bringing them into VA for needed services. 
Of the new staff positions 26 are office managers assigned to each of 
the new vet centers to perform administrative functions. The remaining 
new staff positions are primarily professional, intended to augment 
existing vet center staff to ensure sufficient staff resources are 
available to provide the professional readjustment services needed by 
the new veterans as they return home. The mix of the latter includes 
social workers, psychologists, psychiatric nurse clinical specialists, 
and other Master degree level licensed counselors.
    Question 3: The new Transition Patient Advocates assist severely 
injured veterans transitioning to VA from a Military Treatment 
Facility. VHA has 100 of them. Are these TPAs professionals such as 
nurses or social workers trained in case management? Any plans to grow 
that program and hire more of them?
    Response: VA's TPAs serve as ombudsmen to assist severely ill and 
injured service members and their families as they transition from the 
Department of Defense (DoD) to VA and move through the VA system of 
care. The TPAs, who are located at VA Medical Centers across the 
country, serve as communicators, facilitators and problem solvers and 
provide long term assistance to severely ill and injured veterans.
    The TPA is not a clinical role. Rather, TPAs are one component of 
the OEF/OIF case management team and work closely with the clinical 
members of the team, which include at a minimum a nurse or social 
worker program manager and nurse and social worker case managers. The 
program managers and case managers provide clinical case management for 
all severely ill or injured service members and veterans and 
nonseverely ill or injured OEF/OIF veterans who would benefit from case 
management services.
    At this time, the program is adequately staffed based on the 
preliminary workload data using an application within the Veterans 
Health Administration (VHA) Vista health information system called the 
primary care management module (PCMM). Using PCMM will facilitate local 
and national tracking of severely ill and injured OEF/OIF veteran 
caseloads which can be used at both the local and national level to 
identify staffing requirements. VA is monitoring the caseloads closely 
and will staff positions as indicated by workload data.
    Question 4: Accurate future projections to treat PTSD and TBI are 
critical when assessing VHA's capacity, infrastructure and staffing 
needs to provide quality, safe treatment to not only the returning 
veterans, but veterans from all past conflicts. Could you tell us today 
what VHA's projection is for future treatment of PTSD and TBI--taking 
into consideration all costs associated with that treatment?
    Response: The numbers of veterans of all service eras treated by VA 
for PTSD have increased at an average rate of 12.5 percent per year for 
the past several years. This rate is relative to the number of active 
duty service members that discharged from the military and is not a 
rate that is compounding every year (there is no change in prevalence). 
The percentage of OEF/OIF era veterans treated for PTSD is less than 10 
percent of the overall population of veterans who are treated for PTSD; 
in FY 2006, 345,712 veterans were treated for PTSD, of which 27,141 
were OEF/OIF era veterans. As of the third quarter of FY 2007, 14,805 
additional OEF/OIF veterans received provisional diagnosis of PTSD. If 
this trend is maintained for the fourth quarter of FY 2007, it would 
result in 19,740 new OEF/OIF veterans with PTSD in FY 2007, an increase 
of 2,700 from FY 2006. The great majority of veterans with PTSD (over 
90 percent) require only outpatient services. The average cost for a 
veteran to receive outpatient services in FY 2006 was approximately 
$2,500 per year. These rates and the associated costs (incorporating 
inflation) can be anticipated to continue for the next several years. 
VHA has enhanced overall mental health resources by over $300 million 
in FY 2007 to meet the influx or veterans with mental and emotional 
problems, of all service eras. Issues of prompt access to care of the 
highest quality employing evidence based practices are in place. Access 
and care needs are monitored in an ongoing manner to maintain efficient 
and effective services.
    In order to project the cost of care for veterans with mild 
traumatic brain injury (TBI), VA is using data from the mandatory TBI 
screening of all OEF/OIF veterans who seek care in the VA, and follow 
up TBI evaluations of veterans with positive screens.
    In FY 2007, 30,726 veterans received services in VA for primary or 
secondary TBI diagnosis at a cost of $165,889,000. Estimated costs for 
all treatment associated with TBI (mild to severe) in FY 2008-FY 2010 
are presented in the table below:

      Projected Patients With Traumatic Brain Injury/TBI Diagnosis
------------------------------------------------------------------------
                                       FY08        FY09         FY10
------------------------------------------------------------------------
Patients                            34,885      38,961      42,955
------------------------------------------------------------------------

    Beginning in FY2009, the cost of TBI care will be submitted as a 
select program in all future VA budget requests. This will ensure that 
VA fulfills its commitment to meet the health care needs of the veteran 
population with TBI.
    For TBI patients with moderate to severe injuries, VA projects that 
10 percent of TBI patients will require long term institutional care. 
An additional 25 percent will benefit from some level of non-
institutional care services such as home based primary care, adult day 
care, respite care/purchased skilled home health care, and homemaker/
home health aid. The projected number of these veterans is relatively 
low at this time (fewer than 300). VA is actively enhancing existing 
programs, developing new programs, and exploring other options to meet 
the needs of this new generation of veterans.
    VA is investing more than $150 million to further develop the 
capacity and infrastructure to provide the highest quality TBI care. A 
fifth poly trauma rehabilitation center has recently been approved for 
San Antonio, TX, and is currently under design. The continuum of TBI 
rehabilitation services in the polytrauma TBI system of care has 
expanded to include several new programs that provide services for 
veterans with different severity of TBI, and at different stages of 
recovery. Targeted resources have been allocated to support staffing 
requirements, upgrade equipment, technologies, and physical space, and 
to promote advanced rehabilitation practices.
           For Daniel L. Cooper, Undersecretary for Benefits
    Question 1: In your written statement, you state that 89 percent of 
OEF/OIF veterans who have filed claims have received decisions on these 
claims, and that 91 percent of those who received decisions were found 
to have service-connected disabilities. How does this match up with 
statistics from previous conflicts and, if there is a disparity, what 
factors do you believe explain this disparity?
    Response: The Veterans Benefit Administration (VBA) does not have 
data to show how many veterans from past wartime eras filed claims or 
received benefits based on service in specific combat theatres. The 
only data available are the numbers of veterans currently receiving 
benefits by era of service. Valid comparisons are also made difficult 
because a significant number of first-time claimants from prior eras 
continue to be added to our rolls many years after service, along with 
Global War on Terror (GWOT) veterans just returning from active duty.
    Question 2: In your testimony, you highlight the problems that VBA 
faces in quantifying the impact of returning servicemembers on VBA. Do 
you have plans to attempt to capture more specific data regarding OEF/
OIF veterans? What additional data would you find useful?
    Response: We continue to partner with 000 to receive higher quality 
and more timely data about OEF/OIF service members. We now receive data 
from the joint patient tracking application, which provides us 
information about service members very shortly after their initial 
injuries. Additionally, we are partnering with 000 on a single 
examination pilot initiative that will allow us to obtain and analyze 
data on veterans undergoing the medical evaluation board and physical 
evaluation board processes.
    With the full implementation of VETSNET and through the use of the 
RBA 2000 application, VA will be able to collect long-term trend data 
on OEF/OIF veterans and other specific categories of veterans. The data 
available through the VETSNET system will allow VA to compile 
additional information on current veterans and make more confident 
projections of future needs.

                                  
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