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


 
                THE U.S. DEPARTMENT OF VETERANS AFFAIRS 
                  BUDGET REQUEST FOR FISCAL YEAR 2009 

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

                                HEARING

                               before the

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                            FEBRUARY 7, 2008

                               ----------                              

                           Serial No. 110-67

                               ----------                              

       Printed for the use of the Committee on Veterans' Affairs


                THE U.S. DEPARTMENT OF VETERANS AFFAIRS

                  BUDGET REQUEST FOR FISCAL YEAR 2009













                THE U.S. DEPARTMENT OF VETERANS AFFAIRS
                  BUDGET REQUEST FOR FISCAL YEAR 2009

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

                                HEARING

                               before the

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

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                            FEBRUARY 7, 2008

                               __________

                           Serial No. 110-67

                               __________

       Printed for the use of the Committee on Veterans' Affairs

                              ----------
                         U.S. GOVERNMENT PRINTING OFFICE 

41-367 PDF                       WASHINGTON : 2009 

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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     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
PHIL HARE, Illinois                  GINNY BROWN-WAITE, Florida
MICHAEL F. DOYLE, Pennsylvania       MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              BRIAN P. BILBRAY, California
JOHN T. SALAZAR, Colorado            DOUG LAMBORN, Colorado
CIRO D. RODRIGUEZ, Texas             GUS M. BILIRAKIS, Florida
JOE DONNELLY, Indiana                VERN BUCHANAN, Florida
JERRY McNERNEY, California           VACANT
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

                               __________

                            February 7, 2008

                                                                   Page
The U.S. Department of Veterans Affairs Budget Request for Fiscal 
  Year 2009......................................................     1

                           OPENING STATEMENTS

Chairman Bob Filner..............................................     1
    Prepared statement of Chairman Filner........................    64
Hon. Steve Buyer, Ranking Republican Member......................     3
Hon. Stephanie Herseth Sandlin, prepared statement of............    65

                               WITNESSES

U.S. Department of Veterans Affairs, Hon. James B. Peake, M.D., 
  Secretary......................................................     5
    Prepared statement of Secretary Peake........................    65

                                 ______

American Legion, Steve Robertson, Director, National Legislative 
  Commission.....................................................    47
    Prepared statement of Mr. Robertson..........................    90
American Veterans (AMVETS), Raymond C. Kelley, National 
  Legislative Director...........................................    45
    Prepared statement of Mr. Kelley.............................    87
Disabled American Veterans, Kerry Baker, Associate National 
  Legislative Director...........................................    42
    Prepared statement of Mr. Baker..............................    78
Iraq and Afghanistan Veterans of America, Paul Rieckhoff, 
  Executive Director.............................................    54
    Prepared statement of Mr. Rieckhoff..........................   105
National Coalition for Homeless Veterans, Cheryl Beversdorf, RN, 
  MHS, MA, President and Chief Executive Officer.................    58
    Prepared statement of Ms. Beversdorf.........................   142
National Association for Uniformed Services, Rick Jones, 
  Legislative Director...........................................    60
    Prepared statement of Mr. Jones..............................   145
Paralyzed Veterans of America, Carl Blake, National Legislative 
  Director.......................................................    40
    Prepared statement of Mr. Blake..............................    75
Veterans for Common Sense, Paul Sullivan, Executive Director.....    56
    Prepared statement of Mr. Sullivan...........................   107
Veterans of Foreign Wars of the United States, Dennis M. 
  Cullinan, Director, National Legislative Service...............    44
    Prepared statement of Mr. Cullinan...........................    85
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................    48
    Prepared statement of Mr. Weidman............................   101

                       SUBMISSIONS FOR THE RECORD

Friends of VA Medical Care and Health Research, statement........   150
Miller, Hon. Jeff, a Representative in Congress from the State of 
  Florida, statement.............................................   151
Mitchell, Hon. Harry E., a Representative in Congress from the 
  State of Arizona, statement....................................   152

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Hon. James B. Peake, M.D., Secretary, U.S. Department of 
      Veterans Affairs, letter dated March 7, 2008, transmitting 
      questions from Chairman Filner, Hon. John J. Hall, and Hon. 
      Joe Donnelly, and VA Responses.............................   153
    Hon. Steve Buyer, Ranking Republican Member, Committee on 
      Veterans' Affairs, to Hon. James B. Peake, M.D., Secretary, 
      U.S. Department of Veterans Affairs, letter dated February 
      27, 2008, and VA Responses.................................   174
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Carl Blake, National Legislative Director, Paralyzed 
      Veterans of America, letter dated March 7, 2008, and 
      response letter dated April 3, 2008, from representatives 
      of The Independent Budget: Raymond C. Kelley, National 
      Legislative Director, AMVETS, Joseph A. Violante, National 
      Legislative Director, Disabled American Veterans, Carl 
      Blake, National Legislative Director, Paralyzed Veterans of 
      America, and Dennis Cullinan, National Legislative 
      Director, Veterans of Foreign Wars of the United States....   176
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Kerry Baker, Associate National Legislative Director, 
      Disabled American Veterans, letter dated March 7, 2008, and 
      response letter dated April 12, 2008.......................   179

Report:
    ``The Independent Budget for the Department of Veterans 
      Affairs, Fiscal Year 2009,'' a Comprehensive Budget and 
      Policy Document Created by Veterans for Veterans...........   181


                THE U.S. DEPARTMENT OF VETERANS AFFAIRS
                  BUDGET REQUEST FOR FISCAL YEAR 2009

                              ----------                              


                       THURSDAY, FEBRUARY 7, 2008

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

    The Committee met, pursuant to notice, at 1:00 p.m., in 
Room 334, Cannon House Office Building, Hon. Bob Filner 
[Chairman of the Committee] presiding.
    Present: Representatives Filner, Brown of Florida, Snyder, 
Michaud, Herseth Sandlin, Hall, Hare, Berkley, Donnelly, 
McNerney, Space, Walz, Buyer, Moran, Brown of South Carolina, 
Miller, Brown-Waite, Lamborn, Bilirakis, Buchanan.

              OPENING STATEMENT OF CHAIRMAN FILNER

    The Chairman. Good afternoon. And welcome to this meeting 
of the House Committee on Veterans' Affairs.
    Secretary Peake, we welcome you to your first meeting with 
us in an official capacity and I know you have met with many of 
us unofficially. We thank you for starting our relationship off 
with good, positive notes and we look forward to your year in 
office and your testimony today. Of course, if you do your job 
right, we might be able to extend that.
    So we certainly welcome you all. This is obviously one of 
the most important hearings that we could have as we hear the 
budget presentation from Secretary Peake.
    We have other witnesses also who have a direct stake in the 
U.S. Department of Veterans Affairs (VA) budget and we thank 
all of you who have worked hard and have been diligent to 
ensure the VA budget is sufficient to meet the needs of our 
veterans.
    Obviously the benefits, the services, the healthcare that 
we provide for our Nation's heroes are our prime responsibility 
and we must make sure that we provide the resources needed by 
our servicemembers returning from Iraq and Afghanistan and 
also, of course, we cannot forget the veterans from the 
previous conflicts.
    This will not be cheap, but the service that has been 
rendered has been real and our VA budget must provide real 
funding levels to meet the needs of all our veterans.
    Part of the cost of war is the cost of treating our 
veterans. I wish that you would talk to the President, Mr. 
Secretary, that when you have a supplemental funding request 
for the war, we need a supplemental for the warrior, too. The 
President is leaving it to the regular budget process to try to 
take care of those costs rather than provide for them in a 
supplemental.
    The budget you are presenting today, Mr. Secretary, 
increases VA medical care by $2 billion, which is a 5\1/2\-
percent increase; and would just barely cover the increase in 
inflation for healthcare in our Nation.
    We are glad you increased that budget, but you are going to 
have to get used to me waving this around. This is The 
Independent Budget. I hope you have looked at it. I hope you 
will look at it. The Independent Budget (IB), which we will 
hear more about today, also asks for an additional $1.6 billion 
over what you have asked for healthcare.
    And although you have put in an increase for medical care 
in the budget, seven out of the ten major accounts in the VA 
budget you have decreased, including major construction 
projects, minor construction projects, grants for State 
cemeteries, grants for State homes, et cetera.
    So although you have increased the healthcare budget, it is 
at the expense of the rest of these accounts. We are 
particularly concerned that in your 5-year budget estimates, 
there is a $19 billion decrease over 5 years below the current 
services budget. We have concerns about not only this year, but 
how you are projecting for the future.
    We are disappointed again that the VA has submitted a 
budget, which assumes the continuation of the enrollment ban on 
so-called Priority 8 veterans. Although you were not here, Mr. 
Secretary, we were promised a detailed report by January of 
this year listing the resources needed by the VA to lift this 
ban and we still have not received that report and that 
information.
    The ability of the Secretary to deny enrollment to a group 
of veterans was provided to the VA in order to address 
unexpected and unforeseen circumstances in the short term. It 
was never meant by Congress to provide the VA with the ability 
to ban groups of veterans year after year after year.
    Again, in this budget--as has been the case over all the 
budgets from the Bush Administration--legislative proposals are 
included to increase fees and co-payments for certain veterans. 
Enrollment fees and increases in pharmacy co-payments have been 
rejected year after year after year by this Congress and, yet, 
they are back again.
    So I would like to know, and I think this Committee wants 
to know, why you have offered these proposals again and the 
policy reasons for deeming the proposed receipts from these 
proposals mandatory dollars.
    We will seriously look at your budget proposal. We have 
concerns, as I have mentioned, and we have incredible needs as 
you well know.
    We have hundreds of thousands of young men and women coming 
back from Iraq and Afghanistan with post traumatic stress 
disorder (PTSD) and traumatic brain injury (TBI). They are not 
adequately diagnosed. They are not adequately treated. They are 
like ticking timebombs in our society, and as you know, suicide 
rates have reached Vietnam levels.
    There was an incredible report in the New York Times about 
PTSD veterans who have committed homicides. A third of those 
diagnosed with PTSD seem to have felonies. This is a national 
tragedy and it is up to us to deal with it. In fact, if we have 
sufficient resources, we can deal with most of the problems we 
see happening.
    We hope the budget will take care of these needs. We see 
already, as we see with Vietnam veterans, homeless Iraqi War 
veterans. We cannot allow this to happen and we will be looking 
at the budget to try to make sure that it does not.
    I will recognize the Ranking Member, Mr. Buyer, for his 
opening statement.
    [The prepared statement of Chairman Filner appears on p. 
64.]

             OPENING STATEMENT OF HON. STEVE BUYER 
                   RANKING REPUBLICAN MEMBER

    Mr. Buyer. Thank you very much, Mr. Chairman.
    I would like to welcome you, Secretary Peake, to your very 
first testimony, this being the second session of the 110th 
Congress. It is my pleasure to welcome you as our first 
witness.
    Secretary Peake is a retired Lieutenant General of the 
United States Army Medical Corps. He is a combat-wounded 
Vietnam veteran, a Silver Star recipient, and former Surgeon 
General of the Army.
    I know from my tenure on the Armed Services Committee that 
Secretary Peake is a man of principle, who adheres to Army 
values, and I am encouraged that our perspectives over the 
years are similarly aligned with regard to serving America's 
soldiers, sailors, airmen, Marine, Coast Guardsmen, and our 
veterans and their dependents.
    I also recognize as you move into this position, Mr. 
Secretary, that you step into it with a pretty good team when I 
look at Admiral Cooper and General Kussman and Mr. Tuerk, and 
you have a champion to your right over there in Gordon 
Mansfield.
    Gordon has been around a long time. He knows a lot about 
the systems and knows a lot about the personalities, the 
players, knows a lot about the Veterans Service Organizations 
(VSOs), knows who is substantive and who makes noise. I mean, 
he knows. And so he can be very valuable to you in his candor. 
He is a good man.
    Mr. Secretary, when I read your written statement, I was 
struck by some things. Number one, your top legislative 
priority is to implement the recommendations of the Dole-
Shalala Commission. With the influx of thousands of returning 
combat veterans from Iraq and Afghanistan, we must act promptly 
to make the fundamental changes in the way VA and the U.S. 
Department of Defense (DoD) compensate and assist veterans and 
their survivors for disabilities and deaths attributed to 
military service.
    It is urgent that Congress, the VA, and DoD work together 
in a decisive manner to implement such reform while the will to 
do so exists. Otherwise, we will be merely passing the targeted 
problems off to others.
    Successful reform would make great strides toward our 
mutually held goal of ensuring that veterans returning from 
military service are able to make a smooth and easy transition 
back to a productive life.
    Mr. Secretary, I am heartened by some other provisions in 
your budget proposal. I commend the legislative proposal to 
expand the specialized residential care and rehabilitation in 
VA and approve medical foster homes for TBI patients. However, 
I do have some concerns with one of the other provisions.
    Now, I differ with the Chairman when it comes to enrollment 
fees and co-pays because these are very good management tools. 
I personally agree with cost-sharing fees for higher income, 
nonservice-connected veterans.
    Now, in your proposal for the first time I have seen that 
any funds collected would go to the Treasury. I think they 
should stay within the VA. My gut tells me this Committee once 
again will not accept an increase in co-pays or enrollment 
fees. It is one of the massive errors that we made as a 
Committee when we opened it up. We should have given these 
tools to you and we did not. And you keep asking for them and 
this Committee will not do it. And I will not belabor it.
    Another issue, the claims backlog continues to be a looming 
problem, but according to the budget proposal, you anticipate 
with additional employees the backlog can be reduced by 24 
percent. We are very optimistic and we will get into how you 
can justify that.
    I am also encouraged that the VA is perhaps finding a 
foothold. However, I question how these remarkable efficiencies 
can be achieved. You know, 24 is a big number, so I am pretty 
eager.
    We learned, not long ago, from Admiral Cooper with regard 
to staff training as a challenge and the exams that you gave 
and how many did not pass those exams. So we are interested to 
hear how the training is going.
    I also want to get into how you are making a better use of 
the information technology (IT) to reduce the backlog problem. 
I also understand you have an initiative underway and we want 
to hear about that.
    Also, any updates, Mr. Howard, you can give us with regard 
to how the IT transition is going and what needs that you may 
have. I see we have a bump up in our IT budget, so if you can 
tell us what that is going toward, software, hardware, as you 
implement your centralization model that is of great interest 
to us.
    And, Mr. Secretary, you mentioned in your written statement 
that one of your highest legislative priorities is the 
establishment of a new position to serve as the VA's Chief 
Acquisition Officer. I have long been interested in procurement 
reform at the VA and I look forward to discussing this and 
other procurement reform initiatives. And I am not the only 
one. The Chairman and others are very concerned about 
procurement issues.
    Also, in your budget, you are asking for $64 million for 
seismic corrections to the main hospital building in San Juan, 
Puerto Rico. Two years ago, we passed the law and we asked for 
you, the VA, to explore options for construction of a new VA 
medical facility in San Juan, so I am interested in the results 
of that study.
    With that, Mr. Secretary, we welcome you and we look 
forward to your testimony.
    And I yield back to the Chairman.
    The Chairman. Thank you, Mr. Buyer.
    Mr. Secretary, the floor is yours and we look forward to 
hearing from you. We will have questions from Members after 
your testimony.
    Secretary Peake. With your permission, Mr. Chairman, I have 
a written statement that I would like to submit for the record.
    The Chairman. Without objection, so ordered. Thank you.
    Secretary Peake. Thank you.

    STATEMENT OF HON. JAMES B. PEAKE, M.D., SECRETARY, U.S. 
DEPARTMENT OF VETERANS AFFAIRS; ACCOMPANIED BY HON. MICHAEL J. 
 KUSSMAN, M.D., MS, MACP, UNDER SECRETARY FOR HEALTH, VETERANS 
  HEALTH ADMINISTRATION; HON. DANIEL L. COOPER, VADM (RET.), 
UNDER SECRETARY FOR BENEFITS, VETERANS BENEFITS ADMINISTRATION; 
 HON. WILLIAM F. TUERK, UNDER SECRETARY FOR MEMORIAL AFFAIRS, 
   NATIONAL CEMETERY ADMINISTRATION; HON. ROBERT T. HOWARD, 
 ASSISTANT SECRETARY FOR INFORMATION AND TECHNOLOGY AND CHIEF 
INFORMATION OFFICER, OFFICE OF INFORMATION AND TECHNOLOGY; HON. 
 ROBERT J. HENKE, ASSISTANT SECRETARY FOR MANAGEMENT; AND HON. 
 PAUL J. HUTTER, GENERAL COUNSEL, U.S. DEPARTMENT OF VETERANS 
                            AFFAIRS

    Secretary Peake. Mr. Chairman, Congressman Buyer, ladies 
and gentlemen of the Committee, I am honored to be here as the 
sixth Secretary of Veterans Affairs now responsible for the 
care of veterans. I appreciate the opportunity that the 
President has given to me to make a difference.
    With me today, Congressman Buyer has already introduced my 
leadership team, and he is right about the quality, from my far 
left, our General Counsel, Paul Hutter; Mr. Bill Tuerk, our 
Under Secretary for Memorial Affairs; Mr. Bob Henke, our 
Assistant Secretary for Management. From my far right is Bob 
Howard, our Assistant Secretary for Information Technology; 
Admiral Dan Cooper, our Under Secretary for Benefits; Dr. 
General Mike Kussman, our Under Secretary for Health.
    In my almost 2 months at the VA, I have seen both the 
compassion and the professionalism of our employees. It is 
frankly just exactly what I expected. The culture is one of 
deep respect for the men and women that we serve. The group at 
this table, and the VA at large, understands that America is at 
war and it is not business as usual.
    I appreciate the importance of and I look forward to 
working with this Committee to build on VA's past successes, 
but more importantly, to look to the future to ensure veterans 
continue to receive timely, accessible delivery of high-quality 
benefits and services earned through their sacrifices and 
services and that we meet the needs of each segment of our 
veterans' population.
    The President's request totals nearly $93.7 billion, $46.4 
billion for entitlement programs and $47.2 billion for 
discretionary programs. The total request is $3.4 billion above 
the funding level for 2008 and the funding level that I am 
talking about is the funding level that includes the $3.7 
billion plus-up from the emergency funding.
    This budget will allow VA to address the areas critical to 
our mission, that is providing timely, accessible, high-quality 
healthcare to our highest-priority patients. We will advance 
our collaborative efforts with the Department of Defense, 
including progress toward secure, interoperable electronic 
medical records system.
    We will improve the timeliness and accuracy of claims 
processing and ensure burial needs of veterans and their 
eligible family members are met and maintain the veterans 
cemeteries as national shrines.
    Young men and women in uniform who are returning from Iraq 
and Afghanistan and their families represent a new generation 
of veterans. Their transition and reintegration into our 
civilian society when they take that uniform off is a prime 
focus. Those seriously injured must be able to transition 
between the DoD and VA system as they move on their journey to 
recovery.
    This budget funds our polytrauma centers and sustains the 
network of polytrauma care that Dr. Kussman and his team have 
put in place. It funds the Federal recovery coordinators 
envisioned by the report of the Dole-Shalala Commission and it 
sustains the ongoing case management of all levels of our 
system.
    We know that prosthetic support must keep pace with the 
newest generation of prostheses as our wounded warriors 
transition into the VA system. In this budget, you will see a 
10 percent increase in our budget for this.
    In 2009, we expect to treat about 333,000 Operation 
Enduring Freedom (OEF) and Operation Iraqi Freedom (OIF) 
veterans. That's a 14 percent increase. We are seeing already a 
little bit of increase in the cost per capita of caring for 
these and we have increased our budget projection 21 percent to 
cover this. That is nearly $1.3 billion to meet the needs of 
OIF and OEF veterans that we expect will come to the VA for 
medical care.
    This budget will sustain our outreach activities that range 
from 799,000 letters that we have sent out to more than 205,000 
engagements with our Vet Centers reaching out to National Guard 
and Reserve units as part of the PDHRA, post deployment health 
reassessment process. It does not mention the 8,154 military 
briefings to about 300,000 veterans, service men and women that 
the Veterans Benefits Administration (VBA) has conducted.
    This is also part of seamless transition. With the 
authority to provide care for 5 years for service-related 
issues, we can, without bureaucracy, offer the counseling and 
the support and care that might be needed to avert or mitigate 
future problems. And we want these young men and women to get 
those services.
    Mental health from PTSD to depression to substance abuse 
are issues that I know are of great concern to you and they are 
of great concern to us. This budget proposes $3.9 billion for 
mental health across the board. That is a 9 percent increase 
from 2008. It will allow us to sustain an access standard that 
says if you show up for mental health, you will be screened in 
24 hours and within 14 days have a full mental health 
evaluation if needed.
    It will keep expanding the mental health access according 
to a uniform mental health package, trained mental health 
professionals and our community-based outpatient clinics, and 
there are 51 new community-based outpatient clinics (CBOCs) 
planned for 2009. And that is in addition to the 64 that are 
coming in 2008.
    Our Vet Centers will bring on yet an additional 100 OIF and 
OEF counselors. And Dr. Kussman is prepared, as the need is 
identified, to add additional Vet Centers.
    We appreciate the issues of rural access in this arena and 
our Vet Centers are budgeted for 50 new vans to support remote 
access as well as expanding telemedicine into 25 locations.
    But this budget and our mission is more than just about 
these most recently returning men and women. We should remember 
that 20 percent of VA patients who in general are older and 
with more comorbid conditions than the general population have 
a mental health diagnosis. In fiscal year (FY) 2007, we saw 
400,000 veterans of all eras with PTSD.
    This budget will sustain VA's internationally recognized 
network of more than 200 specialized programs for the treatment 
of post traumatic stress disorder to our medical centers and 
clinics that serve all of our veterans.
    We have a unique responsibility to those that have served 
before and, you know, we still have one World War I veteran. 
One died earlier this week actually. The World War II and Korea 
veterans are recipients of our geriatric care and our efforts 
at improving long-term, noninstitutional care where in this 
budget we have increased funding 28 percent will make a huge 
difference in their quality of life.
    We currently have 32,000 people served by home telehealth 
programs. This budget continues our work in this area and in 
the expansion of home-based primary care.
    Overall, the President's 2009 budget request has $41.2 
billion for VA medical care, an increase of $2.3 billion over 
the 2008 level, but that is more than twice the funding level 
available at the beginning of the Bush Administration. With it, 
we will provide quality care, improve access, expand special 
services to the 5,771,000 patients we expect to treat in 2009, 
1.6 percent above our current 2008 estimate.
    In April of 2006, there were over 250,000 unique patients 
waiting more than 30 days for their desired appointment date. 
And you are right. That is not acceptable. As of January 1st, 
we had reduced the waiting list to just over 69,000. With this 
budget request, we believe we have the resources to virtually 
eliminate the waiting list by the end of next year.
    Information technology cross-cuts the entire Department and 
this budget provides more than $2.4 billion for this vital 
function, 19 percent above our 2008, and reflects the 
realignment of all IT operations and functions under the 
management control of our Chief Information Officer, Robert 
Howard.
    A majority, $261 million of that increase in IT funds will 
support VA's medical care program, particularly VA's electronic 
records system. I emphasize this here because it is so central 
to what we do and to the care we provide and the care that is 
touted in such publications as the book, Best Care Anywhere, as 
the key to our quality that is lauded worldwide.
    This IT budget also includes all the infrastructure support 
such as hardware and software and communication systems for 
those 51 CBOCs that I mentioned as an example. And there is $93 
million for cyber security continuing us on that road to being 
the gold standard.
    IT will also be key as we move our claims model down the 
road to paperless processes. It is an investment that we must 
make. This budget sustains the work of VETSNET that is giving 
us management data already to really get after our claims 
processing and virtual VA, our electronic data repository.
    In addition to IT, this budget does sustain a 2-year effort 
to hire and train 3,100 new staff to achieve our 145-day goal 
for processing compensation and pension claims in 2009. This is 
a 38-day improvement, 21 percent in processing time than it was 
from 2007 and that 24-day or 14-percent reduction from this 
year.
    This is important because the volume of claims received is 
projected to reach 872,000 in 2009. That is a 51-percent 
increase since 2000.
    Can we show that slide, that graph up here? The active 
Reserve and National Guard returning from OEF and OIF have 
contributed to an increase in new claims and bring with them 
really an increasing number of issues with each claim which you 
can see the difference between the claims growth on the bottom 
curve and the issues curve growth on the top curve. It is out 
of proportion.
    [The graph referred to is attached to Secretary Peake's 
testimony, which appears on p. 75.]
    And what you see also is that Dan Cooper has been able to 
keep that time to complete, that average days to complete 
relatively flat even with that growth. Each one of those issues 
has to be separately adjudicated and judged and can really be 
separately rated, if you will.
    The President's budget includes seven legislative proposals 
as has been mentioned totaling $42 million. One of those 
proposals expands the authority to cover payment for 
specialized residential care and rehab in VA approved medical 
foster homes for OIF and OEF suffering from TBI.
    We again do bring you a request for enrollment fees for 
those who can afford to pay and for a raise in the co-pays. 
Again, this does not affect our VA budget and I believe that is 
the same as it was last year. The money would return to the 
Treasury. That is $5.2 billion over a period of 10 years, not 
in the short term, but it does reflect the matter of equity for 
those veterans who have spent a full career in the military and 
under TRICARE who do pay an annual enrollment fee for that 
care.
    The $442 million to support VA's medical and prosthetic 
research program, though less than what we have had from the 
augmented 2008 budget, is actually about 7.3 percent more than 
what we received in 2007 or what we asked for in 2007 and 2008.
    It does contain, however, $252 million devoted to research 
projects focused specifically on veterans returning from 
service in Afghanistan and Iraq, projects in TBI and polytrauma 
and spinal cord injury and prosthetics and burn injury. In 
fact, we anticipate with this Federal grants and other grants, 
we will have a full research portfolio of about $1.85 billion.
    This budget request includes just over $1 billion in 
capital funding for the VA, with resources to continue to five 
medical facility projects already underway in Denver, Orlando, 
Lee County, Florida, San Juan, and St. Louis and to begin three 
new medical facility projects at Bay Pines, Tampa, Florida, and 
Palo Alto, two of which relate to our polytrauma rehab centers 
and continue our priority in this specialized area of 
excellence.
    Finally, we will perform 111,000 interments in 2009. That 
is 11 percent more than 2007. The $181 million in this budget 
for the National Cemetery Administration (NCA) is 71 percent 
above the resources available to the Department's burial 
program when the President took office.
    These resources will operationalize the six new national 
cemeteries that will open this year, providing a VA burial 
option to nearly a million previously unserved veteran 
families, and will maintain our cemeteries as national shrines 
that will again earn the highest marks in government and 
private sector for customer satisfaction.
    This budget of $93.7 billion, nearly double from 7 years 
ago, and with a healthcare component more than twice what it 
was 7 years ago, will allow us to make great progress in the 
care of all of our veterans and will keep us on this quality 
journey in health and the management of an extraordinary 
benefit and ensuring the excellence of our final tribute to 
those who shall have borne the battle.
    It is an honor to be with you, and I look forward to your 
questions.
    [The prepared statement of Secretary Peake appears on p. 
65.]
    The Chairman. Thank you, Mr. Secretary.
    We will begin the questions with the Chairman of our Health 
Subcommittee, Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman.
    And I want to thank you, Mr. Secretary, and your staff for 
coming here today to present the President's budget.
    The 2009 budget submission for medical services is based 
primarily on actuarial analysis founded on current and 
projected veterans' population statistics, enrollment 
projections of demand, and case mix associated with current 
veteran patients.
    Did that analysis include an increase in manpower 
deployment to support the surge and the subsequent redeployment 
back to the United States?
    Secretary Peake. It did, sir. I understand that in a 
previous year, we may have been a little bit low on that 
projection and we, I think, made the appropriate adjustments 
with that, working with DoD, understanding the Congressional 
Budget Office (CBO) model and so forth. So that has been taken 
into account with this projection of 333,000.
    Mr. Michaud. Good. And did that analysis also include the 
recent downturn in the economy and increased unemployment?
    A lot of times, if you have a veteran who might be working, 
they might be provided healthcare benefits at their job of 
employment. But if they lose that job, then they are left in a 
lot of cases without any healthcare provided, so they look 
toward the VA. Did that include the downturn in the economy?
    Secretary Peake. We did, I think, project the fact that we 
have open access for the first 5 years now to be able to bring 
them into our system and it does not matter whether they are 
employed or not employed. If they have something that can be 
related possibly to their involvement overseas, we can take 
care of them.
    Mr. Michaud. So did your projection include that 
consideration of the downturn though? I know you can take care 
of them. But if you have an influx because of the downturn and 
you are not accounting for them, then that is going to be a----
    Secretary Peake. Right. I cannot tell you specifically, 
sir, if we looked at a rise in unemployment. I do not know if 
that was in our model.
    Mr. Michaud. If you can check and get back with the 
Committee.
    Secretary Peake. I will, yes.
    Mr. Michaud. My next question deals with the enrollment 
fee. With the enrollment fee that you are proposing, I believe 
in 2007, it was estimated that that would result in 
approximately 200,000 veterans leaving the system if they had 
to pay an enrollment fee.
    Under this, is there an estimate of how many veterans might 
leave if the enrollment fee is introduced?
    Secretary Peake. Again, it is an estimate. This does affect 
just the Priority 8s really because so few of the Priority 7s 
would fit into that. It would be on the order of folks that use 
us of perhaps 140,000, which is really a relatively small 
number, and that we also know that many of those also have 
insurance and do not necessarily use VA as much anyway.
    It gets to some of the management issues that Congressman 
Buyer was talking about. You think about it. You put a little 
skin in the game with an enrollment fee, they are perhaps more 
likely to come to us and get the full benefit of what we can 
offer them and we would be happy to do that.
    Mr. Michaud. And could you provide the Committee, I asked 
this the last time, the Department had proposed an enrollment 
fee, and I never received the information if you submitted it, 
but could you provide a breakdown on that enrollment fee, so, 
say if someone makes $100,000, how many people are affected, 
how much revenue that would produce? I would like to have a 
further breakdown on that, how you came up with your numbers on 
that enrollment fee, if you could provide that for the 
Committee.
    Secretary Peake. I will provide that for the record.
    [The information was provided in the response to Question 
5(a) in the Post-Hearing Questions posed by Mr. Filner and 
Responses from VA for the Record, which appear on p. 155.]
    Mr. Michaud. Okay. Thank you.
    My last question deals with not only VA but also the Army. 
There was a report in the news on January 29th, and I received 
confirmation from VSOs from my area, where the Army actually 
blocked VA staff from assisting transitioning soldiers because 
the soldiers had been receiving higher rating in their medical 
evaluation board.
    What is the VA doing in regards to that?
    And another area actually just brought to my attention 
earlier this morning from the Ranking Member also deals with 
the Army dealing with dental work. The Army more or less is 
shifting that cost on to the VA and not taking care of the 
soldiers.
    Could you respond to both those?
    Secretary Peake. Sure. Let me address those. First, we are 
still trying to sort out who said what to whom on the issue of 
the counseling at Fort Drum. I can tell you the first report to 
me is that some of our people were actually helping write the 
requirements that were within the military system.
    Our folks are not really necessarily trained to do that, 
but we clearly have a role of being there, advising 
servicemembers on what their VA benefits might be and what 
their ratings might be from the VA.
    This actually talks to the issue of why we need to get 
ahead and streamline this disability system so it is not so 
confusing and it is not, oh, well, they are the VA and there is 
the DoD. So, again, the Dole-Shalala recommendations give us a 
road ahead on that and we need to sort out the details so we 
get it right.
    On the issue of dental care, that has been an issue for the 
military and particularly for the Reservists for a long time. I 
had to come up here and testify why we took out so many teeth 
when we mobilized people in my previous life. So perhaps it 
would be nice if the military were able to have that all taken 
care of for the Reservists. But when they come rolling back in 
and come back to their home station, at least when they come to 
the VA, and I will give great credit to Dr. Kussman, we have 
gone and we have purchased the care because we are authorized 
to provide that dental care within what, 60 days or----
    Dr. Kussman. Ninety days and we're going to 180.
    Secretary Peake [continuing]. Ninety days and we are going 
to 180 if the legislation is passed. And it will help the 
soldier and it, I think, will improve medical readiness because 
some of these people are still in the Reserves.
    Mr. Michaud. Thank you very much.
    And thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Lamborn, you are recognized for 5 minutes.
    Mr. Lamborn. Thank you, Mr. Chairman.
    And, Mr. Secretary, feel free to answer this question or 
pass it on to one of your Under Secretaries.
    But first I would like to say thank you, Chairman Filner 
and Ranking Member Buyer, for your leadership and dedication to 
the calls of our Nation's veterans.
    I would also like to thank Chairman Hall for working with 
me in a bipartisan manner on the Disability Assistance and 
Memorial Affairs Subcommittee of which I am now the Ranking 
Member.
    Secretary Peake, I am pleased to see that the fiscal year 
2009 VA budget request addresses the concerns of our veterans. 
Ensuring that our national cemeteries are maintained as shrines 
is emblematic of the VA's core beliefs. And I look forward to 
working with you and Under Secretary Tuerk on this important 
issue.
    While I remain concerned about the disability compensation 
claims backlog, I am encouraged that VBA plans to utilize 
proven information technologies to decrease processing times.
    As you know, I introduced two bills last year that would 
authorize a pilot program to test the capabilities of an 
automated claims processing system that helps VA employees 
process claims faster and more accurately.
    And, Mr. Peake, also, I would like to ask you that, this is 
possibly something under the purview of Under Secretary Tuerk, 
the budget mentions a request for $5 million for a new land 
acquisition line item. I understand that this money is to be 
allocated for those regions with the highest projected need in 
the future for new cemetery space for existing cemeteries.
    Based on the criteria used to assess this need, is it true 
that Fort Logan National Cemetery in Denver, Colorado, will be 
the next cemetery to reach capacity?
    Secretary Peake. Perhaps Bill can offer the specifics. The 
money is designed to allow us to get moving on acquisition when 
the opportunity arises and so that we can ensure we do not have 
to close cemeteries.
    Mr. Tuerk. To answer your question specifically, 
Congressman, as I look across the universe of our larger 
cemeteries that are going to meet capacity, there is one 
cemetery, Jefferson Barracks National Cemetery in St. Louis, 
which would reach capacity before Fort Logan. But we already 
have a plan in place to acquire land contiguous to the cemetery 
from the medical center next door.
    Based on the numbers that I have seen as recently as this 
morning, it would appear that Fort Logan is the next large 
cemetery that will reach capacity on the acreage that it 
currently owns.
    Mr. Lamborn. Thank you.
    And as a followup, is it true that this land acquisition 
needs to be completed prior to Fort Logan or another such 
example reaching capacity because the process for acquiring 
land to build a cemetery is time-consuming and sometimes 
unpredictable?
    Mr. Tuerk. Shall I?
    Secretary Peake. Please.
    Mr. Tuerk. Certainly the market, the catchment area if you 
will, of Denver and Colorado Springs is currently served by 
Fort Logan. We would not want to see that that area, which has 
a significant number of veterans, certainly well beyond our 
170,000 criterion--possibly twice as many veterans than that 
criterion live within the catchment area of those two cities--
cease to be served. We would certainly want to begin planning 
for a successor cemetery to Fort Logan before that cemetery 
closes so there will not be a lapse in service for the veterans 
on the eastern slope of the Rockies in Colorado. So in response 
to your question, the answer is yes, we most definitely plan 
to, intend to, and are beginning now to plan for, a successor 
cemetery lest there be an interruption of service.
    Mr. Lamborn. Okay. Thank you very much.
    And I have a separate topic I would like to address briefly 
if my 5 minutes are still going. Mr. Secretary, over the past 
year, Members from both sides of the aisle have continued our 
push to require VBA to move toward a paperless claims 
processing system that uses rules-based technology.
    This was something that was added to the Republican fiscal 
year 2008 views and estimates and was included in my 
legislation, H.R. 1884 and H.R. 3047.
    I am happy to read about VBA's new paperless claims 
processing initiative. What is the funding level for this 
project and how much funding will be required over the next 
several years to complete this project?
    Secretary Peake. A request for information (RFI) was put 
out for rules-based engines. That information is coming back. 
And then we are planning on getting a systems integrator to 
come in and look at all of the process that is put together. 
And so we will have to find what that future cost is based on 
the estimates that come out of these processes.
    But I will assure you it is a high priority for me to get 
us moving in that direction. All you have to do is walk through 
the VBA mail room to make you believe that this is time to 
change.
    Mr. Lamborn. Thank you.
    And I yield back.
    The Chairman. Thank you, Mr. Lamborn.
    The Chair of our Economic Opportunity Subcommittee, Ms. 
Herseth Sandlin, is recognized for 5 minutes.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman.
    Again, Mr. Secretary, welcome to the Committee. We look 
forward to working with you on a whole host of issues. And 
certainly Mr. Boozman and I look forward to working with you on 
the range of issues in the jurisdiction of our Subcommittee. 
And I do have a few questions for you about some of those 
issues, but I also want to talk with you a little bit about 
rural health and long-term care.
    There was a handout that you had provided for the Veterans' 
Affairs Committee staff on February 4th. And in that handout, 
there was a chart as it relates to mandatory spending. And for 
housing, it shows an appropriation fiscal year 2007 of $50 
million, fiscal year 2008 of $815 million, and fiscal year 
2009, $2 million for a percentage change of 100 percent based 
on the fact that we are going, you know, less $813 million.
    And I was just wondering if someone could explain that to 
me a little bit further as to why there would be such a drastic 
percentage change in the mandatory funding for the housing 
programs administered by VA.
    Secretary Peake. If I may, I will ask Mr. Henke to answer.
    Mr. Henke. Yes, ma'am. There is a good reason for that. It 
is no change from our previous practice. It relates to the 
practice of credit reform legislation that we have had in place 
since 1992, now for 15 years.
    There is no change in the number of loans, 180,000 loans 
that we are going to guarantee with the 2009 budget. It simply 
reflects the way we account for the risk for those loans and it 
is no different than we have done in the past.
    Ms. Herseth Sandlin. So can you explain why then there was 
the jump from $50 to $815 million from last year?
    Mr. Henke. Because it is a projection for what is expected 
in that year for loan costs related to all of the cohorts that 
go back to 1992. What we projected in 2009 is the cohort from 
2009.
    Ms. Herseth Sandlin. Okay. Well, I think I will explore 
this a little bit further with you in a different setting 
because I want to get to some of the others.
    On vocational rehabilitation loans, in the budget 
submission, the VA claims that fewer vocational rehabilitation 
loans will be provided in fiscal year 2009 than in fiscal year 
2008. It is a difference of about $210 million or so.
    And so I am just wondering what leads you to believe that 
there will be fewer loans established given the increasing 
numbers we are seeing, especially of OIF and OEF veterans 
returning home. I anticipate that there might actually be a 
greater need for these vocational rehabilitation loans.
    Secretary Peake. Admiral Cooper.
    Admiral Cooper. Those loans are used primarily to help 
people while their claims are being processed. In other words, 
if a person comes in and we can immediately qualify him or her 
for vocational rehabilitation, we go ahead and do that. And, if 
they need money immediately, we provide them loans. We felt as 
we looked at the estimate that we were higher than we needed to 
be right now. So we feel that the current estimate is a correct 
estimate.
    Ms. Herseth Sandlin. Is that based on actual numbers then 
for fiscal year 2008?
    Admiral Cooper. It is based on trends that we have seen 
over the last few years and the number we expect to come in. We 
feel that we do have a sufficient amount there.
    Ms. Herseth Sandlin. Okay. Well, I will look forward to 
working with you----
    Admiral Cooper. Yes, ma'am.
    Ms. Herseth Sandlin [continuing]. Admiral Cooper, because 
we know there have been problems with the methodology in the 
past. I know we have tried to make some improvements to that, 
but we will look forward to pursuing that in a little bit more 
detail as well.
    Secretary Peake. If I may just add----
    Ms. Herseth Sandlin. Yes.
    Secretary Peake [continuing]. We are increasing the number 
of vocational rehabilitation people in the field. We think this 
is a great program. We think it is underused. We think that we 
would like to see more people actually graduate from it. And so 
that is one of the first briefings I asked to get because I 
think it is a program that we really want to get behind.
    Ms. Herseth Sandlin. Thank you, Mr. Secretary.
    I do think that especially with, and this will relate to my 
next question on rural health and rural veterans, when we have 
so many folks coming home and because of the National Guard and 
Reserve, many of them coming from rural areas, I think these 
loans not just for veterans in rural areas but anywhere, but in 
particular rural areas and the costs associated with 
maintaining the training programs if they are living a further 
distance and how much they are paying for other expenses just 
to continue participating in the program. And, like you said, 
increasing those rates of completion of the program is very 
important.
    The VA Office of Rural Health, I notice that the budget 
submission is $1 million for one full-time employee. Given that 
studies indicate that over 40 percent of the veterans returning 
home from OEF and OIF come from rural communities, I am a 
little concerned about whether or not this is enough given the 
scope of the office in terms of conducting studies, developing 
policies. I know that we have made tremendous progress with the 
community-based outreach clinics. We have a number of them in 
South Dakota.
    But as it relates to again the rural veteran population and 
the challenges that they face in getting care and the 
additional challenges with a new generation of veterans, many 
of whom are in rural areas, I am a little concerned about the 
budget request.
    Secretary Peake. Actually, we have two people and you say, 
boy, is that enough? I am not sure it is if you just say, well, 
that is the only two people interested in rural health in the 
VA. I have asked the same question.
    In fact, we have contract support that is the several 
million dollars level. I do not recall that number off the top 
of my head. And we have really an integrated effort.
    When I sat down with this Office of Rural Health, the one 
person, the second person, just joined, she was surrounded by a 
lot of people from Dr. Kussman's team that are working 
collaboratively. And so it is an area that I think is really 
important.
    You start looking at our numbers, about 38 percent of 
veterans live in rural areas. About 1.7 percent live in highly 
rural areas. When you look at where our CBOCs are, about 41 
percent of our CBOCs are in rural areas. About 5 percent of our 
CBOCs are in highly rural areas.
    That is why I was excited to see the 50 vans focused with 
our Vet Centers, so they can do that outreach and be the first 
face of the VA there, and why I am excited about this issue of 
telehealth and telemedicine and being able to reach out into 
their homes even out there.
    As a matter of fact, one of my first trips is going to be 
to Montana because Senator Tester and I have had discussions 
about rural health. And so I appreciate your concern about it 
and I will assure you that we are paying some attention to it.
    Ms. Herseth Sandlin. I appreciate that.
    And, Mr. Chairman, I know I am over my time, but I know we 
just mandated the creation of that office fairly recently, 
within the last year or so. But I do hope that through the 
course of the year----
    Secretary Peake. A year is a year. I appreciate that.
    Ms. Herseth Sandlin [continuing]. We can lay the groundwork 
so that depending on the changes that are made to the budget as 
we undertake that work and what that leads to for the request 
for the next year, we hope we have more information going 
forward.
    And then, finally, Mr. Chairman, one of the things I want 
to, because I have pursued this with previous Secretaries, is 
the issue of long-term care. And I know that there is a 
statutory requirement relating to the average daily census and 
that the budget submission does not meet that.
    And I am not going to beat anybody up about that. I would 
rather engage in a longer conversation at some point about the 
rebalancing that is needed across States, across regions, 
across health systems to better address how long-term care has 
evolved because that statutory obligation was put in in 1999. 
And we have seen a lot of changes in long-term care since then.
    So I just wanted to make mention of that, Mr. Chairman, for 
a topic that I know others of us have been interested, and we 
look forward to working with the Secretary on.
    The Chairman. Thank you very much.
    Mr. Brown, you are recognized for 5 minutes.
    Mr. Brown of South Carolina. Thank you, Mr. Chairman.
    Thank you, Mr. Secretary, for being here today and thank 
you for your commitment to our veterans. And I enjoyed our 
conversation the other day and I was going to ask some 
continuing questions along those same lines.
    Number one, there is a cemetery, a veterans' cemetery that 
has been proposed for Columbia, South Carolina. I know there 
has been some negotiation, I guess, with the Fort Jackson 
system there.
    But could you tell me where we are in that process? Has 
there been some land exchanged between, you know, the Fort 
Jackson and the cemetery?
    Secretary Peake. Can I ask Under Secretary Tuerk to answer 
that, please.
    Mr. Tuerk. Yes, sir, Mr. Brown. We have reached an 
agreement with the Department of the Army to transfer land from 
Fort Jackson to us. That transfer has not yet been effected. It 
is authorized by statute. We have reached an agreement with the 
Army on the transfer, but lawyers are working out the details, 
the title transfer, et cetera. And we expect actual title to 
pass probably in September of this year. But, we are not 
waiting for title to pass before we start designing the 
cemetery. Indeed, we have already let contracts for the design 
of that cemetery. I have already seen a master plan of that 
cemetery in sketch form. And right now we are scheduled to 
break ground in July even in advance of taking title with the 
goal of opening that cemetery for burials before the end of 
this year.
    Mr. Brown of South Carolina. The next question is about the 
VA Medical University Association in Charleston. I know in 2006 
in the authorization bill, we actually put $38.6 million there 
to start the design phase. The Medical University is already in 
a construction mode now.
    They have already built their first tower. And we were 
hoping that by use of this $38.6 million or some portion 
thereof to start some design for replacing the old VA hospital 
with a new bed tower adjacent to the Medical University.
    Could you give me an update on that, please.
    Secretary Peake. Sir, as we discussed the other day, our 
engineer and facilities folks suggest to me that there is a 
longer life expectancy for that building than perhaps has been 
considered, the current VA hospital there down on the grounds.
    We are also looking at what the requirements might be to 
support the veterans in that area and what kind of 
collaboration we might be able to build with the university.
    We have this week had an engineering team down with the 
Navy looking at the old Charleston Naval Hospital to understand 
whether that might well become a better site for us to invest 
in to be able to provide really what we are looking at, almost 
a new model of care where we have a really robust ambulatory 
center that is capable of doing day surgery and those kinds of 
things, ambulatory surgery, so that people do not have to 
travel all the way down the peninsula.
    And so I look forward to working with you, sir. And, 
actually, just talking to the Ranking Member about going down 
perhaps to visit and see you there and look on the ground. But 
we are looking at how to best serve the needs.
    I know we have the work up at Goose Creek going on as well. 
So I think if we look really at the whole population area and 
trying to make the decision as we move forward is what we would 
like to be able to do.
    Mr. Brown of South Carolina. Okay. I really do appreciate 
the opportunity to show you physically on the ground the close 
proximity of the VA and the Medical University and hoping that, 
you know, maybe by giving you an oversight of where, you know, 
the facilities are located, it might give you a little bit 
closer view.
    I know we have been working on, you know, consolidating 
some services between the VA and some other hospital, not just 
for the Charleston region but across the whole system. I think 
it would be a whole lot of savings incurred there. And I know 
we appreciate Dr. Kussman for his, you know, continuing 
dialogue along those lines too.
    So look forward to having you down in Charleston, and thank 
you for coming today.
    Secretary Peake. Thank you, sir.
    The Chairman. Thank you, Mr. Brown.
    The Chairman of our Disability Assistance and Memorial 
Affairs Subcommittee, Mr. Hall, is recognized for 5 minutes.
    Mr. Hall. Thank you, Mr. Chairman and the Ranking Member.
    And, Secretary, thank you so much for you and your 
associates for being here today and thank you for your service 
to our country both in uniform and with the Veterans 
Administration.
    I wanted to start by asking in light of questions before 
your tenure, the VA's budget submission in fiscal year 2007 
estimated that we would see 109,000 OEF/OIF veterans and 
current records now show that the VA instead saw 206,000.
    In fiscal year 2008, the estimate was that VA would see 
263,000, but now that number has risen to 293,000. So, in other 
words, it is an 87,000 person increase over fiscal year 2007. 
This year, you estimate that you will see 333,000 OEF/OIF 
veterans in 2009, an increase of 40,000.
    In light of the previous underestimating of that number, 
what should this Committee honestly expect? Do you think that 
40,000 is a realistic number when the previous numbers were off 
by as much as 87,000?
    Secretary Peake. Sir, I believe it is a legitimate number. 
I will tell you we do not want to underestimate that number. My 
understanding is that we have cranked in the right 
considerations and the Kentucky windage to try to make sure 
that we are coming in with a very legitimate number.
    Mr. Hall. That is good. I am praying for that to be 
accurate.
    And I wanted to know what the impact on the budget would be 
or if you know, if anybody in your team knows what the impact 
would be if we had universal screening of all veterans who are 
leaving active duty and separating from the service and 
becoming veterans and coming under the VA's jurisdiction.
    The reason I ask is because we have had testimony before 
the Subcommittee on Disability Assistance and Memorial Affairs 
and before the full Committee about veteran suicides 
presumptively due to PTSD among other factors. And we know we 
are facing a record number of suicides, not just among veterans 
but among soldiers, active-duty men and women.
    And it was suggested by one of the parents of a person who 
took his life that it is too hard to self-identify, that the 
veterans who are coming out, they are taught to be tough and 
they do not want to have something on their record that might 
hinder their advancement in the Guard or Reserve or hinder 
their advancement in private business. So they stand in line 
and do not go to door number five to see the psychiatrist or 
whatever, you know, when they are told the opportunity is 
there.
    And this father said he would like us to look at screening 
everybody. And the percentage coming back from Iraq and 
Afghanistan with PTSD seems to be high enough that it might be 
warranted anyway.
    What are your thoughts about that and what do you think of 
those budget-wise?
    The Chairman. Mr. Secretary, before you answer, if you 
would yield for a corollary question.
    Most of you, when you testify, you use this little phrase. 
You say, ``if you show up'' at the VA, you will get a full 
screening. The problem is that, not everybody shows up. We have 
to have far more universal screening because the percentages 
are so high and you keep saying ``if you show up.'' We need to 
go out and do it in cooperation with the Department of Defense.
    Secretary Peake. Thank you, Mr. Chairman.
    Mr. Chairman, I agree with your premise of ``if they show 
up'' and that is why this outreach is so important. That is why 
I tried to emphasize it in my opening remarks because I agree 
with you. What we want, as I was trying to point out, is to 
bring these people in.
    Let me address your point, sir, a couple ways. One, in the 
military, there is an attempt to do this. It is called the post 
deployment health assessment. It is followed up at a later date 
because we know if you hit them right away, they just want to 
go home. And I mean, I have seen it. I do not even want to fill 
out that form, just let me go home. Okay. I will fill it out, 
boom, boom, boom.
    And a paper that was published in November by the military, 
Dr. Millican, said that what they found on the post deployment 
health assessment, which again is sort of self-referral and 
self-selection, you have to fill out the form and then you get 
a face to face, is that there was a higher number of folks that 
actually identified themselves as needing some help.
    Our Vet Centers are putting people at those sites with the 
Reserve components where they do that post deployment health 
reassessment. So we are trying to do exactly what you say.
    I will say also that anybody that comes to us, even if they 
are not coming for mental health, come in for a sprained ankle 
or, feeling bad or whatever, in Mike Kussman's whole arena, you 
get screening for mental health, you get screened.
    There are actually specific questions asked for PTSD, for 
TBI, for suicide risk, because we do want to be sensitive to 
those kinds of things, identify those people who are not 
necessarily coming in for that even.
    And that is one of the other reasons why we want mental 
health people in our community-based outpatient clinics, 
because we know that people show up for physical illnesses 
because they have mental illnesses sometimes, mental issues.
    And so it is not a very simple issue, but it is one that I 
think we are dealing with on multiple fronts and we want to 
continue to do that outreach.
    Mr. Hall. Thank you, Mr. Chairman. I will submit more 
questions for the record.
    [Questions for the Record to VA from Mr. Hall appear on p. 
163.]
    The Chairman. Thank you.
    Mr. Moran.
    Mr. Moran. Mr. Chairman, thank you.
    Mr. Secretary, pleasure to initially make this acquaintance 
and look forward to having conversations with you in the 
future.
    I especially wanted to thank your colleague, Under 
Secretary Tuerk, for his personal attention that he provided in 
helping us resolve a cemetery issue, a lack of space at Fort 
Riley. And everything I know is that that has been a good 
outcome and I appreciate the personal attention, but also the 
let us get it done attitude that he and his staff exhibited.
    I offered an amendment. In fact, I have done it for 5 years 
now since I have been in Congress and ultimately it became law. 
We increased the amount of money available for medical mileage.
    Mr. Secretary, I represent a district that has no VA 
hospitals. It is 60,000 square miles and many World War II 
veterans who live hours from a VA facility. I appreciate the 
cooperation I have had with our VA system, our Veterans 
Integrated Service Network (VISN) in CBOC opportunities.
    But one of the things that has been a cause for me since I 
came to Congress is trying to recognize that 30 years is a long 
time to raise the medical mileage stuck at 11 cents.
    As I understand it, the VA has reached the conclusion that 
this 28\1/2\ cents mile--first of all, let me thank you for 
implementing it what I would say is rather quickly and took a 
long time to get there, but it seemed to me that the Department 
responded in an appropriate timely fashion after the 
appropriation bill was signed.
    That money or that rate, 28\1/2\ cents a mile, I would like 
for you to confirm. It is my understanding that the VA expects 
that rate to continue into future years, that this is not a 1-
year 28\1/2\ cents mile and it drops back to 11 cents in the 
future.
    Secretary Peake. Sir, that is my intent. I would tell you 
that we need to keep watching the price of gas.
    Mr. Moran. As do our veterans.
    Secretary Peake. Right.
    Mr. Moran. And the $125 million was set aside for this 
purpose and the VA concluded you were bound by law, that with 
the increase in the mileage rate, you had to increase the co-
payments which, if that is the case, it seemed to me that the 
estimate, the CBO estimate was a cost of $113 million.
    So the language in our amendment talked about 28\1/2\ cents 
a mile. You concluded that you had to raise the co-payments. 
CBO says that increasing the mileage rate is $113 million. 
There is a gap. It seems to me we picked the worst options for 
our veterans as the co-payment has to be paid and we will not 
increase the rate above the 28\1/2\ cents a mile that is in the 
language, yet we had another $12 million to spend.
    Secretary Peake. Sir, what went out with that guidance was 
pointing out that that co-payment could be waived. So we are 
expecting that to be the norm actually.
    Mr. Moran. You are telling me something I do not know. Be 
waived in certain circumstances?
    Secretary Peake. My understanding is that we have not been 
collecting the co-pays or, I am sorry, the deduction is what it 
is actually.
    Mr. Moran. The deduction, you do not intend to collect an 
increased amount from the veterans even though the mileage rate 
went up?
    Secretary Peake. That is correct.
    Mr. Moran. I am glad I asked this question because I was 
expecting a different answer, but I am pleased with the answer.
    Secretary Peake. The guidance was clear in the letter I 
sent. As a matter of fact, it had to go out again.
    Mr. Moran. So the deductibles will remain the same while 
the mileage rate increases?
    Secretary Peake. They are not paying the deductibles now. I 
mean, they are----
    Mr. Moran. That will be news to my veterans who complain to 
me constantly about their mileage check being reduced by a 
deductible. We will explore this, I guess, further.
    Secretary Peake. Let me get with you separately on it and I 
will address the issue.
    Mr. Moran. Very good. I also would raise just two more 
points in the 49 seconds that I have left. My impression of, in 
fact I say that perhaps the greatest accomplishment of the 2007 
year in Congress was the significant increase in healthcare 
funding for our veterans.
    But one of the things I have discovered is that despite the 
increased funding, the VA has a significant challenge, as does 
the private sector, in recruiting healthcare professionals.
    And I would be interested in hearing at some point in time 
about the efforts at the VA to increase the pool or the 
opportunity that you have to recruit nurses, doctors, mental 
health professionals, psychiatrists, psychologists. The message 
I am getting from my VA employees back home is, it is great to 
have more money, we appreciate that, but the end result is that 
we may not be able to recruit to fill those positions.
    Secretary Peake. Sir, it is geographically dependent in the 
United States. It is a problem across the country. I think we 
have been aided recently in the opportunity to pay more 
competitive fees for healthcare providers. And that has made a 
difference. As I have looked at some of the graphs already, you 
can see some upturns in the number of providers that we have, 
nurses and physicians specifically.
    Mr. Moran. That is good to hear.
    Secretary Peake. But there are areas where we do have 
challenges with it.
    Mr. Moran. And, finally, I just would remind you that I 
think a priority for the Department of Veterans Affairs and 
should be in the budget is the elimination of Priority or 
Category 8. I wish that was a higher priority within the 
Department and your budget process.
    To me, our Priority 8 veterans deserve to be included, not 
excluded. And my guess is that we disagree, me as a Member of 
Congress, you as the Secretary of the Department of Veterans 
Affairs.
    As you prioritize your budget, I just would encourage you 
that you have the authority to waive that and I wish it was 
included in the request from the Administration on the budget.
    Secretary Peake. Thank you, sir.
    Mr. Moran. Thank you, Mr. Secretary.
    The Chairman. Mr. Secretary, I would just like to remind 
you when the question is asked from an individual, he is really 
asking as a Member of the Committee and any information should 
be provided to the whole Committee.
    Secretary Peake. Absolutely.
    The Chairman. Thank you.
    Ms. Berkley, you are recognized for 5 minutes.
    Ms. Berkley. Thank you very much, Mr. Chairman.
    First, I also would like to welcome you. I think this 
position is so very important in the cabinet. I view the 
Secretary's role as being the primary advocate for the veterans 
and not an apologist for the Administration. And I like a 
Secretary that will fight the good fight for the vets and let 
the chips fall where they may.
    For me, the cost of veterans' care is the cost of doing 
more and should be part and parcel. You cannot send young men 
and women overseas to fight this Nation's wars without the 
expectation that they are coming home and they are going to 
need healthcare and other benefits, and we need to provide not 
only as they leave, but when they come back as well.
    I also want to compliment you on how well prepared you are. 
I appreciate that and I think it shows a great sign of respect 
for the Committee and also for your job. And so I thank you 
very much for being so well prepared and being so new at the 
same time. I do not think that has been lost on any of us.
    I have a number of areas that I wanted to touch bases with 
you. And, of course, all politics is local, so I am going to 
localize my comments to you and my questions.
    First of all, as you know, we have been very pleased that 
we are in the process of building a VA medical complex in north 
Las Vegas that will take care of the 200,000 plus veterans that 
call southern Nevada home. This has been a long time coming, 
but it is coming out of the ground.
    And I was just there as recently as last month, had an 
opportunity to walk the 147 acres with the two contractors that 
have been selected. And I would love to have you come and see 
for yourself.
    A couple of questions that I have is, one, is I do not know 
whether you realize Montana is very close to Nevada. So as long 
as you are going to Montana, you might want to make a little 
side trip down to Nevada and see what we are doing.
    I would like to work with you and your Department to keep 
this project on track. Right now we are up to 2011 and we 
cannot wait too much longer. As you know, we have some serious 
needs. So that is going to be an issue that, you know, as I 
have said, if I have to go out with nail and hammer myself, I 
am going to do this. But I think it would be much better if the 
contractors did this and with your help, that will happen.
    Also know that it is going to cost, I understand, about 
$100 million to get this up and running after it is completed 
with the technology and the furnishings and the equipment and 
the hiring of the new personnel.
    And I would appreciate some guidance on when we start 
requesting those funds as well because it is not going to do us 
very much good if we have state-of-the-art buildings and no 
equipment or no personnel to actually provide the healthcare 
services to my veterans.
    There was something that I think we cleared up earlier, but 
if you would not mind going on record. Let me find this. There 
was something that was--let me find this. We asked the question 
there was something in the budget regarding lowering the cost 
of--diverting 50 percent of primary and mental healthcare from 
the complex to ancillary sites. And you gave me a satisfactory 
answer. I believe that someone from your office did.
    But could you go on record and explain the diversion 
because it is not actually a diversion, but I would like that 
for the record.
    Secretary Peake. The idea was rather than all of that care 
being done at that complex that it would be providing for 
community-based environments for primary care to support that 
larger community. It would probably be more convenient, would 
be less expensive for that project, but also more convenient 
for the veterans, and it would be tied together electronically 
and so forth. So it will be part of an integrated system.
    Ms. Berkley. Okay. So it is not a diminution of funding? 
Okay. I am glad we got that taken care of.
    I am very concerned about something and I had a story, but 
we do not have the time to. I go to Walter Reed and I visit our 
wounded and one that was particularly touching to me, although 
he did not live in my congressional district, he lived in 
Arizona, was a young 24-year-old Lieutenant who had lost his 
arm and his leg. Quite a remarkable young man that I have 
gotten to know since my visit to Walter Reed even better, and 
he came for a second honeymoon with his wife to Las Vegas when 
he got out of Walter Reed. And we have kept in touch.
    But why this is so significant is that was on a Thursday a 
couple of years ago. And on Tuesday, when we came back and were 
presented with the VA budget for the following year, there was 
a cut of $12 million from prosthetic research. And now, 
Republican and Democrat alike, we fought that and got the money 
back in.
    I notice in this budget, unless I am misreading it, there 
is a $28 million cut in medical and prosthetic research. Is 
that really where we want to be trying to balance our budget on 
the arms and legs of these young men and women?
    Secretary Peake. Well, first of all, for prostheses itself 
and buying prosthetics and the things that go with that, it is 
a 10 percent increase. From the research perspective, it is not 
just prostheses. It is across the board. It is a medical 
research piece. And we----
    Ms. Berkley. Why are we cutting that?
    Secretary Peake. We appreciate the plus-up from last year. 
This really is consistent with what we have asked in the past. 
We believe we can leverage that.
    We also put, if you think about the operational moneys that 
Dr. Kussman has in terms of the salaries of our investigators 
and so forth, that is another $440 million contributing to it.
    We also get Federal funds, Federal grants to the tune of 
about $750 million, another $200 and some million from other 
than Federal grants. So we will have a research portfolio of 
about $1.85 billion.
    And I think that we can meet the needs. Really our critical 
needs are focusing on our veterans with that amount of money.
    Ms. Berkley. I suspect that this Committee is going to 
fight to restore those cuts and I think that would be an 
appropriate role for the Committee.
    May I take one more minute?
    The Chairman. Yes.
    Ms. Berkley. Thank you. Thank you.
    There is another issue that I am kind of confused about and 
let me set this up. The hardest call I had to make, and I call 
everybody in the State of Nevada, everybody's family when we 
lose someone, the hardest call I had to make was to a 
grandmother who had raised her grandson who had killed himself 
because he was so depressed. He was very depressed and 
suffering from PTSD.
    Another tragedy in my community was a man named Justin 
Bailey who had a substance abuse problem when he returned and 
his family, parents insisted that he go to a VA hospital and 
get treated. The treatment exacerbated his situation because 
they gave him more drugs and he eventually overdosed while in 
the care of the VA hospital.
    I have legislation pending, but I am a little concerned 
when I read this budget. And it also has a proposed cut of $4 
million to substance abuse research under designated research 
areas. I would think that is one area that we would like to 
plus-up rather than cut.
    And I know I have a bill pending, ``The Mental Health 
Improvement Act.'' There are other Members of this Committee 
who have bills that deal primarily with PTSD and substance 
abuse. I would like to see this plussed-up and not cut.
    Secretary Peake. Thank you, ma'am.
    Ms. Berkley. And with that, I have other questions, but I 
know there are other Members of the Committee that wish to talk 
to you.
    Thank you for your courtesy, Mr. Chairman.
    And thank you very much. And we all wish you great success.
    The Chairman. Thank you, Ms. Berkley.
    Mr. Buyer, you are recognized for 5 minutes.
    Mr. Buyer. Thank you very much, Mr. Chairman.
    And, Mr. Secretary, I have a 2:30 meeting with the 
Ambassador of Panama, so I am going to run out to that and come 
back. Ms. Brown-Waite is going to take the chair here.
    General Howard, under the cyber security funding line, that 
line item has been zeroed out, so I would like for you to 
explain to me, when a breach of personal identifiable 
information occurs requiring notification and a provision of 
credit monitoring services goes to a veteran, where does that 
funding come from?
    Hold on to that. I am going to get the questions, so get 
ready to answer that one. And tell me about that plus-up. Okay?
    The other is with regard to San Juan. It is a candidate 
site for a new VA medical center, so why would you want to 
spend this large amount of money you are proposing on an 
existing facility when proposing a replacement? So I would like 
you to answer that one.
    With regard to Charleston, we are going to have a side bar 
conversation. I hope you and I can go to Charleston at a time 
when I can be there with Mr. Brown. But if I cannot, please, 
please go. There is a lot of push and pull on Charleston. You 
have some who work for you saying, ``Oh, do not do that.'' We 
have a different kind of an idea. We have created the 
Charleston model. We tried to leverage it. We are trying to 
catch the wave of the future here.
    And so one of us has to be an agent of change and take on a 
culture. And that is a side bar conversation that we will have.
    The other I would like for you to know is about our 
previous conversation regarding dental. I did not prompt that 
question to the Chairman of the Health Subcommittee. I saw you 
smile at me. He has had an equal concern because he is a bill 
payor for Army Dental.
    And if we, as a Congress, are going to embrace what General 
Casey as the Chief and General Cody as the Vice are doing to 
operationalize the force to include the Guard and Reserve, yes, 
we pay on the front end on sending them, but then when they 
come home, what are we doing? They are sending them to the VA 
to pay for dental.
    And you coming from your medical profession say, well, you 
know what. At least somebody is taking care of them. But you 
know what, General. The Army has to be doing that.
    And so we tried to get them to do a study and they took a 
look. They took care of the Sergeant Major's unit there, the 
first of the 34th. When they came back, they did all those 
dental exams and x-rays. You know why? Because I had them do 
that survey. Now we are finding out that in my calculations, 
they cooked the books.
    I would like your reaction because I am not very happy. And 
this is an issue that we have as a Committee, and I am going to 
have some more conversations with the Chairman, we are going 
down and we are going to flip the beds over here on the Army 
Dental Corps because they told me 2 days ago that the 
demobilization is not their mission. Can you believe that? The 
Chief of the Army Dental Corps looks me in the eye and says not 
our mission. Taking care of soldiers not your mission? I do not 
get it.
    So this is something that we, as a Committee, are going to 
take on. We will coordinate with Ike Skelton and we want to 
work with you. We opened up the access for the VA to take care 
of soldiers, not to be a bill payor for DoD.
    Now, if you want us to send the Army Dental Corps a bill, I 
am sure Mr. Michaud would be more than happy to do that, would 
you not? We will just send them a bill, because the more we pay 
on them, see, they will cost shift more to us, right? Well, 
wait a minute. Take care of your own. There are some 
intangibles there about the Army taking care of the Army.
    And I know you spent 40 years in the Army. And I know you 
have to believe if we are going to move to operationalize the 
force, that we have to take care of them when they come home, 
especially with the Army Force Generation model. Would you not 
concur?
    Secretary Peake. Sir, we know that the dental care 
deteriorates in the theater just because of the hygiene, the 
Coca-Cola and everything else. But I agree that we need to get 
them taken care of. And when we have the authority to do it, we 
will keep doing it until it is done in a different way.
    Mr. Buyer. Well, you are correct. I know that. We are going 
to try to change that. We want the Army to embrace and take 
care of their soldiers.
    Secretary Peake. We will be happy to work with you and the 
Army, sir.
    Mr. Buyer. Thank you.
    General Howard.
    Mr. Howard. Sir, I believe I have two questions to answer. 
The first one refers to the supplemental funding credit 
protection being zeroed out. You see, there in the 2007 
timeframe the $15 million. You know that was provided to us 
through the supplemental.
    To give you an estimate of how much it has cost us in 2007 
for credit protection, the number is $6.5 million. So, in other 
words, although we had set aside a large amount of money, we 
have not used it all. As you know, the veterans opt in, to the 
credit protection service, and that amount is $6.5 million.
    Mr. Buyer. Okay.
    Mr. Howard. The mailings associated with all that is about 
$1.3 million. So during 2007, that whole activity cost us about 
$8 million.
    Why is it zero? Sir, we hope it is going to be zero in 
fiscal year 2009, that it is not going to cost us anything. We 
do not know how much to put in there and I hope it is nothing. 
There is just no way to estimate what that number is going to 
be.
    But the fact of the matter is, whatever it is, is paid for 
right now out of the cyber security. We have to absorb it 
within that line item.
    Mr. Buyer. What have you spent on notification? About $30 
million?
    Mr. Howard. The mailings cost about $1.3 million in 2007.
    Mr. Buyer. I think we are probably going to have a problem. 
We gave you breathing room because we know that as you move to 
this new model that the chances of breaches are going to occur 
because the Under Secretary knows full well that he asked for a 
waiver. So we have a lot of docs out there with a lot of 
laptops and not everybody ``as compliant.'' And so the chances 
that one of those laptops can either be stolen or lost are 
pretty real.
    So if you have to do it, where do you go? What pot are you 
going to go and say I zeroed it out because I believe we will 
have no breaches this year, but if you have one, where are you 
going to get the money?
    Mr. Howard. Sir, first of all, the personal equipment can 
be used. You are exactly right. The rules are very, very clear 
about the use of that. You know, we have recently published our 
handbook 6500, which augments the directive. The rules 
associated with the use of personal equipment are very clear: 
approval by the supervisor, the protection of the device, the 
rules that if you are a physician using your own laptop, it 
has----
    Mr. Buyer. General Howard, I know that. If, in fact, a 
violation occurs, where are you going to get the money? You 
have zeroed out the account.
    Mr. Howard. Right now out of cyber security, we have to 
absorb it, whatever it happens to be.
    Mr. Buyer. All right. You can answer the other questions 
for the record.
    Thank you, Mr. Chairman.
    [The Post-Hearing Questions and Responses for the Record 
from Mr. Buyer appear on p. 174.]
    The Chairman. Ms. Brown, you are recognized for 5 minutes.
    Ms. Brown of Florida. Thank you. It has been so long since 
I have had the microphone.
    Mr. Secretary, welcome. You will find that our Committee is 
very bipartisan and we work really well together in trying to 
do what we can for the veterans.
    I have a general question and then I have a specific 
question about my district. But the general question is, I know 
that we have raised the issue about suicides and, of course, 
many stories on television about the homeless. Mental health is 
the nuts of the problem.
    Are we working with community-based organizations? Are we 
subcontracting and any way working with those organizations to 
work with us with our veterans?
    Secretary Peake. Yes, ma'am, we are. We do in our homeless 
program, with our transitional housing. And I visited one of 
our transitional housing units actually down in Richmond within 
the first couple of weeks I was there. And we are increasing 
that. I think there are 3,000 new beds that will come on with 
that Grant Per Diem Program that we have.
    In terms of the homeless folks, it is better than $1.6 
billion worth of healthcare that we give to homeless people. I 
have been to one of our homeless stand-downs. Actually, the one 
out here at the Washington, D.C., VA Medical Center.
    Ms. Brown of Florida. I participated in the one in 
Jacksonville. But I am wondering, part of it has to be the 
mental health though.
    Secretary Peake. Yes, ma'am.
    Ms. Brown of Florida. That has to be a part of it because 
they are homeless. They are having problems.
    Secretary Peake. You are exactly right. It is mental 
health. It is substance abuse. I think those are the things 
that really are big drivers to it.
    And if you look at our domiciliary programs, they have 
treatment programs built into those. And we are also going to 
see a rise in the domiciliary beds. I think there were 11 new 
domiciliaries that were approved in the last 3 years that will 
be coming onboard and coming online. So I think that is a 
positive story.
    Ms. Brown of Florida. The Orlando Hospital has been in the 
making for over 25 years. And I think we recently just signed 
the contract for the land.
    I mean, can we look at, and I spoke with you about this 
when you first----
    Secretary Peake. Yes, ma'am.
    Ms. Brown of Florida [continuing]. Took the job, design 
build. It should not take another 5 years. We have great people 
in the area. I visited the Gainesville facility. I told you 
that they are building a cancer hospital right next door to it. 
It is a design build. It is going to be up in 16 months and we 
are talking about years.
    And the facility, they are trying to do a wrap-around in 
Gainesville, the facility, but you have men five and six in a 
room and the facility for showers is down the hall. Now, that 
was great when I was in college, but that is not what our men 
need in these facilities.
    Secretary Peake. I went back and checked after your 
conversation, ma'am. We are at 100 percent design, so the 
design piece is not the holdup. And so we are moving.
    I did also check about the hospital across the street and 
there was really work back there in April of 2006. So I mean, 
even though they may not be so visible, it has been on the 
books a little bit longer than that 18 months. But these are 
complex facilities, but there is no question, because I also 
went back and looked to understand the need that you have in 
Gainesville.
    Ms. Brown of Florida. Yes.
    Secretary Peake. So I have talked to our people about let 
us see what we can do with the contractor to work to speed that 
baby up. But the design build will not help us in this case 
because we are at 100 percent design and you are fully funded 
for it.
    Ms. Brown of Florida. But it would help us in the Orlando 
facility.
    Secretary Peake. I will go back and look at that to see if 
there is a way that would make a difference for it. I know we 
are on the Orlando facility, the first thing going back to your 
other point is the domiciliary is one of the first projects 
that is going into that campus.
    Ms. Brown of Florida. Now, on Tuesday, I am going to spend 
the day in New Orleans with your people there on that hospital 
there because I want to know what is the status, how can we 
speed it up, how we can work with the community people.
    And I am finding that people are great in the field, but I 
want us to do our part. We are always talking about how we do 
things, how we can speed up putting these facilities online 
when we actually fund it here.
    Secretary Peake. Yes, ma'am. For the New Orleans facility I 
looked at the testimony last year, I think we are a little 
further along. We are really working hard on the site that is 
across from Louisiana State University. So I think we have the 
downtown site and we are still crossing the Ts and dotting the 
Is with the city and----
    Ms. Brown of Florida. I will be meeting with the city and 
with your people Tuesday.
    Secretary Peake. I think we are getting ready to go there.
    Ms. Brown of Florida. Good. Thank you, and welcome.
    Secretary Peake. Thank you.
    The Chairman. Thank you, Ms. Brown.
    Ms. Brown-Waite.
    Ms. Brown-Waite. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. I am the Ranking Member on the 
Oversight and Investigations Subcommittee. We recently held 
several hearings and the Office of Inspector General (OIG) gave 
us reports that were very relevant to the subject matter at 
hand. One actually happened to be credentialing and 
privileging.
    And at this Subcommittee hearing, we were concerned that 
the Inspector General whose budget was plussed-up could indeed 
have his budget reduced. I think especially because the need is 
there for additional oversight and investigation that the 
Inspector General's Office performs a very valuable task. And I 
see you shaking your head. Obviously you agree----
    Secretary Peake. I do.
    Ms. Brown-Waite [continuing]. Mr. Secretary. I know that it 
was not your budget that actually cut back the funding for the 
Inspector General's Office to reduce the 48 plus-up positions 
that the appropriations for 2008 actually provided; is that 
correct?
    Secretary Peake. Well, this is my budget. I can tell you 
that when I looked at that, I asked a question. And if you look 
at it, we are about 8 percent more this year than what it was 
the year before, before the plus-up.
    I will tell you I do believe that the OIG is a very 
important organ for us and for us collectively, we in the VA 
and you in the Congress. And so I have not had specific 
discussions with Mr. Opfer yet on if he feels like he has any 
significant shortfalls here. But I do believe in the value of 
the OIG.
    Ms. Brown-Waite. Well, would this not in effect take the 48 
positions that were added and eliminate them?
    Secretary Peake. I know he does some of his work by 
contract and I cannot tell you----
    Ms. Brown-Waite. I believe it is 48 full-time equivalents 
(FTE) that would be eliminated as a result of the budget 
request. And I know that Members on both sides of the aisle and 
on this Committee are committed to making sure that the 
Inspector General's Office is adequately funded.
    And I do not think adequately funded would translate into a 
reduction of the number of people in the Inspector General's 
Office. And so we had actually discussed this in the Oversight 
and Investigations Subcommittee about how important it is that 
the Members of this Committee support the increase from last 
year and perhaps even plus it up more.
    We want to make sure that that funding is there and that 
staffing levels are appropriate for the needs of the VA. And 
while the Office of Management and Budget (OMB) may have been 
the entity that made that cut, I do believe that Members on 
both sides of the aisle will support going back and restoring 
that funding.
    Let me ask you another question and that is on compensation 
and pension. I see where you are talking about adding 700 new 
FTE positions and if it takes I am told 3 years to train new 
compensation and pension employees, how is this going to work 
out to address the immediate need and the immediate backlog 
that exists right now mainly because of the increasing number 
of benefits being sought?
    Secretary Peake. Well, it is a challenge and training is a 
challenge. I know that Admiral Cooper and I have talked about 
some of the things that he is doing to try to shorten that time 
between bringing you on and making you effective to include 
things like training them on some of the simpler things where 
they can go back and unburden some of the more experienced 
people in their work sites, allowing them to focus on the 
harder claims, and then learning more on the job using more 
electronics in terms of the computers to be able to train 
people.
    But I think the real answer is that we need to get after 
change in the process and making a simpler process using these 
rules-based engines--but that is going to take more time to 
deal with the issue.
    Ms. Brown-Waite. But you are looking at having them do the 
more simpler tasks to free up the more experienced claims 
rating----
    Secretary Peake. And I would be happy to have Admiral 
Cooper go in more detail if you would like.
    Admiral Cooper. Yes, ma'am. Part of our plan is to more 
effectively utilize new people earlier in their training by 
having them process the simpler claims first. So we have 
started doing that. In the month of January, we produced more 
end products, the third most in the last 6 years. So we are 
making progress.
    But another important point is that we will have hired the 
total number of people we expect for Compensation and Pension 
(C&P) Service, 10,750, and we will have them onboard at the 
beginning of the year. The buildup will be done by the 
beginning of 2009, so we should be able to take greater 
advantage of those assets that we have.
    Ms. Brown-Waite. Thank you.
    I yield back.
    The Chairman. Thank you. And thank you for the concern over 
the OIG budget.
    Mr. Hare.
    Mr. Hare. Thank you, Mr. Chairman.
    Welcome, Mr. Secretary. Nice to meet you for the first 
time.
    Secretary Peake. Nice to meet you, sir.
    Mr. Hare. Just a couple of things I would like to say 
before a question or two for you. I want to commend Under 
Secretary Tuerk. He came out to my district. We have the Rock 
Island Army Arsenal Cemetery. And we spent a lot of time on a 
very cold day. And you could just tell and so could the 
veterans, Under Secretary Tuerk, how much and how honored you 
were to be there and what a great job you did. So I just want 
to give a complement to your boss here.
    The other thing, too, and I want to thank the VA. I know 
they are taking a look at, Mr. Secretary, the possibility of 
getting a CBOC in Sterling, Illinois, which is in my 
congressional district. And I understand that that information 
that you are gathering might be completed by late summer and we 
are hoping and praying in Sterling, Illinois, that that can 
happen. It is certainly needed.
    One of the top legislative priorities of most of the VSOs, 
Mr. Secretary, is legislation that will require mandatory 
funding for the VA. Thirteen out of the last fourteen VA 
appropriations bills have been late in providing critical 
funding for the Veterans Health Administration (VHA).
    I have a bill that you are probably aware of. It is the 
Assured Funding Bill that I have introduced and have about 130 
co-sponsors to the bill.
    You know, we heard a lot the other day on Super Tuesday 
about who won and who lost. The veterans in my State actually 
won. We had a referendum on most of the counties, with 102 in 
Illinois. Ninety-seven percent of the people, Republicans, 
Democrats, and everybody that voted, voted yes, so it was a 
nonbinding, but it was a sense of where people wanted to go.
    And the Lieutenant Governor mentioned this very issue of 
assured funding and 97 percent of the people on both sides that 
came out on a very cold and nasty day voted in support of this.
    I was pleased to see that during your confirmation 
hearings, you expressed an interest in looking more closely on 
the issue of mandatory funding and would be interested to maybe 
get some thoughts from you on that.
    You know, I hear so much from so many people that it is 
very difficult to figure out what you are going to spend when 
you do not know and if you are not even going to get the money 
in a timely fashion.
    So I would like to maybe just ask you about your position 
on that and would certainly love to, down the road obviously, 
sit down and maybe have a conversation with you outside the 
hearing on the matter, too, but kind of wanted to see where you 
were at there.
    Secretary Peake. Yes, sir. I will tell you that there is 
concern and I share it about getting into some magic formula 
when we have potentially changing needs that might come with 
conflict or whatever. I think we have gotten much better with 
our population models and our actuarial projections.
    In fact, with Admiral Dunne and really a shop dedicated to 
that, I think as I have looked at our numbers, we are getting 
closer and closer to really being able to have good actuarial 
projections that should be able to help us.
    I apologize. I am not familiar with your bill. I have not 
had a chance to study it, but will.
    Mr. Hare. Thank you, sir.
    Secretary Peake. I am certainly willing to look at it and 
understand it about what ways we can have to get more 
consistent funding. It is a problem when we do not get money 
early on in the year or when it delays and those kinds of 
things.
    But I am not sure just a mandatory funding with a stock 
formula tells us all we need to know about the changes in 
medicine, the changes in technology, and those kinds of things. 
But I am willing to explore it with you, sir.
    Mr. Hare. Thank you, Mr. Secretary.
    The other quickly, I know we talked about the disability 
backlog. And my friend, Mr. Donnelly, from Indiana is sitting 
here. We were having coffee one morning saying how, from just a 
commonsense perspective, how can we possibly fix this. And, you 
know, hiring other people is an idea and training them up and 
everything.
    But Joe said why don't we treat our veterans like we treat 
people that pay their taxes. They put the form in and if they 
have a refund coming, they get their refund. If they do not, 
they do not. If there is something there they want to question, 
they can audit it.
    But to clear up the time and maybe erring on the side of 
veterans. I have done a number of town meetings and I come from 
a very rural district. And hopefully we can bump up, and I want 
to throw this in quickly, the rural funding in the budget.
    But, you know, veterans said, well, why does it take 177 
days on an average to be able to get this. And I think it puts 
them in a very--you know, they get angry. They are frustrated 
with the system. And is there a way that we can err on the side 
of the veteran, the presumption that the veteran's disability 
claim is legitimate?
    The vast majority, 99.99, I believe in my heart of hearts 
that submit these are not going to try to pull one over on 
anybody, to be able to really effectively get that backlog 
caught up in some fashion other than just hiring people that is 
going to take some time to get them trained up to do it. So I 
just wanted to maybe throw that out as something to think 
about, you know, down the road.
    Secretary Peake. I have asked about that and some of the 
numbers, about 49 percent of folks have issues that do not get 
adjudicated, that are found not to be service connected. Now, 
that is not a whole claim necessarily, but it is all those many 
issues that we are starting to see within each claim. So I 
think that there are some things that we should be able to look 
at.
    I am not sure just forgiving it off the top, you know, 
blanketly is the right answer. Every time that we do give 
somebody--I mean, we do have situations now, prestabilization 
as an example, where we will adjudicate somebody at 50 percent 
or 100 percent and then go back and check them later. And every 
time we do and it goes down, it is a big problem because it 
looks like we are being unfair to the veteran when really it 
may be the fair thing.
    So somehow we would have to figure out how to deal with 
those kinds of issues because, otherwise, it will just go up 
and up and up and growing when it is not necessarily 
legitimate.
    Mr. Hare. I know I am over on my time. Thank you, Mr. 
Chairman.
    And, Mr. Secretary, I wish you all the best.
    Secretary Peake. Thank you.
    Mr. Hare. And if there is anything that this freshman 
veteran from Illinois can do to help or any ideas that you are 
looking for, I would be more than willing to. I mean, you know, 
veterans come first and foremost to me. So I thank you very 
much.
    Thank you, Mr. Chairman.
    Secretary Peake. Yes, sir.
    The Chairman. Thank you, Mr. Hare.
    And just two things before you get too long into your 
Secretaryship. I do not want you to have misconceptions about 
mandatory funding. It does not mean a stock formula, as you put 
it, because formulas can change. It is just a question of where 
the funding comes from under the budget rules.
    As you know, the history of the Department's formulas has 
not been exemplary as shown by the fact that you forgot to plug 
in the war a few years ago. So mandatory funding does not mean 
that it is completely inflexible. Please keep that in mind.
    And, on Mr. Hare's point about presumption of disability 
claims, we are exploring the idea that if the disability claim 
was prepared with the help of a VA certified service officer, 
that we grant the claim. And we can take into account some of 
the problems you brought up with the professional help, which 
has been built up in the VSOs and the County Veteran Service 
Organizations and certainly, in VAs all over the country.
    Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman.
    And, Secretary Peake, I thank you and congratulations. I 
cannot tell you how much I appreciate you taking this job.
    I would also like to thank your team here. I have had the 
pleasure to get to know and work with them and find that the 
passion for our veterans and the expertise they bring to the 
job is very encouraging. And these are all gentlemen that could 
find work in the private sector and they have chosen to serve 
our veterans.
    And I see Mr. Mansfield here. I thank him also for the work 
that he has done.
    We also have a room full of people I would like to thank. 
We have representatives from a lot of Veteran Service 
Organizations that I have worked with over the years. I see a 
lot of familiar faces.
    I think I saw Rose Lee for a while from Gold Star Wives 
there in the back. I have often thought that there probably 
should be some chairs up front for the Gold Star Wives. We 
might want to work on that one.
    But the point being, this is the one place passions are 
high and their passions are high for the right reason, for our 
veterans. And it is the one place where I think you can hear 
there is cooperation about one goal and whether they are 
sitting here or sitting at the table or sitting out there, 
trying to get better care for our veterans is the goal.
    So I thank you for taking this. I think many of us are 
very, very hopeful that your experience in DoD and then coming 
over to VA to help bridge that gap will really help us.
    I think a lot of us felt last year we made great strides. 
We think that we did things for veterans that needed to be 
done. We showed that it was a priority and we showed the 
American public we could follow through with that. And I am 
very, very proud of that.
    And we are here today to discuss the budget a little bit 
and to talk specifically on that. And the one thing I think it 
is important to keep in my mind is constitutionally the 
President's budget is a suggestion to us and I very much take 
it as a suggestion.
    And I see some of the things in here, whether it is fees or 
co-pays. I have a 15-month-old son at home. My wife keeps 
telling me stubbornness is a virtue. And so the President is 
bringing them to us and we are going to be just as stubborn on 
saying that there is a better way to do this.
    But I appreciate the difficult situation you are in, but it 
is one that you have taken on the challenge and we are very, 
very hopeful for that.
    I did want to just mention and go back to Ms. Brown-Waite. 
I was in the same Subcommittee hearing on this issue of the OIG 
and something came up in there that was quite troubling for me 
for the reason that I think you and I, Secretary, share a 
belief.
    And I know one of your quotes was OIG operations provide a 
return on investment of eleven to one. That is the type of 
thinking that really makes me encouraged, that we are seeing 
ways and that I think all of us know. When we are talking 
budgeting and we are talking funding, it is not the panacea for 
everything, but there are ways to target our funding to be 
smarter about this.
    And the OIG, and I have seen it time and time again, many 
of us see the OIG as a critical component in ensuring care and 
how we are taking care of our veterans.
    But something came up last week that quite honestly I have 
lost sleep over this comment because it is very disturbing. We 
were having an Oversight and Investigations Subcommittee 
hearing on the investigation of some deaths at the Marion, 
Illinois, facility. And in there, we heard from a widow who 
talked about her husband dying from what was substandard care. 
And I will have to say, just like I told your predecessor, you 
will not find a more staunch supporter and someone who is more 
proud of the VA than me. But I will also be its harshest 
critic. So we have problems. I want to know what the situation 
was, as does everyone else here.
    And I asked the representative from the Office of Inspector 
General if they thought there was a correlation between 
resources and their ability to perform their duty and stop 
these problems from happening. And the OIG representative said 
with more resources, we could have done more.
    And I pressed on and I said, this was an exact quote, are 
we falling into a conundrum where you are not getting the 
resources you need to help stop patients' deaths and we are 
turning into substandard care. And there was a silence, and 
then a yes.
    Now, there is a widow sitting there and an Inspector 
General saying, had I had more resources in their professional 
opinion, and I applaud this under oath and taking a stand like 
that, because I think all of us know that case is far from over 
and it is going to end up in a court of law where it rightfully 
should be adjudicated, but the issue of this being that I 
believe in the VA. I believe in the Inspector General. And I 
had an Inspector General telling me that they felt the resource 
issue led to substandard care and then I get the budget and I 
see we are going down.
    Now, I know you addressed it with Ms. Brown-Waite. It is 6 
percent less than we had this year and 9 percent less than The 
Independent Budget.
    My question I guess to you, General, is how do I answer 
that to that widow? She heard that and I do not believe it was 
an OIG representative speaking out of turn.
    Secretary Peake. I did not get that feedback from them, but 
I will look at that. In the Marion instance, we asked the OIG 
to go in afterward and take a look. The whole incident was 
detected because of the processes that were in place to look at 
quality and we would need to tighten those so that we maybe get 
the flag a bit earlier. But I think Dr. Kussman and his team 
immediately took aggressive action. It was not triggered by the 
OIG. It was not triggered by an OIG inspection. And that is not 
to argue at all about the importance of the OIG or whether or 
not they need more resources.
    But in Marion, just for the record to be clear, that was 
picked up by our internal quality assurance policies and 
procedures that I think are really remarkable and then led to 
swift action by the leadership.
    The other issue I absolutely will address for the OIG to 
understand what their shortfalls are. And as I mentioned with 
Ms. Brown-Waite, I have not had that discussion with them yet.
    Mr. Walz. Okay. And I do appreciate that. And the issue 
that did come up, and this is what is so difficult and I have 
said it time and time again, this is a zero sum game. And the 
investigation was started. But when that investigation was 
ongoing, it was after the time that the investigation had been 
initiated that Mrs. Shank lost her husband.
    So it is one of those issues that we are going to have to 
continue to get better. I know this team is committed to that. 
Our question is, are we providing the resources? Are we getting 
into a situation where we are focusing those resources to fix 
it?
    But, again, I thank you. You have given up an incredible 
amount of your valuable time to come here and I hope you know 
this Committee is here to do whatever we can to work with you 
for our veterans.
    I yield back and thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Walz.
    Mr. Snyder.
    Mr. Snyder. Thank you, Mr. Chairman.
    I feel like I should call you Secretary General because I 
have never called anyone Secretary General before and you are 
the first person that would qualify. But, General Peake, it is 
good to see you----
    Secretary Peake. It is good to see you again.
    Mr. Snyder [continuing]. In your new role as Secretary. I 
appreciate all the work you did.
    I had to go and meet with our National Guard folks from 
back home and then came back. I understand that Ms. Berkley, as 
she often does, beats me to the punch on things. But I wanted 
to pursue this issue of the research again, which I think I 
have talked about every year for the last 10 years and probably 
your staff told you about it.
    But this is your document here and on page 2A2 in which you 
discuss medical and prosthetic research, the VA's 2008 budget 
estimate was that you could mobilize $769 million in Federal 
resources from the National Institutes of Health (NIH) and 
other Federal resources, correct?
    The reality is that it is now looking, by your estimate 
from your document, it is going to be $708 million which is $61 
million less than the President's budget last year at this time 
told us you would mobilize and other Federal resources, 
leverage other Federal resources.
    And, yet, now you are coming back with a budget this year 
saying, hey, you know what, we think we can leverage $751 
million. Well, you are a smart guy. You learn from the past. We 
learn from the past. You did not do it last time. We told you 
you would not do it last time. NIH budget is flat in the 
President's budget this time again. He is not going to do it.
    Why put this number out? I am curious, Secretary Peake. Do 
you all know what the number was that you requested for 
research for your Department? I suspect OMB has cut you off. I 
am curious. What number did you request? I cannot imagine that 
you all would have gotten together and said let us fail to 
learn from our experience. Do you know what number you all 
requested?
    Secretary Peake. I do not know the number offhand, but as I 
look at the kind of researchers that we have in the VA and the 
academic affiliations that we have, I would hope that we would 
be able to compete effectively for those dollars.
    Mr. Snyder. Yeah, but you will not. You will not. That is 
not the way this is going to work. I do not know why we are 
going to expect other Federal agencies to pick up VA's 
responsibility on research.
    And this is not some, you know, pie in the sky kind of 
thing. You are talking about, I suspect, I do not know, maybe 
you can share with us sometime or inquire since you are new on 
the job, I suspect you have an abundance of top-notch 
researchers----
    Secretary Peake. We do.
    Mr. Snyder [continuing]. With research projects that would 
speak right to the heart of some of the problems facing our 
veterans today, whether it is prosthetics or prevention stuff 
or vaccines or PTSD or whatever, all kinds of things, that 
would benefit from additional funding.
    And at this time in our history, I just do not understand 
why we are not looking on this as an opportunity to say let us 
do better than keep up with inflation. Let us recognize this, 
that we are in for the long haul here with a new generation of 
veterans.
    Why not really pump some money into this at this point and, 
by the way, let us make a commitment to recognize that good 
research depends on not an annual budget cycle? Good research 
and attracting good researchers, they need to know we are with 
you for 3 to 5 years. I mean, you know that.
    This is not new information for you and I suspect you are 
part of the choir here. But when we see this, when we heard 
from your predecessor we will be able to leverage dollars and 
your own document right here says we failed to leverage dollars 
by $61 million, but we are going to try it again, that is not 
going to happen.
    And it does a disservice to this Committee and to the 
American people, but even greater, it does a disservice to 
veterans that depend, you know, that they are hoping, they do 
not know anything about these numbers, but they are hoping that 
something better will happen in their medical conditions.
    I wanted to ask a question involving claims. Who is our 
claims guy? I toured our regional office last week. They have a 
great team up there of personnel. In fact, they are doing some 
of this training for their people there from Oklahoma and other 
places, this training for new claims evaluators.
    And then I toured their facility and they have a real 
problem with storage, infrastructure, but they think they are 
on the way to solving it. That is not what I wanted to ask 
about.
    This is the question I want to ask about. This Committee 
has a lot of interest in going to computerized medical records 
and computerized forms. And we think that is the direction 
everything is going in the universe right now.
    In fact, it appeared to me when it comes to applications 
for disability claims, it is going in the wrong direction, that 
veterans are going to the Internet and finding documentation 
themselves or their advisors or whatever that say, hey, this 
stuff is great, let us add this to the file. And then, in fact, 
the claims, the paper trail on the claims, are getting longer 
and longer and longer.
    And so I went back in the file room and they were a bit 
like canyons with three-volume files that were not like the 
medical record, but attached documentation in nonelectronic 
form and the canyons are getting higher. There is no room for 
it in the drawers and the trend is for thicker, thicker files, 
that veterans are being encouraged, and I would do the same, 
attach all this documentation that you can find.
    Now, why are we not moving in the direction of an 
electronic filing? Why is that? Where am I off-base here, 
because clearly the trend is we are running out of space, 
whereas 10 years or 20 years ago for the same number of claims, 
we would have been able to get everything in the file drawers 
and we cannot now at a time when we think we can move to 
computerized stuff?
    Admiral Cooper. You are correct. We are overburdened with 
paper. We are moving to become more paperless as the Secretary 
mentioned before. We are doing everything we can, working with 
IT to get to the point of using the Virtual VA system in place 
of paper records.
    Mr. Snyder. But do you agree with me that, in fact, per 
file, per claim that the trend is actually going in the wrong 
direction, that the files are actually getting bigger in paper?
    Admiral Cooper. They are getting bigger because of all the 
material that people are sending in, and also because of the 
things we require today.
    We started in the year 2000 with VCAA, ``Veterans Claims 
Assistance Act,'' which was established, properly in my mind, 
to ensure that we helped the veteran. But in doing that, we 
also said there are certain things you have to provide and we 
have to assist you in obtaining.
    Since then, the courts have made several decisions which 
have increased what we should try to get to ensure we 
absolutely look at the claim and ensure that we do everything 
we possibly can to adjudicate the claim right. But what that 
has meant is more and more paper coming in. You are absolutely 
correct. We are being overrun by that and trying to control 
that, but we hope to process more claims in a paperless 
environment within a couple years, and start doing away with 
some of the paper. But the fact is, right now we have 
requirements that we have to fulfill and, by sending letters 
back and forth, we get a lot more information to support each 
claim.
    Mr. Snyder. I am sorry. My time is up.
    Well, I do not have a problem with, you know, if there is a 
lack in the file and you send a letter that says we are lacking 
this. My issue is, why does that have to be done by paper? Why 
can this not be done--just because I ask for more information 
now than we did 5 years ago does not mean it has to be in hard 
mail. I mean, in fact, if it came electronically, it would come 
like that rather than have to go through the mail. I see 
Secretary Peake is trying to get a word in here too.
    Secretary Peake. Just that I am in agreement with you, sir. 
Maybe one of these days we can travel to Winston-Salem or Salt 
Lake City, Utah, where we have two pilot programs using 
paperless rating of the BDD claims. We are also moving toward a 
paperless environment in our new pension claims. So, we have 
some pilots in there, but it is like walking back into the 
1950s. I have been there.
    Mr. Snyder. Yeah. And I am over my time, Mr. Chairman. But 
I do not know if I am just the slowest kid on the block here, 
but we have talked about this going to paperless stuff for some 
time. I actually thought that we were kind of moving in the 
right direction, although slower than we would want. In fact, 
it is going the other way. And there may be a way we want to 
follow that in terms of what is the actual number of paper 
claims versus electronic claims and what is the number of pages 
that are being submitted because we are not talking about the 
difference between 30 and 60 pages. We are talking about the 
difference between 50 pages and 3 or 4, 5 or 600 pages. And 
they are sitting back there in volumes about to fall on our 
staff.
    Thank you.
    The Chairman. Thank you. Could you get me a memo on that? 
Thank you.
    Mr. Secretary, thank you for being with us. Let me just ask 
you a couple of questions before you leave.
    One of the top priorities of this Committee this year is 
going to be a GI Bill for the 21st century, and we are working 
on that. I think I mentioned it when we met. In our view, the 
bill will include an update in education benefits to take into 
account the true cost of college and provide flexibility for 
those payments. As you know, if you have a shorter course you 
cannot apply that money to the whole tuition if it is a 3-month 
course, and making the Guard and Reserve units who have seen 
active duty eligible for that GI Bill. It will also include an 
improvement to the housing program to meet the real needs out 
there, such as inflation, and maybe include homelessness and 
mental health.
    But if we move in that direction, will you work with us and 
try to find the funding?
    Secretary Peake. I will.
    The Chairman. As you know, nothing is mentioned in the 
budget, obviously.
    Secretary Peake. I will work with you on that. I think 
education is important. I already commented on the emphasis I 
would like to place on our vocational rehabilitation education 
programs that already have a very good benefit for those that 
have 20-percent disability from their service.
    So I look forward to working with you. I know that the 
Montgomery GI Bill was a peacetime bill and right now, as I 
say, everybody here appreciates that we are in a war.
    The Chairman. Well, we are going to take that very 
seriously.
    By the way, I had a forum with your people in the Home Loan 
Program and its relationship to the current crisis that we are 
in. And it just seemed to me, and from townhall meetings, that 
the VA Home Program is sort of irrelevant to the crisis in that 
the loan value is too low to help in California and a lot of 
other places.
    The refinancing cap is just meaningless given the crisis 
that people have. The fees for refinancing are incredibly high 
and make it basically useless for someone in this current 
crisis. You have rules about condominiums that seem to be out 
of date.
    I have legislation to try to change all that. But it seems 
to me that the VA can contribute right now to helping veterans 
or active duty personnel actually deal with this crisis that 
millions of people are facing.
    I also believe that we should have a policy that says no 
foreclosure for anybody on active duty because it is a crime if 
somebody comes home and finds that they have to lose their 
home.
    Again, I hope you will work with us on that. We have to do 
this right away, as part of the stimulus package we are doing. 
The maximum mortgage amount is raised temporarily for Fannie 
Mae and Freddie Mac and the FHA but not the VA. So I think we 
have to do that and work with you on that----
    Secretary Peake. Yes, sir.
    The Chairman [continuing]. Because I think we can 
contribute a little bit to solving that crisis.
    I do not know if you were aware, when I mentioned in my 
opening statement, that the Priority 8 study that we asked for 
when we went through this with your predecessor, he said, well, 
it is a lot more complicated than just giving you a figure for 
how much it is going to cost. And I asked him to give us a 
study. And we are still waiting to receive that. So I hope you 
will----
    Secretary Peake. Sir, I understand the study should be up 
here in February.
    The Chairman. Okay. Thank you.
    In previous budget submissions, I believe that although we 
may have had to drag it out of you instead of getting it from 
the VA, there were some estimates around of how many veterans 
would leave the VA healthcare system due to the increased 
enrollment fees and pharmaceutical co-payments.
    Did you do anything about that, your estimate of how many 
people could not afford that and may leave the system?
    Secretary Peake. Sir, what I understand the estimates are 
is that about 440,000 enrollees of which about 144,000 that 
actually use the VA would not pay the enrollment fee.
    The other point that I understand is the majority of those 
have other health insurance already that they would--and that 
the 144,000 users are those who do not use us very much anyway 
already. Those are the numbers as I understand.
    The Chairman. How about the co-pays, the pharmacy co-pays? 
Did you do any estimates on that?
    Secretary Peake. I think that is included in that same 
number.
    The Chairman. Well, I hate to have you leave the VA with a 
legacy of saying, oh, whatever it is, 140,000, 440,000, I did 
not understand quite what you were saying there.
    Secretary Peake. We have----
    The Chairman. You know, they left the VA because they could 
not afford it. You do not want that as your legacy, I do not 
think. So we will take steps to make sure you do not have that 
legacy. This is not a time to say that veterans should not be 
served.
    One last thing. I do not know if I will call it a sermon or 
not. I think you and your staff will do better with this 
Committee with honesty and a nondefensiveness about issues that 
everybody knows are there, but never come up in your reports.
    I did not see how many backlogged claims there were. Did 
you put a number in there? Whether it is 600,000, 400,000 or 
700,000, if you do not tell us and say, look, we are working on 
this or here is what we need to do it, you look like you are 
not confronting it and you are hiding it.
    I went through this, I do not know if your staff told you, 
with the head of your Mental Health Division with the suicides. 
We had media estimates of 6,000 veterans a year or so dying 
from suicide. And your guys were telling us how great a job 
they were doing and now, there were 300 people who called in--
300 people we talked to. And I kept saying what about the 
6,000.
    We have to have honesty about these issues. We are not 
holding you personally responsible. We just have to have an 
understanding, a joint understanding between Congress, the 
Executive Branch, and the public about what these issues are 
because then we can work together to solve them.
    But if we do not know about them, or you do not recognize 
them, or you do not want to talk about them officially, it 
creates the impression that you are hiding this, that you do 
not really care and are not doing the job.
    And we know how dedicated everybody is. But when those 
official statements come to us and you did not tell us in your 
paper that there is going to be a $19 billion decrease over the 
next 5 years, I mean, why is that and what can we do with you 
to avoid that from happening?
    We are not trying, just to say ``got you''--we want to look 
at the problems honestly and try to deal with them together. 
That is the spirit in which I hope we can work together.
    You have the floor for any final comments you would like to 
make.
    Secretary Peake. Sir, first of all, let me thank you all 
for the hearing today. And I thank you for particularly that 
last comment because I hope that you will find me and this 
great team to be open. It is not about hiding anything. And 
perhaps we sometimes err on the side of trying to tell the good 
news story.
    I think my predecessor said something about the VA being 
the greatest story never told or something, so maybe we err on 
that side. It is not to hide issues. There are issues that we 
need to deal with.
    In terms of that out-year projection, I understand that 
that is just a placeholder for all agencies and they reflect no 
policy decisions or VA demand. So, I mean, it is almost, as I 
understand it, it is irrelevant to our future and what we----
    The Chairman. I will tell the President that.
    Secretary Peake. I have a year, I guess. But, you know, I 
have been tremendously impressed with the quality of the people 
here just as you say, sir. And I think that we all are 
dedicated to the same thing. We have a common sense about the 
importance of our veterans and there is probably not a time in 
our recent past that it has been more important.
    So I welcome the opportunity to work with this Committee 
and with the other parts of Congress to make some progress 
here.
    The Chairman. Thank you, sir. Again, it is a pleasure to 
have you here. It is a pleasure to be working with you.
    We will let this panel go so you can go back to work on 
behalf of our veterans. Thank you so much.
    The second panel that we will hear from today is from the 
four organizations that provide The Independent Budget; the 
Paralyzed Veterans of America (PVA), the Disabled American 
Veterans (DAV), the Veterans of Foreign Wars (VFW) of the 
United States, and American Veterans (AMVETS). And in addition, 
the American Legion and the Vietnam Veterans of America (VVA) 
will be testifying on this panel.
    We thank you for all the work that goes in The Independent 
Budget. We look forward to working with you to make it a 
reality. Each of you have 5 minutes. We have some new 
technology you see that is in front of you. It tells you how 
much time you have. And, of course, your complete statements 
will be made an official part of our record.
    Mr. Blake is with PVA and we welcome you here.

   STATEMENTS OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, 
PARALYZED VETERANS OF AMERICA; KERRY BAKER, ASSOCIATE NATIONAL 
  LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; DENNIS M. 
 CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF 
FOREIGN WARS OF THE UNITED STATES; RAYMOND C. KELLEY, NATIONAL 
    LEGISLATIVE DIRECTOR, AMERICAN VETERANS (AMVETS); STEVE 
ROBERTSON, DIRECTOR, NATIONAL LEGISLATIVE COMMISSION, AMERICAN 
 LEGION; AND RICHARD F. WEIDMAN, EXECUTIVE DIRECTOR FOR POLICY 
      AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF AMERICA

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman and Ranking Member 
Buyer. On behalf of the four co-authors of The Independent 
Budget, I would like to thank you for the opportunity to 
testify today on the funding requirements for the Department of 
Veterans Affairs' healthcare system for fiscal year 2009.
    For fiscal year 2009, the Administration requests 
approximately $41.2 billion for veterans' healthcare. This 
includes approximately $2.5 billion from medical care 
collections.
    Although this represents another positive step forward in 
achieving adequate funding for the VA, it still falls short of 
the recommendations of The Independent Budget.
    For fiscal year 2009, The Independent Budget recommends 
approximately $42.8 billion for total medical care budget 
authority, an increase of $3.7 billion over the fiscal year 
2008 appropriated level and approximately $1.6 billion above 
the Administration's request.
    In order to properly reflect the Administration's change to 
the medical services account and our recommendation, the 
separate accounts for medical services and medical 
administration must be added together.
    With this in mind for fiscal year 2009, The Independent 
Budget recommends approximately $38.2 billion for medical 
services.
    Our increase in patient workload is based on a projected 
increase of approximately 120,000 new unique veterans, 
including category 1A veterans and covered nonveterans. We also 
estimate the cost of these new unique patients to be 
approximately $792 million.
    The increase in patient workload also includes a projected 
increase of 85,000 new Operation Iraqi Freedom and Operation 
Enduring Freedom veterans at a cost of approximately $253 
million.
    Our policy initiatives include $325 million for improved 
mental health services and traumatic brain injury care on top 
of what is already being provided, $250 million for long-term 
care, $325 million for funding of the fourth mission which 
encompasses homeland security and emergency preparedness, and 
$100 million to support centralized prosthetics funding.
    For medical facilities, The Independent Budget recommends 
approximately $4.6 billion. This amount also includes an 
additional $250 million for nonrecurring maintenance for the VA 
to begin addressing the massive backlog of infrastructure 
needs.
    Although not proposed to have a direct impact on veterans' 
healthcare, we are deeply disappointed that the Administration 
chose to once again recommend an increase in prescription drug 
co-payments from $8 to $15 and an index enrollment fee based on 
veterans' incomes.
    Although the VA does not overtly explain the impact of 
these proposals, similar proposals in the past have estimated 
that nearly 200,000 veterans would leave the system and more 
than 1 million veterans will choose to enroll, notwithstanding 
the discussion from the previous panel.
    It is astounding that this Administration will continue to 
recommend policies that would push veterans away from the best 
healthcare system in America. Congress has soundly rejected 
these proposals in the past and we call on you to do so once 
again.
    Finally, Mr. Chairman, as you know, the whole community of 
National Veteran Service Organizations strongly supports 
mandatory funding or an improved funding mechanism for VA 
healthcare. However, if the Congress cannot support mandatory 
funding, there are alternatives which could meet our goals of 
timely, sufficient, and predictable funding.
    We are currently working on a proposal that could change 
VA's medical care appropriation to an advanced appropriation 
which would provide approval 1 year in advance, thereby 
guaranteeing its timeliness.
    Furthermore, by adding transparency to VA's healthcare 
enrollee projection model, we can focus the debate of the most 
actuarially sound projection of veterans' healthcare costs to 
ensure efficiency and sufficiency.
    Under this proposal, Congress would retain its discretion 
to approve appropriations, retain all of its oversight 
authority, and, most importantly, there would be no PAYGO 
implications.
    We ask this Committee in your views and estimates for 
fiscal year 2009 to consider and possibly recommend to the 
Budget Committee either mandatory funding or this new advanced 
appropriations approach to take the uncertainties out of 
healthcare for all of our Nation's wounded, sick, and disabled 
veterans.
    This is a proposal that we began meeting with staff for 
already and we would offer the opportunity to speak both with 
your staff and Mr. Buyer's staff further on this issue.
    Lastly, Mr. Chairman and Mr. Buyer, I would like to offer 
my thanks for your staff allowing us the opportunity to get 
together with them prior to the release of the President's 
budget to discuss our recommendations and to kind of lay 
ourselves bare.
    The previous panel mentioned about not having anything to 
hide and in the last couple of years, we have taken to briefing 
the Committee staff in advance because in my honest opinion, we 
have nothing to hide. And, in fact, it gives us an opportunity 
to begin the debate with the key policymakers long before the 
President's budget is actually submitted.
    So with that, Mr. Chairman, I would like to thank you again 
for the opportunity to testify. This concludes my testimony, 
and I would be happy to answer any questions you might have.
    [The prepared statement of Mr. Blake appears on p. 75.]
    The Chairman. Thank you, Mr. Blake.
    Representing the Disabled American Veterans is the 
Associate National Legislative Director, Kerry Baker.

                    STATEMENT OF KERRY BAKER

    Mr. Baker. Members of the Committee, thank you.
    As agreed by the organizations, I will focus my testimony 
on understaffing in VBA, the claims backlog, and a few other 
related highlights from The Independent Budget.
    The claims backlog is undeniably growing. By the end of 
January, there were over 816,000 pending claims, including 
appeals. In the 3 years since the end of 2004, pending claims 
rose by an average of 63,000 cases per year.
    Also, the number of cases with eight or more disabilities 
increased well over 100 percent from 2000 to 2006. The complex 
cases further slow down VBA's claims process.
    Therefore, based on the estimated receipt of 920,000 claims 
in fiscal year 2009, The Independent Budget recommends Congress 
authorize 12,184 FTE for VA's C&P service in fiscal year 2009. 
That number equates to successfully processing 83 cases per 
year per each direct program FTE.
    In addition to a staffing increase, we believe VA must 
attack the claims backlog using new methods and policies, 
especially when they follow the intent of the law, save 
resources, and protect the rights of disabled veterans.
    One example deals with VA's policy of requiring medical 
opinions in cases where a claimant already submitted an opinion 
adequate for rating purposes.
    Congress rescinded VA's prior policy of verifying a private 
physician's opinion with a VA examination prior to an award of 
benefits. Yet, VA continues to refuse to render decisions in 
cases where a claimant secures a private medical opinion until 
after VA obtains its own opinion.
    We believe these actions are an abuse of discretion, delay 
decisions, and prompt needless appeals. Congress should mandate 
the VA must decide cases based on a veteran's private medical 
evidence when it is adequate for rating purposes.
    This small change will preserve VA's manpower and budgetary 
resources, reduce the backlog for needless appeals, and, most 
importantly, better serve disabled veterans and their families.
    The law requires VA to accept lay evidence as proof of a 
service-connected disability if a veteran is a combat veteran. 
VA accepts certain military documentations as proof of combat, 
but only a fraction of combat veterans receive one of these 
qualifying medals.
    Military records do not document individual combat 
experiences. As a result, veterans who suffer a disability in 
combat are forced to wait a year or more while VA conducts 
research to determine whether a veteran's unit engaged in 
combat as claimed. This results in difficulty, even 
impossibility in proving a veteran's personal participation in 
combat by official military records.
    Congress should clarify its intent by defining a combat 
veteran for all purposes under Title 38 as one who during 
active military service served in a combat zone for purposes of 
112 of the Internal Revenue Code 1986 or predecessor law.
    This amendment would reinforce the original intent of 
Congress in liberalizing service connection for sick and 
disabled veterans who served in combat.
    On behalf of Independent Budget VSOs, I also want to call 
the Committee's attention to issues involving the U.S. Court of 
Appeals for Veterans Claims. The greatest challenge facing the 
court today is similar to the VA's, the rising backlog of 
appeals.
    However, staffing is not the court's primary dilemma. The 
court has shown a propensity to remand cases to the Board of 
Veterans Appeals based on errors alleged by VA's counsel for 
the first time on appeal. In this, the courts suggest that a 
veteran is free to present their assignments of error to the 
board even though that appellant may have already done so.
    This leads the board to repeat the same mistakes that it 
had made previously. Such remands reopen the appeal to 
unnecessary development and further delays, overburden an 
already backlogged system, and exemplify far too restrictive 
judicial process.
    Ignoring legal arguments that serve as the basis of an 
appeal and remanding cases on technicalities a veteran may be 
willing to waive merely adds to the claims backlog.
    We believe solving this unacceptable situation would be 
simple and cost effective. Congress should require the court on 
a de novo basis to decide all relevant questions of law and 
decide all assignments of error properly presented by the 
appellant.
    Mr. Chairman, I have only highlighted a few of the many 
important issues contained in our Independent Budget for fiscal 
year 2009. I commend the remainder to you, and I will be 
pleased to answer any questions from the Committee. Thank you.
    [The prepared statement of Mr. Baker appears on p. 78.]
    The Chairman. Thank you, Mr. Baker.
    Representing the VFW is the Director of their National 
Legislative Service, Dennis Cullinan.

                STATEMENT OF DENNIS M. CULLINAN

    Mr. Cullinan. Chairman Filner, Ranking Member Buyer, 
distinguished Members of the Committee, the VFW is responsible 
for the construction portion of the IB, so I will limit my 
remarks to that subject.
    The Administration's fiscal year 2009 budget request for 
major and minor construction is dramatically inadequate. 
Despite hundreds of pages of budgetary documents that show a 
need for millions of dollars in construction projects, the 
Administration saw fit to halve the major and minor 
construction accounts from the 2008 levels.
    The President's request for major construction is a paltry 
$581.6 million for 2009. This is a dramatic cut from last 
year's funding level of $1.1 billion. While we appreciate that 
this level covers eight medical facility projects, including 
three new previously unfunded projects, the total level of 
funding does not come close to meeting the IB's recommendation 
of $1.275 billion in construction money.
    Only $476.6 million of the Administration's request covers 
Veterans Health Administration projects, significantly lower 
than the $1.1 billion that the IB has called for.
    While the eight major construction projects called for in 
this budget may seem like a lot, the funding levels recommended 
for them are a tiny blip in the overall cost.
    Looking at just the partially unfunded projects, the 
backlog, if you will, even $320 million aimed at them barely 
scratches the surface. Only the Lee County, Florida, outpatient 
clinic is funded to completion. The other four projects still 
require a total funding level of $1.26 billion.
    The funding for the three new projects total $776.8 million 
out of a total construction estimate of $771 million. This is 
important because it means that there will be a total 
construction backlog of over $2 billion when the Administration 
prepares its request for the following fiscal year.
    Both the prior year and this year's budgets desperately 
need funding beyond the Administration's request. These 
projects are necessary to ensure VA reinvests in its aging 
physical infrastructure.
    We remain concerned about the unfulfilled promises of the 
Capital Asset Realignment for Enhanced Services (CARES). Former 
VA Secretary Anthony Principi testified before this Committee's 
Health Subcommittee in July of 2004 that CARES reflects a need 
for additional investments of approximately $1 billion per year 
for the next 5 years to modernize VA's medical infrastructure 
and enhance veterans' access to care.
    According to VA's November 2007 testimony before that same 
Committee, Congress has appropriated just $2.83 billion for 
CARES projects, far below what is needed to which the Secretary 
testified.
    Further, this includes nearly $1 billion for rebuilding 
facilities after the Gulf Coast hurricanes, amounts that we 
have argued that the Congress should have provided as a 
separate emergency funding outside of VA's regular planning 
process. With the fiscal year 2008 appropriation, the total is 
up to $3.9 billion. Better, but it is still lagging.
    We are also greatly concerned about the Administration's 
proposed slashing of the minor construction budget. As with the 
major construction account, this cut is contrary to what is 
indicated by the information the Department provides in its 
budgetary documents.
    For fiscal year 2009, the recommendation is just $329 
million, $301 million below the fiscal year 2008 level and far 
below the $621 million called for in the IB.
    VA has a long list of minor construction projects targeted 
for 2009. There is a list of 145 minor construction projects 
listed on page 795 of the 5-year capital plan. Based on the 
average cost for past years, VHA would require a budget of $812 
million, nearly $500 million more than was actually requested.
    We understand that VA has some carryover funding for minor 
construction to offset that balance. But even if all $267 
million of that are applied to this list of projects, VHA would 
still require $545 million in funding instead of the $273 
million the Administration has requested.
    The minor construction request seems even more deficient 
when you factor in its role with respect to maintenance of VA 
facilities. VA says that 30 percent of all minor construction 
is targeted to correct documented facility condition assessment 
deficiencies.
    Mr. Chairman, the IB is also concerned regarding 
nonrecurring maintenance (NRM). Those same Facility Condition 
Assessments reviews show the importance of NRM and that the $5 
billion backlog shows how woefully deficient past NRM request 
and appropriations have been.
    For fiscal year 2009, we are pleased to see the President 
request $802 million for NRM funding. This is in line with what 
the IB has called for in the past and we also applaud the 
allocation of a portion of these dollars outside of bureau.
    This concludes my testimony, Mr. Chairman. Thank you.
    [The prepared statement of Mr. Cullinan appears on p. 85.]
    The Chairman. Thank you.
    Just for the record, I would like to say that the Secretary 
and his first panel are still with us and I appreciate that 
very much. It shows a willingness to listen and respect that we 
have not had before.
    So, Mr. Secretary, and your staff, thank you for staying 
for the panels that follow.
    Representing AMVETS is the National Legislative Director, 
Raymond Kelley.

                 STATEMENT OF RAYMOND C. KELLEY

    Mr. Kelley. Thank you, Mr. Chairman, thank you, Ranking 
Member Buyer, for holding this hearing today.
    As co-author of The Independent Budget, AMVETS is pleased 
to give you our best estimates on the resources necessary to 
carry out the responsibilities of the National Cemetery 
Administration.
    First, I commend the NCA staff who provide the highest 
quality service to veterans and their families in their time of 
tremendous grief.
    The Administration has requested approximately $181 million 
in discretionary funding for operations and maintenance of NCA. 
Of that number, $105 million is dedicated for major 
construction, $25 million for minor construction, as well as 
$32 million for the State Cemetery Grants Program.
    In contrast, The Independent Budget recommends Congress 
provide $251.9 million of the operational requirements of NCA, 
a figure that includes $50 million toward the National Shrine 
Initiative.
    In total, our funding recommendations represents a $71 
million increase over the Administration's request.
    The National Cemetery System continues to be seriously 
challenged. Adequate resources and developing acreage must keep 
pace with the increasing workload.
    Currently there are 15 national cemeteries in some phase of 
development or expansion. The Administration's budget provides 
funding for only three of these projects, while NCA expects 
nearly 115,000 interments in 2009, an 8.7-percent increase over 
the current year.
    Congress must also address the need of gravesite renovation 
and upkeep. Though there has been noteworthy progress made over 
the years, the NCA is still struggling to remove decades of 
blemishes and scars from military burial grounds across the 
country.
    To date, $99 million has been invested in restoring the 
appearance of our national cemeteries, completing nearly 300 of 
the 928 deficiencies identified in the 2002 study on the 
improvements of veterans' cemeteries.
    Therefore, The Independent Budget recommends a $50 million 
commitment in fiscal year 2009 and we continue to recommend 
Congress establish a 5-year, $250 million fund for the National 
Shrine so NCA can fully restore the appearance of the national 
cemeteries to reflect the utmost dignity and respect for those 
who are interred.
    The State Cemetery Grants Program is an important component 
of NCA. It has greatly assisted States in increasing burial 
services to veterans, especially those living in areas where 
national cemeteries are underserved.
    NCA admits only 80 percent of those requesting interment 
meet the 170,000 veterans within the 75-mile radius threshold 
the NCA has set for itself. This reemphasizes the importance of 
the State Grants Program.
    Since 1978, the VA has more than doubled the acreage 
available and accommodated more than a 100-percent increase in 
burials through these grants and this year, States have 
indicated a plan to establish 14 new cemeteries within the next 
4 years.
    Therefore, to provide for these cemeteries and to reach 
NCA's threshold goals, The Independent Budget requests $42 
million for the State Cemetery Grants Program in fiscal year 
2009.
    Also, The Independent Budget strongly recommends Congress 
to review the current burial benefits that has seriously eroded 
in value over the years. While these benefits were never 
intended to cover the full cost of burial, they now pay for 
just 6 percent of what they covered when the program started in 
1973.
    The Independent Budget requests the plot allowance be 
increased from $300 to $750, to increase the allowance for the 
service-connected deaths from $2,000 to $4,100, and increase 
the nonservice-connected burial benefits from $300 to $1,270. 
This increase would proportionately bring these benefits back 
to their original value.
    The NCA honors more than 2.8 million with a final resting 
place that commemorates their service to this Nation. Our 
national cemeteries are more than a final resting place. They 
are a memorial to those who died in our defense and hallowed 
ground for those who survived.
    Mr. Chairman, this concludes my testimony, and I will be 
happy to answer any questions the Committee would have.
    [The prepared statement of Mr. Kelley appears on p. 87.]
    The Chairman. Thank you.
    Representing the American Legion is its Director of the 
National Legislative Commission, Steve Robertson. Welcome.

                  STATEMENT OF STEVE ROBERTSON

    Mr. Robertson. Thank you, Mr. Chairman and Members of the 
Committee, for allowing the American Legion to offer its views 
on the President's budget request for fiscal year 2009.
    Last September, National Commander Marty Conatser clearly 
outlined the American Legion's budget recommendations for the 
Department of Veterans Affairs. Since our complete written 
testimony is submitted for the record, I will only address some 
of the key concerns with the President's budget request.
    The American Legion wants to thank you and your colleagues 
for aggressively resolving both the fiscal year 2007 and 2008 
VA budgets last session. Clearly initial fiscal year 2008 
budget agreed to by both bodies exceeded or met every 
recommendation made by the American Legion. Although it was not 
the final budget agreed to, it clearly reflected the specific 
funding needs identified by the veterans community.
    The American Legion also appreciated the emergency funding 
provided for in Public Law 110-161 and the President's request 
for that additional funding.
    Unfortunately, the American Legion does not believe that 
the current President's budget request addressed several 
factors that will adversely impact the budget request for 2009, 
such as the normal rate of inflation, which absorbs a great 
portion of what the President's increase recommends.
    Also, as mentioned by Congressman Michaud, the change in 
the economy, the increased unemployment rates, this may bring a 
lot of veterans back to the system that were not using it last 
year. The surge is another example of a large influx of 
veterans that will be returning to the United States and going 
to VA facilities.
    The ``National Defense Authorization Act'' (NDAA) recently 
signed extends access for OEF/OIF veterans from 2 to 5 years 
and also the increased medical research and treatment need for 
such combat-related medical conditions as traumatic brain 
injury and post traumatic stress disorder.
    The American Legion believes that each of these factors 
will increase demand on VA in many areas and seriously 
questions VA's ability to provide timely access to these earned 
benefits and services.
    Unfortunately, the veterans community is well aware of the 
adverse impact of miscalculation and continue to urge Congress 
to strive to achieve medical care funding that is timely, 
predictable, and sufficient, not just once, but every year. The 
American Legion looks forward to working with you and your 
colleagues to achieve this goal.
    Mr. Chairman, the American Legion remains adamantly opposed 
to the President's legislative proposals to establish an annual 
enrollment fee and increase pharmacy co-payments for Priority 
Group 7 and 8 veterans.
    The objective behind these proposals remains unclear, 
especially when many of these veterans are already enrolled in 
Medicare and VA is prohibited from receiving any third-party 
reimbursements for their nonservice medical conditions. It also 
does not exempt service-connected disabled veterans that are in 
those groups. That seems unconscionable.
    How many times does a veteran need to pay the Federal 
Government for an earned benefit?
    I am getting a little older, but my memory is still pretty 
sharp. I do not remember any priority veterans in basic 
training. I do not remember any priorities in honorable 
discharges. I do not remember seeing any sign that refers to 
the Department of Priority Veterans Affairs.
    Some folks think that the veterans' community asks for a 
lot, but it pales in what the Nation asks of its veterans.
    Thank you very much, Mr. Chairman. That concludes my 
remarks. I will accept any questions you have for us.
    [The prepared statement of Mr. Robertson appears on p. 90.]
    The Chairman. Thank you so much.
    Representing the Vietnam Veterans of America is the 
Executive Director for Policy and Government Affairs, Rick 
Weidman.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Mr. Chairman, Mr. Buyer, thank you very much 
for allowing VVA to share our views on the President's request 
for the 2009 budget this morning or this afternoon.
    Our recommendation overall is $3.1 billion more than the 
Administration's request. Included in that would be $1.9 
billion to restore Priority 8s to the system and to accommodate 
what we believe is a gross underestimate of the number of 
Global War on Terrorism veterans who will come in.
    Every single year since the wars started in Afghanistan and 
Iraq, the VA has underestimated the number of new OIF/OEF 
veterans who will come into the system and we believe they have 
done it again this year.
    Secondly, we take it very seriously of leave no veteran 
behind. Those who are separating from the military and have 
separated within the last 5 years, once they are in, they are 
in, even if they turn out to be Category 8 veterans. We see no 
reason to cast aside those who served in an earlier era and 
prevent them from entering the system until, until they become 
indigent and/or service connected down the line.
    There is no good study that we are aware of of the 
migration from Priority 8 to Priorities 1 and 2 and to people 
becoming indigent and, therefore, having access to the system. 
We would ask that that be required by the fiscal process as 
part of the 2009 appropriation to look at that and hopefully 
the Secretary would respond and do that on his own without 
being forced to.
    An additional $500 million of that recommendation is for 
additional mental health and substance abuse services over and 
above the $3.9 billion that VA plans to spend in fiscal year 
2009.
    Additionally, it would be additional staff for the VA Vet 
Centers, the most cost effective, cost efficient part of the VA 
system that is really our forward aid stations. If you want to 
get more veterans in and do the outreach, if you want to do 
something about suicides, beef up the Vet Centers and it will 
help more than any other single thing.
    In addition to that, we believe that there ought to be 
additional employment counselors hired in VA vocational 
rehabilitation. I am not talking about vocational 
rehabilitation counselors. What we are talking about is actual 
placement. We frankly at this point do not have the faith that 
the Veterans Business Outreach Program (VBOP)/Local Veteran's 
Employment Representatives (LVER) system is doing what needs to 
be done, particularly for our most profoundly disabled 
veterans.
    Blinded veterans with the additional moneys that we are 
recommending could expand on what has already been done for the 
blind and visual recovery centers. And in addition to that, put 
together an education and, most importantly, a job placement 
program for blind veterans.
    It is my understanding from talking to our friends at the 
Blinded Veterans of America that not a single one of the new 
blind veterans was placed in unsubsidized employment last year. 
We can do it. I have participated in a project with blind 
veterans in the past where we did it.
    Last but by no means least is R&D, research and 
development. This is not the time to cut. This is the time to 
make them focus and get that outfit to focus much more on the 
wounds and maladies that accrue to individuals by virtue of 
military service and, if anything, increase it. We recommended 
$500 million. The Friends of VA Research recommended $555 
million. But in any case, it needs to be increased and not 
decreased as it was in the President's request.
    Last but by no means least, we would ask that on a 
bipartisan basis. The Chair and the Ranking Member, we thank 
you very much for your efforts last year in getting the 
appropriation bill for the current fiscal year to include a 
requirement that the Administration have 90 days to deliver 
unto you a plan about how they are going to complete the 
already legally mandated National Vietnam Veterans Longitudinal 
Study within 2 years.
    That 90 days is up the end of March and we would hope that 
you would schedule a briefing with the Secretary and his people 
can come in and brief you on how within a 2-year period they 
are going to deliver that completed report to you to understand 
the last large generation of combat vets, what happens over 
time to those people's health.
    It is an invaluable tool for you to look for planning for 
the future, fiscal policy, as well as otherwise for Vietnam 
veterans for the rest of our lifetime, but it also will impact 
on the planning for OIF/OEF veterans.
    Once again, I thank you, and I would be pleased to answer 
any questions you may have, sir.
    [The prepared statement of Mr. Weidman appears on p. 101.]
    The Chairman. Thank you.
    And thank you all for your work and all the expertise that 
you bring to these issues and your dedication to our veterans.
    Mr. Buyer.
    Mr. Buyer. Thank you.
    Mr. Blake, who wrote the section on IT?
    Mr. Blake. Well, it was not me, sir, but I could say that I 
know who----
    Mr. Buyer. Oh, I was ready for that.
    Mr. Blake. Sir, I would be willing to take any questions 
that you have and attempt to answer it. I anticipated a 
question. Probably not the best person to answer it, but I will 
certainly take on the question.
    Mr. Buyer. Well, then I will tell you what. You find the 
guy that wrote this and bring him to my office.
    Mr. Blake. I will be glad to, sir.
    Mr. Buyer. Okay. And I am going to bring General Howard 
with me. Okay?
    This was embraced in a bipartisan fashion, this entire 
Committee. Okay? Now, I understand General Howard here is an 
agent of change. And when you are the agent of change, you are 
not the most popular guy in the room. You do not make friends 
at all when you are the agent of change.
    And the goal here, I just want to share it with you because 
this is supposed to be the IB's position, the goal here is not 
to have that IT person whether he is at the medical center or 
at the VISN or at a central office, it is not his job to say 
no.
    So this has been written in a manner as though catastrophe 
was about to happen. Oh, my gosh. No, it is not. This is not 
catastrophic. Okay?
    Their job is to say yes, but make sure whatever ideas, that 
they work, that they are compatible. We do not want to chill 
innovation. Okay? That is not the desire. I just want you to 
know. We have gone through all of this. But I want to meet the 
guy who wrote this.
    Mr. Blake. I will be glad to, sir, and I will be there as 
well.
    Mr. Buyer. Good. All right. We will go to the next question 
then.
    I do not think I completely understand this, advanced 
appropriation. So can you elaborate on the concept? How is that 
going to work?
    Mr. Blake. Well, I will be the first to admit, sir, that I 
am learning because this was kind of driven by a process that 
was worked up from the DAV, but we were all kind of learning as 
we developed this approach.
    The theory behind it, I believe, is all of the service 
organizations obviously are in agreement that the process is 
broken. That is not to say that the appropriation from 2008 was 
a bad one in terms of dollars. I think we all agree that it was 
a good appropriation. It does not change the fact that it was 
appropriated in January in the end, so we are talking about 
nearly 4 months late. So there is a significant issue with 
timeliness.
    The thought is that with an advanced appropriation which, 
believe it or not, there is a portion of the Federal budget 
albeit not a very large one when balanced against the entire 
Federal budget that is done through an advanced appropriation 
whereby the healthcare portion or whatever, you know, if 
Congress was to accept this, it could be laid out in whatever 
fashion, but I think the thrust at least as of this time is to 
set the healthcare portion aside in a form of advanced 
appropriations so that at this point in time, we would actually 
be advocating for a funding level for the fiscal year 2010 
portion of the healthcare budget of the VA.
    That would certainly draw some immediate concerns maybe 
about getting that farther away from the time period in which 
we are talking about, things like that, but I think in the end, 
we are still trying to overcome the problem with--I think 
timeliness maybe stymies the VA in a lot of its abilities more 
so than what the funding levels might be, although some people 
disagree with me. I like to believe that even if the VA had an 
insufficient budget, if they knew what the budget was----
    Mr. Buyer. This is an IB motion?
    Mr. Blake. Yes, sir. It actually is not in the policy 
portion of the IB because this is actually kind of rolling out 
even now as we speak. And we have met with some of the staff 
from Mr. Filner's staff and we would be glad to meet with the 
folks from your staff as well.
    Mr. Buyer. I have not poured through this. Do you take an 
official position on Dole-Shalala to implement----
    Mr. Blake. I do not think we endorse full implementation of 
the Dole-Shalala Commission, sir.
    Mr. Buyer. Go ahead.
    Mr. Cullinan. Mr. Buyer, I would speak to that just on 
behalf of the VFW, although I suspect others here would agree 
with me.
    Dole-Shalala was created basically in response to what 
happened at Walter Reed. It had what, about 4\1/2\ months it 
was in existence. And originally, as we understand it, it was 
intended to come up with some readily achievable, practical 
fixes to transitioning from active-duty military to VA and 
accessing VA.
    It was not intended to come up with broad, sweeping 
reforms, ideas for reform. And it certainly was not empowered, 
as we understand it, to come up with ideas of completely 
revamping the entire VA compensation system.
    Now, what we would like to see is the Congress take a 
closer look at the congressionally chartered VDBC, the 
Veterans' Disability Benefits Commission, which had been in 
existence almost 3 years, conducted over a thousand interviews, 
the report bordering on 600 pages. I think it is 113 specific 
recommendations. We do not agree with all of them. We think 
that is what should be looked at first. Dole-Shalala, there are 
some good things in Dole-Shalala for the most part that are 
being enacted now as either part of the Wounded Warrior 
legislation and the NDAA and also that VAs take it upon 
themselves even without a legislative push.
    So we think that is the way to go. Take a look at the VDBC 
first. That is the meaty, substantive study.
    Mr. Blake. Mr. Buyer, I would also say that we have also, 
not to speak for the organizations, but I think we have taken 
the position that it is not an all or nothing game with the 
Dole-Shalala Commission.
    The same would even be said with the VDBC. I mean, I do not 
think we would want to see everything in the VDBC be legislated 
immediately. I mean, there are some good things and there are 
some bad things.
    We had some kind of preliminary meetings with the 
Committees and their staffs already. And I do not think we can 
just jump off the side of the cliff quickly and think we can 
implement this.
    And I would certainly applaud the VA for the steps they 
have already taken. They have addressed a number of the things 
that we were principally concerned about. And there is a number 
of legislative proposals dealing with it. And as Dennis 
mentioned, the NDAA has already addressed some as well.
    Mr. Buyer. If I may, Mr. Chairman.
    One last question I have, we have struggled since the early 
1990s on the issue of burial ceremonies. It is a never-ending 
issue. And I thought that VSOs, that you had organizational 
policies.
    I had a circumstance. A World War II veteran landed at 
Normandy, a Bronze Star recipient, prisoner of war for 9 
months, he dies. He was a member of the American Legion. The 
Legion's post then closed. He moved away, but then he wanted to 
be buried where he grew up and had his business and the Legion 
said you are not a member of our post and they would not do his 
ceremony.
    The President of their local auxiliary was very upset over 
it. I contacted Marty Umbarger, who is Major General Umbarger. 
He sends out a couple of soldiers. We fly a flag over the 
Capitol for him.
    A couple of your Legionnaires heard about it and they got a 
couple of their buddies who are with the VFW. They put together 
their own ad hoc honor guard and the President of the Legion 
auxiliary came out and apologized to me. We put on the best 
ceremony we could and we did it by putting together what we 
thought would be the best ceremony to give him the honors.
    I spoke, I spoke to the family, things that I would do, 
things that they did. A chaplain came. We tried to do our very 
best. But help me here because I helped write legislation on 
how to do this. I just assumed, I just thought you guys had 
policies. Are there? Help me out.
    Mr. Robertson. Mr. Buyer, I will be more than happy to 
field that because I went through the same thing when my father 
passed away.
    The American Legion post in our hometown was basically 
defunct, so even the other VSOs in the community said, well, he 
is not eligible for membership in our organization, therefore, 
we are not going to do it. And I was able to put together a 
group to provide my father's burial ceremony.
    But the problem is that these are local community service 
organizations. And if it is based upon the strength of that 
local community, that is one of the reasons why we make such an 
aggressive effort to enroll as many people that are veterans 
that are eligible to join our organization to bring up the next 
generation of pallbearers and color guards and et cetera. It is 
a problem nationwide.
    There are some places that it is outstanding and then there 
are other places where it is lacking. When I was stationed in 
North Dakota, some of the little communities in North Dakota, 
you would see the burial detail would consist of whoever 
happened to be not on the farm that day that was a veteran. And 
some of them would be in uniforms and some of them would not. 
But it was just the idea of meeting the need for the community.
    From a national organization, we outline the procedures 
that should be followed. But as far as putting boots on the 
ground, it is a challenge, especially in rural parts of the 
country.
    Mr. Buyer. Now that I am learning this, I will go back and 
take another look at the law. Let us take another look at what 
we created because we created the procedures with regard to the 
military and what they can do and what they do not have to do 
and we rely then upon all of you. And maybe I need to go back 
and take another look at this.
    Mr. Robertson. Mr. Chairman, that law that you are talking 
about, what it did was allowed reimbursement for the volunteer 
organizations that were able to fill the billet that the Guard 
and Reserve and the active duty was unable to fill.
    Mr. Buyer. But my assumption is that if the active force 
could not do it, that you will.
    Mr. Blake. That it would happen.
    Mr. Robertson. It is not----
    Mr. Buyer. It was my error.
    Mr. Robertson. It was purely a volunteer thing and we are 
trying to meet that commitment.
    Mr. Weidman. The issue in terms of national policy for 
Vietnam Veterans of America is that we encourage our chapters 
to do it. And most who have that capacity do it for any veteran 
whether they are a member of VVA or not, Mr. Buyer.
    But the issue is not so much policy or willingness. It is 
organizational capacity to be able to do it. And that is often 
what is lacking, that they want to and they simply do not have 
the organizational capacity to field an honor guard or a firing 
squad that would be appropriate during the time a funeral is 
held.
    Mr. Buyer. All right. Thank you.
    The Chairman. Thank you, Mr. Buyer.
    Mr. Weidman. May I comment on just one thing, Mr. Buyer, in 
answer to your question earlier about the partnership looking 
for forward funding?
    In fact, other parts of the Federal Government are forward 
funded. Obviously capital purchases by DoD are very forward 
funded and you just adjust as you move closer to the target 
based on the actual experience.
    The United States Department of Labor, the money that they 
ask for for fiscal year 2009 will not begin until program year 
2009 which does not begin until July 1, 2009, as opposed to 
October 1, 2008. In other words, it is forward funded by 9 
months on the theory that they will do a better job of 
planning.
    Now, obviously that breaks down when it comes to the 
Department of Labor, but we have faith that and great hopes 
that at the VA, they will do a better job of actually, if they 
have time to prepare, of getting a greater bang for the 
taxpayer dollars, one, and, two, getting a budget on time, 
therefore, you can shop for the best value.
    And that is part of the theory behind it, whether it is 9 
months forward funded or a complete fiscal year forward funded 
in terms of getting the best value for that hard-earned dollar 
that the taxpayer forks over to the Federal Government for 
delivery of goods and services that are important to the whole 
Nation.
    The Chairman. We thank the panel.
    Let me just say with the Secretary here, sometimes the 
hearing format and process does not always enlighten to the 
best extent possible. We have had some success over the last 
year with putting together roundtables that include VA staff, 
VSOs, and other stakeholders at the same table and having a 
discussion, for example, on various parts of this budget.
    I hope, Mr. Secretary, you can cooperate again and let us 
have a discussion with you and your staff on different aspects 
of this rather than solely in a hearing format. So we will try 
to do that on certain parts of this budget in the future.
    Again, thank you for all the work that you have done over 
such a long time, and we will have our third panel testify now.
    Again, the organizations that are with us for panel three 
have done a lot of work in this area and we look forward to 
hearing your testimony.
    The Executive Director of the Iraq and Afghanistan Veterans 
of America (IAVA), Mr. Paul Rieckhoff, is with us. Thank you. 
You are recognized.

  STATEMENTS OF PAUL RIECKHOFF, EXECUTIVE DIRECTOR, IRAQ AND 
   AFGHANISTAN VETERANS OF AMERICA; PAUL SULLIVAN, EXECUTIVE 
  DIRECTOR, VETERANS FOR COMMON SENSE; CHERYL BEVERSDORF, RN, 
   MHS, MA, PRESIDENT AND CHIEF EXECUTIVE OFFICER, NATIONAL 
 COALITION FOR HOMELESS VETERANS; AND RICK JONES, LEGISLATIVE 
     DIRECTOR, NATIONAL ASSOCIATION FOR UNIFORMED SERVICES

                  STATEMENT OF PAUL RIECKHOFF

    Mr. Rieckhoff. Thank you, Mr. Chairman. Thank you, sir. 
Thank you to the Members of the Committee. And on behalf of 
IAVA, the Iraq and Afghanistan Veterans of America, and our 
tens of thousands of members nationwide, I want to thank you 
for the opportunity to testify today regarding the VA budget 
request for 2009.
    From 2003 to 2004, I served as the First Lieutenant and 
Infantry Platoon Leader in Iraq. And when I returned home, I 
quickly became concerned about the lack of real support for 
returning troops and veterans.
    In the early years of the wars, issues like traumatic brain 
injury, post traumatic stress disorder, and homelessness 
received far too little attention. But times have thankfully 
changed.
    Last year, this Congress showed tremendous commitment to 
our Nation's veterans, providing the VA with its single largest 
budget increase in 77 years. So on behalf of the millions of 
veterans who rely on VA healthcare, including the almost 
300,000 troops newly home from Iraq and Afghanistan, we hope 
you will continue to show your support for veterans' 
healthcare.
    IAVA is one of over 60 organizations who have endorsed The 
Independent Budget and we endorse it again for 2009.
    As the War in Iraq continues into its fifth year, this 
generation of troops and veterans face new and unique problems.
    Today IAVA is releasing our annual legislative agenda. Our 
2008 legislative agenda covers the entire war-fighting cycle, 
before, during, and after deployment. It outlines practical 
solutions to the most pressing problems facing Iraq and 
Afghanistan veterans. And this agenda is available now on our 
Web site, iava.org.
    The cornerstone of this agenda is the new GI Bill. After 
World War II, nearly 8 million servicemembers took advantage of 
a GI Bill educational benefit. A veteran of World War II was 
entitled to free tuition, books, and a living stipend that 
completely covered the cost of education.
    Today we have an opportunity to renew our social contract 
with our service men and women and help rebuild our military. 
IAVA supports reinstating a World War II style GI Bill that 
would cover the true cost of education and will fairly reward 
all veterans of Iraq and Afghanistan. And we have endorsed H.R. 
2702.
    Now, critics have said that the GI Bill is too expensive. 
The fact is the GI Bill is a bargain. The current GI Bill cost 
the Veterans Department $1.6 billion in 2004. Even if a World 
War II style GI Bill were to double that cost, it would be 
about what we spend in a week in the War on Terror.
    And the GI Bill is more than a veterans benefit. It is also 
an effective recruiting tool to stimulate the economy and 
improve our military readiness.
    The GI Bill also helped improve this country's economy 
after World War II. A 1988 congressional study proved that 
every dollar spent on educational benefits under the original 
GI Bill added $7 to the national economy in terms of 
productivity, consumer spending, and tax revenue. And many of 
our Nation's strongest leaders got their start thanks to the GI 
Bill, including Presidents Ford and Herbert Walker Bush, 
Senators Bob Dole, George McGovern, and Pat Moynihan. The GI 
Bill also educated 12 Nobel Prize winners and two dozen 
Pulitzer Prize winners, including Joseph Heller, Norman Mailer, 
and Frank McCourt.
    Veterans of Iraq and Afghanistan, however, receive only a 
fraction of the support offered to the greatest generation. For 
many, including my good friend, Sergeant Todd Bowers, the 
burdens of student loans and mounting debt can simply become 
too great.
    When Sergeant Bowers was activated for a second deployment 
to Iraq, he was forced to withdraw from his classes at George 
Washington University, racking up an extra semester of debt 
without receiving credit for his coursework.
    While he was deployed to Iraq, Bowers was wounded when a 
sniper's round penetrated his rifle scope and sent fragments 
into the left side of his face. He was awarded a Purple Heart, 
a Navy Commendation Medal with V device for valor.
    When Bowers returned home, he was not greeted as a hero by 
his university and credit lenders. His student loans had been 
sent to collection and his credit rating was ruined. Struggling 
to keep up with his payments, Bowers was eventually forced to 
leave school. But a new GI Bill does not just benefit Todd 
Bowers. It would benefit our entire military.
    It is an important recruitment tool. For years, the 
military has been lowering recruiting standards and increasing 
bonuses. We now spend more than $4 billion annually on 
recruitment, yet are still struggling to meet goals.
    The GI Bill is the military's single most effective 
recruitment tool and the number one reason why civilians join 
the military is to get money for college. A new GI Bill, one 
that puts college within reach of a new generation of veterans, 
would be a tremendous boom to the recruitment and also help 
rebuild our military after years of war.
    Above all, a World War II style GI Bill would thank this 
generation of combat veterans for their service and their 
sacrifice. As President Roosevelt said in his signing statement 
to the original GI Bill, the GI Bill gives emphatic notice to 
the men and women of our Armed Forces that the American people 
do not intend to let them down.
    For these reasons, IAVA is calling for a new GI Bill to be 
funded in this year's budget. Thank you for your time and I 
welcome your questions.
    [The prepared statement of Mr. Rieckhoff appears on p. 
105.]
    The Chairman. Thank you.
    Representing the Veterans for Common Sense (VCS), the 
Executive Director, Paul Sullivan.

                   STATEMENT OF PAUL SULLIVAN

    Mr. Sullivan. Thank you, Chairman Filner, for inviting 
Veterans for Common Sense to testify about VA's 2009 budget. We 
appreciate the many hearings you have held and your swift 
action to pass the ``Dignity for Wounded Warriors Act.''
    VCS begins our testimony with a quote from Associate 
Supreme Court Justice Thurgood Marshall: ``Justice too long 
delayed is justice denied.'' VCS believes that VA's budget is 
dead on arrival because it denies justice to our Nation's 24 
million veterans and their families. At a time of war, it is 
unconscionable for VA to ask for fewer dollars to treat more 
patients.
    VA's budget does not address what we believe should be VA's 
four highest current priorities for veterans, ending 
homelessness, reducing suicide, providing free medical care to 
Iraq and Afghanistan war veterans, and eliminating the VA 
claims backlog.
    First, VCS would like to ask Congress to establish a policy 
of zero tolerance for homelessness. VCS believes that 200,000 
homeless veterans on our streets every night is a national 
disgrace. VA's budget should have contained an emergency plan 
to end homelessness for our veterans plus prevent homelessness 
among Iraq and Afghanistan war veterans.
    Second, VCS asks Congress to establish a policy of zero 
tolerance for turning away suicidal veterans. VCS believes that 
the epidemic of suicides among veterans justifies an emergency 
plan to guarantee that no suicidal veteran is ever again turned 
away from VA.
    Third, VCS asks Congress to enact mandatory full funding 
for healthcare for all veterans so VA stops turning away 
veterans and Iraq and Afghanistan war veterans. VCS believes 
VA's budget should have contained a plan to guarantee 5 years 
of free healthcare, a new law the President signed last month.
    Instead of asking for more money to treat veterans, VA went 
to court to fight against the new law and against free 
healthcare for our new war veterans. VCS believes VA has 
underfunded healthcare for Iraq and Afghanistan war veterans by 
at least $1 billion. VA's budget spends an average of $7,100 
per veteran who is already in the system. However, VA's budget 
plan only spends about $3,900 per new veteran.
    VA's budget request does not address VA's severe capacity 
crisis either. VA's Inspector General reported that 25 percent 
of all veterans waited more than 1 month to see a doctor. The 
situation is worse for newer war veterans. VA's internal 
reports leaked to a reporter showed 33 percent of Iraq and 
Afghanistan war veterans waited more than 1 month to see a 
doctor. No veteran should ever have to wait that long.
    Fourth, VCS asks Congress to establish a policy of zero 
tolerance for VA claim delays and VA claim errors. This year, 
VA repeated their empty promise given every year to reduce the 
claims backlog by processing claims in an average of 145 days. 
The current average is 183 days.
    VCS believes VA should have submitted a budget plan to 
process claims accurately within 30 days. VA should 
automatically approve all claims and we have much more detail 
on that if you want it.
    VA should also establish presumptions of service connection 
for PTSD and TBI for our war veterans to make processing those 
claims faster.
    Finally, in this era of the all-volunteer Army, VCS appeals 
once again for Congress to honor our Nation's obligation to our 
veterans. We can end homelessness. We can reduce suicides. VA 
can provide both prompt and high-quality medical care. We are 
cheerleaders for VA. We like VA and we believe VA can provide 
both prompt and accurate claims decisions.
    We believe that if there is an unlimited budget for bullets 
and bombs for war, then there must also be mandatory full 
funding for our veterans' transition from the battlefield to 
home.
    We close with this quote from former Army General and VA 
Administrator, Omar Bradley. I used to have this in my cube at 
VA. ``We are dealing with veterans, not procedures, with their 
problems, not ours.''
    VA's reputation for high-quality medical care and excellent 
employees is jeopardized by chronic underfunding and staff 
shortages. Mandatory full funding for VA is the only way to 
eliminate the smoke and mirrors that have plagued the VA's 
budget process for decades. And we believe if Congress cannot 
fix VA, then who will?
    Thank you very much, Mr. Chairman. If you have any 
questions, I will be more than happy to answer them.
    [The prepared statement of Mr. Sullivan appears on p. 107.]
    The Chairman. Thank you so much.
    Representing the National Coalition for Homeless Veterans 
(NCHV), the President and Chief Executive Officer, Cheryl 
Beversdorf.

          STATEMENT OF CHERYL BEVERSDORF, RN, MHS, MA

    Ms. Beversdorf. Chairman Filner, Ranking Member Buyer, the 
National Coalition for Homeless Veterans appreciates the 
opportunity to submit testimony to the House Veterans' Affairs 
Committee regarding the VA budget request for fiscal year 2009.
    VA officials report the partnership between the VA and 
community-based organizations has substantially reduced the 
number of homeless veterans each night by more than 25 percent 
since 2003, a commendable record of achievement that must be 
continued if this Nation is to provide the supportive services 
and housing options necessary to prevent homelessness among the 
newest generation of combat veterans from Operations Iraqi 
Freedom and Enduring Freedom.
    Regarding VA's homeless veterans programs, Congress has 
established a number of programs within VA to address 
homelessness among veterans. The primary goal for these 
programs is to return homeless veterans to self-sufficiency and 
stable, independent living.
    The major homeless veterans programs administered by VA 
include the Homeless Providers Grant and Per Diem Program, the 
HUD-VASH Program, which is the U.S. Department of Housing and 
Urban Development and Veterans Affairs Supportive Housing, the 
Multi-Family Transitional Housing Loan Guarantee Program, and 
the Compensated Work Therapy Transitional Residence Program.
    Homeless veterans also receive primary medical care, mental 
health, and substance abuse services at VA medical centers and 
community-based outpatient clinics through the Healthcare for 
Homeless Veterans Program. Our testimony will focus on these 
homeless veteran assistance initiatives.
    Regarding Grant and Per Diem, it is the Nation's largest VA 
program to help address the needs of homeless veterans. Last 
September, the U.S. Government Accountability Office (GAO) 
presented testimony before this Committee's Health Subcommittee 
regarding homeless veterans' programs and reported an 
additional 11,100 transitional housing beds are necessary to 
meet the demands of the estimated number of homeless veterans 
needing assistance.
    Public Law 110-161 provided for $130 million, the fully 
authorized level to be expended for the Grant and Per Diem 
Program. Based on GAO's findings and VA's projected needs, NCHV 
has concerns about the $138 million budget request for fiscal 
year 2009 and believes that a $200 million authorization is 
needed. An increase in the funding level for the next several 
years would help ensure and expedite VA's program expansion 
targets.
    Regarding special needs grants, the VA provides these to VA 
healthcare facilities and existing Grant and Per Diem 
recipients to assist them in serving homeless veterans with 
special needs. For these grants, Public Law 109-461 authorizes 
appropriations of $7 million for fiscal year 2007 through 
fiscal year 2011. But the increased risk of homelessness among 
these populations, especially women veterans, warrants funding 
for special needs grants above the currently authorized level. 
Additional Grant and Per Diem Program funding would address 
this need.
    The HUD-VASH Program provides permanent housing and ongoing 
treatment services to harder to serve homeless veterans with 
chronic mental health and substance abuse issues. We were 
pleased that Public Law 110-161 included $75 million to be used 
for 7,500 Section 8 vouchers for homeless and disabled 
programs. Under this program, the VA must provide funding for 
supportive services to veterans receiving rental vouchers.
    We believe the $7.8 million proposed in the current budget 
was agreed upon before the dramatic increase in HUD-VASH 
vouchers became law. Because each housing voucher requires 
approximately $5,700 in supportive services, we estimate 
approximately $45 million will be needed to adequately serve 
7,500 or more clients in HUD-VASH housing units.
    The Multi-Family Transitional Housing Loan Guarantee 
Program authorizes the VA to guarantee 15 loans with an 
aggregate value of $100 million for construction, renovation of 
existing property, and refinancing of existing loans to develop 
transitional housing projects for homeless veterans and their 
families.
    Since 1998, when the program was authorized, only two 
projects have survived beyond the initial planning stages, one 
in Chicago and one in San Diego, and only the Chicago project 
has been developed.
    While we believe this program seemed promising in original 
design and intent, a much more practical and streamlined 
program should be developed. We believe the resources earmarked 
for this program might be better allocated to support projects 
that can be developed and brought online more swiftly.
    We are pleased to see additional funding provided for the 
Compensated Work Therapy, Transitional Residence Program, in 
the fiscal year 2009 proposed budget.
    Regarding mental health programs, virtually every 
community-based organization providing assistance to veterans 
in crisis depends on the VA for access to comprehensive mental 
health services. We believe VA's mental health strategic plan 
has increased the number of services provided to veterans in 
crisis and believe the budget will facilitate further 
implementation of this plan.
    We also strongly recommend more attention, and I think this 
is of interest to you, Mr. Chairman, that there would be an 
opportunity for simplifying and expanding access to community 
mental health clinics for OIF/OEF veterans in communities that 
are not well served by VA facilities.
    In conclusion, I want to thank you for giving NCHV an 
opportunity to testify for the American's veterans in crisis, 
and we would be happy to answer any questions.
    [The prepared statement of Ms. Beversdorf appears on p. 
142.]
    The Chairman. Thank you for all that you do.
    Representing the National Association for Uniformed 
Services (NAUS) is the Legislative Director, Rick Jones. 
Welcome.

                    STATEMENT OF RICK JONES

    Mr. Jones. Chairman Filner, Ranking Member Buyer, thank you 
very much for the opportunity to appear here today to testify 
on the Department of Veterans Affairs budget for fiscal year 
2009.
    First of all, we would like to thank you, Mr. Chairman, and 
the leadership of this Committee and the House itself for the 
years in which you pushed for The Independent Budget to be 
appropriated.
    Last year's budget, the current year we are in, was just an 
extraordinary, astounding feat and we thank you so very much 
for applying the money and directing the priorities to 
veterans.
    The VA budget, including the $3.7 billion, which was a 
discretionary amount for the President's decision, was released 
last January. And we appreciate all your effort.
    As you approach issues this year, NAUS highly recommends 
and commends the Veterans' Disability Benefits Commission 
report. NAUS is pleased that its President, retired Army Major 
General Bill Matz, actively served on the Veterans' Disability 
Commission and that the final report of the VDBC has received 
praise from most Veterans Service Organizations.
    The National Association for Uniformed Services firmly 
believes that the veterans healthcare system is an 
irreplaceable national investment. It is critical to the Nation 
and its veterans. The provision of quality, timely care is 
considered one of the most important veterans' benefits 
afforded.
    Our citizens have also benefited from the advances made in 
medical care through VA medical research and VA innovations 
have also made a difference in the medical advancements in this 
country.
    We endorse The Independent Budget's recommendation for a 
medical care budget of $42.8 billion. That is an increase of 
$3.7 billion above this year's funding level and approximately 
$1.6 billion more than the Administration's request. And we 
endorse the IB recommendations for the VA research as well.
    We ask that you reject the fees and new charges for 
veterans and provide adequate resources as needed. Veterans 
deserve the benefits they have earned, and they deserve them 
because of the sacrifices they have made.
    Never again should a situation occur in the VA healthcare 
system as occurred over the past 2 years at the James A. Haley 
VA Medical Center in Tampa. The National Association for 
Uniformed Services is informed that the Haley Medical Center 
was on divert status for critical patients 27 percent of the 
time between January 1, 2006, and October 2007. That is the 
equivalent of about 170 days.
    VA figures were reviewed by the St. Petersburg Times that 
showed the hospital had diverted all patients regardless of 
condition 16 percent of the time over that period. Those 
conditions should never exist again. And what you did last year 
will help avoid that.
    Current VA policy also should be overturned with regard to 
Priority 8 veterans. We think the ban should be lifted. Current 
VA policy allows enrollment of veterans returning from Iraq and 
Afghanistan. Once enrolled in the VA healthcare system, they 
are not disenrolled regardless of the category and priority 
they might fall into following a certain period of time.
    We agree with this decision, but we question why veterans 
from prior conflicts or periods of service before the OIF/OEF 
period are not afforded the same consideration. Veterans of 
Korea, World War II should be allowed to have equal 
consideration.
    Funding in the currently operating fiscal year provides VBA 
with the resources necessary to hire over 3,000 full-time 
claims processors. At the close of January, however, VBA had 
more than 650,000 compensation and pension claims pending. More 
than 26 of those were pending over 180 days.
    At a recent briefing of the budget roll-out, Admiral Cooper 
expressed confidence that recent and continuing hiring and 
training efforts will allow VBA to significantly reduce that 
backlog. We hope the Under Secretary is correct in his 
estimates and we encourage you to follow that progress because 
the monetary benefits are important to the lives of disabled 
veterans and their families.
    Mr. Chairman, as staunch advocates of veterans, we again 
thank you for the opportunity to testify and thank you for the 
efforts you have made over the past year. And we look forward 
to working with you in the new year for a robust budget for the 
coming fiscal year.
    [The prepared statement of Mr. Jones appears on p. 145.]
    The Chairman. Thank you.
    And thank all of you for your interest and your expertise. 
We hope you will participate in the roundtables where we will 
look at several pieces of the budget.
    I just have a specific question, Cheryl. Do I understand it 
right that the Per Diem Program applies to homeless shelters 
that have a 75 percent or more veteran population? Is that the 
law or is that policy?
    Ms. Beversdorf. Yes. The requirement is for anyone to be 
funded under the Grant and Per Diem Program that the veteran 
population has to be at least 75 percent.
    The Chairman. I am not sure of the rationale behind that. 
Why not follow the veteran? We have shelters in San Diego, for 
example, that may be 50 percent veteran or 20 percent veteran, 
but they do not get any help from the VA. Is that correct?
    Ms. Beversdorf. Well, that is why I mentioned non-VA 
clinics in my testimony. I think the VA is interested in 
introducing legislation that would provide supportive services 
to homeless veterans in non-VA facilities. There could be a 
contractual arrangement for veterans who are too far away from 
a VA facility. Veterans could receive VA supportive services in 
non-VA facilities and not have to pay for these services.
    The Chairman. Thank you. And thank you for keeping this 
issue in front of us at all times.
    Ms. Beversdorf. Thank you.
    The Chairman. And, Paul, thank you for your statements on 
the GI Bill. We intend, as I said earlier, to make that a top 
priority and look forward to working with you on that.
    Mr. Buyer.
    Mr. Buyer. Mr. Chairman, I remember the Sepulveda bill that 
we had. I thought there was a requirement in that bill, though, 
that it be 100-percent veterans homeless. Was that right? Was 
there?
    The Chairman. I do not think so. That was a contract to 
serve a certain population.
    Mr. Buyer. Stay on that land.
    The Chairman. Yes.
    Mr. Buyer. Okay. All right. Thanks. You are right. Thanks.
    Mr. Jones, regarding the questions on the claims backlog 
and claims processing, you commented on the number of 
additional personnel.
    Over the years, I think what is getting exhaustive to me is 
this is not necessarily a problem that we can throw money at 
and we can throw people at. And I think Admiral Cooper went 
right at it when he started testing people and learned that 
there was such a low rate of individuals who could pass these 
tests.
    And training is the issue. So if we have individuals in 
here who are not qualified, there is no question as to why we 
have so many appeals and so many backlogs. And we have a 
training issue.
    I do not want to throw more people in if we are not going 
to get them adequately trained. And I think Admiral Cooper is 
getting his arms around that one. Would you concur?
    Mr. Jones. I agree fully. And the other element, of course, 
is the IT element that you have been working so hard on over 
the years. Hiring, training, and technology.
    Mr. Buyer. Okay. I asked the other panel the question with 
regard to the Secretary's testimony that his number one 
priority is the implementation of Dole-Shalala. Do any of you 
have comments with regard to the Secretary's testimony?
    Mr. Jones. Well, the Dole-Shalala, I would comment, is very 
narrowly focused. It was focused solely on combat-injured 
veterans. There was comment on the previous panel, I believe, 
about the Veterans' Disability Benefits Commission, which was 
more broadly focused and in being more broadly focused, it 
includes all veterans who are part of the effort in defending 
freedom and ensuring that our way of life remains vital.
    So we would like to have you more focused, although it is 
very important on Dole-Shalala, we would like to have you more 
focused on the Veterans' Disability Benefits Commission, 
perhaps merging those areas that can be merged. There were some 
disagreements between the two.
    One of those disagreements was that on the age of 65, 
benefits from VA would end from the Dole-Shalala. At that 
point, Social Security benefits would take place. The Veterans' 
Disability Benefits Commission disagreed with that and stated 
that VA benefits should be for life.
    So with regard to Dole-Shalala, it was a very narrowly 
focused commission.
    Mr. Buyer. Well, there are many ways to go about this. The 
Chairman and I have had discussions. He believes in a 
comprehensive approach and that is what you are talking about.
    Mr. Jones. Yes, sir.
    Mr. Buyer. And I would endorse an incremental approach, do 
what we can. You know, we have an opportunity to strike and 
hopefully we can proceed with something, you know.
    Does anybody else have any comment?
    Mr. Rieckhoff. I would agree with you, sir. I think it is 
important to see what we can agree on and get things done, but 
at the same time recognizing that we do face comprehensive 
challenges and that we are facing mammoth generational 
challenges that are unprecedented. And so I hate to see us 
throw the baby out with the bath water, but I think there is 
obviously going to be battles to be fought.
    But to be honest with you, what I am encouraged by is the 
fact that Dole-Shalala and the VDBC have created momentum in 
this country of put veterans' issues on the front page and we 
will hopefully give you all the support that you need to make 
this a top tier priority. And I think that is critical at a 
time where veterans are concerned about being pushed to the 
back pages or not getting the attention that they deserve.
    Mr. Buyer. You know, I can fully embrace and understand 
Senator Dole's desire to address the combat veteran, right? It 
is the dimension in which he sees the world. It is also part of 
our warrior ethos of taking care of others who, you know, are 
less well off than we are and we put them ahead of us. And I 
can understand that.
    I recall politically, and then I will talk about the other 
side of this, when I chaired Personnel and I had $25 billion. 
Okay? What am I going to do with $25 billion? And what did I 
do? I knew exactly what to do, concurrent receipt. I said this 
thing had not been done for a long time, so I blew the lid off 
that and said we would do it for only the 100-percent combat 
veteran.
    And the following year, I was bastardized. I was attacked. 
It was unmerciful that I did not do it for everyone, that there 
was inequity. And so I have never forgotten that.
    And I know what Senator Dole and Secretary Shalala have 
asked of me and, yes, I want to do what we can. But, boy, I 
have never forgotten what hell I went through because of my 
desire only to help them and claims I did not care about 
everybody else.
    And I can see why doing the comprehensive approach protects 
you against that type of thing. I mean, the veteran community 
can be a pretty tough community, you know, when they get 
together and how they can use language sometimes.
    I am just speaking openly about our challenges and how we 
want to proceed with it. Thank you for your testimony.
    I yield back, Chairman.
    The Chairman. Again, these issues are really important and 
we are going to spend some time on each one of them in a 
different kind of setting. I thank you all for being here. I 
thank the VA for participating in the whole day's hearing. And 
this Committee is adjourned.
    [Whereupon, at 4:30 p.m., the Committee was adjourned.]




















                            A P P E N D I X

                              ----------                              

                 Prepared Statement of Hon. Bob Filner
             Chairman, Full Committee on Veterans' Affairs
    Welcome everyone to the hearing on the Department of Veterans 
Affairs Budget Request for Fiscal Year 2009.
    This hearing marks the first time Secretary Peake has come before 
this Committee, and I cannot think of a more important subject than the 
VA's fiscal year 2009 budget request.
    I would like to welcome our other witnesses, representing 
organizations that have a direct stake in the VA's budget, and thank 
you for your hard work and diligence in helping to ensure the VA's 
budget is sufficient to meet the needs of our veterans.
    Ensuring veterans are provided the benefits and services we have 
promised them as a Nation is an issue that I, and the Members of this 
Committee, take very seriously. We must make sure we provide the 
resources needed by our servicemembers returning from Iraq and 
Afghanistan, and we must make sure resources are available for our 
veterans from previous conflicts. This is not cheap, but the service 
and sacrifice of our veterans is real, and VA's budget must provide 
realistic funding levels to meet these needs.
    The VA has requested an increase for VA medical care of $2 billion, 
for a total of $42.2 billion, including collections. We applaud this 
increase, but we have serious concerns that this increase may not be 
enough. The Independent Budget has recommended an additional $1.6 
billion.
    I believe that no veteran should have to wait for a healthcare 
appointment simply because the VA does not have the resources to care 
for that veteran. We must make sure there is sufficient funding in FY 
2009 to meet the mental health needs of our veterans, and to 
effectively deal with the issue of homeless veterans, which is a 
national tragedy. We must also make sure the resources are available 
for our women veterans, and to meet the unique needs of our returning 
servicemembers.
    We look forward to hearing how this budget will assist the VA in 
working with the Department of Defense to make certain situations like 
those found last year at Walter Reed do not occur again, and that 
bureaucracies and jurisdictional issues do not serve as roadblocks in 
getting the healthcare and benefits that our servicemembers and 
veterans need.
    I am, however, extremely disappointed that the VA has once again 
submitted a budget that assumes the continuation of the enrollment ban 
on Priority 8 veterans. We were promised a detailed report by January 
1st of this year, listing the resources needed by the VA to lift this 
ban. We are still waiting for this report, and this information.
    The ability of the Secretary to deny enrollment to a group of 
veterans was provided to the VA in order to address unexpected and 
unforeseen circumstances--it was never meant by Congress to provide the 
VA with the ability to ban groups of veterans year after year after 
year.
    I am also disappointed the VA has once again brought forward 
legislative proposals to increase fees and co-payments for certain 
veterans. The Administration's proposals to institute enrollment fees 
and increase pharmacy co-payments have been rejected year after year by 
Congress. I would like the VA to explain to this Committee why they 
have offered these proposals again, and the policy reasons for deeming 
the proposed receipts from these proposals ``mandatory'' dollars.
    Although the Administration has requested an increase for medical 
care, this increase has come at the expense of other VA programs. The 
VA's FY 2009 budget recommends a 5.5-percent increase for medical care, 
while recommending cuts in VA major and minor construction of nearly 44 
percent; nearly 49 percent for grants for construction of State 
extended care facilities; nearly 8 percent for VA medical and 
prosthetic research; slightly more than 7 percent for the National 
Cemetery Administration; 19 percent for grants for construction of 
State veteran cemeteries; and 5 percent for the Office of Inspector 
General. The VA's FY 2009 budget recommends an increase of nearly 6 
percent in general operating expenses, the budget account that funds, 
among other items, VA claims processors. The VA also requests an 
increase in information technology systems of slightly more than 24 
percent.
    We must make sure that we are providing the resources needed to 
address the claims backlog and speed up the process for veterans to 
receive the benefits they have earned. We must also carefully consider 
the VA's IT request to make certain these dollars are spent wisely.
    This Committee will seriously weigh the VA's budget request for FY 
2009 and will make our recommendations to the Budget Committee at the 
end of this month. We will work closely with our colleagues on the 
Appropriations Committee to ensure veterans get the benefits and 
services they have earned, and we will work to ensure that the 
veterans' funding achievements we accomplished last year are continued 
this year.
    We provided historic increases last year, and we will continue to 
make sure our veterans are cared for in the coming years.

                                 
          Prepared Statement of Hon. Stephanie Herseth Sandlin
    Thank you to everyone for being here to discuss the Department of 
Veterans Affairs budget request for fiscal year 2009.
    I would like to take this opportunity to congratulate you Secretary 
Peake on your recent appointment to lead the Department of Veterans 
Affairs.
    Mr. Secretary, as you may know, I am the Chairwoman of the Economic 
Opportunity Subcommittee. I look forward to working with you to ensure 
our service men and women have the benefits they have earned and 
deserve to successfully transition to civilian life. Most notably, I 
look forward to working with you to update the Montgomery GI Bill to 
ensure educational benefits reflect the increased mission tempo and 
high cost of a secondary education of the 21st century.
    Although the President's budget provides increased funding for the 
VA, I do not believe it is sufficient to meet the needs of our 
veterans. In particular, I am worried that this budget is not honest in 
its assessment of the cost associated with treating both the current 
veteran population and the newest generation of veterans--many of whom 
are returning home from the wars in Iraq and Afghanistan with PTSD, 
TBI, and other injuries that will require a lifetime of care.
    Finally, I am disappointed that the budget again proposes annual 
enrollment fees and increasing pharmacy co-payments. We should not be 
shifting the burden for veterans' healthcare to veterans themselves. I 
look forward to working with my colleagues in a bipartisan manner 
toward eliminating this tax on veterans and addressing the other 
shortfalls of this budget proposal.
    Again, I want to thank everyone for taking the time to be here to 
discuss these important matters.

                                 
            Prepared Statement of Hon. James B. Peake, M.D.
             Secretary, U.S. Department of Veterans Affairs
    Mr. Chairman and Members of the Committee, good afternoon. I am 
happy to be here and I am deeply honored that the President has given 
me the opportunity to serve as Secretary of Veterans Affairs. I look 
forward to working with you to build on VA's past successes to ensure 
veterans continue to receive timely, accessible delivery of high-
quality benefits and services earned through their sacrifice and 
service in defense of freedom.
    I am here today to present the President's 2009 budget proposal for 
VA. The request totals nearly $93.7 billion--$46.4 billion for 
entitlement programs and $47.2 billion for discretionary programs. The 
total request is $3.4 billion above the funding level for 2008. The 
President's ongoing commitment to those who have faithfully served this 
country in uniform is clearly demonstrated through this budget request 
for VA. Resources requested for discretionary programs in 2009 are more 
than double the funding level in effect when the President took office 
7 years ago.
    The President's request for 2009 will allow VA to achieve 
performance goals in four areas critical to the achievement of our 
mission:

      Provide timely, accessible, and high-quality healthcare 
to our highest priority patients--veterans returning from service in 
Operation Enduring Freedom and Operation Iraqi Freedom, veterans with 
service-connected disabilities, those with lower incomes, and veterans 
with special healthcare needs;
      Advance our collaborative efforts with the Department of 
Defense (DoD) to ensure the continued provision of world-class 
healthcare and benefits to VA and DoD beneficiaries, including progress 
toward the development of secure, interoperable electronic medical 
record systems;
      Improve the timeliness and accuracy of claims processing; 
and
      Ensure the burial needs of veterans and their eligible 
family members are met and maintain veterans' cemeteries as national 
shrines.
Ensuring a Seamless Transition from Active Military Service to Civilian 
                                  Life
    One of our highest priorities is to ensure that veterans returning 
from service in Operation Enduring Freedom and Operation Iraqi Freedom 
receive everything they need to make their transition back to civilian 
life as smooth and easy as possible. We will take all measures 
necessary to provide them with timely benefits and services, to give 
them complete information about the benefits they have earned through 
their courageous service, and to implement streamlined processes free 
of bureaucratic red tape.
    We will provide timely, accessible, and high-quality medical care 
for those who bear the permanent physical scars of war as well as 
compassionate care for veterans who suffer from less visible but 
equally serious and debilitating mental health issues, including 
traumatic brain injury (TBI) and post traumatic stress disorder (PTSD). 
Our treatment of those with mental health conditions will include 
veterans' family members who play a critical role in the care and 
recovery of their loved ones.
    The President's top legislative priority for VA is to implement the 
recommendations of the President's Commission on Care for America's 
Returning Wounded Warriors (Dole-Shalala Commission). The Commission's 
report provides a powerful blueprint to move forward with ensuring that 
service men and women injured during the Global War on Terror continue 
to receive the healthcare services and benefits necessary to allow them 
to return to full and productive lives as quickly as possible. VA has 
initiated studies to determine appropriate payment levels for quality 
of life, transition assistance, and loss of earnings. The next step is 
for Congress to pass the President's legislation, which will modernize 
the disability compensation system. VA is working closely with 
officials from DoD on the recommendations of the Dole-Shalala 
Commission that do not require legislation to help ensure veterans 
achieve a smooth transition from active military service to civilian 
life.
    For example, VA and DoD signed an agreement in October 2007 to 
provide Federal recovery coordinators to ensure medical services and 
other benefits are provided to seriously wounded, injured, and ill 
active duty servicemembers and veterans. VA hired the first recovery 
coordinators, in coordination with DoD, and they are located at Walter 
Reed Army Medical Center, National Naval Medical Center, and Brooke 
Army Medical Center. They will coordinate services between VA and DoD 
and, if necessary, private-sector facilities, while serving as the 
ultimate resource for families with questions or concerns about VA, 
DoD, or other Federal benefits.
    In November 2007, VA and DoD began a pilot disability evaluation 
system for wounded warriors at the major medical facilities in the 
Washington, DC area--Washington VA Medical Center, Walter Reed Army 
Medical Center, National Naval Medical Center, and Malcolm Grow Medical 
Center. This initiative is designed to eliminate the duplicative and 
often confusing elements of the current disability processes of the two 
Departments. Key features of the disability evaluation system pilot 
include one medical examination and a single disability rating 
determined by VA. The single disability examination is another 
improvement resulting from the recommendations of the Dole-Shalala 
Commission and is aimed at simplifying benefits, healthcare, and 
rehabilitation for injured servicemembers and veterans.
    VA will continue to work with Congress, DoD, and other Federal 
agencies to aggressively move forward with implementing the Dole-
Shalala Commission recommendations.
                              Medical Care
    The President's 2009 request includes total budgetary resources of 
$41.2 billion for VA medical care, an increase of $2.3 billion over the 
2008 level and more than twice the funding available at the beginning 
of the Bush Administration. Our total medical care request is comprised 
of funding for medical services ($34.08 billion), medical facilities 
($4.66 billion), and resources from medical care collections ($2.47 
billion). We have included funds for medical administration as part of 
our request for medical services. Merging these two accounts will 
improve and simplify the execution of our budget and will make it 
easier for us to respond rapidly to unanticipated changes in the 
healthcare environment throughout the year. We appreciate Congress 
providing us with the authority to transfer funding between our medical 
care accounts as this helps ensure we operate a balanced medical 
program. We will evaluate the potential need for adjustments to our 
medical accounts during 2008.
    Information technology (IT) plays a vital role in direct support of 
our medical care program and VA is requesting a significant increase in 
IT funding in 2009, much of which will help ensure we continue to 
provide timely, safe, and high-quality healthcare services. The most 
critical component of our medical IT program is the continued operation 
and improvement of our electronic health record system, a Presidential 
priority which has been recognized nationally for increasing 
productivity, quality, and patient safety. We must continue the 
progress we have made with DoD to develop secure, interoperable 
electronic medical record systems which is a critical recommendation in 
the Dole-Shalala Commission report. The availability of medical data to 
support the care of patients shared by VA and DoD will enhance our 
ability to provide world-class care to veterans and active duty 
members, including our wounded warriors returning from Afghanistan and 
Iraq.
Workload
    During 2009, we expect to treat about 5,771,000 patients. This 
total is nearly 90,000 (or 1.6 percent) above the 2008 estimate. Our 
highest priority patients (those in priorities 1-6) will comprise 67 
percent of the total patient population in 2009, but they will account 
for 84 percent of our healthcare costs.
    We expect to treat about 333,000 veterans in 2009 who served in 
Operation Enduring Freedom and Operation Iraqi Freedom. This is an 
increase of 40,000 (or 14 percent) above the number of veterans from 
these two campaigns that we anticipate will come to VA for healthcare 
in 2008, and 128,000 (or 62 percent) more than the total in 2007.
Funding for Major Healthcare Initiatives
    In 2009 we are requesting nearly $1.3 billion to meet the needs of 
the 333,000 veterans with service in Operation Enduring Freedom and 
Operation Iraqi Freedom whom we expect will come to VA for medical 
care. This is an increase of $216 million (or 21 percent) over our 
resource needs to care for these veterans in 2008.
    The Department's resource request includes $3.9 billion in 2009 to 
continue our effort to improve access to mental health services across 
the country. This is an increase of $319 million, or 9 percent, above 
the 2008 level. These funds will help ensure VA continues to realize 
the aspirations of the President's New Freedom Commission Report, as 
embodied in VA's Mental Health Strategic Plan, to deliver exceptional, 
accessible mental healthcare. The Department will place particular 
emphasis on providing care to those suffering from PTSD as a result of 
their service in Operation Enduring Freedom and Operation Iraqi 
Freedom. An example of our firm commitment to provide the best 
treatment available to help veterans recover from these mental health 
conditions is our increased outreach to veterans of the Global War on 
Terror, as well as increased readjustment and PTSD services. Our 
strategy for improving access includes increasing mental healthcare 
staff and expanding our telemental health program that allows us to 
reach about 20,000 additional patients with mental health conditions 
each year.
    Our 2009 request includes $762 million for non-institutional long-
term care services, an increase of $165 million, or 28 percent, over 
2008. By enhancing veterans' access to non-institutional long-term 
care, the Department can provide extended care services to veterans in 
a more clinically appropriate setting, closer to where they live, and 
in the comfort and familiar settings of their homes surrounded by their 
families. This includes adult day healthcare, home-based primary care, 
purchased skilled home healthcare, homemaker/home health aide services, 
home respite and hospice care, and community residential care. During 
2009 we will increase the number of patients receiving non-
institutional long-term care, as measured by the average daily census, 
to about 61,000. This represents a 38-percent increase above the level 
we expect to reach in 2008.
    VA's medical care request includes nearly $1.5 billion to support 
the increasing workload associated with the purchase and repair of 
prosthetics and sensory aids to improve veterans' quality of life. This 
is $134 million, or 10 percent, above the funding level in 2008. This 
increase in resources for prosthetics and sensory aids will allow the 
Department to meet the needs of the growing number of injured veterans 
returning from combat in Afghanistan and Iraq.
    Requested funding for the Civilian Health and Medical Program of 
the VA (CHAMPVA) totals just over $1 billion in 2009, an increase of 
$145 million (or 17 percent) over the 2008 resource level. Claims paid 
for CHAMPVA benefits are expected to grow by 9 percent (from 7.0 
million to 7.6 million) between 2008 and 2009 and the cost of 
transaction fees required to process electronic claims is rising as 
well.
    Our budget request contains $83 million for facility activations. 
This is $13 million, or 19 percent, above the resource level for 
activations in 2008. As VA completes projects within our Capital Asset 
Realignment for Enhanced Services (CARES) program, we will need 
increased funding to purchase equipment and supplies for newly 
constructed and leased buildings.
Quality of Care
    The resources we are requesting for VA's medical care program will 
allow us to strengthen our position as the Nation's leader in providing 
high-quality healthcare. VA has received numerous accolades from 
external organizations documenting the Department's leadership position 
in providing world-class healthcare to veterans. For example, our 
record of success in healthcare delivery is substantiated by the 
results of the December 2007 American Customer Satisfaction Index 
(ACSI) survey. Conducted by the National Quality Research Center at the 
University of Michigan Business School and the Federal Consulting 
Group, the ACSI survey found that customer satisfaction with VA's 
healthcare system was higher than the private sector for the eighth 
consecutive year. The data revealed that patients at VA medical centers 
recorded a satisfaction level of 83 out of a possible 100 points, or 6 
points higher than the rating for care provided by the private-sector 
healthcare industry.
    In December 2007 the Congressional Budget Office (CBO) issued a 
report highlighting the success of VA's healthcare system. In this 
report--The Health Care System for Veterans: An Interim Report--the CBO 
identified organizational restructuring and management systems, the use 
of performance measures to monitor key processes and health outcomes, 
and the application of health IT as three of the major driving forces 
leading to high-quality healthcare delivery in VA. In October 2007, the 
Institute of Medicine released a report--Treatment of PTSD: An 
Assessment of the Evidence--that states VA's use of exposure-based 
therapies for the treatment of PTSD is effective. This confirms the 
Department's own conclusions and bolsters our efforts to continue to 
effectively treat veterans of the Global War on Terror who are 
suffering from PTSD and other mental health conditions.
    These external acknowledgments of the superior quality of VA 
healthcare reinforce the Department's own findings. We use two primary 
measures of healthcare quality--clinical practice guidelines index and 
prevention index. These measures focus on the degree to which VA 
follows nationally recognized guidelines and standards of care that the 
medical literature has proven to be directly linked to improved health 
outcomes for patients. Our performance on the clinical practice 
guidelines index, which focuses on high-prevalence and high-risk 
diseases that have a significant impact on veterans' overall health 
status, is expected to grow to 86 percent in 2009, or a 1 percentage 
point rise over the level we expect to achieve in 2008. As an indicator 
aimed at primary prevention and early detection recommendations dealing 
with immunizations and screenings, the prevention index will also grow 
by 1 percentage point above the estimated 2008 level, reaching 89 
percent in 2009.
Access to Care
    In April 2006 there were over 250,000 unique patients waiting more 
than 30 days for their desired appointment date for healthcare 
services. As of January 1, 2008, we had reduced the waiting list to 
just over 69,000. Our budget request for 2009 provides the resources 
necessary for the Department to virtually eliminate the waiting list by 
the end of next year. Improvements in access to healthcare will result 
in part from the opening of 64 new community-based outpatient clinics 
in 2008 and 51 more in 2009 (bringing the total number to 846).
    The Department will expand its telehealth program which is a 
critical component of VA's approach to improve access to healthcare for 
veterans living in rural and remote areas. Other strategies include 
increasing the number of community-based outpatient clinics and 
enhancing VA's participation in the National Rural Development 
Partnership that serves as a forum for identifying, discussing, and 
acting on issues affecting those residing in rural areas. In 2009 the 
Department's Office of Rural Health will conduct studies to evaluate 
VA's rural health programs and develop policies and additional programs 
to improve the delivery of healthcare to veterans living in rural and 
remote areas.
Medical Collections
    The Department expects to receive nearly $2.5 billion from medical 
collections in 2009, which is $126 million, or more than 5 percent, 
above our projected collections for 2008. About $8 of every $10 in 
additional collections will come from increased third-party insurance 
payments, with almost all of the remaining collections resulting from 
growing pharmacy workload. We will continue several initiatives to 
strengthen our collections processes, including expanded use of both 
the Consolidated Patient Account Center to increase collections and 
improve operational performance, and the Insurance Card Buffer system 
to improve third-party insurance verification. In addition, we will 
enhance the use of real-time outpatient pharmacy claims processing to 
facilitate faster receipt of pharmacy payments from insurers and will 
expand our campaign to increase the number of payers accepting 
electronic coordination of benefits claims.
Legislative Proposals
    The President's 2009 budget includes seven legislative proposals 
totaling $42 million. One of these proposals expands legislative 
authority to cover payment of specialized residential care and 
rehabilitation in VA-approved medical foster homes for veterans of 
Operation Enduring Freedom and Operation Iraqi Freedom who suffer from 
TBI. Another proposal would reduce existing barriers to the early 
diagnosis of human immunodeficiency virus (HIV) infection by removing 
requirements for separate written informed consent for HIV testing 
among veterans. This change would ensure that patients treated by VA 
receive the same standard of HIV care that is recommended to non-VA 
patients.
    The 2009 budget also contains three legislative proposals which ask 
veterans with comparatively greater means and no compensable service-
connected disabilities to assume a modest share of the cost of their 
healthcare. They are exactly the same as proposals submitted but not 
enacted in the 2008 budget. The first proposal would assess Priority 7 
and 8 veterans with an annual enrollment fee based on their family 
income:


------------------------------------------------------------------------
               Family Income                    Annual Enrollment Fee
------------------------------------------------------------------------
Under $50,000                                                      None
------------------------------------------------------------------------
$50,000-$74,999                                                    $250
------------------------------------------------------------------------
$75,000-$99,999                                                    $500
------------------------------------------------------------------------
$100,000 and above                                                 $750
------------------------------------------------------------------------


    The second legislative proposal would increase the pharmacy co-
payment for Priority 7 and 8 veterans from $8 to $15 for a 30-day 
supply of drugs. And the last provision would equalize co-payment 
treatment for veterans regardless of whether or not they have 
insurance.
    These legislative proposals have been identified in VA's budget 
request for several years. The proposals are consistent with the 
priority system of healthcare established by Congress, a system which 
recognizes that priority consideration must be given to veterans with 
service-disabled conditions, those with lower incomes, and veterans 
with special healthcare needs.
    These proposals have no impact on the resources we are requesting 
for VA medical care as they do not reduce the discretionary medical 
care resources we are seeking. Our budget request includes the total 
funding needed for the Department to continue to provide veterans with 
timely, accessible, and high-quality medical services that set the 
national standard of excellence in the healthcare industry. Instead, 
these three provisions, if enacted, would generate an estimated $2.3 
billion in revenue from 2009 through 2013 that would be deposited into 
a mandatory account in the Treasury.
    One of our highest legislative priorities is to establish the 
position of Assistant Secretary for Acquisition, Logistics, and 
Construction. The person occupying this new position would serve as 
VA's Chief Acquisition Officer, a position required by the Services 
Acquisition Reform Act of 2003. This will elevate the importance of 
these critical functions to the level necessary to coordinate their 
policy direction across the Department's programs and other government 
agencies. An Assistant Secretary with focused policy responsibility for 
acquisition, logistics, and construction would ensure these vital 
activities receive the visibility they need at the highest levels of 
VA. Legislation to accomplish this was introduced in the Senate on 
October 4, 2007, as S. 2138. We would appreciate Congress' support of 
this legislation.
                            Medical Research
    VA is requesting $442 million to support VA's medical and 
prosthetic research program. Our request will fund nearly 2,000 high-
priority research projects to expand knowledge in areas critical to 
veterans' healthcare needs, most notably research in the areas of 
mental illness ($53 million), aging ($45 million), health services 
delivery improvement ($39 million), cancer ($37 million), and heart 
disease ($33 million).
    One of our highest priorities in 2009 will be to continue our 
aggressive research program aimed at improving the lives of veterans 
returning from service in Operation Enduring Freedom and Operation 
Iraqi Freedom. The President's budget request for VA contains $252 
million devoted to research projects focused specifically on veterans 
returning from service in Afghanistan and Iraq. This includes research 
in TBI and polytrauma, spinal cord injury, prosthetics, burn injury, 
pain, and post-deployment mental health. Our research agenda includes 
cooperative projects with DoD to enhance veterans' seamless transition 
from military treatment facilities to VA medical facilities, 
particularly in the treatment of veterans suffering from TBI.
    The President's request for research funding will help VA sustain 
its long track record of success in conducting research projects that 
lead to clinically useful interventions that improve the health and 
quality of life for veterans as well as the general population. Recent 
examples of VA research results that have direct application to 
improved clinical care include the use of a neuromotor prosthesis to 
help replace or restore lost movement in paralyzed patients, continued 
development of an artificial retina for those who have lost vision due 
to retinal damage, use of an inexpensive generic drug (prazosin) to 
improve sleep and reduce trauma nightmares for veterans with PTSD, and 
advancements in identifying a new therapy to prevent or slow the 
progression of Alzheimer's disease.
    In addition to VA appropriations, the Department's researchers 
compete for and receive funds from other Federal and non-Federal 
sources. Funding from external sources is expected to continue to 
increase in 2009. Through a combination of VA resources and funds from 
outside sources, the total research budget in 2009 will be almost $1.85 
billion.
                       General Operating Expenses
    The Department's 2009 resource request for General Operating 
Expenses (GOE) is $1.7 billion. Within this total GOE funding request, 
nearly $1.4 billion is for the management of the following non-medical 
benefits administered by the Veterans Benefits Administration (VBA)--
disability compensation; pensions; education; housing; vocational 
rehabilitation and employment; and insurance. The 2009 budget request 
provides VBA over two times the level of discretionary funding 
available when the President took office and underscores the priority 
this Administration places on improving the timeliness and accuracy of 
claims processing. Our request for GOE funding also includes $328 
million to support General Administration activities.
Compensation and Pensions Workload and Performance Management
    A major challenge in improving the delivery of compensation and 
pension benefits is the steady and sizeable increase in workload. The 
volume of claims receipts is projected to reach 872,000 in 2009--a 51-
percent increase since 2000.
    The number of active duty servicemembers as well as Reservists and 
National Guard members who have been called to active duty to support 
Operation Enduring Freedom and Operation Iraqi Freedom is one of the 
key drivers of new claims activity. This has contributed to an increase 
in the number of new claims, and we expect this pattern to persist at 
least for the near term. An additional reason that the number of 
compensation and pension claims is climbing is the Department's 
commitment to increase outreach. We have an obligation to extend our 
reach as far as possible and to spread the word to veterans about the 
benefits and services VA stands ready to provide.
    Disability compensation claims from veterans who have previously 
filed a claim comprise about 54 percent of the disability claims 
received by the Department each year. Many veterans now receiving 
compensation suffer from chronic and progressive conditions, such as 
diabetes, mental illness, cardiovascular disease, orthopedic problems, 
and hearing loss. As these veterans age and their conditions worsen, VA 
experiences additional claims for increased benefits.
    The growing complexity of the claims being filed also contributes 
to our workload challenges. For example, the number of original 
compensation cases with eight or more disabilities claimed increased by 
168 percent during the last 7 years, reaching over 58,500 claims in 
2007. Over one-quarter of all original compensation claims received 
last year contained eight or more disability issues. In addition, we 
expect to continue to receive a growing number of complex disability 
claims resulting from PTSD, TBI, environmental and infectious risks, 
complex combat-related injuries, and complications resulting from 
diabetes. Claims now take more time and more resources to adjudicate. 
Additionally, as VA receives and adjudicates more claims, this results 
in a larger number of appeals from veterans and survivors, which also 
increases workload in other parts of the Department, including the 
Board of Veterans' Appeals and the Office of the General Counsel.
    The Veterans Claims Assistance Act of 2000 has significantly 
increased both the length and complexity of claims development. VA's 
notification and development duties have grown, adding more steps to 
the claims process and lengthening the time it takes to develop and 
decide a claim. Also, the Department is now required to review the 
claims at more points in the adjudication process.
    VA will address its ever-growing workload challenges in several 
ways. For example, we will enhance our use of information technology 
tools to improve claims processing. In particular, our claims 
processors will have greater online access to DoD medical information 
as more categories of DoD's electronic records are made available 
through the Compensation and Pension Records Interchange project. We 
will also strengthen our investment in Virtual VA, which will reduce 
our reliance upon paper-based claims folders and enable accessing and 
transferring electronic images and data through a Web-based 
application. Virtual VA will also dramatically increase the security 
and privacy of veteran data. The Department will continue to move work 
among regional offices in order to maximize our resources and enhance 
our performance. Also, this year we will complete the consolidation of 
original pension claims processing to three pension maintenance centers 
which will relieve regional offices of their remaining pension work. In 
addition, we will further advance staff training and other efforts to 
improve the consistency and quality of claims processing across 
regional offices.
    Using resources available in 2008, we are aggressively hiring 
additional staff. By the beginning of 2009, we expect to complete a 2-
year effort to hire about 3,100 new staff. This increase in staffing is 
the centerpiece of our strategy to achieve our 145-day goal for 
processing compensation and pension claims in 2009. This represents a 
38-day improvement (or 21 percent) in processing timeliness from 2007 
and a 24-day (or 14 percent) reduction in the amount of time required 
to process claims this year.
    In addition, we anticipate that our pending inventory of disability 
claims will fall to about 298,000 by the end of 2009, a reduction of 
more than 94,000 (or 24 percent) from the pending count at the close of 
2007. At the same time we are improving timeliness, we will also 
increase the accuracy of the compensation claims we adjudicate, from 88 
percent in 2007 to 92 percent in 2009.
Education and Vocational Rehabilitation and Employment Performance
    With the resources provided in the President's 2009 budget request, 
key program performance will improve in both the education and 
vocational rehabilitation and employment programs. The timeliness of 
processing original education claims will improve by 13 days during the 
next 2 years, falling from 32 days in 2007 to 19 days in 2009. During 
this period, the average time it takes to process supplemental claims 
will improve from 13 days to just 10 days. These performance 
improvements will be achieved despite an increase in workload. The 
number of education claims we expect to receive will reach about 
1,668,000 in 2009, or 9 percent higher than last year. In addition, the 
rehabilitation rate for the vocational rehabilitation and employment 
program will climb to 76 percent in 2009, a gain of 3 percentage points 
over the 2007 performance level. The number of program participants is 
projected to rise to 91,700 in 2009, or 5 percent higher than the 
number of participants in 2007.
Funding for Initiatives
    Our 2009 request includes $10.8 million for initiatives to improve 
performance and operational processes throughout VBA. Of this total, 
$8.7 million will be used for a comprehensive training package covering 
almost all of our benefits programs. A little over one-half of the 
resources for this training initiative will be devoted to compensation 
and pension staff while nearly one-quarter of the training funds will 
be for staff in the vocational rehabilitation and employment program. 
These training programs include extensive instruction for new employees 
as well as additional training to raise the skill level of existing 
staff. Our robust training program is a vital component of our ongoing 
effort to improve the quality and consistency of our claims processing 
decisions and will enable us to be more flexible and responsive to 
changing workload demands.
                    National Cemetery Administration
    Results from the December 2007 ACSI survey conducted by the 
National Quality Research Center at the University of Michigan and the 
Federal Consulting Group revealed that for the second consecutive time 
VA's national cemetery system received the highest rating in customer 
satisfaction for any Federal agency or private sector corporation 
surveyed. The Department's cemetery system earned a customer 
satisfaction rating of 95 out of a possible 100 points. These results 
highlight that VA's cemetery system is a model of excellence in 
providing timely, accessible, and high-quality services to veterans and 
their families.
    The President's 2009 budget request for VA includes $181 million in 
operations and maintenance funding for the National Cemetery 
Administration (NCA), which is 71 percent above the resources available 
to the Department's burial program when the President took office. The 
resources requested for 2009 will allow us to meet the growing workload 
at existing cemeteries by increasing staffing and funding for contract 
maintenance, supplies, and equipment, open new national cemeteries, and 
maintain our cemeteries as national shrines. We will perform 111,000 
interments in 2009, or 11 percent more than in 2007. The number of 
developed acres (7,990) that must be maintained in 2009 will be 8 
percent greater than in 2007.
    Our budget request includes an additional $5 million to continue 
daily operations and to begin interment operations at six new national 
cemeteries--Bakersfield, California; Birmingham, Alabama; Columbia-
Greenville, South Carolina; Jacksonville, Florida; Sarasota, Florida; 
and southeastern Pennsylvania. Establishment of these six new national 
cemeteries is directed by the National Cemetery Expansion Act of 2003. 
We plan to open fast track burial sections at five of the six new 
cemeteries in late 2008 or early 2009, with the opening of the cemetery 
in southeastern Pennsylvania to follow in mid-2009.
    The President's resource request for VA provides $9.1 million in 
cemetery operations and maintenance funding to address gravesite 
renovations as well as headstone and marker realignment. When combined 
with another $7.5 million in minor construction, VA is requesting a 
total of $16.6 million in 2009 to improve the appearance of our 
national cemeteries which will help us maintain cemeteries as shrines 
dedicated to preserving our Nation's history and honoring veterans' 
service and sacrifice.
    With the resources requested to support NCA activities, we will 
expand access to our burial program by increasing the percent of 
veterans served by a burial option within 75 miles of their residence 
to 88 percent in 2009, which is 4.6 percentage points above our 
performance level at the close of 2007. In addition, we will continue 
to increase the percent of respondents who rate the quality of service 
provided by national cemeteries as excellent to 98 percent in 2009, or 
4 percentage points higher than the level of performance we reached 
last year.
          Capital Programs (Construction and Grants to States)
    The President's 2009 budget request includes just over $1 billion 
in capital funding for VA, $5 million of which will be derived from the 
sale of assets. Our request for appropriated funds includes $581.6 
million for major construction projects, $329.4 million for minor 
construction, $85 million in grants for the construction of State 
extended care facilities, and $32 million in grants for the 
construction of State veterans cemeteries.
    The 2009 request for construction funding for our healthcare 
programs is $750.0 million--$476.6 million for major construction and 
$273.4 million for minor construction. All of these resources will be 
devoted to continuation of the Capital Asset Realignment for Enhanced 
Services (CARES) program. CARES will renovate and modernize VA's 
healthcare infrastructure, provide greater access to high-quality care 
for more veterans, closer to where they live, and help resolve patient 
safety issues. Some of the construction funds in 2009 will be used to 
expand our polytrauma system of care for veterans and active duty 
personnel with lasting disabilities due to polytrauma and TBI. This 
system of care provides the highest quality of medical, rehabilitation, 
and support services.
    Within our request for major construction are resources to continue 
five medical facility projects already underway:

      Denver, Colorado ($20.0 million)--replacement medical 
center near the University of Colorado Fitzsimons campus.
      Lee County, Florida ($111.4 million)--new building for an 
ambulatory surgery/outpatient diagnostic support center.
      Orlando, Florida ($120.0 million)--new medical center 
consisting of a hospital, medical clinic, nursing home, domiciliary, 
and full support services.
      San Juan, Puerto Rico ($64.4 million)--seismic 
corrections to the main hospital building.
      St. Louis, Missouri ($5.0 million)--medical facility 
improvements and cemetery expansion.

    Major construction funding is also provided to begin three new 
medical facility projects:

      Bay Pines, Florida ($17.4 million)--inpatient and 
outpatient facility improvements.
      Tampa, Florida ($21.1 million)--polytrauma expansion and 
bed tower upgrades.
      Palo Alto, California ($38.3 million)--centers for 
ambulatory care and polytrauma rehabilitation center.

    In addition, we are moving forward with plans to develop a fifth 
Polytrauma Rehabilitation Center in San Antonio, Texas with the $66 
million in funding provided in the 2007 emergency supplemental.
    Minor construction is an integral component of our overall capital 
program. In support of the medical care and medical research programs, 
minor construction funds permit VA to address space and functional 
changes to efficiently shift treatment of patients from hospital-based 
to outpatient care settings; realign critical services; improve 
management of space, including vacant and underutilized space; improve 
facility conditions; and undertake other actions critical to CARES 
implementation. Further, minor construction resources will be used to 
comply with the energy efficiency and sustainability design 
requirements mandated by the President.
    We are requesting $130.0 million in construction funding to support 
the Department's burial program--$105.0 million for major construction 
and $25.0 million for minor construction. Within the funding we are 
requesting for major construction are resources for gravesite expansion 
and cemetery improvement projects at three national cemeteries--New 
York (Calverton, $29.0 million); Massachusetts ($20.5 million); and 
Puerto Rico ($33.9 million).
    VA is requesting $5 million for a new land acquisition line item in 
the major construction account. These funds will be used to purchase 
land as it becomes available in order to quickly take advantage of 
opportunities to ensure the continuation of a national cemetery 
presence in areas currently being served. All land purchased from this 
account will be contiguous to an existing national cemetery, within an 
existing service area, or in a location that will serve the same 
veteran population center.
                         Information Technology
    The President's 2009 budget provides more than $2.4 billion for the 
Department's IT program. This is $389 million, or 19 percent above our 
2008 budget, and reflects the realignment of all IT operations and 
functions under the management control of the Chief Information 
Officer.
    IT is critical to the timely, accessible delivery of high-quality 
benefits and services to veterans and their families. Our healthcare 
and benefits programs can only be successful when directly supported by 
a modern IT infrastructure and an aggressive program to develop 
improved IT systems that will meet new service delivery requirements. 
VA must modernize or replace existing systems that are no longer 
adequate in today's rapidly changing healthcare environment. It is 
vital that VA receives a significant infusion of new resources to 
implement the IT-related recommendations presented in the Dole-Shalala 
Commission report.
    Within VA's total IT request of more than $2.4 billion, 70 percent 
(or $1.7 billion) will be for IT investment (non-payroll) costs while 
the remaining 30 percent (or $729 million) will go for payroll and 
administrative requirements. Of the $389 million increase we are 
seeking for IT, 86 percent will be devoted to IT investment. The 
overwhelming majority ($271 million) of the IT investment funds will 
support VA's medical care program, particularly VA's electronic health 
record system.
    VA classifies its IT investment functions into two major 
categories--those that directly impact the delivery of benefits and 
services to veterans (i.e., veteran facing) and those that indirectly 
affect veterans through administrative and infrastructure support 
activities (i.e., internal facing). For 2009, our $1.7 billion request 
for IT investment is comprised of $1.3 billion in veteran facing 
activities and $418 million in internal facing IT functions. Within 
each of these two major categories, IT programs and initiatives are 
further differentiated between development functions and operations and 
maintenance activities.
    The increase in this budget of 94 full-time equivalent staff will 
provide enhanced support in two critical areas--information protection 
and IT asset management. Additional positions are requested for 
information security: testing and deploying security measures; IT 
oversight and compliance; and privacy, underscoring our commitment to 
the protection of veteran and employee information. The increase in IT 
asset management positions will bring expertise to focus on three 
primary functions--inventory management, materiel coordination, and 
property accountability.
    Our 2009 budget request contains $93 million in support of our 
cyber security program to continue our commitment to make VA the gold 
standard in data security within the Federal Government. We continue to 
take aggressive steps to ensure the safety of veterans' personal 
information, including training and educating our employees on the 
critical responsibility they have to protect personal and health 
information. We are progressing with the implementation of the Data 
Security--Assessment and Strengthening of Controls Program established 
in May 2006. This program was established to provide focus to all 
activities related to data security.
    As part of our continued operation and improvement of the 
Department's electronic health record system, VA is seeking $284 
million in 2009 for development and implementation of the Veterans 
Health Information Systems and Technology Architecture (HealtheVet-
VistA) program. This includes a health data repository, a patient 
scheduling system, and a reengineered pharmacy application. HealtheVet-
VistA will equip our healthcare providers with the modern tools they 
need to improve safety and quality of care for veterans. The 
standardized health information from this system can be easily shared 
between facilities, making patients' electronic health records 
available to all those providing healthcare to veterans.
    Until HealtheVet-VistA is operational, we need to maintain the 
VistA Legacy system. This system will remain operational as new 
applications are developed and implemented. This approach will mitigate 
transition and migration risks associated with the move to the new 
architecture. Our budget provides $99 million in 2009 for the VistA 
Legacy system.
    In support of our benefits programs, we are requesting $23.8 
million in 2009 for VETSNET. This will allow VA to complete the 
transition of compensation and pension payment processing off of the 
antiquated Benefits Delivery Network. This will enhance claims 
processing efficiency and accuracy, strengthen payment integrity and 
fraud prevention, and position VA to develop future claims processing 
efficiencies, such as our paperless claims processing strategy. To 
further our transition to paperless processing, we are seeking $17.4 
million in 2009 for Virtual VA which will reduce our reliance on paper-
based claims folders through expanded use of electronic images and data 
that can be accessed and transferred electronically through a Web-based 
platform.
    We are requesting $42.5 million for the Financial and Logistics 
Integrated Technology Enterprise (FLITE) system. FLITE is being 
developed to address a longstanding internal control material weakness 
and will replace an outdated, noncompliant core accounting system that 
is no longer supported by industry. Our 2009 budget also includes $92.6 
million for human resource management application investments, 
including the Human Resources Information System which will replace our 
current human resources and payroll system.
                                Summary
    Our 2009 budget request of nearly $93.7 billion will provide the 
resources necessary for VA to:

      Provide timely, accessible, and high-quality healthcare 
to our highest priority patients--veterans returning from service in 
Operation Enduring Freedom and Operation Iraqi Freedom, veterans with 
service-connected disabilities, those with lower incomes, and veterans 
with special healthcare needs;
      Advance our collaborative efforts with DoD to ensure the 
continued provision of world-class healthcare and benefits to VA and 
DoD beneficiaries, including progress toward the development of secure, 
interoperable electronic medical record systems;
      Improve the timeliness and accuracy of claims processing; 
and
      Ensure the burial needs of veterans and their eligible 
family members are met and maintain veterans' cemeteries as national 
shrines.

    I look forward to working with the Members of this Committee to 
continue the Department's tradition of providing timely, accessible, 
and high-quality benefits and services to those who have helped defend 
and preserve liberty and freedom around the world.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                    Prepared Statement of Carl Blake
      National Legislative Director, Paralyzed Veterans of America
    Mr. Chairman and Members of the Committee, as one of the four co-
authors of The Independent Budget, Paralyzed Veterans of America (PVA) 
is pleased to present the views of The Independent Budget regarding the 
funding requirements for the Department of Veterans Affairs (VA) 
healthcare system for FY 2009.
    PVA, along with AMVETS, Disabled American Veterans, and the 
Veterans of Foreign Wars, is proud to come before you this year to 
present the 22nd edition of The Independent Budget, a comprehensive 
budget and policy document that represents the true funding needs of 
the Department of Veterans Affairs. The Independent Budget uses 
commonly accepted estimates of inflation, healthcare costs and 
healthcare demand to reach its recommended levels. This year, the 
document is endorsed by 54 veterans' service organizations, and medical 
and healthcare advocacy groups.
    Last year proved to be a difficult year for the appropriations 
process. The year started with an incomplete appropriation for FY 2007. 
Congress eventually completed the FY 2007 funding bills in February, 
placing the Department of Veterans Affairs (VA) in a very difficult 
position. While the funding levels provided for FY 2007 were very good, 
the fact that the bill was not completed for nearly 5 months after the 
start of that fiscal year is wholly unacceptable. Congress then 
followed that action up by providing more than $1.8 billion in 
supplemental funding for the VA.
    Unfortunately, the FY 2008 appropriations process did not go any 
smoother. Due to political wrangling over the Federal budget, the VA 
did not receive its appropriation until December. We were very 
disappointed that the VA was forced to endure this situation for the 
13th time in the last 14 years. This was particularly disappointing in 
light of the fact that the Administration guaranteed that the bill 
would be signed into law and because the bill was completed before the 
start of the fiscal year on October 1.
    The appropriations bill was eventually enacted, but it included 
budgetary gimmicks that The Independent Budget has long opposed. While 
the maximum appropriation available to the VA would match or exceed our 
recommendations, the vast majority of this increase was contingent upon 
the Administration making an emergency funding request for this 
additional money. Fortunately, the Administration recognized the 
importance of this critical funding and requested it from Congress. 
This emergency request provided the VA with $3.7 billion more than the 
Administration requested for FY 2008.
    For FY 2009, the Administration requests $41.2 billion for 
veterans' healthcare. This included approximately $2.5 billion from 
medical care collections. Although this represents another step forward 
in achieving adequate funding for the VA, it still falls short of the 
recommendations of The Independent Budget.
    For FY 2009, The Independent Budget recommends approximately $42.8 
billion for total medical care budget authority, an increase of $3.7 
billion over the FY 2008 operating budget level established by P.L. 
110-161, the Omnibus Appropriations bill, and approximately $1.6 
billion above the Administration's FY 2009 request. It is important to 
note that our budget recommendations reflect a distinct change from 
past years as it reinforces the long-held policy that medical care 
collections should be a supplement to, not a substitute for real 
dollars. The Administration, year-after-year, chooses to include 
medical care collections as part of its overall funding authority for 
Medical Services. However, we believe that the cost of medical care 
services should be provided for entirely through direct appropriations. 
In order to develop this recommendation, we used the maximum 
appropriation amount included in P.L. 110-161 for VA medical care and 
added the projected medical care collections to that amount to 
formulate our baseline.
    The medical care appropriation in past years has included three 
separate accounts--Medical Services, Medical Administration, and 
Medical Facilities--that comprise the total VA healthcare funding 
level. However, for FY 2009, the Administration's Budget Request 
recommends consolidating Medical Services and Medical Administration 
into a single account. In order to properly reflect this change in our 
recommendations, the separate accounts for Medical Services and Medical 
Administration must be added together. For FY 2009, The Independent 
Budget recommends approximately $38.2 billion for Medical Services. Our 
Medical Services recommendation includes the following recommendations:


Current Services Estimate                               $32,574,528,000
Increase in Patient Workload                            $ 1,045,470,000
Policy Initiatives                                      $ 1,000,000,000
Medical Administration                                  $ 3,625,762,000
                                                      ------------------
  Total FY 2007 Medical Services                        $38,245,760,000

    In order to develop our current services estimate, we first added 
the estimated collections for FY 2008 to the Medical Services 
appropriation for FY 2008. This best reflects the total budget 
authority that the VA will use to provide healthcare services. This 
amount was then increased by relevant rates of inflation. We also use 
the Obligations by Object in the President's budget submission in order 
to set the framework for our recommendation. We believe this method 
allows us to apply more accurate inflation rates to specific 
subaccounts within the overall account. Our inflation rates are based 
on 5-year averages of different inflation categories from the Consumer 
Price Index--All Urban Consumers (CPI-U) published by the Bureau of 
Labor Statistics every month.
    Our increase in patient workload is based on a projected increase 
of 120,000 new unique patients--Category 1-8 veterans and covered non-
veterans. We estimate the cost of these new unique patients to be 
approximately $792 million. The increase in patient workload also 
includes a projected increase of 85,000 new Operation Iraqi Freedom and 
Operation Enduring Freedom (OIF/OEF) veterans at a cost of 
approximately $253 million.
    The policy initiatives include $325 million for improvement of 
mental health services and traumatic brain injury care. This amount 
represents the growing trend both within the Administration and the 
Congress to enhance the mental health services within the VA. 
Furthermore, it reinforces our belief that resources should be provided 
to the VA to allow them to be the lead for providing these specialized 
services, not outside healthcare organizations. We also recommend $250 
million for long-term care services. The policy portion of The 
Independent Budget further explains the shortfall that the VA has in 
meeting the Average Daily Census mandated by the Millennium Health Care 
Act. We also recommend that the VA be appropriated $325 million for 
funding the fourth mission which encompasses homeland security and 
emergency preparedness initiatives. Currently, the VA already spends 
approximately this amount, but this funding is drawn directly out of 
the Medical Services account. Finally, we recommend $100 million to 
support centralized prosthetics funding.
    As mentioned previously, our Medical Administration recommendation 
must be added to our Medical Services recommendation to properly 
reflect the format of the FY 2009 budget submission. As such, The 
Independent Budget recommends approximately $3.6 billion for Medical 
Administration for FY 2009.
    Finally, for Medical Facilities The Independent Budget recommends 
approximately $4.6 billion. This amount includes an additional $250 
million for nonrecurring maintenance for the VA to begin addressing the 
massive backlog of infrastructure needs.
    Although The Independent Budget healthcare recommendation does not 
include additional funding to provide for the healthcare needs of 
Category 8 veterans being denied enrollment into the system, we believe 
that adequate resources should be provided to overturn this policy 
decision. During FY 2008, the VA estimated that a total of over 
1,500,000 Category 8 veterans would have been denied enrollment into 
the VA healthcare system. Despite the fact that we have not seen any 
solid empirical data to substantiate this continued growth rate in 
denied Category 8 veterans, the VA continues to project higher and 
higher numbers of Category 8 veterans denied enrollment into the 
healthcare system. Based on the projected increase in this population 
of veterans over the last 5 years, The Independent Budget estimates 
that more than 1,870,000 will have been denied enrollment by FY 2009. 
Assuming a utilization rate of 20 percent, in order to reopen the 
system to these deserving veterans, The Independent Budget estimates 
that the actual total cost to reopen the system will be approximately 
$1.4 billion in order to meet this new demand. For the sake of 
discussion, if the projected collections for this group of veterans 
were to be considered in this estimation, the actual cost in 
appropriated dollars would be approximately $456 million. We believe 
that the system should be reopened to these veterans and that adequate 
funding should be provided in addition to our medical care 
recommendation.
    Although not proposed to have a direct impact on veterans' 
healthcare, we are deeply disappointed that the Administration chose to 
once again recommend an increase in prescription drug co-payments from 
$8 to $15 and an indexed enrollment fee based on veterans' incomes. 
These proposals will simply add additional financial strain to many 
veterans, including PVA members and other veterans with catastrophic 
disabilities. Although the VA does not overtly explain the impact of 
these proposals, similar proposals in the past have estimated that 
nearly 200,000 veterans will leave the system and more than 1,000,000 
veterans will choose not to enroll. It is astounding that this 
Administration would continue to recommend policies that would push 
veterans away from the best healthcare system in the world. Congress 
has soundly rejected these proposals in the past and we call on you to 
do so once again.
    For medical and prosthetic research, The Independent Budget is 
recommending $555 million. This represents a $75 million increase over 
the FY 2008 appropriated level established in the Omnibus 
Appropriations Act and $113 million over the Administration's request 
for FY 2009. We are particularly pleased that Congress has recognized 
the critical need for funding in the medical and prosthetic research 
account, and we urge Congress to again overrule VA's request, one that 
will seriously erode VA's crucial biomedical research programs. 
Research is a vital part of veterans' healthcare, and an essential 
mission for our national healthcare system. VA research has been 
grossly underfunded in contrast to the growth rate of other Federal 
research initiatives. At a time of war, the government should be 
investing more, not less, in veterans' biomedical research programs.
    The Independent Budget recommendation also includes a significant 
increase in funding for information technology (IT). For FY 2009, we 
recommend that the VA IT account be funded at approximately $2.165 
billion. This amount includes approximately $121 million for an 
Information Systems Initiative to be carried out by the Veterans 
Benefits Administration. This initiative is explained in greater detail 
in the policy portion of The Independent Budget.
    We remain concerned that the major and minor construction accounts 
are significantly underfunded in the FY 2009 budget request. The 
Administration's request slashes funding for major construction from 
the FY 2008 appropriations level of $1.1 billion to $582 million. The 
minor construction account is also significantly reduced from the 
appropriated level of $631 million to only $329 million. These funding 
levels do little to help the VA offset the rising tide of necessary 
infrastructure upgrades. Without the necessary funding to address minor 
construction needs, these projects will become major construction 
problems in short order. For FY 2009, The Independent Budget recommends 
approximately $1.275 billion for major construction and $621 million 
for minor construction. The minor construction recommendation includes 
$45 million for research facility construction needs.
    Finally, Mr. Chairman, as you know, the whole community of national 
veterans service organizations strongly supports an improved funding 
mechanism for VA healthcare. However, if the Congress cannot support 
mandatory funding, there are alternatives which could meet our goals of 
timely, sufficient, and predictable funding.
    Congress could change VA's medical care appropriation to an advance 
appropriation which would provide approval 1 year in advance, thereby 
guaranteeing its timeliness. Furthermore, by adding transparency to 
VA's healthcare enrollee projection model, we can focus the debate on 
the most actuarially-sound projection of veterans' healthcare costs to 
ensure sufficiency.
    Under this proposal, Congress would retain its discretion to 
approve appropriations; retain all of its oversight authority; and most 
importantly, there would be no PAYGO problems.
    We ask this Committee in your views and estimates for FY 2009 to 
recommend to the Budget Committee either mandatory funding or this new 
advance appropriations approach to take the uncertainties out of 
healthcare for all of our Nation's wounded, sick and disabled veterans.
    In the end, it is easy to forget, that the people who are 
ultimately affected by wrangling over the budget are the men and women 
who have served and sacrificed so much for this Nation. We hope that 
you will consider these men and women when you develop your budget 
views and estimates, and we ask that you join us in adopting the 
recommendations of The Independent Budget.
    This concludes my testimony. I will be happy to answer any 
questions you may have.

                                 
                   Prepared Statement of Kerry Baker
  Associate National Legislative Director, Disabled American Veterans
    Mr. Chairman and Members of the Committee:
    I am pleased to have this opportunity to appear before you on 
behalf of the Disabled American Veterans (DAV), one of four national 
veterans' organizations that create the annual Independent Budget (IB) 
for veterans programs, to summarize our recommendations for fiscal year 
(FY) 2009.
    As you know, Mr. Chairman, the IB is a budget and policy document 
that sets forth the collective views of DAV, AMVETS, Paralyzed Veterans 
of America (PVA), and Veterans of Foreign Wars of the United States 
(VFW). Each organization accepts principal responsibility for 
production of a major component of our Independent Budget--a budget and 
policy document on which we all agree. Reflecting that division of 
responsibility, my testimony focuses primarily on the variety of 
Department of Veterans Affairs' (VA) benefits programs available to 
veterans.
    In preparing this 22nd Independent Budget, the four partners draw 
upon our extensive experience with veterans' programs, our firsthand 
knowledge of the needs of America's veterans, and the information 
gained from continuous monitoring of workloads and demands upon, as 
well as the performance of, the veterans benefits and services system. 
Consequently, this Committee has acted favorably on many of our 
recommendations to improve services to veterans and their families. We 
ask that you give our recommendations serious consideration again this 
year.
The Veterans Benefits Administration is Still Understaffed and 
        Overwhelmed
    To improve administration of VA's benefits programs, the IB 
recommends Congress provide the Veterans Benefits Administration (VBA) 
with enough staffing to support a long-term strategy for improvement in 
claims processing and for other programs under jurisdiction of the VBA. 
Included in our recommendations are new resources needed for training 
programs and information technologies; however, this testimony primary 
focuses on solving VA's staffing shortages as well as other initiatives 
to manage the increase in new claims and reduce the out-of-control 
claims backlog. In total, if Congress accepts our recommendations, VBA 
will be better positioned to serve all disabled veterans and their 
families.
Understaffing and Claims Backlog
    Mr. Chairman, the claims' backlog is unquestionably growing. Rather 
than making headway and overcoming the protracted delays in the 
disposition of its claims, VA continues to lose ground on its claims 
backlog. According to VA's weekly workload report, as of January 26, 
2008, there were 816,211 pending compensation and pension (C&P) claims, 
which include appeals. Putting this number into perspective, at the end 
of 2004, 2005, 2006, and 2007, the total number of pending claims was 
620,926; 680,432; 752,211; and 809,707 respectively. Therefore, in the 
3 years from the end of 2004 to the end of 2007, the total number of 
pending C&P claims rose by 188,781 for an average of 62,929 additional 
pending claims per year. The VA's pending claims rose by 6,504 just 
from the end of 2007 to January 26, 2008--less than 1 month. At this 
rate, VA's caseload will pass 1 million claims in 3 years. With the 
wars in Iraq and Afghanistan still raging, together with the mass 
exodus from military service that usually occurs following cessation of 
combat operations, new and re-opened claims received by VA are more 
likely to increase than decrease. A caseload topping 1 million claims 
will truly be a demoralizing moment for America--the time to act is 
now.
    Throughout the foregoing years, many promises were made in public; 
yet VBA staffing has essentially remained nearly flat at between 9,200 
to 9,500 full-time employees (FTE)--9,287 in FY 2006; 9,445 in FY 2007; 
and 9,559 in FY 2008. (The FY 2008 figure does not currently take into 
account increased staffing levels authorized in the most recent 
appropriations bill for 2008.) While we do not suggest additional 
resources as the solitary answer to the claims backlog, the current VBA 
staffing levels have proven year after year to be significantly below 
the levels needed to halt the growth in the claims backlog, much less 
sufficient to begin reducing the backlog. There is no proverbial silver 
bullet to solving VA's challenges. Various policy changes can and 
should be implemented that may collectively have a positive impact on 
reducing VA's claims backlog while also improving services to VA's 
clientele. Nonetheless, implementing any policy change will utterly 
fail without a significant increase in VBA staffing that is at least on 
parity with VA's increased receipt of new and reopened claims as well 
as its ever-growing claims backlog,
    Based on an estimated receipt of 920,000 claims in FY 2009, 
Congress should authorize 12,184 FTE for FY 2009. That number equates 
to 83 cases per year per each direct program FTE. The IB veterans' 
organizations realize that 83 claims per FTE are below VA's historical 
projections per FTE. Nonetheless, an infusion of new personnel into 
VBA's workforce will inevitably result in a reduced output per FTE for 
a significant length of time. These newly allotted employees will be 
unable to process claims at rates equal to experienced employees. 
Additionally, senior staff within VBA will be forced to frequently halt 
production of their own workload in order to provide necessary training 
to inexperienced employees. We nonetheless strongly encourage the VA to 
provide adequate training to ensure that claims are decided properly 
the first time. Therefore, the reduction in workload per FTE is 
unavoidable.
    Additionally, VBA's new claims per year continue to increase from 
one year to the next despite VA's 2008 budget assertion that such 
claims were going to decline. For example, VBA received 771,115 new 
rating claims in FY 2004 and 838,141 new claims in FY 2007, equaling an 
average increase of 16,756 additional claims per year. During this same 
period, VA received the following Benefits Delivery at Discharge (BDD) 
claims: 39,885 in FY 2004; 37,832 in FY 2005; 40,074 in FY 2006; and 
37,370 in FY 2007, for a total 155,164 new beneficiaries that had never 
before been on VA rolls. At this rate, the average number of new BDD 
claims per year is 38,791 for a total of 232,746 new claims through the 
BDD process by the end of FY 2009. These figures do not include 
servicemembers filing claims through either the military's physical 
disability evaluation systems, or those discharging via end-of-service 
contracts who then come to VA on their own to files claims after 
discharge.
    The significance of these new beneficiaries is that large portions 
of VA's workload increase via new claims each year are re-opened claims 
rather than claims from veterans who have never filed for VA benefits. 
Therefore, the increase in brand new beneficiaries into the system will 
inevitably increase further the number of re-opened claims, ultimately 
causing the total number of claims received by VA each year to continue 
growing, contrary to VA's FY 2008 budget estimate. VA's 2009 budget 
submission reveals the VA added 277,000 beneficiaries to its C&P rolls 
in 2007, which further proves this point.
    The complexity of the workload has also continued to grow. Veterans 
are claiming greater numbers of disabilities and the nature of 
disabilities such as post traumatic stress disorder (PTSD), complex 
combat injuries, diabetes and related conditions, and environmental 
diseases are becoming increasingly more complex. For example, the 
number of cases with 8 or more disabilities increased 135 percent from 
21,814 in 2000 to 51,260 in 2006.\1\ Such complex cases will only 
further slow down VBA's claims process.
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    \1\ Fiscal Year 2008 Budget Submission, Volume II, National 
Cemetery Administration, Benefits Programs, and Departmental 
Administration, Benefits Summary, Department of Veterans Affairs, Pg. 
6A-2 (Retrieved Feb. 2, 2008, from ).
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    We believe that adequate staffing is essential to any meaningful 
strategy to get claims processing and backlogs under control. In its 
budget submission for FY 2007, VBA projected its production based on an 
output of 109 claims per direct program FTE. We have long argued that 
VA's production requirements do not allow for thorough development and 
careful consideration of disability claims, resulting in compromised 
decisions, higher error and appeal rates, and ultimately more overload 
on the system. In addition to recommending staffing levels more 
commensurate with the workload, we have maintained that VA should 
invest more in training adjudicators and that it should hold them 
accountable for higher standards of accuracy. Nearly half of VBA 
adjudicators responding to survey questions from VA's Office of 
Inspector General admitted that many claims are decided without 
adequate record development. (The Board of Veterans' Appeals (Board) 
and the Court of Appeals for Veterans Claims' (Court's) remand rate 
clearly demonstrate this.) The Inspector General saw an incongruity 
between their objectives of making legally correct and factually 
substantiated decisions, with management objectives of maximizing 
output to meet production standards and reduce backlogs. Nearly half of 
those surveyed reported that it is generally, or very difficult, to 
meet production standards without compromising quality. Fifty-seven 
percent reported difficulty meeting production standards while 
attempting to ensure they have sufficient evidence for rating each case 
and thoroughly reviewing the evidence. Most attributed VA's inability 
to make timely and high-quality decisions to insufficient staff. In 
addition, they indicated that adjudicator training had not been a high 
priority in VBA.
    Therefore, we believe it prudent to recommend staffing levels based 
on an output of 83 cases per year for each direct program FTE. With an 
estimated 920,000 incoming claims in FY 2009, that effort would require 
11,084 direct program FTEs in fiscal year 2009. With support FTE added, 
this would require C&P to be authorized 12,184 total FTE for FY 2009.
    Adjudicating veterans' claims is a labor-intensive system of 
personal decisionmaking, with lifelong consequences for disabled 
veterans. During Congressional hearings, VA is routinely forced to 
defend VBA budgets that it knows to be inadequate to the task. The 
priorities and goals of Congress, the Administration, and the VA must 
be on par with the necessity for a long-term strategy to fulfill VBA's 
mission and confirm the Nation's moral obligation to disabled veterans.
Overdevelopment of Claims
    Numerous developmental procedures in the VA claims' process 
collectively add to the enormous backlog of cases. While many of these 
procedures are mandatory, they are often over-utilized. This 
unnecessarily delays claims for months--when this occurs in, or leads 
to, the appeals process, claims are delayed for many years. There is no 
single answer to solving the claims backlog. Therefore, in addition to 
staffing increases, Congress and VA must attack the problem using 
alternative methods, particularly when those alternative methods are 
parallel with the intent of the law, work to save departmental 
resources, and protect the rights of disabled veterans.
    For example, rather than making timely decisions on C&P claims when 
evidence development may be complete, the VA routinely continues to 
develop claims. These actions lend validity to many veterans' 
accusations that whenever VA would rather not grant a claimed benefit, 
VA intentionally overdevelops cases to obtain evidence against the 
claim. Despite these accusations, a lack of adequate training is just 
as likely the cause of such overdevelopment.
    Such actions result in numerous appeals, followed by needless 
remands from the Board and/or the Court. In many of these cases, the 
evidence of record supports a favorable decision on the appellant's 
behalf yet the appeal is remanded nonetheless. These unjustified 
remands usually do nothing but perpetuate the hamster-wheel reputation 
of veterans' law. Numerous cases exemplify this scenario; a list can be 
provided upon request. One such example is summarized in the IB 
submission. For the sake of brevity, we will not repeat the summary 
here, but urge the Committee to review the example titled Improvements 
in the Claims Process, which can be found in the Compensation and 
Pension section of the General Operating Expenses chapter.
    This example deals with VA requesting unnecessary medical opinions 
in cases where the claimant has already submitted one or more medical 
opinions that are adequate for rating purposes. VA claimants desiring 
to secure their own medical evidence, including a fully informed 
medical opinion, are entitled by law to do so. If a claimant does 
secure an adequate medical opinion, there is no need in practicality or 
in law for VA to seek its own opinion. Congress enacted title 38, 
United States Code, section 5125 for the express purpose of eliminating 
the former 38 Code of Federal Regulations, section 3.157(b)(2) 
requirement that a private physician's medical examination report be 
verified by an official VA examination report prior to an award of VA 
benefits. Section 5125 states:

          For purposes of establishing any claim for benefits under 
        chapter 11 or 15 of this title, a report of a medical 
        examination administered by a private physician that is 
        provided by a claimant in support of a claim for benefits under 
        that chapter may be accepted without a requirement for 
        confirmation by an examination by a physician employed by the 
        Veterans Health Administration if the report is sufficiently 
        complete to be adequate for the purpose of adjudicating such 
        claim. [Emphasis added]

    Therefore, Congress codified section 5125 to eliminate unnecessary 
delays in the adjudication of claims and to avoid costs associated with 
unnecessary medical examinations. Notwithstanding the elimination of 
title 38, Code of Federal Regulations, section 3.157, and the enactment 
of title 38 United States Code section 5125, VA consistently refuses to 
render decisions in cases wherein the claimant secures a private 
medical examination and medical opinion until a VA medical examination 
and medical opinion are obtained. Such actions are an abuse of 
discretion, which delay decisions and prompt needless appeals. When 
claimants submit private medical evidence that is adequate for rating 
purposes, Congress should mandate that VA must decide the case based on 
such evidence rather than delaying the claim by arbitrarily and 
unnecessarily requesting additional medical examinations and opinions 
from the agency. Such enactment will preserve VA's manpower and 
budgetary resources; help reduce the claims backlog and prevent 
needless appeals; and most importantly, better serve disabled veterans 
and their families.
Standard for Determining Combat Veteran Status
    Title 38, United States Code, section 1154(b) requires VA to accept 
lay or other evidence as sufficient proof of service connection of a 
disease or injury if a veteran alleges that disease or injury occurred 
in or was aggravated during combat. While VA recognizes the receipt of 
certain medals as proof of combat, only a fraction of those who 
participate in combat receive a qualifying medal. Further, military 
personnel records usually do not document actual combat experiences. As 
a result, veterans who suffer a disease or injury resulting from combat 
are forced to provide evidence that may not exist or wait a year or 
more while the VA conducts research to determine whether a veteran's 
unit engaged in combat.
    Congress should amend title 38, United States Code, section 1154(b) 
to clarify military service as treatable service in which a member is 
considered to have engaged in combat for purposes of determining 
combat-veteran status. Such clarification would properly allow for 
utilization of nonofficial evidence as proof of in-service occurrence 
for service connection of combat-related diseases or injuries.
    This type of legislation would remove a barrier to the fair 
adjudication of claims for disabilities incurred or aggravated by 
military service in combat zone. Under existing law, veterans who can 
establish that they ``engaged in combat'' are not required to produce 
official military records to support their claim for disabilities 
related to such service. This legislation would not alter the law's 
current requirement that a veteran confirm a disability through 
official diagnosis. Further, it would not alter the requirement that a 
veteran show a nexus between a claimed disability and military service. 
The only alteration from current law would be a relaxed standard of 
proof, consistent with Congress' original intent, required to establish 
a veteran as one who engaged in combat. This relaxed standard of proof 
would then only apply to those who serve in a combat zone.
    Many veterans disabled by their service in Iraq and Afghanistan, 
and those who served in earlier conflicts are unable to benefit from 
liberalizing evidentiary requirements found in the current version of 
section 1154(b). This results because of difficulty, even 
impossibility, in proving personal participation in combat by official 
military documents.
    Impositions put forth by VA General Counsel opinion 12-99 require 
veterans to establish by official military records or decorations that 
they ``personally participated in events constituting an actual fight 
or encounter with a military foe or hostile unit or instrumentality.'' 
Oversight visits by Congressional staff to VA regional offices found 
claims denied under this policy because those who served in combat 
zones were not able to produce official military documentation of their 
personal participation in combat via engagement with the enemy. The 
only possible resolution to this problem without amending section 
1154(b) is for the military to record the names and personal actions of 
every single soldier, sailor, airman, and Marine involved in every 
single event--large or small--that constitutes combat and/or engagement 
with the enemy on every single battlefield. Such recordkeeping is 
impossible.
    Numerous veterans have been and continue to be harmed by this 
defect in the law. In numerous cases, extensive delays in claims 
processing occur while VA adjudicators attempt to obtain official 
military documents showing participation in combat: documents that may 
never be located.
    The Senate noted in 1941, in the report on the original bill that 
the absence of an official record of care or treatment in many of such 
cases is explained by the conditions surrounding the service of combat 
veterans. Congress emphasized that the establishment of records for 
non-combat veterans was a simple matter compared to the combat 
veteran--either the veteran carried on despite his disability to avoid 
having a record made lest he or she be separated from his or her 
organization or, as in many cases, the records themselves were lost. 
Likewise, many records are simply never generated.
    Congress should clarify its intent by amending title 38, United 
States Code, section 1154(b), with respect to defining a veteran who 
engaged in combat for all purposes under title 38, as a veteran who 
during active service served in a combat zone for purposes of section 
112 of the Internal Revenue Code 1986 or a predecessor provision of 
law.
Information Technology
    Mr. Chairman, in addition to boosting its staffing, we believe VBA 
must continue to upgrade its information technology infrastructure and 
revise its training tools to stay abreast of modern business practices, 
to maintain efficiency, and to meet increasing workload demands. With 
the continually changing environment in claims processing and benefits 
administration, anything less is a recipe for failure.
    In recent years, however, Congress has actually reduced 
significantly the funding for such VBA initiatives. In fiscal year 
2001, Congress provided $82 million for VBA initiatives. In FY 2002, it 
provided $77 million; in 2003, $71 million; in 2004, $54 million; in 
2005, $29 million; and, in 2006, $23 million, despite VBA's undeniable 
challenges.
    With restored investments in its initiatives, VBA could complement 
staffing increases for higher workloads with a support infrastructure 
designed to increase operational effectiveness. VBA could resume an 
adequate pace in its development and deployment of information 
technology solutions, as well as upgrade and enhance training systems, 
to improve operations and service delivery.
Court of Appeals for Veterans Claims
    The Congressional mandate that VA claimants receive the benefit of 
the doubt in appropriate cases is the cornerstone of veterans' benefits 
derived from military service. Yet, the Court has ignored the intent of 
Congress by creating a judicial roadblock that completely isolates 
claimants from their statutory right to the benefit of the doubt.
    Title 38, United States Code, section 5107(b) grants claimants the 
benefit of the doubt as a matter of law with respect to any benefit 
under laws administered by the Secretary of Veterans Affairs 
(Secretary) when there is an approximate balance of positive and 
negative evidence regarding any issue material to the determination of 
a matter. Yet, the Court has been affirming any BVA denial when the 
record contains only minimal evidence necessary to show a ``plausible 
basis'' for such finding. This renders a claimant's statutory right to 
the benefit of the doubt futile because claims can be denied and the 
denial upheld when supported by far less than a preponderance of the 
evidence.
    Congress tried to correct this situation by amending the law with 
the enactment of the Veterans Benefits Improvement Act of 2002 \2\ to 
require the Court to consider whether Board findings were consistent 
with the benefit-of-the-doubt rule. The intended effect of section 401 
of the Veterans Benefits Act of 2002 has not been upheld by the 
court.\3\
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    \2\ Pub. L. No. 107-330, 401, 116 Stat. 2820, 2832.
    \3\ Section 401 of the Veterans Benefits Act, effective December 6, 
2002, amended title 38, United States Code, sections 7261(a)(4) and 
(b)(1).
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    Prior to the enactment of Veterans Benefits Act, the Court's case 
law provided (1) that the court was authorized to reverse a finding of 
fact when the only permissible view of the evidence of record was 
contrary to that found by the Board, and (2) that a finding of fact 
must be affirmed where there was a plausible basis in the record for 
the Board's determination. However, Congress added new language to 
section 7261(b)(1) that mandates the Court to review the record before 
the Secretary pursuant to section 7252(b) of title 38 and ``take due 
account of the Secretary's application of section 5107(b) of this 
title. . . .'' \4\ The Secretary's obligation under section 5107(b), as 
referred to in section 7261(b)(1), is as follows:
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    \4\ See 38 U.S.C. Sec. 7261(b)(1).

          (b) BENEFIT OF THE DOUBT--The Secretary shall consider all 
        information and lay and medical evidence of record in a case 
        before the Secretary with respect to benefits under laws 
        administered by the Secretary. When there is an approximate 
        balance of positive and negative evidence regarding any issue 
        material to the determination of a matter, the Secretary shall 
---------------------------------------------------------------------------
        give the benefit of the doubt to the claimant.

    Prior to enactment of Veterans Benefits Act section 401, the Court 
characterized the benefit-of-the-doubt rule as mandating that ``when . 
. . the evidence is in relative equipoise, the law dictates that [the] 
veteran prevails'' and that, conversely, a VA claimant loses only when 
``a fair preponderance of the evidence is against the claim.'' \5\ 
Nonetheless, such characterizations have historically proven to be 
nothing more than meaningless rhetoric.
---------------------------------------------------------------------------
    \5\ Gilbert v. Derwenski, 1 Vet.App. 49, 54-55 (1990).
---------------------------------------------------------------------------
    Reading amended sections 7261(a)(4) and 7261(b)(1) together, which 
must be done in order to determine the effect of the Veterans Benefits 
Act section 401 amendments, reveals the Court is now directed, as part 
of its scope-of-review responsibility under section 7261(a)(4), to 
undertake three actions in deciding whether adverse Board findings are 
clearly erroneous and, if so, what the court should hold as to that 
finding. The plain meaning of the amended subsections (a)(4) and (b)(1) 
require the Court (1) to review all evidence before the Board; (2) to 
consider the application of the benefit-of-the-doubt rule in view of 
that evidence; and (3) if after carrying out actions (1) and (2), the 
Court concludes that an adverse Board finding is clearly erroneous and 
therefore unlawful, to set it aside or reverse it.
    Therefore, as the foregoing discussion illustrates, Congress 
intended the Veterans Benefits Act section 401 amendments to 
fundamentally alter the Court's review of Board decisions. This is 
evident by the plain meaning of the amended language and the 
amendment's unequivocal legislative history. Congress intended the 
Court to take a more proactive and less deferential role in its 
judicial review. For example, Congress specifically intended the Court 
``to examine the record of proceedings--that is, the record on appeal--
before the Secretary and BVA. Section 401 also provides special 
emphasis during the judicial process to the `benefit of the doubt' 
provisions of section 5107(b) as the Court makes findings of fact in 
reviewing BVA decisions. The combination of these changes is intended 
to provide for more searching appellate review of BVA decisions, and 
thus give full force to the benefit-of-the-doubt provision.'' \6,7\ 
This language is consistent with the existing section 7261(c), which 
precludes the Court from conducting trial de novo when reviewing VA 
decisions--receiving evidence not part of the record before the Board.
---------------------------------------------------------------------------
    \6\ 148 CONG. REC. S11334 (remarks of Sen. Rockefeller).
    \7\ 148 CONG. REC. S11337, H9003 (daily ed. Nov. 18, 2002) 
(explanatory statement printed in Congressional Record as part of 
debate in each body immediately prior to final passage of compromise 
agreement).
---------------------------------------------------------------------------
    Perhaps the most dramatic of the three Court actions directed by 
section 401 was the mandate that the Court ``take due account of the 
Secretary's application of section 5107(b),'' i.e., the ``benefit-of-
the-doubt rule.'' It is against this more relaxed standard of review 
that, through the Veterans Benefits Act section 401, Congress has now 
required the Court to review the entire record on appeal and to examine 
the Secretary's determination as to whether the evidence presented was 
in equipoise on a particular conclusion. The foregoing notwithstanding, 
the Court's equipoise review is no better after the Veterans Benefits 
Act section 401 than it was before section 401 was enacted. The Court 
has ignored Congress' intent.
    In light of this background, the section 401 mandate supersedes the 
previous Court practice of upholding a factual finding unless the only 
permissible view of the evidence is contrary to that found by the 
Board. Likewise, section 401 overrules the requirement that a Board 
finding of fact must be affirmed where there is a ``plausible basis'' 
in the record for the determination. Yet, the nearly impenetrable 
``plausible basis'' standard continues to prevail to this very date as 
if Congress never amended section 7261. The former Ranking Minority 
Member of this Committee, spoke in strong support of this amendment and 
explained that ``the bill . . . clarifies the authority of the [Court] 
to reverse decisions of the [BVA] in appropriate cases and requires the 
decisions be based upon the record as a whole, taking into account the 
pro-veteran rule known as the benefit of the doubt.'' \8\
---------------------------------------------------------------------------
    \8\ 148 CONG. REC. H9003.
---------------------------------------------------------------------------
    Ultimately, the Board sits in near splendid isolation to 
arbitrarily weigh evidence and unfairly determine its probative value. 
Such determinations are the lynchpin in claims for benefits by disabled 
veterans. Regardless of the quantity and quality of evidence in favor 
of a claimant's case, a Board's conclusion that an infinitesimal amount 
of unfavorable evidence, however much lacking in quality, outweighs and 
is more probative than an immeasurable amount of high-quality evidence 
is practically untouchable by the Court. Worse yet, it is the Court's 
own doing. Essentially, when the Board renders this type of decision 
that turns on the weighing of such evidence, the Court is precluded 
from even considering the benefit-of-the-doubt rule. Evidence must 
first be in equipoise, or balance, for the benefit of the doubt to 
apply. As soon as the Board finds the slightest plausible basis that a 
claimant's evidence preponderates against the claim, the favorable and 
unfavorable evidence is no longer in balance. Unless the Court finds 
such a ruling to be clearly erroneous, meaning there is no plausible 
basis regardless of how trivial such basis may be, the Court cannot 
overturn the ruling. Consequently, if the Court cannot overturn the 
ruling, it can never reach a review of the Board's application of the 
benefit of the doubt. The Court has therefore created a barrier between 
itself and a VA claimant's statutory right to the benefit of the 
doubt--a barrier moveable only by Congress.
    Congress should not allow any Federal court to ignore its 
legislative power, particularly one charged with the protection of 
rights afforded to our Nation's disabled veterans and their families. 
To ensure the Court enforces the benefit-of-the-doubt rule, Congress 
should replace the clearly erroneous standard with a requirement that 
the Court will reverse a factual finding adverse to a claimant when it 
determines such finding is not reasonably supported by a preponderance 
of the evidence.
Solving the Court's Backlog
    The Board and the Court add substantially to the claims backlog by 
needlessly and frequently remanding numerous cases on appeal. In many 
of these appeals, the evidence of record fully supports a favorable 
decision on the appellant's behalf, yet the appeal is remanded 
nonetheless. These unjustified remands deprive the appellant, usually 
for many additional years, to benefits awardable based on facts already 
of record.
    The greatest challenge facing the Court is identical to the VA--the 
backlog of cases. The Court has shown a reluctance to reverse errors 
committed by the Board. Rather than addressing an allegation of error 
raised by an appellant, the Court has a propensity to vacate and remand 
cases to the Board based on an allegation of error made by the VA's 
counsel for the first time on appeal, such as an inadequate statement 
of reasons or bases in a Board decision. Another example occurs when 
the VA argues, again for the first time on appeal, for remand by the 
Court because VA failed in its duty to assist the claimant in 
developing the claim notwithstanding an express finding by the Board 
that all development is complete and where the appellant accepts, and 
does not challenge such finding by the Board. Such actions are 
particularly noteworthy because the VA has no legal authority to appeal 
a Board decision to the Court.\9\
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    \9\ 38 U.S.C.A., Sec. 7252(a) (West 2002) (``The Court of Appeals 
for Veterans Claim shall have exclusive jurisdiction to review 
decisions of the Board of Veterans' Appeals. The Secretary may not seek 
review of any such decision.'')
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    Consequently, the Court will generally decline to review alleged 
errors raised by an appellant that actually serve as the basis of the 
appeal. Instead, the Court remands the remaining alleged errors on the 
basis that an appellant is free to present those errors to the Board 
even though an appellant may have already done so, leading to the 
possibility of the Board repeating the same mistakes on remand that it 
had previously. Such remands leave errors properly raised to the Court 
unresolved; reopen the appeal to unnecessary development and further 
delay; overburden an already backlogged system; exemplify far too 
restrictive judicial restraint; and inevitably require an appellant to 
invest many more months and perhaps years of his or her life in order 
to receive a decision that the Court should have rendered on initial 
appeal. As a result, an unnecessarily high number of cases are appealed 
to the Court for the second, third, or fourth time.
    In addition to postponing decisions and prolonging the appeal 
process, the Court's reluctance to reverse Board decisions provides an 
incentive for VA to avoid admitting error and settling appeals before 
they reach the Court. By merely ignoring arguments concerning legal 
errors rather than resolving them at the earliest stage in the process, 
VA contributes to the backlog by allowing a greater number of cases to 
go before the Court. If the Court would reverse decisions more 
frequently, VA would be discouraged from standing firm on decisions 
that are likely to be overturned or settled late in the process.
    To remedy this unacceptable situation, Congress should amend title 
38, United States Code section 7261 to require the Court on a de novo 
basis, to: (1) decide all relevant questions of law; (2) interpret 
constitutional, statutory, and regulatory provisions; and (3) determine 
the meaning or applicability of the terms of an action of the 
Secretary. The Court's jurisdiction should also be amended to require 
it to decide all assignments of error properly presented by an 
appellant.
General
    The benefit programs are effective for their intended purposes only 
to the extent VBA can deliver benefits to entitled veterans and 
dependents in a timely fashion. However, in addition to ensuring that 
VBA has the resources necessary to accomplish its mission in that 
manner, Congress must also make adjustments to the programs from time 
to time to address increases in the cost of living and needed 
improvements. We invite your attention to the IB itself for the details 
of those issues, but the following summarizes a number of 
recommendations to adjust rates and improve the benefit programs 
administered by VBA:

      Cost-of-living adjustments for compensation, specially 
adapted housing grants, and automobile grants, with provisions for 
automatic annual increases in the housing and automobile grants based 
on increases in the cost of living.
      A presumption of service connection for hearing loss and 
tinnitus for combat veterans and veterans who had military duties 
involving high levels of noise exposure who suffer from tinnitus or 
hearing loss of a type typically related to noise exposure or acoustic 
trauma.
      Removal of the provision that makes persons who first 
entered service before June 30, 1985, ineligible for the Montgomery GI 
Bill, along with other improvements to the program.
      No increase in, and eventual repeal of, funding fees for 
VA home loan guaranty.
      Increase in the maximum coverage and adjustment of the 
premium rates for Service-Disabled Veterans' Life Insurance.
      Increase in the maximum coverage available in policies of 
Veterans' Mortgage Life Insurance.
      Legislation to restore protections for veterans' benefits 
against awards to third parties in divorce actions.
      Legislation to increase Dependency and Indemnity 
Compensation for certain survivors of veterans, and to no longer offset 
DIC with Survivor Benefit Plan payments.

    We hope the Committee will review these recommendations and give 
them consideration for inclusion in your legislative plans and will 
support their funding in the Congressional Budget Resolution for FY 
2009, as well as subsequent appropriations.
    Mr. Chairman, thank you for inviting DAV and other member 
organizations of The Independent Budget to testify before you today.

                                 

           Prepared Statement of Dennis M. Cullinan, Director
 National Legislative Service, Veterans of Foreign Wars of the United 
                                 States

    MR. CHAIRMAN AND MEMBERS OF THIS COMMITTEE:
    On behalf of the 2.4 million men and women of the Veterans of 
Foreign Wars of the United States (VFW) and our Auxiliaries, I would 
like to thank you for the opportunity to testify today. The VFW works 
alongside the other members of The Independent Budget (IB)--AMVETS, 
Disabled American Veterans and Paralyzed Veterans of America--to 
produce a set of policy and budget recommendations that reflect what we 
believe would meet the needs of America's veterans. The VFW is 
responsible for the construction portion of the IB, so I will limit my 
remarks to that portion of the budget.
    The Administration's fiscal year 2009 budget request for major and 
minor construction is woefully inadequate, especially in light of the 
Administration's own supporting documents. Despite hundreds of pages of 
budgetary documents that show a need for millions of dollars in 
construction projects, the Administration saw fit to halve the major 
and minor construction accounts from the FY 2008 levels, failing to 
meet the future needs of our veterans. We look to you in Congress to 
correct this, and to advance VA's construction priorities so that 
future generations of veterans--those currently serving in the deserts 
of Iraq and the mountains of Afghanistan--can have a first-rate VA 
healthcare system that lives up to their needs.

                           MAJOR CONSTRUCTION

    The President's request for major construction is a paltry $581.6 
million for FY 2009. This is a dramatic cut from last year's funding 
level of $1.1 billion. While we appreciate that this level covers eight 
medical facility projects, including three new previously unfunded 
projects, the total level of funding does not come close to meeting the 
IB's recommendation of $1.275 billion in construction projects. Four 
hundred seventy-six point six million dollars of the Administration's 
request covers Veterans Health Administration projects, significantly 
lower than the $1.1 billion that the IB has called for.
    In determining our recommendations, we follow VA's prioritization 
process as VA discusses in its annual 5-Year Capital Plan, which is 
included in Volume III of the Department's budget submission.
    VA determines its budget year priorities in two phases. First, 
partially funded projects from previous years are ordered by fiscal 
year and priority order. Second, newly evaluated projects from the 
current budget year are listed in priority order. These are combined, 
with the first category receiving priority over the second.
    For the current year's process, VA had seven partially unfunded 
projects at the top of the list and chose to provide funding for five 
of those projects. They also began to provide funding for the top three 
new projects as ranked in the current fiscal year: Bay Pines, FL; 
Tampa, FL; and Palo Alto, CA. We certainly appreciate the progress on 
new construction projects as last year's funding request did not call 
for any new projects. We also appreciate the focus on construction and 
improvements to VA's polytrauma centers. We believe, however, that more 
can and must be done.
    While the eight major construction projects might sound like a lot, 
the funding levels recommended for them are a tiny blip in the overall 
costs of those projects. If we look at just the partially unfunded 
projects--the backlog, if you will--even the $320 million aimed at them 
barely scratches the surface. Only the Lee County, Florida, outpatient 
clinic is funded to completion. The other four projects still require a 
total future funding level of $1.26 billion. The funding for the three 
new projects totals $76.8 million out of a total construction estimate 
of $771 million. This is important because it means that there will be 
a total construction backlog of over $2 billion when the Administration 
prepares its request for the following fiscal year. It is increasingly 
unlikely that the top priority construction projects--likely to include 
this year's number four priority project in Seattle, Washington, or 
improvements in Dallas, Texas, or Louisville, Kentucky--will be funded 
in future years while VA's meager construction budget is earmarked only 
to prior projects, as was the case with last year's funding request.
    I would refer you to the table on page 7-12 of VA's 5-Year Capital 
Plan for the full list of projects VA considered funding in the current 
year. The increase in funding that we are calling for could be applied 
to those prior year projects we referred to previously, or to the FY 
2009 scored projects. Both categories desperately need funding beyond 
the Administration's request. Even an increase of about $31 million 
would allow VA to begin the first stages of construction on priority 
projects 4-6, which typically requires 10% of the total cost estimate.
    These projects are necessary to ensure that VA properly reinvests 
in its aging physical infrastructure. VA's facilities average over 50 
years old, and VA has historically recapitalized at a rate far below 
hospital industry standards. From 1996-2001, for example, VA 
recapitalized at a rate of just 0.64% per year. This corresponds with 
an assumed building life of 155 years, far beyond any reasonable 
expectations. VA has made progress since then, but more clearly must be 
done, especially if we are to live up to the promise of CARES and 
modernize the system so that veterans now and into the future will have 
first-rate healthcare in clean, safe, modern and comfortable 
facilities.
    We remain concerned about the unfulfilled promise of CARES. Upon 
completion of the CARES decision document, former VA Secretary Anthony 
Principi testified before the Health Subcommittee of the House 
Committee on Veterans' Affairs in July 2004. His testimony noted that 
CARES ``reflects a need for additional investments of approximately $1 
billion per year for the next 5 years to modernize VA's medical 
infrastructure and enhance veterans' access to care.''
    According to VA's November 2007 testimony before that same 
Committee, Congress has appropriated just $2.83 billion for CARES 
projects, far below the need to which the Secretary had testified. 
Further, this includes a sizeable amount for rebuilding facilities 
after the Gulf Coast hurricanes--amounts we have argued that Congress 
should have provided as separate emergency funding, outside of VA's 
regular planning process. With the FY 2008 appropriation, the total is 
up to $3.9 billion--better, but still lagging.
    With just $581 million requested for major construction in FY 2009, 
which is far below VA's demonstrated needs, it is clear that VA is 
falling short. After that 5-year de facto moratorium on construction 
while CARES was ongoing and without additional funding coming forth, VA 
and veterans have an even greater need than they did at the start of 
the CARES process. Accordingly, we urge action to live up to the 
Secretary's words by making a steady investment in VA's capital 
infrastructure to bring the system up to date with the 21st century 
needs of veterans.
                           MINOR CONSTRUCTION
    We also are greatly concerned with the Administration's proposed 
slashing of the minor construction budget. As with the major 
construction account, this cut is contrary to the information the 
Department provides in the total budget document. For FY 2009, the 
recommendation is just $329 million, $301 million below the FY 2008 
level and far below the $621 million called for in The Independent 
Budget.
    Two hundred seventy-three million dollars of the request is 
targeted for VHA facilities and $18 million--about 5 percent of the 
total--is allocated for staff offices to accommodate the consolidation 
of VA's information technology programs.
    VA has a long list of minor construction projects targeted for FY 
2009. There is a list of 145 minor construction projects listed on page 
7-95 of the 5-Year Capital Plan. Although there is no cost specifically 
associated with them, we can estimate the cost using the average cost 
of the scored projects from FY 2008, which can be found on page 7-90. 
For the FY 2008 projects listed, the average price per project is $5.6 
million. If you multiply that cost per project by the 145 proposed FY 
2009 projects, VHA would require a budget of $812 million, nearly $500 
million more than they have actually requested. We understand that VA 
has some carryover funding for minor construction to offset some of 
that balance, but even if all $267 million of that were applied to this 
list of projects, VHA would still require $545 million in funding 
instead of the $273 the Administration has requested.
    The minor construction request seems even more deficient when you 
factor in its role with respect to the maintenance of VA's facilities. 
Every medical center is surveyed at least once every 3 years and given 
a thorough assessment of all component systems. These reviews comprise 
the Facility Condition Assessment (FCA), and the scores are used, in 
part, to produce the condition index of the facility, one of the 
benchmark statistics in VA's Real Property Scorecard. The majority of 
funding for projects and systems found to be deficient through the FCA 
is nonrecurring maintenance (NRM), but VA says that 30% of all minor 
construction is targeted to correct documented FCA deficiencies. In FY 
2007, VA notes that its FCA backlog was well over $5 billion in 
projects. Congress has done a good job to improve some of these 
deficiencies--notably the $550 supplemental that was targeted toward 
FCA problems--but more must be done if VA is going to properly maintain 
its facilities.
                        NONRECURRING MAINTENANCE
    Those FCA reviews show the importance of NRM, and the $5 billion 
backlog shows how woefully deficient past NRM requests and 
appropriations have been. It is sad that it took the unconscionable 
situation at Walter Reed--a non-VA facility--to demonstrate the 
importance of the account. We certainly applaud VA's efforts post-
Walter Reed to assess the maintenance of its infrastructure and 
Congress' immediate response, but it should not have come to that. The 
problems with the lack of NRM funding have been repeatedly pointed out 
in The Independent Budget, and we continue to ask Congress and the 
Administration to do more.
    For FY 2009, we are pleased to see that the President has requested 
$802 million for NRM funding. This is in line with what the IB has 
called for in the past. For justification of our number, we continue to 
cite the Price Waterhouse review of VA's facility management programs 
that cited industry standards to claim that VA should be spending 
between 2 and 4 percent of its plant replacement value on NRM. VA 
accepted this recommendation and adopted it as part of its Asset 
Management Plan. That VA document noted that VA's plant replacement 
value was approximately $40 billion, and accordingly, the NRM budget 
should be between $800 million and $1.6 billion.
    With the near-$5 billion backlog in FCA-observed maintenance needs, 
the proposed $802 million is surely on the low end. That amount would 
allow VA to perform maintenance at current levels, but not to dip into 
the backlog. Accordingly, we would like Congress to increase funding 
for this account, as has been done in the past. We need to eliminate 
the backlog to ensure that veterans have healthcare in clean, safe, and 
efficient locations, and that VA properly cares for its infrastructure 
to ensure that it lasts for years into the future.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions that you or the Members of the Committee may have.

                                 
                Prepared Statement of Raymond C. Kelley
       National Legislative Director, American Veterans (AMVETS)
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee:
    AMVETS is honored to join our fellow veterans service organizations 
and partners at this important hearing on the Department of Veterans 
Affairs budget request for fiscal year 2009. My name is Raymond C. 
Kelley, National Legislative Director of AMVETS, and I am pleased to 
provide you with our best estimates on the resources necessary to carry 
out a responsible budget for VA.
    AMVETS testifies before you as a co-author of The Independent 
Budget. This is the 22nd year AMVETS, the Disabled American Veterans, 
the Paralyzed Veterans of America, and the Veterans of Foreign Wars 
have pooled our resources to produce a unique document, one that has 
stood the test of time.
    In developing The Independent Budget, we believe in certain guiding 
principles. Veterans should not have to wait for benefits to which they 
are entitled. Veterans must be ensured access to high-quality medical 
care. Specialized care must remain the focus of VA. Veterans must be 
guaranteed timely access to the full continuum of healthcare services, 
including long-term care. And, veterans must be assured accessible 
burial in a State or national cemetery in every State.
    The VA healthcare system is the best in the country and responsible 
for great advances in medical science. VHA is uniquely qualified to 
care for veterans' needs because of its highly specialized experience 
in treating service-connected ailments. The delivery care system 
provides a wide array of specialized services to veterans like those 
with spinal cord injuries, blindness, traumatic brain injury, and post 
traumatic stress disorder.
    Looking at the numbers alone, the VA budget would appear to be one 
that would garner only praise and be a model for years to come. 
However, the budget was signed into law 5 months after the start of the 
new fiscal year, marking the 13th time in 14 years the VA had to work 
from continuing resolutions to maintain the system. Also, the budget 
was contingent on $3.7 billion in emergency funding that was signed 
into law less than 1 month ago. This is an unacceptable way of funding 
a department that is as fluid in nature as the VA.
    Mr. Chairman, as you know, we strongly support mandatory funding 
for VA healthcare. However, if the Congress cannot support mandatory 
funding, there are alternatives which could meet our goals of timely, 
sufficient, and predictable funding.
    Congress could change VA's medical care appropriation to an advance 
appropriation which would provide approval 1 year in advance, thereby 
guaranteeing its timeliness. Furthermore, by adding transparency to 
VA's healthcare enrollee projection model, we can focus the debate on 
the most actuarially sound projection of veterans healthcare costs to 
ensure sufficiency.
    Under this proposal, Congress would retain its discretion to 
approve appropriations; retain all of its oversight authority; and most 
importantly, there would be no PAYGO problems.
    We ask this Committee in your views and estimates to recommend to 
the Budget Committee either mandatory funding or this new advance 
appropriations approach to take the politics out of healthcare for all 
of our Nation's wounded, sick and disabled veterans.
    As a partner of The Independent Budget, AMVETS devotes a majority 
of its time with the concerns of the National Cemetery Administration 
(NCA) and I would like to speak directly to the issues and concerns 
surrounding NCA.
The National Cemetery Administration
    The Independent Budget acknowledges the dedicated and committed NCA 
staff who continue to provide the highest quality of service to 
veterans and their families despite funding shortfalls, aging 
equipment, and increasing workload. The devoted staff provides aid and 
comfort to grieving veterans' families in a very difficult time, and we 
thank them for their consolation.
    The NCA currently maintains more than 2.8 million gravesites at 131 
national cemeteries in 39 States and Puerto Rico. VA estimates that 
about 24 million veterans are alive today. They include veterans from 
World War I through the Global War on Terrorism, as well as peacetime 
veterans. With the anticipated opening of the new national cemeteries, 
annual interments are projected to increase from more than 105,000 in 
2008 to 115,000 in 2009.
    The NCA is responsible for five primary missions: (1) to inter, 
upon request, the remains of eligible veterans and family members and 
to permanently maintain gravesites; (2) to mark graves of eligible 
persons in national, State, or private cemeteries upon appropriate 
application; (3) to administer the State Grant Program in the 
establishment, expansion, or improvement of State veterans cemeteries; 
(4) to award a Presidential certificate and furnish a United States 
flag to deceased veterans; and (5) to maintain national cemeteries as 
national shrines sacred to the honor and memory of those interred or 
memorialized.
NCA Budget Request
    The Administration requests $181 million for the NCA for fiscal 
year 2009. The members of The Independent Budget recommend that 
Congress provide $252 million and 51 additional FTE for continuing 
operations and workload increases of NCA. We recommend your support for 
a budget consistent with NCA's growing demands and in concert with the 
respect due every man and woman who wears the uniform of the United 
States Armed Forces.
    The national cemetery system continues to be seriously challenged. 
Though there has been progress made over the years, the NCA is still 
struggling to remove decades of blemishes and scars from military 
burial grounds across the country. Visitors to many national cemeteries 
are likely to encounter sunken graves, misaligned and dirty grave 
markers, deteriorating roads, spotty turf and other patches of decay 
that have been accumulating for decades. If the NCA is to continue its 
commitment to ensure national cemeteries remain dignified and 
respectful settings that honor deceased veterans and give evidence of 
the Nation's gratitude for their military service, there must be a 
comprehensive effort to greatly improve the condition, function, and 
appearance of all our national cemeteries.
    In accordance with ``An Independent Study on Improvements to 
Veterans Cemeteries,'' which was submitted to Congress in 2002, The 
Independent Budget again recommends Congress to fully fund the National 
Shrine Initiative by providing $50 million in FY 2009 budget and a 
commitment of $250 million over a period of 5 years to restore and 
improve the condition and character of NCA cemeteries.
    It should be noted that the NCA has done an outstanding job thus 
far in improving the appearance of our national cemeteries, but 
critical underfunding does not allow NCA to remove the backlog of 
improvements that need to be met. To date, NCA has invested $99 million 
to the initiative, making nearly 300 improvements. Additionally, $28.2 
million will be invested in restoration in 2008. This money is the full 
amount of supplemental funding that was given to NCA in FY 2008, a fact 
that should be a wake-up call of the importance of the National Shrine 
Initiative. Even with the funding that has been spent on these 
improvements, new areas requiring restoration are identified. By 
enacting a 5-year program with dedicated funds and an ambitious 
schedule, the national cemetery system can provide veterans and their 
families with the utmost dignity, respect, and compassion.
The State Cemetery Grants Program
    The State Cemetery Grants Program (SCGP) complements the NCA 
mission to establish gravesites for veterans in those areas where the 
NCA cannot fully respond to the burial needs of veterans. Several 
incentives are in place to assist States in this effort. For example, 
the NCA can provide up to 100 percent of the development cost for an 
approved cemetery project, including design, construction, and 
administration. In addition, new equipment, such as mowers and 
backhoes, can be provided for new cemeteries. Since 1978, the 
Department of Veterans Affairs has more than doubled acreage available 
and accommodated more than a 100-percent increase in burials through 
this program.
    To help provide reasonable access to burial options for veterans 
and their eligible family members, The Independent Budget recommends 
$42 million for the SCGP for fiscal year 2009. The availability of this 
funding will help States establish, expand, and improve State-owned 
veterans' cemeteries.
    States have intentions of beginning construction of 24 new State 
cemeteries in 2008. Many States have difficulties meeting the 
requirements needed to build a national cemetery in their respective 
State. The large land areas and spread out population in these areas 
make it difficult to meet the ``170,000 veterans within 75 miles'' 
national veterans cemetery requirement. Recognizing these challenges, 
VA has implemented several incentives to assist States in establishing 
a veterans cemetery. For example, the NCA can provide up to 100 percent 
of the development cost for an approved cemetery project, including 
design, construction, and administration.
Burial Benefits
    There has been serious erosion in the value of the burial allowance 
benefits over the years. While these benefits were never intended to 
cover the full costs of burial, they now pay for only a small fraction 
of what they covered in 1973, when the Federal Government first started 
paying burial benefits for our veterans.
    In 2001 the plot allowance was increased for the first time in more 
than 28 years, from $150 to $300, which covers approximately 6 percent 
of funeral costs. The Independent Budget recommends increasing the plot 
allowance from $300 to $745, an amount proportionally equal to the 
benefit paid in 1973.
    In the 108th Congress, the burial allowance for service-connected 
deaths was increased from $500 to $2,000. Prior to this adjustment, the 
allowance had been untouched since 1988. The Independent Budget 
recommends increasing the service-connected burial benefit from $2,000 
to $4,100, bringing it back up to its original proportionate level of 
burial costs.
    The nonservice-connected burial allowance was last adjusted in 
1978, and also covers just 6 percent of funeral costs. The Independent 
Budget recommends increasing the nonservice-connected burial benefit 
from $300 to $1,270.
    The NCA honors veterans with a final resting place that 
commemorates their service to this Nation. More than 2.8 million 
soldiers who died in every war and conflict are honored by burial in a 
VA national cemetery. Each Memorial Day and Veterans Day we honor the 
last full measure of devotion they gave for this country. Our national 
cemeteries are more than the final resting place of honor for our 
veterans; they are hallowed ground to those who died in our defense, 
and a memorial to those who survived.
    Mr. Chairman, this concludes my testimony. I thank you again for 
the privilege to present our views, and I would be pleased to answer 
any questions you might have.

                                 
                 Prepared Statement of Steve Robertson
       Director, National Legislative Commission, American Legion
    Mr. Chairman and Members of the Committee:
    The American Legion would like to begin this hearing by expressing 
our gratitude to you and your colleagues for your work on the FY 2008 
budget for the Department of Veterans Affairs (VA). From the very 
beginning of the 110th Congress, there was a great deal of fiscal work 
to be accomplished. In essence, you and your colleagues had to put 
together two VA appropriations budgets during the first session.
    The American Legion supported the Budget Resolution for the first 
time in many, many years. The American Legion supported the original 
version of the Military Construction, Veterans' Affairs, and Related 
Appropriations for FY 2008, passed overwhelmingly with bipartisan 
support in both chambers; however, we were also very pleased when 
President Bush requested the additional $3.7 billion provided in Public 
Law 110-161. Needless to say, last year was an unusual appropriations 
cycle.
    The veterans' community continues to request an annual VA 
appropriation that is timely, predictable, and sufficient to meet the 
growing demands on VA. Every VA program is specifically designed to 
address the various needs of America's veterans and their families. 
Some programs date back to past proprieties of an earlier era of 
veterans such as the greatest piece of social legislation ever enacted, 
the Servicemen's Readjustment Act of 1944 (the GI Bill of Rights). 
Newer areas of concern include improved diagnosis and treatment of 
traumatic brain injury. Some programs are individual entitlements that 
are funded through mandatory appropriations, while the balance are 
subject to the annual discretionary appropriations battle in Congress. 
But all represent the thanks of a grateful Nation.
    The American Legion does not support the 2009 policy proposals 
contained in the FY 2009 budget submission that seek to impose an 
annual enrollment fee and practically double the current co-payment for 
pharmaceuticals. The American Legion has opposed these proposals in the 
past and we once again call on the Members of this Committee to join us 
in defeating any proposal that seeks to balance the VA budget on the 
backs of America's veterans.
    Mr. Chairman, The American Legion welcomes the opportunity to 
present recommendations on the FY 2009 VA appropriations and other 
appropriations that fall under the jurisdiction of this Committee. The 
American Legion appreciates the efforts of the Secretary of Veterans 
Affairs and his capable leadership staff to produce a budget request 
that reflects the fiscal needs of VA to provide timely access to the 
earned benefits provided to those who served in the Armed Forces of the 
United States. In a Nation of over 300 million citizens and a host of 
visitors, only 24 million veterans have accepted the challenge of 
military service. Some veterans were placed in harm's way, but all 
accepted the oath of enlistment. All were prepared to give ``the last 
full measure of devotion.''
    Last September, The American Legion National Commander Marty 
Conatser testified before you and your colleagues to outline budget 
recommendations for FY 2009 and address some legislative concerns as 
well. To briefly recap, here is a table that reflects the final VA 
appropriations for FY 2008, The American Legion's budget request for FY 
2009, and the President's budget request for FY 2009:


----------------------------------------------------------------------------------------------------------------
                                                         Final FY 2008      Legion's FY 09        President's
            Discretionary Funding Programs                P.L. 110-161          Request          Request FY 09
----------------------------------------------------------------------------------------------------------------
Total Medical Care                                     $36.7 billion        $38.4 billion       $38.7 billion
-------------------------------------------------------------------------                    -------------------
  Medical Services                                     $29.1 billion                              $34 billion
-------------------------------------------------------------------------
  Medical Administration                                $3.2 billion
-------------------------------------------------------------------------                    -------------------
  Medical Facilities                                    $4.1 billion                             $4.6 billion
----------------------------------------------------------------------------------------------------------------
Medical/Prosthetics Research                            $480 million         $476 million        $442 million
----------------------------------------------------------------------------------------------------------------
Major Construction                                      $1.1 billion         $560 million        $582 million
----------------------------------------------------------------------------------------------------------------
Minor Construction                                      $579 million         $485 million        $329 million
----------------------------------------------------------------------------------------------------------------
CARES                                                                          $1 billion
----------------------------------------------------------------------------------------------------------------
State Extended Care
Facilities Grants Program                               $165 million         $275 million         $85 million
----------------------------------------------------------------------------------------------------------------
State Veterans' Cemetery
Construction Grants Program                              $39 million          $45 million         $32 million
----------------------------------------------------------------------------------------------------------------
National Cemetery
Administration                                          $195 million         $228 million        $181 million
----------------------------------------------------------------------------------------------------------------
General Operating Expenses                              $1.6 billion         $2.8 billion        $1.7 billion
----------------------------------------------------------------------------------------------------------------
Information Technology                                    $2 billion         $2.3 billion        $2.4 billion
----------------------------------------------------------------------------------------------------------------

                  VETERANS AFFAIRS AND REHABILITATION
    The American Legion breaks down its Veterans Affairs and 
Rehabilitation testimony into three sections that mirror the major 
organizational segments of the Department of Veterans Affairs (VA). In 
these separate sections The American Legion will discuss our 
legislative budget priorities regarding the Veterans Health 
Administration (VHA), the Veterans Benefits Administration (VBA) and 
the National Cemetery Administration (NCA).
Veterans Health Administration
    The distinction of the VA as the Nation's leader in providing safe, 
high-quality healthcare in the healthcare industry (both public and 
private), has been recognized by several reputable sources:

      The medical journal Neurology commented, ``The VA has 
achieved remarkable improvements in patient care and health outcomes, 
and is a cost-effective and efficient organization'' (2007).
      Harvard University's Kennedy School of Government 
presented VA with the highly coveted ``Innovations in American 
Government'' for its advanced electronic health records and performance 
measurement system (2006).
      The Journal of the American Medical Association (JAMA) 
noted VA's healthcare system has ``. . . quickly emerged as a bright 
star in the constellation of safety practice, with systemwide 
implementation of safe practices, training programs and the 
establishment of four patient-safety research centers'' (2005).
      The recent book by Phillip Longman entitled Best Care 
Anywhere: Why VA Health Care is Better Than Yours (2007).

Veterans' Healthcare Benefit Enrollment Discrimination
    All veterans eligible to receive benefits from VA should have 
access to the VA healthcare system. The American Legion opposes any 
enrollment policy that disallows any eligible veteran, who was prepared 
to give his or her life for this country, access to what is often 
described as the best healthcare in the Nation. Honorable military 
service, whether for a single enlistment period or for a 30-year 
career, is not merely another period of employment in an individual's 
personal history. It is a defining portion of one's life.
    Maintaining the quality of care that VA is currently known for 
should be a national priority. But that quality of care is being denied 
to an ever-increasing number of America's veterans. FY 2009 budget 
request continues the suspension of enrollment of new Priority Group 8 
veterans due to the increased demands for services. According to VA, 
the number of Priority Group 8 veterans denied enrollment in the VA 
healthcare system at the end of FY 2007 was 386,767. The American 
Legion believes this number is significantly higher because it does not 
include those veterans who have not attempted to use the VA because 
they are aware of the suspension. Given the recruiting and retention 
problems the armed forces face, it is clear that denying earned 
benefits to eligible veterans does not solve the problems created by an 
inadequate Federal budget.
    As the Global War on Terrorism wages on, fiscal resources for VA 
will continue to be stretched and this Nation's veterans will continue 
to beg elected officials for moneys to sustain a viable VA. A viable VA 
is one that cares for all veterans, not just the most severely wounded. 
More importantly, VA is often the first experience veterans have with 
the Federal Government after leaving military service. This Nation's 
veterans have never let this country down; it is time for Congress to 
do its best not to let them down.
    All veterans, who are eligible to receive benefits from VA, should 
have timely access to the VA healthcare system. Honorable military 
service is evidence of an individual's commitment to this Nation. In 
return for honorable military service, the thanks of a grateful Nation 
should not simply be a conditional benefit that can easily be 
restricted or denied by political or bureaucratic whim, but should be 
regarded as an earned right in recognition for faithful service to this 
country.
    Quality, timely and accessible VA healthcare is the ongoing cost of 
war. It is unconscionable to send the young men and women in the armed 
forces to every corner of the globe and then limit the funding to take 
care of their injuries suffered in service to this country. VA was 
created to take care of the unique needs of a very specific population, 
those veterans that wore the uniforms of the armed forces. Once those 
uniforms are off, these veterans should be able to depend upon the VA 
healthcare system for their healthcare needs--regardless of the type or 
severity of their injuries. Many veterans will need healthcare for the 
rest of their lives. The American Legion expects the VA healthcare 
system to ensure and provide the very best healthcare for this Nation's 
heroes. The American Legion strongly supports the reinstatement of 
enrollment for Priority Group 8 veterans.
Mandatory Funding of VA Medical Care
    The American Legion believes the time for mandatory funding for 
veterans' healthcare is now. Congress should act to ensure that we, as 
a Nation, will always provide the funding necessary to ensure veterans, 
who seek timely access to quality healthcare through the VA healthcare 
delivery system, are provided the healthcare they earned.
    A new generation of young Americans is now deployed around the 
world, answering the Nation's call to arms. Like so many brave men and 
women who honorably served before them, these new veterans are fighting 
for freedom, liberty and security of us all. Also like those who served 
before them, today's veterans deserve the respect of a grateful Nation 
when they return home.
    Previous generations of wartime veterans were welcomed at VA 
medical facilities until the 1980s. Unfortunately, without urgent 
changes in healthcare funding, these new veterans will soon discover 
their battles are not yet over. This Nation's newest heroes will be 
fighting for the life of the VA healthcare system. Just as the veterans 
of the 20th century did, they will be forced to fight for the care they 
are eligible to receive.
    The American Legion believes that the Veterans Health 
Administration's (VHA) recurring fiscal difficulties will only be 
solved when its funding becomes a mandatory appropriation item. As a 
mandatory appropriation, law would guarantee VA healthcare funding for 
all eligible enrollees--and it will be a patient-based, rather than a 
budget-driven, annual appropriation.
    The American Legion continues to support legislation that 
establishes a system of capitation-based funding for VHA. This new 
funding system would provide all of VHA's funding, except that of the 
State Extended Care Facilities Construction Grant Program which would 
be separately authorized and funded as a discretionary appropriation.
    Although VHA continues to struggle to maintain its global 
preeminence with a 21st century integrated healthcare delivery system, 
it is handicapped by funding methods that were developed in the 19th 
century for a now antiquated, inpatient delivery system. No modern 
healthcare organization can be expected to survive with such an 
inconsistent and inadequate budget process. The American Legion's 
position on VA healthcare funding is that healthcare rationing for 
veterans must end. It is time to guarantee healthcare funding for all 
veterans seeking VA healthcare.
Third-Party Reimbursements
    The Balanced Budget Act of 1997, P.L. 105-33, established the VA 
Medical Care Collections Fund (MCCF). The law requires that money 
collected or recovered from third-party payers after June 30, 1997, be 
deposited into this fund. The MCCF is a depository for collections from 
third-party insurance, outpatient prescription co-payments and other 
medical charges and user fees. The funds collected may be used to 
provide VA medical care and services and for VA expenses for 
identification, billing, auditing and collection of amounts owed the 
Federal Government.
    The American Legion supported legislation to allow VA to bill, 
collect and reinvest third-party reimbursements and co-payments. 
However, The American Legion has adamantly opposed the scoring of MCCF 
as an offset to annual discretionary appropriations because almost all 
of these funds derive from the treatment of nonservice-connected 
medical conditions. Historically, these collection goals far exceed 
VA's ability to collect accounts receivable.
    Once again, the President's budget request for FY 2009 raises the 
bar on MCCF from $2.3 billion to $2.5 billion. VA's ability to capture 
these funds is critical to its ability to provide quality and timely 
healthcare to veterans. Miscalculations of VA required funding levels 
results in real budgetary shortfalls. Seeking an annual emergency 
supplemental appropriation is not the most cost-effective means of 
funding the Nation's model healthcare delivery system.
    Government Accountability Office (GAO) reports have described the 
continuing problems in VHA's ability to capture insurance data in a 
timely and accurate manner and have raised concerns about VHA's ability 
to maximize its third-party collections. GAO visited three VA medical 
centers and found the following concerns: VA lacked the ability to 
verify insurance; VA could not accept partial payment as full payment; 
VA had inconsistent compliance with collections followup; VA failed to 
ensure documentation by VA physicians was sufficient; VA had 
insufficient automation; and, VA had a shortage of qualified billing 
coders. All of these concerns are key deficiencies contributing to the 
collections shortfalls. VA should implement all available remedies to 
maximize its collections of accounts receivable.
    The American Legion opposes offsetting annual VA discretionary 
funding by the arbitrarily set MCCF goal, especially since VA is 
prohibited from collecting any third-party reimbursements from the 
Nation's largest Federally-mandated health insurer, Medicare.
Medicare Reimbursements
    Veterans contribute to the Medicare Trust Fund, as do most American 
workers, without choice, throughout their working lives. Veterans also 
paid these contributions when they served on active-duty. However, when 
a veteran is treated at a VA medical facility, VA is prohibited from 
collecting Medicare reimbursements for the treatment of allowable, 
nonservice-connected medical conditions. Since over half of VA's 
enrolled patient population is Medicare-eligible, this prohibition 
constitutes a multi-billion dollar annual subsidy to the Medicare Trust 
Fund. No other Federal healthcare provider is prohibited from receiving 
Medicare reimbursements. The American Legion supports allowing Medicare 
reimbursement to VHA to pay for the treatment of allowable, nonservice-
connected medical conditions of enrolled Medicare-eligible veterans.
Medical Construction and Infrastructure Support
Major Construction
    The CARES process identified more than 100 major construction 
projects in 37 States, the District of Columbia, and Puerto Rico. 
Construction projects are categorized as `major' if the estimated cost 
is over $7 million. Now that VA has a plan to deliver healthcare 
through 2022, it is up to Congress to provide adequate funds.
    The CARES plan calls for, among other things, the construction of 
new hospitals in Orlando, FL, and Las Vegas, NV, and replacement 
facilities in Louisville, KY, and Denver, CO, for a cost estimated to 
be well over $1 billion for these four facilities. VA has not had this 
type of progressive construction agenda in decades. Major construction 
money can be significant and proper utilization of funds must be well 
planned. Recently, Congress approved funding for a new Veterans Affairs 
medical center in Denver. It is our hope that funding will be provided 
for Louisville and Las Vegas as well.
    In addition to the cost of the proposed new facilities are the many 
construction issues that have been virtually ``put on hold'' for the 
past several years due to past inadequate funding and the moratorium 
placed on construction spending by the CARES process. One of the most 
glaring shortfalls is the neglect of the buildings sorely in need of 
seismic correction. This is an issue of safety. The delivery of 
healthcare in seismically unsafe buildings cannot be tolerated and 
funds must be allocated to not only construct the new facilities, but 
also to pay for much needed upgrades at existing facilities. Gambling 
with the lives of veterans, their families and VA employees is 
absolutely unacceptable.
    The American Legion believes that VA has effectively shepherded the 
CARES process to its current state by developing the blueprint for the 
future delivery of VA healthcare--it is now time for Congress to 
adequately fund the implementation of this crucial undertaking.
    The American Legion recommends $560 million for major construction 
in FY 2009. Although the President's budget request for FY 2009 calls 
for major construction to be $582 million, The American Legion also 
recommends an additional $1 billion specifically designated for 
approved CARES major construction.
Minor Construction
    VA's minor construction program has also suffered significant 
neglect over the past several years. Maintaining the infrastructure of 
VA's buildings is no small task. Because the buildings are old, 
renovations, relocations and expansions are quite common. When combined 
with the added cost of the CARES program recommendations, it is easy to 
perceive that a major increase over the previous funding level is 
crucial and overdue.
    The American Legion recommends $485 million for minor construction 
in FY 2009.
Veterans Benefits Administration
    The President's annual budget request is a detailed outline of the 
mandatory and discretionary funding needed by the Veterans Benefits 
Administration (VBA). Given VBA's many challenges and responsibilities, 
which include the annual expenditures for compensation, pension, and 
related benefit payments, it is imperative that Congress ensure that 
VBA's programs have the personnel and other resources necessary to 
operate efficiently and can provide quality and timely service. The 
budget debate process and oversight hearings provide opportunities to 
evaluate how well VBA is, in fact, performing its missions and whether 
the needs and expectations of its stakeholders are being met.
    For several years, VBA has endeavored to implement its long-term 
strategic plans to hire and train a new cadre of adjudicators, to 
continue the computer modernization program, and to institute a variety 
of procedural and programmatic changes intended to improve the claims 
adjudication process. However, external factors, such as the enactment 
of legislation providing new benefits and medical care services and 
precedent setting legal decisions by the Federal courts, continue to 
play a major role in changing VBA's plans, policies, and operations. 
VBA's efforts to address these varied and complex issues have profound 
budgetary and operational implications.
    One of the most significant challenges plaguing VBA is the sheer 
size of the backlog of pending disability claims and appeals. These 
claims are usually multi-issue cases arguing complex medical and legal 
issues that must be resolved. The American Legion believes the backlog 
is a symptom of unresolved systemic problems that adversely affect the 
adjudication and appeals process. These unresolved problems further 
contribute to the ever-growing backlog. These problems include: 
frequent decisionmaking errors at all levels of the decisionmaking 
process; failure by VA personnel to comply with the Veterans' Claims 
Assistance Act of 2000 (VCAA); lack of personal accountability by VA 
employees and managers; ineffective quality control and quality 
assurance programs; inadequate personnel training; and, an unreliable 
work measurement system. VBA is faced with a serious dilemma. While 
endeavoring to address these thorny issues, it is also aggressively 
trying to process claims faster. From the results, it does not appear 
VBA has found a way to successfully balance these competing priorities.
    As of January 5, 2008, there were more than 406,000 rating cases 
pending in the VBA system. Of these, 105,693 (26 percent) have been 
pending for more than 180 days. There are more than 163,000 appeals 
pending at VA regional offices, with more than 147,000 requiring some 
type of further adjudicative action. Additionally, there are currently 
more than 30,000 appeals pending at the Board of Veterans' Appeals and 
more than 19,000 remands pending at the Appeals Management Center.
    As previously noted, The American Legion remains deeply concerned 
by the problems arising from the VBA's general lack of compliance with 
its `duty to notify' and its `duty to assist' requirements directed by 
the VCAA. This legislation is one of the most significant, pro-veteran 
improvements in the VA claims adjudication system in the past decade. 
However, VBA continues to give only lip service to this law. While 
claimants receive what VBA terms a VCAA letter, this letter, in fact, 
is generally not very informative about what particular evidence is 
needed by VBA to grant the benefit sought by the veteran. In addition, 
these VCAA letters are usually long and confusing, not very specific to 
the evidence needed from claimants, and written in bureaucratic 
language instead of `plain English.' Rather than helping claimants with 
the development of the claim, these letters frequently generate more 
questions, more telephone calls, and more correspondence to veterans' 
service officers or the VA regional office. Clearly, the VCAA letter 
currently in use by VBA today only serves to delay rather than 
facilitate the claims process.
    The VBA's work measurement system may directly or indirectly affect 
the VBA's failure to reduce the claims backlog. The VBA's work 
measurement system is the means by which both individual employee and 
station performance is tracked and evaluated. This system is also 
relied upon in determining staffing needs at the station, region, and 
service levels in support of VBA's annual budget request. A serious 
problem can arise if the data developed by the work measurement system 
is neither accurate nor reliable in reporting the actual amount of work 
accomplished. This produces a distorted view of the way the VBA 
adjudication process is operating and what the true staffing needs are, 
both locally and systemwide.
    The American Legion believes VBA's current work measurement system 
is seriously flawed. It does not provide VBA and Congress the needed 
information on how long it actually takes to properly process a claim 
and how many staff are required to perform this process in a timely 
manner. The American Legion advises that this work data is also subject 
to frequent manipulation and abuse, thus, its accuracy and reliability 
is open to serious question as are the conclusions and decisions drawn 
from this work data. In the view of The American Legion, the 
development and implementation of a new work measurement system should 
be one of VBA's highest priorities. The American Legion fully 
understands and appreciates the major challenges facing VBA in the 
upcoming year, but as a major stakeholder in VBA's benefit programs we 
are committed to ensuring that VBA provides the best quality and timely 
service to our Nation's veterans and their families.
National Cemetery Administration
    Approximately 24 million veterans are living today. Nearly 690,000 
veteran deaths are estimated to occur in 2009. VA estimates that 
approximately 111,000 will request interment in national cemeteries. 
Considering the growing cost of burial services and the excellent 
quality of service the National Cemetery Administration (NCA) provides, 
The American Legion foresees that this percentage will be much greater. 
Congress must therefore provide sufficient major construction 
appropriations to permit NCA to accomplish its stated goal of ensuring 
that burial in a national or State cemetery is a realistic option for 
our Nation's veterans by locating cemeteries within 75 miles of 90 
percent of eligible veterans. The American Legion recommends $228 
million be appropriated for the National Cemetery Administration for FY 
2009.
National Cemetery Expansion
    According to VA, it takes approximately 20 to 30 full-time 
equivalents (FTEs), to operate a national cemetery (depending on the 
size and workload at a particular facility) and it takes approximately 
8 to 10 FTEs to operate a newly opened cemetery (cemeteries are opened 
to interments long before completion of the full site). Thus, it seems 
reasonable that at least 50 new FTEs will be needed to operate the six 
new cemeteries NCA is planning to bring online in FY 2008. It is 
likely, therefore, that these new cemeteries will need the full 20 to 
30 FTEs in FY 2009. The average VA employee salary with benefits is 
$63,709. The American Legion recommends that funding for an additional 
120-150 employees be included in the FY 2009 budget.
National Shrine Commitment
    Maintaining cemeteries as national shrines is one of NCA's top 
priorities. This commitment involves raising, realigning and cleaning 
veterans' headstones and markers to renovate their gravesites. The work 
that has been done by VA so far has been outstanding; however, adequate 
funding is the key to maintaining this very important commitment. The 
American Legion supports NCA's goal of completing the National Shrine 
Commitment within 5 years. This commitment includes the establishment 
of standards of appearance for national cemeteries that are equal to 
the standards of the finest cemeteries in the world. Operations, 
maintenance and renovation funding must be increased to reflect the 
true requirements of the NCA to fulfill this commitment.
    VA has assessed burial sections and sites, roadways, buildings, and 
historic structures and has identified 928 potential improvement 
projects at an estimated cost of $280 million. October 2007 marked the 
end of the 5-year plan, but still much work needs to be done. With the 
addition of six new cemeteries and the addition of six more cemeteries 
that are fast tracked to come online this year, resources will be 
strained. The American Legion recommends that $52 million be 
appropriated to the National Shrine Commitment in order to fulfill this 
commitment to the Nation's veterans.
State Cemetery Construction Grants Program
    This program is not intended to replace national cemeteries, but to 
complement them. Grants for State-owned and operated cemeteries can be 
used to establish, expand and improve on existing cemeteries. There are 
60 operational State cemeteries and two more under construction. Since 
NCA concentrates its construction resources on large metropolitan 
areas, it is unlikely that new national cemeteries will be constructed 
in all of the States. Therefore, individual States are encouraged to 
pursue applications for the State Cemetery Grants Program. Fiscal 
commitments from the States are essential to keep the operations of 
State cemeteries on track. NCA estimates it costs about $300,000 per 
year to operate a State cemetery.
    Determining an ``average cost'' to build a new State cemetery or to 
expand an existing one is very difficult. Many factors influence cost, 
such as location, size and the availability of public utilities. The 
American Legion believes States will increasingly use the State 
Cemetery Grants Program to fulfill the needs of their veteran 
populations that are still not well served by the ``75-mile service 
area/170,000 veteran population'' threshold that currently serves as 
the VA benchmark for establishing a new national cemetery. New State 
cemeteries and expansions and improvements of existing State cemeteries 
are therefore likely to increase. With increasing costs, especially 
given the high cost of land in urban areas, and with increasing demand, 
The American Legion recommends the amount of funding for the State 
Cemetery Grants Program be substantially increased. The American Legion 
recommends $45 million for the State Cemetery Grants Program in FY 
2009.
                               ECONOMICS
THE GI BILL AND VETERANS' EDUCATION BENEFITS
    The American Legion has a proud history of developing the 
Servicemen's Readjustment Act of 1944 (Public Law 78-346), also known 
as the GI Bill of Rights, which served to assist 18 million veterans of 
WWII in gaining employment after military service and assisting in the 
creation of the American middle class.
    Accordingly, The American Legion supports passage of major 
enhancements to the All-Volunteer Force Education Assistance Program, 
better known as the Montgomery GI Bill (MGIB). The current make-up of 
the operational military force requires that adjustments be made to 
support all armed forces servicemembers. The American Legion supports 
legislation that will allow members of the Reserve Components to earn 
credits for education while mobilized, just as active-duty troops do, 
and be able to use those credits after they leave military service. Two 
of the top priorities of any veterans' education legislation are equity 
and portability of benefits. However, it is also clear that the current 
dollar value of benefits must be increased to meet the greater costs of 
today's higher education.
    In the 20 years since the MGIB went into effect on June 30, 1985, 
the Nation's security needs have changed radically from a fixed Cold 
War to a dynamic Global War on Terrorism. In 1991, the Active-Duty 
Force (ADF) of the military stood at 2.1 million; today it stands at 
1.4 million. Between 1915 and 1990 the Reserve Force (RF) was 
involuntarily mobilized only nine times. Today the Nation's Reserve 
Forces are no longer a strategic force but are an operational force 
mobilized continuously and working side-by-side with active-duty units 
all over the world.
    The Department of Defense (DoD) reported as of August 2007 that in 
support of Operation Iraqi Freedom (OIF) and Operation Enduring Freedom 
(OEF) there have been:

      2.4 million deployment events;
      1.6 million servicemembers have been deployed;
      540,000 servicemembers have had more than one deployment;
      443,000 National Guard and Reservists have been mobilized 
and deployed to Iraq or Afghanistan since 2001, for an average of 18 
months per mobilization;
      Out of 540,000 servicemembers with more than one 
deployment, 103,909 are members of the Reserve Components; and
      `Stop-loss' (a policy that prevents troops from leaving 
the service when their enlistment end date has arrived) has been 
imposed on more than 50,000 troops.

    The American Legion recommends that the dollar amount of the 
entitlement should be indexed to the average cost of college education 
including tuition, fees, textbooks and other supplies for commuter 
students at an accredited university, college or trade school for which 
they qualify and that the educational cost index should be reviewed and 
adjusted annually.
    The American Legion supports a monthly, tax-free subsistence 
allowance indexed for inflation as part of the educational assistance 
package.
    The American Legion recommends reauthorizing and funding State 
Approving Agencies to assure current staffing and activities and to 
assure that there is no harm to veterans receiving education payments.
STATE APPROVING AGENCIES
    The American Legion is deeply concerned with the timely manner that 
veterans, especially returning wartime veterans, receive their 
education benefits. Annually, approximately 300,000 servicemembers 
(90,000 of them belonging to the National Guard and Reserve) return to 
the civilian sector and use their earned education benefits from the 
VA.
    Any delay in receipt of education benefits or approval of courses 
taken at institutions of higher learning can adversely affect a 
veteran's life. A recent GAO report entitled ``VA Student Financial 
Aid; Management Actions Needed to Reduce Overlap in Approving Education 
and Training Programs and to Assess State Approving Agencies'' (GAO-07-
384) focuses on the need to ``ensure that Federal dollars are spent 
efficiently and effectively.''
    GAO recommends that VA should require State Approving Agencies 
(SAAs) to track and report data on resources spent on approval 
activities, such as site visits, catalog review, and outreach in a 
cost-efficient manner. The American Legion agrees. Additionally, GAO 
recommended that VA establish outcome-oriented performance measures to 
assess the effectiveness of SAA efforts. The American Legion fully 
agrees. In response, VA Deputy Secretary Mansfield plans to establish a 
working group with SAA to create a reporting system for approval 
activities and develop outcome-oriented measures with a goal of 
implementation in the FY 2009 budget cycle.
    Finally, GAO recommended that VA should collaborate with other 
agencies to identify any duplicate efforts and use the agency's 
administrative and regulatory authority to streamline the approval 
process. The American Legion agrees. VA Deputy Secretary Mansfield 
responded that VA would initiate contact with appropriate officials at 
the Departments of Education and Labor to help identify any duplicate 
efforts.
    SEC. 301 of P.L. 107-330 created increases in the aggregate annual 
amount available for State approving agencies for administrative 
expenses from FY 2003-FY 2007 to the current funding level of $19 
million. The American Legion fully supports reauthorization of SAA 
funding.
    The American Legion strongly recommends keeping SAA funding at $19 
million in FY 2009 to assure current staffing and activities.
VA HOME LOAN GUARANTY PROGRAM
    Since the home loan program was enacted as part of the original 
Servicemen's Readjustment Act of 1944 (the GI Bill), VA has guaranteed 
more than 18 million home loans totaling nearly $914 billion for 
veterans to purchase or construct a home, or to refinance another home 
loan on more favorable terms. In the 5-year period from 2001 through 
2006, VA has assisted more than 1.4 million veterans in obtaining home 
loan financing totaling almost $197 billion. About half of these loans, 
just over 730,000, were to assist veterans to obtain a lower interest 
rate on an existing VA guaranteed home loan through VA's Interest Rate 
Reduction Refinancing Loan Program.
    The VA funding fee is required by law and is designed to sustain 
the VA Home Loan Program by eliminating the need for appropriations 
from Congress. Congress is not required to appropriate funding for this 
program; however, because veterans must now `buy' into the program, it 
no longer serves the intent of helping veterans afford a home. The 
funding fee makes the VA Home Loan Program less beneficial when 
compared to a standard, private loan, in some aspects. The current rate 
for mortgages is approximately 5.7 percent. The funding fee would be in 
addition to the rate given by the lender. A $300,000 loan would 
generate a fee in addition to any rate the veteran would achieve. The 
funding fee mandates the participant to buy into the program; however, 
that goes directly against the intention of the law: to provide 
veterans a resource for obtaining a home. Approximately 80 percent of 
all VA Home Loan participants must pay the funding fee and the current 
funding fee paid to VA to defray the cost of the home loan has had a 
negative effect on many veterans who choose not to participate in this 
highly beneficial program.
    The American Legion supports the elimination of the VA Home Loan 
funding fee and urges Congress to appropriate funding to sustain the VA 
Home Loan Guaranty Program.
    The American Legion reaffirms its strong support for VA's Loan 
Guaranty Program. The American Legion also supports any administrative 
and/or legislative efforts that will improve and strengthen the VA Home 
Loan Guaranty Program's ability to serve America's veterans.
Homeless Providers Grant and Per Diem Program
    In 1992, VA was given authority to establish the Homeless Providers 
Grant and Per Diem Program under the Homeless Veterans Comprehensive 
Service Programs Act of 1992 (P.L. 102-590). Grants from the Grant and 
Per Diem Program are offered annually (as funding permits) by the VA to 
fund community agencies providing service to homeless veterans. VA can 
provide grants and per diem payments to help public and nonprofit 
organizations establish and operate supportive housing and/or service 
centers for homeless veterans.
    Funds are available for assistance in the form of grants to provide 
transitional housing (up to 24 months) with supportive services, 
supportive services in a service center facility for homeless veterans 
not in conjunction with supportive housing, or to purchase vans.
    The American Legion strongly supports funding the Grant and Per 
Diem Program for a 5-year period instead of annually and supports 
increasing the funding level to $200 million annually.
Department of Labor Veterans' Employment and Training Service (DoL-
        VETS)
    VETS is and should remain a national program with Federal oversight 
and accountability. The American Legion is eager to see this program 
grow and especially would like to see greater expansion of 
entrepreneurial-based, self-employment opportunity training.
    The mission of VETS is to promote the economic security of 
America's veterans. This mission is executed by assisting veterans in 
finding meaningful employment. The American Legion believes that by 
strengthening American veterans, we in turn strengthen America. 
Annually, DoD discharges approximately 250,000 servicemembers. Recently 
separated service personnel will seek immediate employment or, 
increasingly, have chosen some form of self-employment.
    In order for the VETS program to assist these veterans to achieve 
their goals, it needs to:

      Improve by expanding its outreach efforts with creative 
initiatives designed to improve employment and training services for 
veterans;
      Provide employers with a labor pool of quality applicants 
with marketable and transferable job skills;
      Provide information on identifying military occupations 
that require licenses, certificates or other credentials at the local, 
State, or national levels;
      Eliminate barriers to recently separated service 
personnel and assist in the transition from military service to the 
civilian labor market;
      Strive to be a proactive agent between the business and 
veterans' communities in order to provide greater employment 
opportunities for veterans; and
      Increase training opportunities, support and options for 
veterans who seek self-employment and entrepreneurial careers.

    The American Legion believes staffing levels for DVOP specialists 
and LVERs should match the needs of the veterans' community in each 
State and not be based solely on the fiscal needs of the State 
government.
    Contrary to the demands placed upon VETS, funding increases for 
VETS since 9/11 does not reflect the large increase in servicemembers 
requiring these services due to the Global War on Terrorism. In support 
of this fact, the inflation rate from January 2002 to January 2008 is 
15.93 percent and yet for State grants alone, funding has only 
increased a meek 2.5 percent ($158 million to $162 million) in the same 
timespan.
    The President's budget request for FY 2009 will allow for an 
increase of 1 percent for State grants, the mechanism for funding DVOPs 
and LVERs. However, this does not meet the inflation rate and 
approximately 100 positions have the potential to be eliminated again 
next year.
    More services and programs are needed and yet since 2002 the VETS 
program has only received a modest 4-percent increase. Transition 
assistance, education, and employment are each a pillar of financial 
stability. They will prevent homelessness, allow the veteran to compete 
in the private sector, and let our Nation's veterans contribute their 
military skills and education to the civilian sector. By placing 
veterans in suitable employment earlier, the country benefits from 
increased income tax revenue and reduced unemployment compensation 
payments, thus greatly offsetting the cost of Transitional Assistance 
Program (TAP) training. The American Legion recommends full funding for 
DoL-VETS.
Homelessness (DoL-VETS)
    The American Legion notes that there are approximately 200,000 
homeless veterans on the street each night. This number, compounded 
with 300,000 servicemembers entering the private sector each year since 
2001 with at least a third of them potentially suffering from mental 
illness, requires intensive efforts. Numerous programs to prevent and 
assist homeless veterans are available.
    The Homeless Veterans Reintegration Program (HVRP) is a competitive 
grant program. Grants are awarded to States or other public entities 
and nonprofit organizations, including faith-based organizations, to 
operate employment programs that reach out to homeless veterans and 
help them become gainfully employed. The purpose of the HVRP is to 
provide services to assist in reintegrating homeless veterans into 
meaningful employment within the labor force and to stimulate the 
development of effective service delivery systems that will address the 
complex problems facing veterans. HVRP is the only nationwide program 
focused on assisting homeless veterans to reintegrate into the 
workforce.
    The competition for these grants is intense as they have one of the 
highest cutoff score thresholds to be in the competitive range for any 
grant program. Amazingly, 243 grants did fall into the competitive 
range but there was only enough funding to award 145 submissions. The 
HVRP program could only award $39 million for FY 2007 but had to deny 
98 fully qualified nominations. These 98 additional qualified programs 
would require an additional $30 million. The American Legion recommends 
$70 million for this highly successful grant program.
Training
    The National Veterans' Employment and Training Services Institute 
(NVTI) was established to ensure a high level of proficiency and 
training for staff that provide veterans employment services. NVTI 
provides training to Federal and State government employment service 
providers in competency based training courses. Current law requires 
all Disabled Veterans' Outreach Program (DVOP) and Local Veterans' 
Employment Representatives (LVER) personnel to be trained within 3 
years of hiring. The American Legion recommends that these personnel 
should be trained within 1 year. The American Legion further recommends 
$6 million in funding to NVTI.
Veterans Workforce Investment Program (VWIP)
    VWIP grants support efforts to ensure veterans' lifelong learning 
and skills development in programs designed to serve the most-at-risk 
veterans, especially those with service-connected disabilities, those 
with significant barriers to employment, and recently separated 
veterans. The goal is to provide an effective mix of interventions, 
including training, retraining, and support services, that lead to long 
term, higher wage and career potential jobs. The American Legion 
recommends $20 million in funding for VWIP.
Employment Rights and Veterans' Preference
    The Uniformed Services Employment and Reemployment Rights Act 
(USERRA) protects civilian job rights and benefits of veterans and 
members of the armed forces, including National Guard and Reserve 
members. USERRA also prohibits employer discrimination due to military 
obligations and provides reemployment rights to returning 
servicemembers. VETS administers this law, conducts investigations for 
USERRA and Veterans' Preference cases, conducts outreach and education, 
and investigates complaints by servicemembers.
    Since September 11, 2001, nearly 600,000 National Guard and Reserve 
members have been activated for military duty. During this same period, 
DoL-VETS has provided USERRA assistance to over 410,000 employers and 
servicemembers.
    Veterans' Preference is authorized by the Veterans' Preference Act 
of 1944. The Veterans' Employment Opportunity Act of 1998 (VEOA) 
extended certain rights and remedies to recently separated veterans. 
VETS was given the responsibility to investigate complaints filed by 
veterans who believe their Veterans' Preference rights have been 
violated and to conduct an extensive compliance assistance program.
    Numerous Federal agencies and government contractors and 
subcontractors are unlawfully circumventing Veterans' Preference. The 
use of multiple certificates in the hiring process is unjustly denying 
veterans opportunity for employment. Whereas figures show a decline in 
claims by veterans of OIF/OEF compared to Gulf War I, the reality is 
that employment opportunities are not being broadcast. Federal agencies 
as well as contractors and subcontractors are required by law to notify 
OPM of job opportunities but more often than not these vacancies are 
never made available to the public. VETS program investigates these 
claims and corrects unlawful practices.
    The American Legion also supports the strongest Veterans' 
Preference laws possible at all levels of government. The American 
Legion is deeply concerned with the protection of the veteran and the 
prevention of illegal and egregious hiring practices. Currently, 
veterans are filing corrective action claims after the noncompliance 
employment event occurs and therefore may become financially 
disadvantaged. Concurrent measures and continuous oversight must be 
emplaced to protect veterans from unfair hiring practices, not just 
reactionary investigations. The American Legion recommends funding of 
$61 million for program management that encompasses USERRA and VEOA.
Veteran/Service-Connected Disabled Veteran-Owned Businesses
    The American Legion views small businesses as the backbone of the 
American economy. It is the driving force behind America's past 
economic growth and will continue to be the major factor for growth as 
we move further into the 21st century. Currently, more than 9 out of 
every 10 businesses are small firms, which produce almost one-half of 
the Gross National Product. Veterans' benefits have always included 
assistance in creating and operating veteran-owned small businesses.
    The impact of deployment on self-employed National Guard and 
Reservists is severe with a reported 40 percent of all veteran-owned 
businesses suffering financial losses and in some cases bankruptcies. 
Many other small businesses have discovered they are unable to operate 
and suffer some form of financial loss when key employees are 
activated. The Congressional Budget Office in its report, ``The Effects 
of Reserve Call-Ups on Civilian Employers,'' stated that it ``expects 
that as many as 30,000 small businesses and 55,000 self-employed 
individuals may be more severely affected if their Reservist employee 
or owner is activated.'' Additionally, the Office of Veterans' Business 
Development within the Small Business Administration (SBA) remains 
crippled and ineffective due to a token funding of $750,000 per year. 
This amount, which is less than the office supply budget for the SBA, 
is expected to support an entire nation of veteran entrepreneurs. The 
American Legion feels that this pittance is an insult to American 
veteran businessowners, undermines the spirit and intent of the 
Veterans Entrepreneurship (TVC) and Small Business Development Act of 
1999 (P.L. 106-50) and continues to be a source of embarrassment for 
this country.
    The American Legion strongly supports increased funding for the 
Small Business Administration's Office of Veterans' Business 
Development to provide enhanced outreach and community-based assistance 
to veterans and self-employed members of the Reserves and National 
Guard.
    Additionally, the American Legion supports allowing the Office of 
Veterans' Business Development to enter into contracts, grants, and 
cooperative agreements to further its outreach goals. The Office of 
Veterans' Business Development must be authorized to develop a 
nationwide community-based service delivery system specifi- 
cally for veterans and members of Reserve components of the United State
s military.
    The American Legion further recommends that funding for the SBA 
Office of Veterans' Business Development be increased to $2.3 million 
in FY 2009.
                               CONCLUSION
    The American Legion is extremely concerned about the budgetary 
process when Congress does not pass appropriations bills before the 
start of the new fiscal year. The failure to pass a proper budget has a 
significant impact on the veterans' community and the healthcare 
delivery provided to veterans. As a result of the failure of Congress 
to pass VA appropriations in a timely manner, all long- and short-range 
planning is adversely affected. VA medical facility administrators are 
asked to use a ``crystal ball'' to make prudent management decisions--
not knowing when and how much funding they will have available to 
finish the fiscal year. Such fiscal irresponsibility spawns gross 
mismanagement decisions, rationing of care, and unacceptable delays and 
backlogs across the program areas--medical care, facility maintenance, 
administration, construction, and State grants programs. It is our hope 
that Congress will move to quickly pass this budget so that we can 
properly take care of our troops and our veterans.
    The American Legion appreciates the opportunity to present its 
views and estimates on programs that will affect veterans, 
servicemembers and their families. We ask that this Committee take into 
consideration the recommendations of The American Legion as your 
colleagues formulate the FY 2009 Budget Resolution. We also ask the 
Committee not to forget the sacrifices and contributions made by 
America's veterans and their families as the budget priorities are 
determined for FY 2009.

                                 
                Prepared Statement of Richard F. Weidman
          Executive Director for Policy and Government Affairs
                      Vietnam Veterans of America
    Chairman Filner, Ranking Member Buyer and distinguished Members of 
the Committee, on behalf of VVA National President John Rowan and all 
of our officers, Board of Directors, and members, I thank you for 
giving Vietnam Veterans of America (VVA) the opportunity to testify 
today regarding the President's fiscal year 2009 budget request for the 
Department of Veterans Affairs. VVA thanks each of you on this 
distinguished panel, on both sides of the aisle, for your strong 
leadership on issues and concerns of vital concern to veterans and 
their families.
    I want to thank you for recognizing that caring for those who have 
donned the uniform in our name is part of the continuing cost of the 
national defense. Caring for veterans, the essential role of the VA 
and, for specific services other Federal entities such as the 
Department of Labor, the Small Business Administration, and the 
Department of Health and Human Services, must be a national priority. 
This is poignantly clear when we visit the combat-wounded troops at 
Walter Reed Army Medical Center and Bethesda Naval Hospital.
    Mr. Chairman, I know you have been a long-time supporter of 
legislation to achieve assured funding. You have always understood the 
need for such a mechanism to correct the problems in the current system 
of funding. As we have this discussion in regard to the FY'09 budget 
for the VA, the readily apparent need for this legislation has never 
been more pressing. We look forward to working with you to ensure its 
enactment, or another reform measure that will move us toward our 
common goal of predictable and timely funding for VA healthcare that is 
sufficient to truly meet the needs of all veterans.
    VVA wishes to note at the outset that the annual exercise of 
debating the merits of the President's proposed budget is flawed. 
Medical center directors should not have to be held in limbo as 
Congress reworks and adjusts this budget and perhaps misses, yet again, 
the start of the next Federal fiscal year. These public servants can be 
more effective, more efficient, and better managers of the public trust 
if they can properly plan for the funding they need to carry out their 
mission of caring for their patients. We hope that this can be avoided 
this year and ask that you seriously consider an immediate alternative 
to the broken system we currently have and reaching our goal of assured 
funding.
    To rectify this situation, VVA and the other members of The 
Partnership for Veterans' Health Care Budget Reform are developing a 
proposal that would give the VA leeway its managers need to properly 
plan for the requisites of their patient load. We will have more for 
you as this proposal is tightened up.
Overview
    Concerning the proposal at hand, the President's FY'09 budget for 
the VA, we must again take exception to the attempt by the 
Administration to tax Priority 7 and 8 veterans with an annual fee just 
for signing into the VA healthcare system; and for almost doubling the 
co-payment for prescription pharmaceuticals. To us this is further 
evidence of the attempt to rid the system of as many ``higher income'' 
veterans as possible. We trust that you will see the folly in this, and 
will reject outright any attempt to enact these measures into the law 
of the land.
    We are pleased, however, that the Administration has again 
refrained from citing phantom ``management efficiencies'' in the 
numbers in this budget proposal. Managers are in general well-paid. 
Effective, caring managers should take rightful pride in the jobs they 
do. Inefficient managers need to be sanctioned and, if necessary, 
transferred or removed.
    We are pleased, too, that this proposal calls for an increased 
outlay for research and development. Traumatic brain injuries, or TBI, 
needs to be better understood for treatment to be more effective. Other 
mental health issues, too, that are afflicting too many of our 
returning troops, need to be better understood. Research, for which VA 
scientists and epidemiologists can be justifiably proud, benefit not 
only troops who are forever changed by their experiences in combat but 
the general populace as well.
    We are less than sanguine, however, about the claim that ``one of 
VA's highest priorities in 2009 will be to continue an aggressive 
research program to improve the lives of veterans returning from 
service in [Iraq and Afghanistan by devoting $252 million] to research 
projects focused specifically on veterans returning'' from service in 
these two hot spots. It is our understanding that data collecting on 
maladies and diseases troops are returning with is not happening. It's 
almost as if our government does not want to know about these ailments 
so that it won't be burdened with Dependency Indemnity Compensation 
(DIC) payments.
    We are pleased that the spirit of cooperation between the VA and 
the Department of Defense may actually be bearing fruit. In 2009, VA 
and DoD will complete the pilot of a new disability evaluation system 
for wounded returnees at major medical facilities in the Washington, 
D.C. area. We hope that what results from this effort ``to eliminate 
the duplicative and often confusing elements of the current disability 
process of the two Departments'' will lead to less confusion and a 
single, viable disability rating determined by the VA.
    We are concerned, however, that there still will not be enough 
resources to deal with the flood of troops and veterans returning to 
our shores and presenting with a range of mental health issues. The VA 
ramped down for several years the numbers of mental health 
professionals it employed. Now, seeing the error of its ways, it is 
hurriedly hiring clinicians. The question is: Will there be enough of 
them to meet the challenge?
    We are more than a little skeptical that, as the VA touts, the 
budget will provide resources ``to virtually eliminate the patient 
waiting list by the end of 2009.'' When have we heard this before?
    On the benefits side of the ledger, we find it ludicrous to believe 
that this budget ``will allow VA to improve the timeliness with which 
compensation and pension claims are processed.'' Are VA planners 
perhaps a bit overly optimistic that they can reduce the average time 
it takes to process a claim to 145 days, 32 days quicker than the 
average 177 days it currently takes? No, the Veterans Benefits 
Administration requires a complete overhaul, one that introduces a new 
way of thinking about vetting veterans who make claims for compensation 
and pension benefits.
    On the whole, this budget proposal is a better start than we have 
had in many a year, but the overall request for additional resources is 
just too low. With concerted work however it can be the most viable 
budget and appropriations document we have had in many years, of which 
we all can be proud.
Veterans Health Administration
    Last year, VVA recommended an increase of $6.9 billion to the 
expected fiscal year 2007 appropriation for the medical care business 
line. Congress was very generous and we actually came close to that 
figure if one includes the supplemental funding of about $1.8 billion 
for veterans' healthcare. We recognize that the budget recommendation 
VVA is making again this year is also extraordinary, but with troops 
still in the field, years of underfunding of healthcare organizational 
capacity, renovation of an archaic and dilapidated infrastructure, 
updating capital equipment, and several cohorts of war veterans 
reaching ages of peak healthcare utilization, these are extraordinary 
times.
    VVA asks that you continue ramping up the resources available to 
rebuild the organizational capacity to the point where the VA can 
really meet the needs of an increasing workload. Frankly, we believe 
that VA has (again) underestimated the projected workload for the next 
fiscal year. Instead of a growth of about 40,000 new veterans of the 
Global War on Terror (GWOT), VVA estimates that the increase will be at 
least equal to last year's increase of 90,000 new veterans entering the 
system, and probably will be in excess of 100,000 new GWOT veterans, 
particularly if the VA starts doing a better job of outreach, reduces 
wait times as called for in their plan, and continues to make gains in 
adding needed staff capacity.
    In contrast to what is clearly needed, we believe the 
Administration's fiscal year 2009 request for $2.34 billion more than 
the FY 2008 appropriation is not adequate.
    The increase the Administration has requested for medical care does 
not quite keep pace with inflation (due to increased energy costs, 
rising pharmaceutical costs, and other costs VA cannot control), but it 
will not allow VA to continue the needed pace of enhancing its 
healthcare and mental healthcare services for returning veterans, 
restore needed long-term care programs for aging veterans, or allow 
working-class veterans to return to their healthcare system. VVA's 
recommendation of a $5.24 billion increase over FY 2008 would 
accommodate these goals.
    The advances of VA in recent years in improving the veterans' 
healthcare system are well known, and often elucidated by all of us, 
particularly VA officials. However, these advances have come with a 
cost. For years, the veterans' healthcare system has been falling 
behind in meeting the healthcare needs of some veterans. At the 
beginning of 2003, the former Secretary of Veterans Affairs made the 
decision to bar so-called Priority 8 veterans from enrolling. In most 
cases, these veterans are not the well-to-do--they are working class 
veterans or veterans living on fixed incomes who earn as little as 
$28,000 a year. It is not uncommon to hear about such veterans choosing 
between getting their prescription drug orders filled or paying their 
utility bills. The decision to ``temporarily'' bar these veterans is 
still standing, and it is still troubling to thoughtful Americans. As 
of this week, VA officials estimated that as many as 250,000 additional 
veterans are shut out of the system until they become indigent or 
eventually are granted service connection for one or more of their 
conditions that originated in military service. No one knows the size 
of the ``migration'' from the wilderness of Priority 8 to a category 
where these veterans can enter the system at some point when they are 
much sicker and/or poorer, because the VA has not tried to track it (at 
least not in a public way that we know of). However, VVA believes that 
it is a significant number.
    It is time to live up to the promise and obligation and to ``Leave 
No Veteran Behind'' by restoring access to so-called Priority 8 
veterans who are now on the outside and looking in. Of the recommended 
increase, $1.3 billion is for restoration of the Priority 8 veterans by 
the end of the second quarter of FY 2009. It will take VA at least 3 to 
6 months to add the organizational capacity to ensure that the system 
is not overwhelmed all at once.
    Congress is to be commended for turning back many legislative 
requests for enrollment fees and outpatient cost increases in the past, 
which would have jeopardized access to care for hundreds of thousands 
of veterans. Hard-fought Congressional add-ons, such as the $3.6 
billion added to veterans' healthcare for fiscal year 2007, and the 
more than $11 billion all told in calendar year 2008, now place us at a 
position where it is not only feasible to re-open the system to all 
veterans who have earned the right to access to this care, but it would 
be wrong to continue to shut them out.
Medical Services
    For medical services for fiscal year 2009, VVA recommends $44.3 
billion including collections. This is approximately $3.1 billion more 
than the Administration's request for fiscal year 2009. VVA is making 
its budget recommendations based on re-opening access to the millions 
of veterans disenfranchised by the Department's policy decision of 
early 2003 that was supposed to be ``temporary.'' The former Ranking 
Member of this Committee, Lane Evans, discovered that a quarter million 
Priority 8 veterans had applied for care in fiscal year 2005. Similar 
numbers of veterans have likely applied in each of the years since 
their enrollment was barred. Our budget allows 1.5 million new Priority 
7 and 8 veterans to enroll for care in their healthcare system. While 
this may sound like too great a lift for the system, use rates for 
Priority 7 and 8 veterans are much lower than for other priority 
groups. Based on our estimates, it may yield only an 8% increase in 
demand at a cost of about $1.9 billion to the system for additional 
personnel, supplies and facilities.
    The decade long diminishment of VA mental health programs that we 
experienced in the 1990s leveled out by 2001, and VA slowly started to 
rebuild capacity that has been accelerated in recent years. However, we 
must continue to restore capacity to deal with mental disorders, 
particularly with post traumatic stress disorder and the often 
attendant co-morbidity of substance abuse. In particular, substance 
abuse treatment needs to be expanded greatly, and be more reliant on 
evidence-based medicine and practices that are shown to actually be 
fruitful. The 21 day revolving door or the old substance abuse wards is 
not something we should return to, but rather treatment modalities that 
can be proven to work, and restore veterans of working age to the point 
where they can obtain and sustain meaningful employment at a living 
wage, and therefore re-establish their sense of self-esteem.
    VVA also urges that additional resources explicitly be directed in 
the appropriation for FY 2009 to the National Center for PTSD for them 
to add to their organizational capacity under the current fine 
leadership. The signature wounds of this war may well be PTSD and 
traumatic brain injury and a complicated amalgam of both conditions. 
VVA believes that if we provide enough resources, and hold VA managers 
accountable for how well those resources are applied, that these fine 
young veterans suffering these wounds can become well enough again to 
lead a happy and productive life.
    Up until recently, VA has not made enough progress in preparing for 
the needs of troops returning from Iraq and Afghanistan--particularly 
in the area of mental healthcare. In addition to the funds VVA is 
recommending elsewhere, we specifically recommend an increase of an 
additional $500 million over and above the $3.9 billion that VA now 
says they will allocate to assist VA in meeting the mental healthcare 
needs of all veterans. These funds should be used to develop or augment 
with permanent staff at VA Vet Centers (Readjustment Counseling Service 
or RCS), as well as PTSD teams and substance use disorder programs at 
VA medical centers and clinician who are skilled in treating both PTSD 
and substance abuse at the CBOC, which will be sought after as more 
troops (including demobilized National Guard and Reserve members) 
return from ongoing deployments. VVA also urges that the Secretary be 
required to work much more closely with the Secretary of Health and 
Human Services, and the States, to provide counseling to the whole 
family of those returning from combat deployments by means of utilizing 
the community mental health centers that dot the Nation. Promising work 
is now going on in Connecticut and possibly elsewhere in this regard 
that could possibly be a model. In addition, VA should be augmenting 
its nursing home beds and community resources for long-term care, 
particularly at the State veterans' homes.
    To allow the staffing ratios that prevailed in 1998 for its current 
user population, VA would have to add more than 15,000 direct care 
employees--MDs, nurses, and other medical specialists--at a cost of 
about $2 billion. This level, because the system can and should be more 
efficient now, would allow us to end the shame of leaving veterans out 
in the cold who want and are in vital need of healthcare at VA, and who 
often have no other option.
Vet Centers
    VA received an additional $20 million in the Supplemental 
Appropriation for the war that was signed into law on March 7, 2007 
specifically to increase the number of staff in the Readjustment 
Counseling Service (RCS) by 250 FTEE. Whether it was VHA or OMB that 
held these funds back, the funds were not released to the RCS to hire 
additional staff for the VA Vet Centers until mid-August. The Vet 
Centers are the most cost effective, cost efficient program operated by 
VA, but which just plain does not have enough staff. Because of the 
late arrival of the money the RCS could not hire any new staff, but 
used the funds for other things, such as vehicles to do rural outreach.
    The additional 250 staff members for the previously existing Vet 
Centers are still very much needed, over and above the 100 peer 
counselors and approximately 50 mental health professionals they have 
already hired as additional staff in the past 2 years.
Medical Facilities
    For medical facilities for fiscal year 2009, VVA recommends a level 
of commitment that is at least equal to fiscal year 2008. Maintenance 
of the healthcare system's infrastructure and equipment purchases are 
often overlooked as Congress and the Administration attempt to correct 
more glaring problems with patient care. In FY 2006, in just one 
example, within its medical facilities account VA anticipated spending 
$145 million on equipment, yet only spent about $81 million. VA 
undertook an intensive process known as CARES (Capital Asset 
Realignment to Enhance Services) to ``right size'' its infrastructure, 
culminating in a May 2004 policy decision that identified approximately 
$6 billion in construction projects. While for the reasons noted above 
the VA has consistently underestimated future needs by using a fatally 
flawed formula, thus far Congress and the Administration have only 
committed $3.7 billion of this all-too-conservative needed funding. We 
urge the Congress to continue the process of upgrading the physical 
plant of medical facilities at least at the rate funding at the FY 2008 
level for the next several years.
    In a system in which so much of the infrastructure would be deemed 
obsolete by the private sector (in a 1999 report GAO found that more 
than 60% of its buildings were more than 25 years old), this has and 
may again lead to serious trouble. We are recommending that Congress 
provide an additional $1.5 billion to the medical facilities account to 
allow them to begin to address the system's current needs. We also 
believe that Congress should fully fund the major and minor 
construction accounts to allow for the remaining CARES proposals to be 
properly addressed by funding these accounts with a minimum of 
remaining $2.3 billion.
Medical and Prosthetic Research
    For medical and prosthetic research for fiscal year 2008, VVA 
recommends $500 million. This is approximately $50 million more than 
the Administration's request for fiscal year 2009. VA research has a 
long and distinguished portfolio as an integral part of the veterans' 
healthcare system. Research funding serves as a means to attract top 
medical schools into valued affiliations and allows VA to attract 
distinguished academics to its direct care and teaching missions.
    VA's research program is distinct from that of the National 
Institutes of Health because it was created to respond to the unique 
medical needs of veterans. In this regard, it should seek to fund 
veterans' pressing needs for breakthroughs in addressing environmental 
hazard exposures, post-deployment mental health, traumatic brain 
injury, long-term care service delivery, and prosthetics to meet the 
multiple needs of the latest generation of combat-wounded veterans.
    Further, VVA brings to your attention that VA medical and 
prosthetic research is not currently funding a single study on Agent 
Orange or other herbicides used in Vietnam, despite the fact that more 
than 300,000 veterans are now service-connected disabled as a direct 
result of such exposure in that war. This is unacceptable.
    Mr. Chairman, finally I thank this Committee and the Appropriations 
Committee for using the power of the purse in the FY 2008 
Appropriations Act to compel VA to obey the law (Public Law 106-419) 
and conduct the long-delayed National Vietnam Veterans Longitudinal 
Study. VVA asks that you schedule a hearing and/or a Members briefing 
for the second half of March for VA to outline their plan as to how 
they are going to complete this much needed study for delivery of the 
final results to the Congress by April 1, 2010, as a comprehensive 
mortality and morbidity study of Vietnam veterans, the last large 
cohort of combat veterans prior to those now serving in OIF/OEF.
Veterans Benefits Administration
    The Veterans Benefits Administration (VBA) continues to need 
additional resources and enhanced accountability measures. VVA 
recommends an additional 300 over and above the roughly 700 new staff 
members that are requested in the President's proposed budget for all 
of VBA.
Compensation & Pension
    VVA recommends adding 100 staff members above the level requested 
by the President for the Compensation & Pension Service (C&P) 
specifically to be trained as adjudicators. Further, VVA strongly 
recommends adding an additional $60 million specifically earmarked for 
additional training for all of those who touch a veterans' claim, 
institution of a competency-based examination that is reviewed by an 
outside body that shall be used in a verification process for all of 
the VA personnel, veteran service organization personnel, attorneys, 
county and State employees, and any others who might presume to at any 
point touch a veterans' claim.
Vocational Rehabilitation
    VVA recommends that you seek to add an additional 200 specially 
trained vocational rehabilitation specialists to work with returning 
servicemembers who are disabled to ensure their placement into jobs or 
training that will directly lead to meaningful employment at a living 
wage. It still remains clear that the system funded through the 
Department of Labor simply is failing these fine young men and women 
when they need assistance most in rebuilding their lives.
    It is also unclear as to whether VA actually added several hundred 
of these employment placement specialists for disabled veterans 
specifically called for in last year's funding measure, and whether 
they are effective in assisting disabled veterans, particularly 
profoundly disabled veterans to obtain decent jobs.
    VVA has always held that the ability to obtain and sustain 
meaningful employment at a living wage is the absolute central event of 
the readjustment process. Adding additional resources and much, much 
greater accountability to the VA vocational rehabilitation process is 
absolutely essential if we as a Nation are to meet our obligation to 
these Americans who have served their country so well, and have already 
sacrificed so much.
Accountability at VA
    There is no excuse for the dissembling and lack of accountability 
in so much of what happens at the VA. It is certainly better than it 
used to be, but there is a long way to go in regard to cleaning up that 
corporate culture to make it the kind of system that it can be with 
existing resources, and even largely the same personnel as they 
currently have onboard. It can be cleaned up and done right the first 
time, if there is the political will to hold people accountable for 
doing their job properly.
    Thank you again, Mr. Chairman. We look forward to working with you 
and this distinguished Committee to obtain an excellent budget for the 
VA in this fiscal year, and to ensure the next generation of veterans' 
well-being by enacting assured funding. I will be happy to answer any 
questions you and your colleagues may have.

                                 
                  Prepared Statement of Paul Rieckhoff
      Executive Director, Iraq and Afghanistan Veterans of America
    Mr. Chairman and Members of the House Veterans' Affairs Committee, 
on behalf of Iraq and Afghanistan Veterans of America and our tens of 
thousands of members nationwide, I thank you for the opportunity to 
testify today regarding the VA budget request for 2009.
    From April 2003-February 2004, I served as a First Lieutenant and 
Infantry Platoon Leader in Iraq. When I returned home, I quickly became 
concerned about the lack of real support for returning troops and 
veterans. In the early years of the wars, issues like traumatic brain 
injury, post traumatic stress disorder, and homelessness received far 
too little attention.
    But times have changed. Last year, this Congress showed tremendous 
commitment to our Nation's veterans, providing the VA with its single 
largest budget increase in 77 years. On behalf of the millions of 
veterans who rely on VA healthcare, including almost 300,000 troops 
newly home from Iraq and Afghanistan, we hope you will continue to show 
your support for veterans' healthcare. IAVA is one of the over 60 
organizations who have endorsed The Independent Budget, and we endorse 
it again for FY2009.
    As the war in Iraq continues into its fifth year, this generation 
of troops and veterans faces new and unique problems. Today, IAVA is 
releasing our annual Legislative Agenda. Our Legislative Agenda covers 
the entire war fighting cycle--before, during and after deployment--and 
outlines practical solutions to the most pressing problems facing Iraq 
and Afghanistan veterans. Our Legislative Agenda is available at IAVA's 
Web site, www.iava.org.
    The cornerstone of our 2008 Legislation Agenda is a new GI Bill. 
After World War II, nearly 8 million servicemembers took advantage of 
GI Bill education benefits. A veteran of WWII was entitled to free 
tuition, books and a living stipend that completely covered the cost of 
education.
    Today we have the opportunity to renew our social contract with our 
service men and women, and help rebuild our military. IAVA supports 
reinstating a World War II-style GI Bill that will cover the true cost 
of education and will fairly reward all combat veterans of Iraq and 
Afghanistan. We have endorsed H.R. 2702.
    Critics have said the GI Bill is too expensive. The fact is, a new 
GI Bill is a bargain. The current GI Bill cost the Veterans' Affairs 
Department $1.6 billion in 2004. Even if a World War II-style GI Bill 
were to double that cost, it would be about what we spend in a week in 
the War on Terror. And the GI Bill is more than a veterans' benefit. It 
is also an effective tool to stimulate the economy and to improve 
military readiness.
    The GI Bill helped rebuild this country's economy after World War 
II. A 1988 Congressional study proved that every dollar spent on 
educational benefits under the original GI Bill added $7 to the 
national economy in terms of productivity, consumer spending and tax 
revenue.
    Many of our Nation's leaders got their start thanks to the GI Bill, 
including Presidents Gerald Ford, George H.W. Bush, and Senators Bob 
Dole, George McGovern, and Pat Moynihan. The GI Bill also educated 14 
Nobel Prize winners and two dozen Pulitzer Prize winners, including 
authors Joseph Heller, Norman Mailer, and Frank McCourt.
    Veterans of Iraq and Afghanistan, however, receive only a fraction 
of the support offered to the Greatest Generation. For many, including 
my good friend Sergeant Todd Bowers, the burden of student loans and 
mounting debt can simply become too great.
    When Sergeant Bowers was activated for his second deployment to 
Iraq, he was forced to withdraw from his classes at George Washington 
University, racking up an extra semester's debt without receiving 
credit for his coursework. While he was deployed to Iraq, Bowers was 
wounded when a sniper's round penetrated his rifle scope and sent 
fragments into the left side of his face. He was awarded the Purple 
Heart and Navy Commendation medal with ``V'' device for Valor. But when 
Bowers returned home, he was not greeted as a hero by his university 
and credit lenders. His student loans had been sent to collection, and 
his credit rating was ruined. Struggling to keep up with payments, 
Bowers was eventually forced to leave school.
    The GI Bill is also an important recruitment tool. For years, the 
military has been lowering recruitment standards and increasing 
bonuses. We now spend more than $4 billion annually on recruitment, but 
we're still struggling to meet recruiting goals. The GI Bill is the 
military's single most effective recruitment tool; the number one 
reason civilians join the military is to get money for college. A new 
GI Bill, one that put college within reach of a new generation of 
veterans, would be a tremendous boon to recruitment and would help 
rebuild our military after years of war.
    Above all, a World War II-style GI Bill would thank this generation 
of combat veterans for their service and their sacrifice. As President 
Roosevelt said in his signing statement to the original GI Bill: ``[The 
GI Bill] gives emphatic notice to the men and women in our armed forces 
that the American people do not intend to let them down.''
    For all of these reasons, IAVA is calling for a new GI Bill to be 
funded in this year's budget.
    Thank you for your time.

                                 
                  Prepared Statement of Paul Sullivan
             Executive Director, Veterans for Common Sense
    I would like to thank Chairman Filner and Members of the Committee 
for inviting Veterans for Common Sense to testify about the Department 
of Veterans Affairs' budget request for fiscal year 2009. VCS 
especially thanks this Committee for the dozens of hearings you held 
last year, and for the prompt passage of the ``Dignity for Wounded 
Warriors Act,'' a bill strongly supported by our VCS members.
    As Associate Supreme Court Justice Thurgood Marshall said, 
``Justice too long delayed is justice denied.'' With that quote in 
mind, VCS believes VA's 2009 budget request falls far short because it 
does not adequately seek to address what we believe should be VA's four 
highest budget priorities:

    1.  Zero tolerance for homelessness. VA's budget does not provide 
enough funding to reduce the number of homeless from 200,000 to as 
close to zero as possible.
    2.  Zero tolerance for VA turning away suicidal patients.
    3.  Zero tolerance for turning away Afghanistan and Iraq war 
veterans from free and prompt VA healthcare within 5 years of their 
discharge from active duty.
    4.  Zero tolerance for VA claim delays and claim errors.

    VCS believes VA suffers from a capacity crisis, and that our 
veterans are unduly denied prompt access to VA services. Our veterans 
earned and need prompt and high-quality medical care as well as prompt 
and accurate claim decisions. VCS is outraged that government lawyers 
argued against the new law mandating 5 years of free VA medical care 
for our Iraq and Afghanistan war veterans.
    VCS is concerned about three statements VA made about VA's 2007 
budget:

    VA Statement #1: Former VA Secretary Jim Nicholson said: ``The 
President's 2008 budget request provides the resources necessary to 
ensure that servicemembers' transition from active-duty military status 
to civilian life continues to be as smooth and seamless as possible.''

    Reality: VA's 2008 budget failed to meet this goal. The Walter Reed 
scandal broke a few days after VA's comments, revealing the military 
and VA were woefully underfunded and unprepared for unanticipated 
patients. We thank this Congress for ignoring the Administration's 
chronic underfunding and increasing VA's 2008 budget.

    VA Statement #2: Current VA Under Secretary for Health Mike Kussman 
said: ``With the resources requested for medical care in 2008, the 
Department will be able to continue our exceptional performance dealing 
with access to healthcare--96 percent of primary care appointments will 
be scheduled within 30 days of patients' desired date. . . .''

    Reality: While VA's Kussman claimed only 4 percent of patients 
waited more than 30 days to see a doctor, VA's Inspector General 
reported that 25 percent waited more than 30 days. This is six times 
more than VA's claim. In Charleston, South Carolina, the 
Charlottesville Observer reported that 93 percent of Iraq and 
Afghanistan war veterans waited more than 30 days for medical care for 
serious conditions such as TBI.

    VA Statement #3: Former VA Secretary Nicholson said: ``We expect to 
improve the timeliness of processing these claims to 145 days in 2008. 
. . . In addition, we anticipate that our pending inventory of 
disability claims will fall to about 330,000 by the end of 2008. . . 
.'' In VA's press release dated February 4, 2008, VA once again 
promised to cut the backlog to 300,000 claims and process claims in an 
average of 145 days.

    Reality: While VA would lead Congress to believe that VBA can 
improve, the pending inventory of rating-related claims is 400,000, and 
veterans wait an average of 183 days.

    Important Facts: VCS used the Freedom of Information Act to obtain 
documents providing incontrovertible evidence that VA's capacity crisis 
requires more funding.

      VA expects to treat 5.8 million patients this year, yet 
VA's IG reported 25 percent, or nearly 1.5 million veterans, will wait 
more than 1 month to see a VA doctor.
      VA regional offices are still working on 650,000 claims 
of all types, yet 26 percent, or 169,000 veterans, have already waited 
more than 6 months.

    Here are salient facts regarding Iraq and Afghanistan war veterans:

        DoD already reports 68,000 non-fatal battlefield 
casualties from the two wars, and VA expects to treat 333,000 veteran 
patients during 2009.
        VA hospitals already treated 264,000 unanticipated 
patients, yet 33 percent, or 87,000 veterans, wait more than 1 month to 
see a VA doctor.
        VA's budget proposal spends more than $7,100 per 
veteran on medical care, yet VA budgets only $3,900, for Iraq and 
Afghanistan veterans, or 55% of the cost.
        VA regional offices received 245,000 unanticipated 
disability claims, yet 16 percent, or 39,000 veterans, are still 
waiting, on average 6 months, for a VA claim decision.
        DoD reported 20 percent, or potentially as many as 
320,000, of our new war veterans are at risk for traumatic brain 
injury, or TBI.
        A recent West Virginia survey identified 36 percent, or 
potentially as many as 600,000, of our veterans as having post 
traumatic stress disorder, or PTSD.
        Veterans who served in the National Guard and Reserves 
are nearly three times as likely to have their claim denied than 
veterans from regular active duty (14% v. 5%).
        VA diagnosed 56,246 veterans with PTSD, yet approved 
only 61 percent of the claims, or 34,138, for PTSD.

    VA's failure to submit a budget to increase capacity and rectify 
other systemic problems needlessly increased suffering among our 
veterans. According to published reports, the number of broken homes, 
unemployed veterans, drug and alcohol abuse, suicides, and homelessness 
all rose--problems expected to worsen without immediate VA action.
    As the Rev. Martin Luther King, Jr. said, ``Injustice anywhere is a 
threat to justice everywhere.'' Our veterans earned and deserve better 
from our government. The Administration's VA budget request is dead on 
arrival because it does not deliver justice for our veterans in a 
complete and timely manner.
Additional VA Budget Suggestions
    VCS believes that VA should follow the role model of General Omar 
Bradley, VA's Administrator after World War II. He said, ``We are 
dealing with veterans, not procedures--with their problems, not ours.'' 
With that in mind, VCS solicited suggestions from our members, and they 
were incorporated in the following additional VA budget suggestions.
    VCS believes that VA's failures are caused by this Administration's 
myopia at saving money and its inability to evolve. VA should not be 
able to hide behind its failures to follow the law for decades as an 
excuse not to begin a massive reform program to eliminate homelessness 
among veterans, guarantee prompt and high-quality medical care, and 
process disability claims accurately within 1 month.
    VCS remains especially concerned that VA's inflexible leaders 
continue to be unable to provide justice to our Nation's veterans, 
especially during war when the needs of our veterans are most acute. 
Here are some items that would bring justice to our veterans.

      Patient Backlog. There is no Administration request for 
mandatory full funding for all priority groups, thereby excluding 
millions of uninsured veterans from VA hospitals and clinics. Currently 
there is an unlimited military budget for bullets and bombs for our 
military. Logically, there must also be mandatory full funding of VA's 
budget for hospital beds and benefits for our veterans. In addition, VA 
needs to stay open longer each weekday and consider being open on 
weekends in order to increase capacity and thus meet the increase in 
demand.
      New Patients. The VA did not request additional funding 
to provide the 5 years of mandatory free healthcare for our returning 
Iraq and Afghanistan war veterans recently signed into law. Similarly, 
there is no VA funding request to provide PTSD and TBI screening for 
all 1.6 million servicemembers deployed to the war zone. In January 
2008, a U.S. District Court ruled that our class action lawsuit against 
VA will move forward. The Court ruled the 2 years of free medical care 
is a spending mandate and rejected VA's view that spending on 
healthcare for Iraq and Afghanistan war veterans was discretionary. 
Congress should codify this ruling with mandatory full funding so no 
future veterans wait for VA care.
      Polytrauma. In 2007, VA planned more than 20 polytrauma 
centers. VCS believes every VA medical center should be capable of 
treating polytrauma patients in order to meet the growing demand that 
more than 6 years of ongoing warfare requires. All VA medical centers 
should have this ability so veterans can be treated near their homes 
where family members and friends can provide comfort and support.
      Suicide Epidemic. VA should fund a state-of-the-art 
suicide data collection, reporting, and analysis office. The national 
office should identify local, State, and Federal data about veterans 
who attempted or committed suicide so VA can implement the best 
policies to reduce suicide among all veterans, especially recent war 
veterans. This should include monitoring of specific cohorts of 
veterans by period of war, gender, race, number of deployments, length 
of deployments, and use of VA healthcare.
      Claims Backlog. In order to expedite claims and reduce 
the backlog, the VA budget submitted by the President should have 
sought new rules designed to create a presumption for a concussive 
blast and/or a psychological stressor so that VA can more accurately 
and quickly adjudicate claims for TBI and PTSD. Congress should mandate 
automatically approving all VA claims within 30 days, for a period of 
up to 1 year for deployed veterans' claims. VCS supports this bold 
recommendation initially made by Harvard University Professor Linda 
Bilmes.
      Disability Claims. VA should make sure that VA employees 
stationed at military facilities are authorized to assist with both 
military and VA healthcare and claims paperwork, thus ending the turf 
war preventing VA employees from assisting soon-to-be veterans. While 
VA recently signed a contract to review adding ``quality of life'' to 
the list of items considered when determining the amount of 
compensation payments, VA has not sought additional authority to pay 
such benefits.
      Long-Term Planning. While there is increased funding for 
information technology, there does not appear to be any funding for 
increased staffing for data collection, reports, and analysis. These 
are necessary so that VA does not repeat prior mistakes when VA 
requested insufficient funding. Congress should enact H.R. 1354, 
introduced by Rep. James Moran and Rep. Ray LaHood, which directs VA to 
define the war zones, collect data, and prepare cost and benefit use 
reports about the Iraq and Afghanistan wars. VCS also supports a 
longitudinal study of Iraq and Afghanistan war veterans that starts 
now. The Congress and the public must be fully and regularly informed 
about the human and financial costs of the two wars.
      Overhauling VA. VA does not appear to request money for a 
desperately needed agencywide overhaul, as recommended by the Veterans 
Disability Benefits Commission. VCS believes that our veterans and VA 
employees will continue to suffer as long as VA fails to plan for 
mandatory full funding and to plan to significantly expand timely 
access to VA healthcare and claims. One component would be to implement 
38 USC Section 5106, and thus require the military to automatically 
provide VA full military and medical records on all servicemembers. 
Another component would be to automatically enroll all servicemembers 
into VA the first day the new servicemember enters the military.
      Education Benefits. Transition and readjustment 
assistance in the form of educational benefits are a meager fraction of 
what they were when compared to the Post-World War II GI Bill. That is 
why VCS strongly supports S. 22, introduced by Senator Jim Webb, ``The 
Post-9/11 Veterans Educational Assistance Act of 2007,'' that 
substantially increases payments to veterans.
      Personality Disorder Discharges. There does not appear to 
be any funding so VA can review the applications for healthcare and 
disability benefits denied by VA on the basis of a personality disorder 
discharge given by the military.
      Ending Stigma. There is no funding to reduce the stigma 
against people with mental health conditions. Military studies confirm 
this stigma hinders many of our war veterans from seeking mental 
healthcare.
      Ending Employment Discrimination. Similarly, there is no 
funding for public service announcements to combat illegal job 
discrimination against veterans.
      Vet Centers. Congress should enact legislation expanding 
VA's highly successful Vet Centers so they can provide mental health 
services to active duty servicemembers, either at existing facilities 
or at new offices on military bases. This expanded service might first 
be targeted at military installations that have shortages of mental 
healthcare providers and bases expecting large redeployments from the 
war zones. Congress should allow families to participate in the 
readjustment counseling process at all Vet Centers.
      Executive Bonuses. Congress should allow only modest 
bonuses for VA executives, and these should be approved outside the 
agency's normal chain of command. Furthermore, VCS strongly supports 
performance-based incentives and bonuses for VA's rank-and-file 
employees for ideas and actions made to improve the delivery of 
healthcare and benefits to veterans.
      Gulf War Veterans. Years of denial of the problem of 
chronically ill Gulf War veterans is a tragic stain on the record of 
the U.S. Government in caring for our veterans. VCS strongly supports 
research to identify treatments for the 175,000 veterans of the 1991 
Gulf War that VA estimates remain chronically ill, especially the $75 
million for VA's program at the University of Texas Southwestern 
Medical School. Another project that deserves close Committee attention 
and support is actually funded by the military: VCS supports adding $30 
million to the Department of Defense budget for competitive research in 
the Congressionally Directed Medical Research Program since the 
military has historically provided the majority of funding for this 
research, but refuses to put it in its budget.
      Vietnam War Veterans. VCS continues to support research 
and treatments for Vietnam War veterans poisoned by dioxin contained in 
Agent Orange. VCS also supports outreach to veterans with diabetes, 
prostate cancer, and other war-related medical conditions so they are 
aware of new VA healthcare and disability benefits for those 
conditions. VA must be prohibited from expending funds to block claims 
by ``Blue Water'' veterans for VA healthcare and benefits related to 
agent orange.
      TSGLI. VA's Traumatic Servicemembers' Group Life 
Insurance program office should hire additional staff to analyze 
significant discrepancies in the outcomes of TSGLI claims. According to 
VA, only half of the TSGLI claims were approved (2,075 approved out of 
3,979 applications, or 52%). Furthermore, Active Duty veterans were 65 
percent more likely to have their TSGLI approved than National Guard 
and Reserve veterans (66% v. 40%). Currently, TSGLI is available only 
to servicemembers deployed to the Iraq and Afghanistan war zones. VCS 
believes Congress should expand TSGLI staffing and make TSGLI benefits 
available to servicemembers involved in training-related accidents, 
regardless of their location.
      Travel Reimbursement. VCS believes people in our country 
should be treated equally, and veterans should receive the full 70 
cents per mile reimbursement for travel, the same amount that 
Representatives and Senators receive, and not the 28 cents approved by 
Congress that includes a deductible that increased from $6 to $15.
      Due Process. VCS believes all veterans should be able to 
retain an attorney at the initial stages of a VA healthcare or 
disability benefit application in order to expedite and improve the 
process as well as to save VA money developing the claim; as it stands 
a veteran must wait until the initial VA determination is made and the 
veteran filed a Notice of Disagreement. VCS wishes to strongly 
emphasize the need for competent, unbiased, non-government legal advice 
for veterans and family members when a veteran has a serious injury 
(such as TBI or PTSD), as the most serious cases of VA healthcare and 
claims negligence and difficulties often involve veterans with these 
conditions.
      Outreach. VCS supports lifting the current ban on VA 
advertising and outreach, as described in the July 2002 memo authored 
by the former VA official Laura Miller. VCS believes VA should 
broadcast public service announcements describing VA services, 
especially for members of the National Guard and Reserve, who are using 
VA services less than their active duty peers. VCS believes Congress 
should fund VA training and outreach to universities so law students 
are encouraged to learn about laws designed to assist veterans, plus 
ongoing education to remain current on changes in the laws. If the 
military can spend billions recruiting new soldiers, then VA should be 
able to spend some money making sure veterans and their families know 
what they earned and making sure they can quickly receive it.

    VCS respectfully requests the following documents be entered into 
the hearing record:

      ``VA Facility Specific OIF/OEF Veterans Coded with 
Potential PTSD,'' Aug. 27, 2007.
      ``VA Benefits Activity: Veterans Deployed to the Global 
War on Terror,'' Nov. 14, 2007.
      VA ``Analysis of Healthcare Utilization Among U.S. Global 
War on Terror Veterans,'' Oct. 2007.
      DoD ``Contingency Tracking System Deployment File for 
Operations Enduring Freedom & Iraqi Freedom,'' Oct. 31, 2007.
      VCS ``VA Fact Sheet,'' Feb. 4, 2008 and VCS ``DoD Fact 
Sheet,'' Jan. 12, 2008.
      ``The Elusive `Seamless Transition','' Proceedings, 
February 2008.

                               __________
    VA Facility Specific OIF/OEF Veterans Coded with Potential PTSD
                         Through 3rd Qt FY 2007
I. Background
    The Government Accountability Office (GAO) has requested VA to 
enumerate the total number of OIF/OEF veterans who were diagnosed with 
PTSD by VISN and VAMC using VA inpatient and outpatient records. GAO 
also asked for this information to be aggregated with Vet Center 
utilization data. VHA prepared an initial report in October 2004 for 
the healthcare utilization during FY 2004. This eleventh report covers 
the VA healthcare data from FY 2002 through 3rd Qt FY 2007.
II. Data Sources
OIF/OEF veteran roster
    Since October 2003, the Department of Defense (DoD) Defense 
Manpower Data Center (DMDC) has sent the Department of Veterans Affairs 
(VA) Environmental Epidemiology Service (EES) a periodically updated 
personnel roster of troops who participated in Operation Enduring 
Freedom (OEF) and Operation Iraqi Freedom (OIF) who had separated from 
active duty and become eligible for VA benefits. The roster was 
originally prepared based on the pay records of individuals but in more 
recent months it was based on a combination of pay records and 
operational records provided by each branch of service. Based on the 
latest DMDC file received on July 27, 2007, there are a total of 
751,273 unique OEF/OIF veterans (excluding 3,638 who died in theater), 
who have been separated as of May 2007 from active duty following the 
deployment. For each veteran, his/her demographic (SSN, name, DOB, 
gender, education, etc.) and military service specific data (branch, 
rank, unit component, deployment dates, etc.) were included in the 
record.
VHA healthcare utilization records
    The roster was checked against VA's inpatient (PTF) and outpatient 
(OPC) electronic patient records available through June 30, 2007 to 
determine those who had sought treatment in VA facilities as well as 
the ICD-9 diagnostic codes used to describe the visits. Thus, the data 
we have was administrative data and not based on a careful review of 
each patient record. For the purpose of this report, we searched his/
her healthcare utilization records during FY 2002, 2003, 2004, 2005, 
2006 and through FY 2007 3rd Qt ending June 30, 2007 following his/her 
first deployment in Iraq or Afghanistan theater. For identification of 
a potential PTSD patient, we used ICD-9CM, 309.81.
    The Vet Center counts were based on the data provided to EES on 
August 17, 2007 by the Readjustment Counseling Service (RCS). The RCS 
staff matched the same DMDC roster with Vet Center users' records 
through FY 2007 3rd Qt.
III. Distribution of Veterans by Diagnostic Code and Facility
      A veteran is counted only once in any facility specific 
category. For example, a veteran, who received healthcare from two or 
more medical centers within the same VISN, was counted once for that 
VISN. Likewise, a veteran who used services across two or more VISN 
facilities and a Vet Center was counted only once for the national 
overall total.
      The number for ``Primary'' indicates the total number of 
unique veterans whose primary reason for the inpatient or outpatient 
visit was for treatment or evaluation of PTSD.
      The number for ``Any'' indicates the total number of 
unique veterans coded with PTSD, whether or not the primary reasons for 
the inpatient or outpatient visit was for treatment or evaluation of 
PTSD.
      Both ``Primary'' and ``Any'' categories may include a 
suspected diagnosis.
IV. Summary
    Recognizing the limitations of DMDC deployment roster and the 
uncertainty of the final diagnostic data based on VHA's electronic 
patient records, a query of VHA healthcare utilization databases using 
the May 2007 DMDC separation roster yielded a total of 48,559 OEF/OIF 
veterans coded with PTSD at a VA medical center and 14,655 veterans who 
received Vet Center service for PTSD. Of these, 41,591 were seen only 
at a VAMC; 7,687 only at a Vet Center; and 6,968 were seen at both 
facilities. In summary, based on the electronic patient records 
available through June 30, 2007, a grand total of 56,246 OEF/OIF 
veterans were seen for potential PTSD at VHA facilities following their 
return from Iraq or Afghanistan Theater.

    Han K. Kang, Dr.P.H.
    August 27, 2007

                               __________


                            Number of Unique OEF/OIF Veterans With PTSD Utilizing VA Facilities During FY 2002-3d Qt FY 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                 Inpatients            Outpatients       Total Patients \1\           Vet Centers \4\
              VISN--Facility               ---------------------------------------------------------------------------------------------------   Grand
                                            Primary \2\  Any \3\  Primary \2\  Any \3\  Primary \2\  Any \3\    PTSD     Sub-PTSD      Other   Total \5\
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--BEDFORD                                         10       36          185      204          185      210       58             5        86       256
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--BOSTON                                          29       84          574      672          578      691      311            25       519       834
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--MANCHESTER                                      --       --          168      208          168      208      144            11       475       304
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--NORTHAMPTON                                     30       39          181      192          182      193       92             2      1729       237
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--PROVIDENCE                                      16       45          332      383          333      390      129             1       785       451
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--TOGUS                                            3       18          275      319          275      321      265            87       595       475
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--WEST HAVEN                                       6       18          513      559          513      561      234            22       856       663
--------------------------------------------------------------------------------------------------------------------------------------------------------
 1--WHITE RIVER JCT                                 11       18          223      276          224      279      142           724       560       374
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    99      236         2332     2662         2334     2684     1375           877      5605      3386
  VISN 1
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 2--UPSTATE N.Y. HCS                                47       96         1205     1330         1209     1335      290            32      2782      1502
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    47       96         1205     1330         1209     1335      290            32      2782      1502
  VISN 2
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 3--BRONX                                           15       28          233      265          235      271       39             8        98       294
--------------------------------------------------------------------------------------------------------------------------------------------------------
 3--EAST ORANGE                                     13       30          533      583          533      586      317            30      2105       799
--------------------------------------------------------------------------------------------------------------------------------------------------------
 3--MONTROSE VA, HUDSON HCS NY                      13       22          183      201          184      203       15            --       115       216
--------------------------------------------------------------------------------------------------------------------------------------------------------
 3--N.Y. HARBOR HCS                                 13       36          590      671          593      676      267             7       819       837
--------------------------------------------------------------------------------------------------------------------------------------------------------
 3--NORTHPORT                                        9       29          240      278          240      279       38            10       125       291
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    59      136         1709     1916         1715     1926      676            55      3262      2328
  VISN 3
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 4--BUTLER                                          --       --           85       97           85       97       --            --        --        97
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--CLARKSBURG                                       7       16          227      249          227      250       83            --       819       296
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--COATESVILLE                                     10       18          170      183          173      188       --            --        --       188
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--ERIE                                            --       --          142      166          142      166       89            18       127       209
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--JAMES E VAN ZANDT VAMC                          --        3          154      185          154      185       --            --        --       185
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--LEBANON                                         15       23          297      327          297      329      123            42       362       392
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--PHILADELPHIA                                    20       33          569      674          569      675      124             1       274       736
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--PITTSBURGH--UNIV DR                             27       48          174      226          184      248      187           346       760       391
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--WILKES BARRE                                     8       22          221      258          222      262      158            60      1082       384
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4--WILMINGTON                                      --        1          128      144          128      144      199            17       589       272
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    84      155         2029     2348         2032     2363      963           484      4013      2926
  VISN 4
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 5--BALTIMORE                                        9       35          336      387          336      392      119             4       371       456
--------------------------------------------------------------------------------------------------------------------------------------------------------
 5--MARTINSBURG                                     14       23          368      395          368      395       96             1        26       436
--------------------------------------------------------------------------------------------------------------------------------------------------------
 5--WASHINGTON                                      12       28          516      572          518      579      208            30       926       688
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    35       80         1185     1311         1187     1320      423            35      1323      1531
  VISN 5
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 6--ASHEVILLE-OTEEN                                 17       21          143      180          145      183       --            --        --       183
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--BECKLEY                                         --        4          166      177          166      177      123             2       112       236
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--DURHAM                                          25       44          429      465          432      472      210            21      2943       583
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--FAYETTEVILLE NC                                 14       39          650      760          654      768       85            --      9293       810
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--HAMPTON                                          9       17          379      422          380      424       48            49      2129       450
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--RICHMOND                                        14       42          381      423          384      440       93             7       643       503
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--SALEM                                           14       25          169      198          173      205       26             3         3       214
--------------------------------------------------------------------------------------------------------------------------------------------------------
 6--SALISBURY                                       29       42          538      621          540      626       77           131      1545       673
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   121      225         2758     3115         2771     3150      662           213     16668      3474
  VISN 6
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 7--ATLANTA                                         29       49          554      614          556      620      159            21      1004       743
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--AUGUSTA                                         21       74          365      449          366      467       --            --        --       467
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--BIRMINGHAM                                      --       21          405      489          405      494       97             8      1675       571
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--CHARLESTON                                      11       18          333      404          336      409      189            26      3660       523
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--COLUMBIA SC                                      9       21          567      623          569      626      226             3      1457       768
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--DUBLIN                                          --        4          200      236          200      237       --            --        --       237
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--MONTGOMERY                                      45       64          694      771          706      785       --            --        --       785
--------------------------------------------------------------------------------------------------------------------------------------------------------
 7--TUSCALOOSA                                      15       28          433      451          436      455       --            --        --       455
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   126      264         3441     3901         3453     3934      671            58      7796      4340
  VISN 7
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 8--BAY PINES                                       11       36          355      396          355      403      105            11       994       457
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--MIAMI                                            9       30          432      486          432      489      479            20      1450       858
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--N FL/S GA HCS                                   18       50          729      847          730      853      178            83      2116       955
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--ORLANDO FL VAMC                                 --       --          334      386          334      386      128            23       746       457
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--SAN JUAN PR                                     16       57          292      428          293      432      155           112      2672       491
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--TAMPA                                           24       83          764      888          765      910       53             3        27       934
--------------------------------------------------------------------------------------------------------------------------------------------------------
 8--W PALM BEACH                                    18       31          207      227          209      230       --            --        --       230
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    95      276         2820     3312         2824     3350     1098           252      8005      3967
  VISN 8
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
 9--HUNTINGTON                                      --        3          286      307          286      308      131            15       623       369
--------------------------------------------------------------------------------------------------------------------------------------------------------
 9--LEXINGTON--LEESTOWN                             21       42          273      334          279      344       48             5       317       370
--------------------------------------------------------------------------------------------------------------------------------------------------------
 9--LOUISVILLE                                      15       33          219      257          223      265       27            29       638       277
--------------------------------------------------------------------------------------------------------------------------------------------------------
 9--MEMPHIS                                         25       42          281      342          285      351       61           158      1290       378
--------------------------------------------------------------------------------------------------------------------------------------------------------
 9--MOUNTAIN HOME                                   14       30          315      362          316      364       82             2       179       392
--------------------------------------------------------------------------------------------------------------------------------------------------------
 9--VA MID TENN HCS NASH TN                         39       85          528      633          536      655      122           270       975       728
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   111      232         1867     2194         1886     2237      471           479      4022      2458
  VISN 9
--------------------------------------------------------------------------------------------------------------------------------------------------------
10--CHILLICOTHE                                     11       23          169      195          169      199       --            --        --       199
--------------------------------------------------------------------------------------------------------------------------------------------------------
10--CINCINNATI                                      10       24          256      278          258      284       57            11       846       309
--------------------------------------------------------------------------------------------------------------------------------------------------------
10--CLEVELAND--WADE PARK                            11       48          544      626          544      638       46            16      1606       655
--------------------------------------------------------------------------------------------------------------------------------------------------------
10--COLUMBUS--IOC                                   --       --          205      242          205      242      123            14       156       320
--------------------------------------------------------------------------------------------------------------------------------------------------------
10--DAYTON                                          15       25          186      218          189      225       44             2        39       256
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    47      118         1318     1504         1322     1526      270            43      2647      1663
  VISN 10
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
11--ANN ARBOR HCS                                    7       19          215      252          216      256       --            --        --       256
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--BATTLE CREEK                                    26       36          313      354          317      360      102            --       127       426
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--DETROIT VAMC                                     5       23          150      215          152      220      108            16       526       294
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--ILLIANA HCS DANVILLE IL                          4       21          289      348          289      350       49             9       838       372
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--INDIANAPOLIS--10TH ST                           16       24          257      302          258      303       34            --       500       327
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--NORTHERN INDIANA HCS                             2        8          137      178          137      179       61            16       415       223
--------------------------------------------------------------------------------------------------------------------------------------------------------
11--SAGINAW                                         --       --          227      292          227      292       --            --        --       292
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    58      126         1537     1871         1542     1881      354            41      2406      2089
  VISN 11
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--HINES                                           18       44          308      346          310      359       71            25       140       407
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--ILLIANA HCS DANVILLE IL                         --       --           --       --           --       --       35            --       577        35
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--IRON MOUNTAIN                                    1        1           72       88           72       88       --            --        --        88
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--MADISON                                          6       24          163      199          163      207       33            30      6639       228
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--MILWAUKEE                                       17       45          366      431          370      441       34            12       245       464
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--NORTH CHICAGO                                    8       23          167      218          170      227       56            14       322       259
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--TOMAH                                           11       20          198      239          198      242       --            --        --       242
--------------------------------------------------------------------------------------------------------------------------------------------------------
12--VA CHICAGO HCS                                   5       16          228      275          228      280      132             3       533       372
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    64      165         1442     1716         1448     1754      361            84      8456      1981
  VISN 12
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
15--VA HEARTLAND--E VH MO                           36       76          673      785          678      794      151            41      1978       883
--------------------------------------------------------------------------------------------------------------------------------------------------------
15--VAMC HEARTLAND--W KANSAS MO                    111      189          755      871          785      922      165            12      4047      1040
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   146      263         1418     1645         1451     1702      316            53      6025      1907
  VISN 15
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
16--ALEXANDRIA                                      10       32          188      244          193      253       --            --        --       253
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--FAYETTEVILLE AR                                 16       30          239      258          241      266       --            --        --       266
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--GULF COAST HCS                                  13       32          560      625          565      636      530             7      1288      1021
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--HOUSTON                                         19       35          570      621          575      632       85            10       318       680
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--JACKSON                                          4       24          145      206          146      211       22            38       273       219
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--LITTLE ROCK                                     48       85          632      668          642      687      212            50       613       803
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--MUSKOGEE                                         4       12          214      241          216      244      108            22        19       321
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--OKLAHOMA CITY                                   15       37          360      424          363      436       63            36       328       464
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--SHREVEPORT                                      14       30          264      301          266      307      118           187      2052       386
--------------------------------------------------------------------------------------------------------------------------------------------------------
16--SOUTHEAST LA HCS                                 3        5          357      396          357      396       71           173        12       447
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   145      314         3436     3874         3463     3945     1209           523      4903      4705
  VISN 16
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
17--DALLAS                                          24       56          613      689          616      699      144            54       656       809
--------------------------------------------------------------------------------------------------------------------------------------------------------
17--SAN ANTONIO                                     33       54          879      986          881      991      301            86      2114      1145
--------------------------------------------------------------------------------------------------------------------------------------------------------
17--VA CENTRAL TEXAS HCS                            28       37          841     1013          843     1015      264            43      1304      1198
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    85      145         2290     2639         2297     2656      709           183      4074      3086
  VISN 17
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
18--AMARILLO HCS                                    --        2          154      178          154      179       64            64        98       216
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--EL PASO HCS                                     --       --          185      204          185      204       24             1      1111       218
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--NEW MEXICO HCS                                  18       45          584      634          586      640      243            15       321       738
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--NORTHERN ARIZONA HCS                             1        1          135      149          135      149       47            10        47       166
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--PHOENIX                                         30       69          847      932          852      941      103             8       942       980
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--SOUTHERN ARIZONA HCS                            39       58          360      436          364      443      102             1      2475       499
--------------------------------------------------------------------------------------------------------------------------------------------------------
18--WEST TEXAS HCS                                  --        2          129      151          129      151       53             3       252       175
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    86      171         2313     2588         2319     2606      636           102      5246      2877
  VISN 18
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
19--CHEYENNE                                        --        2          129      144          129      145      107            22       575       215
--------------------------------------------------------------------------------------------------------------------------------------------------------
19--DENVER                                          50       73          772      903          778      911      232             5      3266      1031
--------------------------------------------------------------------------------------------------------------------------------------------------------
19--FORT HARRISON                                    2       12          328      393          328      394      234            15       674       539
--------------------------------------------------------------------------------------------------------------------------------------------------------
19--GRAND JUNCTION                                   1        2           76       88           76       88       --            --        --        88
--------------------------------------------------------------------------------------------------------------------------------------------------------
19--SALT LAKE CITY HTHCARE                          27       48          482      551          485      560      198            38      2074       685
--------------------------------------------------------------------------------------------------------------------------------------------------------
19--SHERIDAN                                        18       28          124      157          127      159       --            --        --       159
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    91      154         1848     2167         1856     2184      771            80      6589      2623
  VISN 19
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
20--ALASKA HCS & RO                                 --       --           85      124           85      124      166            24      1206       242
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--BOISE                                            4       16          157      199          160      203       79            88      1540       265
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--PORTLAND                                        14       39          660      770          661      775      258            47       695       926
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--PUGET SOUND HCS                                105      137          956     1061          975     1087      397            53      6662      1333
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--S. ORG REHAB WHITE CITY                         --       --           67       77           67       77       37             2        82       103
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--SPOKANE                                          6       15          212      244          212      248      103            18      1499       298
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--VA ROSEBURG HCS                                 63       65          251      278          281      308       90            27      1710       355
--------------------------------------------------------------------------------------------------------------------------------------------------------
20--WALLA WALLA                                      4        4          136      158          136      158       --            --        --       158
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   185      259         2427     2798         2451     2834     1130           259     13394      3505
  VISN 20
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
21--CENTRAL CALIFORNIA HCS                           8       16          241      285          242      290      107             2       596       335
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--HONOLULU                                         1        4          223      242          223      243       88            25      1853       301
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--MANILA                                          --       --           14       14           14       14       --            --        --        14
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--NCHC MARTINEZ                                   --        2          535      775          535      777      352            44      1408       966
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--PALO ALTO--PALO ALTO                            28       88          501      586          508      616      125             3      1332       666
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--SAN FRANCISCO                                    5       20          284      315          286      325       99            13       176       381
--------------------------------------------------------------------------------------------------------------------------------------------------------
21--SIERRA NEVADA HCS                                5       16          160      175          160      177       57             3       153       202
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    43      142         1898     2300         1904     2339      828            90      5518      2742
  VISN 21
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
22--GREATER LA HCS                                  13       38          808      930          809      938      266            24      1451      1087
--------------------------------------------------------------------------------------------------------------------------------------------------------
22--LOMA LINDA                                      32       63          621      723          623      732      166            13      2827       823
--------------------------------------------------------------------------------------------------------------------------------------------------------
22--VA LONG BEACH HCS CA                             5       16          508      595          508      598      163            10       568       743
--------------------------------------------------------------------------------------------------------------------------------------------------------
22--VA SAN DIEGO HCS CA                             22       43          705      834          707      842      251             9      4673       974
--------------------------------------------------------------------------------------------------------------------------------------------------------
22--VA SOUTHERN NEVADA HCS                           6       19          281      332          282      334       78            12       541       377
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    77      174         2853     3311         2858     3334      924            68     10060      3867
  VISN 22
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
23--FARGO                                            3        6           90      115           92      117       92             1       910       180
--------------------------------------------------------------------------------------------------------------------------------------------------------
23--FORT MEADE                                       3        4          119      156          119      157       34             8       359       180
--------------------------------------------------------------------------------------------------------------------------------------------------------
23--MINNEAPOLIS                                     13       61          316      378          318      400       74            61      1135       448
--------------------------------------------------------------------------------------------------------------------------------------------------------
23--SIOUX FALLS                                      3       15          151      216          152      219       91            83      1589       267
--------------------------------------------------------------------------------------------------------------------------------------------------------
23--ST CLOUD                                         6       14          185      205          186      209       --            --        --       209
--------------------------------------------------------------------------------------------------------------------------------------------------------
23--VA NEB--WESTERN IA HCS                          19       55          855      955          855      963      227            30      2135      1071
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    47      153         1676     1971         1681     2000      518           183      6128      2279
  VISN 23
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Unique Counts                                     1788     3721        41982    48148        42106    48559    14655          4194    128922     56246
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. The ``total patient'' counts were generated by matching a cumulative roster of 751,273 unique OEF/OIF veterans, who had been separated from active
  duty as of May 31, 2007, with VA inpatient (PTF) and outpatient (OPC) databases for FY 2002, 2003, 2004, 2005, 2006 and through 3rd Qt FY 2007. The
  DoD Defense Manpower Data Center identified and provided the identity of these veterans to the VA Environmental Epidemiology Service on July 27, 2007.
2. The number for ``Primary'' indicates the total number of unique veterans whose primary reason for the inpatient or outpatient visit was for treatment
  or evaluation of PTSD.
3. The number for ``Any'' indicates the total number of unique veterans with PTSD, whether or not the primary reasons for the inpatient or outpatient
  visit was for treatment or evaluation of PTSD.
4. The Vet Center counts were based on matching the DMDC OEF/OIF roster with Vet Center user's record through 3rd Qt FY 2007.
5. The number for ``Grand Total'' (n=56,246) indicates the sum of ``Any Total Patients'' (n=48,559) and ``Vet Center PTSD'' (n=14,655) after excluding
  known duplicates (n=6,968).

                          VA BENEFITS ACTIVITY
             VETERANS DEPLOYED TO THE GLOBAL WAR ON TERROR
                          November 2007 Update

      Prepared by VBA Office of Performance Analysis and Integrity
                           November 14, 2007

    This report summarizes participation in VA benefits programs by 
veterans identified by the Department of Defense as having been 
deployed overseas in support of the Global War on Terror (GWOT). 
Information is included for the following VA programs: Compensation, 
Insurance, Home Loan Guaranty, Education, and Vocational Rehabilitation 
and Employment.
    This update provides data on VA program participation for 787.196 
GWOT veterans separated from military service through July 2007.
    It is important to understand that because many GWOT veterans had 
earlier periods of service, the benefits activity identified in this 
report could have occurred either prior to or subsequent to their GWOT 
deployment (or both).


                                  Chart #1  GWOT Veterans by Branch of Service
----------------------------------------------------------------------------------------------------------------
                        Branch of Service                            Reserve Guard      Active Duty      Total
----------------------------------------------------------------------------------------------------------------
Air Force                                                                    82,236           61,906    144,142
----------------------------------------------------------------------------------------------------------------
Army                                                                        265,597          155,062    420,659
----------------------------------------------------------------------------------------------------------------
Coast Guard                                                                     327              529        856
----------------------------------------------------------------------------------------------------------------
Marine Corps                                                                 28,601           70,634     99,235
----------------------------------------------------------------------------------------------------------------
Navy                                                                         23,171           92,969    116,140
----------------------------------------------------------------------------------------------------------------
Other                                                                             4               13         17
----------------------------------------------------------------------------------------------------------------
Unknown                                                                       2,226            2,102      4,328
----------------------------------------------------------------------------------------------------------------
Total matched to VA systems                                                 402,162          383,215    785,377
----------------------------------------------------------------------------------------------------------------
Unable to match to VA systems                                                   927              892      1,819
----------------------------------------------------------------------------------------------------------------
    Total                                                                   403,089          384,107    787,196
----------------------------------------------------------------------------------------------------------------


Note: The veteran's branch of service was obtained from VA's BIRLS 
system, which stores information for up to three periods of service. 
The branch of service associated with the most recent service date was 
used for the chart above.


                                        Chart #2  Gender of GWOT Veterans
----------------------------------------------------------------------------------------------------------------
                              Gender                                 Reserve Guard      Active Duty      Total
----------------------------------------------------------------------------------------------------------------
Female                                                                       42,054           43,499     85,553
----------------------------------------------------------------------------------------------------------------
Male                                                                        356,967          336,577    693,544
----------------------------------------------------------------------------------------------------------------
Unknown                                                                       3,141            3,139      6,280
----------------------------------------------------------------------------------------------------------------
Total matched to VA systems                                                 402,162          383,215    785,377
----------------------------------------------------------------------------------------------------------------
Unable to match to VA systems                                                   927              892      1,819
----------------------------------------------------------------------------------------------------------------
    Total                                                                   403,089          384,107    787,196
----------------------------------------------------------------------------------------------------------------



                                         Chart #3  Age of GWOT Veterans
----------------------------------------------------------------------------------------------------------------
                            Age Group                                Reserve Guard      Active Duty      Total
----------------------------------------------------------------------------------------------------------------
Under 20                                                                        157              280        437
----------------------------------------------------------------------------------------------------------------
20-29                                                                       135,492          247,911    383,403
----------------------------------------------------------------------------------------------------------------
30-39                                                                       119,465           74,040    193,505
----------------------------------------------------------------------------------------------------------------
40-49                                                                       105,658           51,996    157,654
----------------------------------------------------------------------------------------------------------------
50-59                                                                        35,909            7,400     43,309
----------------------------------------------------------------------------------------------------------------
60-69                                                                         4,662              277      4,939
----------------------------------------------------------------------------------------------------------------
Unknown                                                                         819            1,311      2,130
----------------------------------------------------------------------------------------------------------------
Total matched to VA systems                                                 402,162          383,215    785,377
----------------------------------------------------------------------------------------------------------------
Unable to match to VA systems                                                   927              892      1,819
----------------------------------------------------------------------------------------------------------------
    Total                                                                   403,089          384,107    787,196
----------------------------------------------------------------------------------------------------------------


Note: Veterans' ages are calculated as the number of whole years 
between the date of birth in the BIRLS system. Any veteran with a 
missing or invalid date of birth, or where the calculated age was under 
17 years or over 69 years, was placed in the ``Unknown'' age group.


                                     Chart #4  Average Age of GWOT Veterans
----------------------------------------------------------------------------------------------------------------
                                                                    Reserve Guard              Active Duty
----------------------------------------------------------------------------------------------------------------
Average Age                                                                36.0 years                30.0 years
----------------------------------------------------------------------------------------------------------------



                          Chart #5  Average Length of Service for GWOT Veterans Reserve
----------------------------------------------------------------------------------------------------------------
                                                                    Reserve Guard              Active Duty
----------------------------------------------------------------------------------------------------------------
Average Length of Service                                                   3.7 years                 7.7 years
----------------------------------------------------------------------------------------------------------------


Service-Connected Disability Compensation Program
    VBA's computer systems do not contain any data that would allow us 
to attribute veterans' disabilities to a specific period of service or 
deployment. We are therefore only able to identify GWOT veterans who 
filed a disability compensation claim at some point either prior to or 
following their GWOT deployment. We are not able to identify which of 
these veterans filed a claim for disabilities incurred during their 
actual overseas GWOT deployment.
    Many veterans file disability compensation claims for more than one 
condition. The table below provides information on individual GWOT 
veterans, not specific claimed disabilities.
    Individuals included in the category ``Veterans Awarded Service-
Connection'' are those veterans who have at least one condition that 
meets eligibility requirements for service connection under VA statutes 
and regulations. For veterans who filed a claim for more than one 
condition, this category contains veterans with a full grant of all 
conditions as well as veterans with a combination of disabilities 
granted and denied.
    If none of a GWOT veteran's claimed conditions meet eligibility 
requirements under VA statutes and regulations, these individuals are 
included in the category ``Veterans Denied Service-Connection.''


               Chart #6  C&P Activity Among GWOT Veterans
   (Includes claims filed both prior to and following GWOT deployment)
------------------------------------------------------------------------
                                     Reserves
             Category                 Guard     Active Duty     Total
------------------------------------------------------------------------
Deployed Servicemembers               434,341    1,140,860    1,575,201
------------------------------------------------------------------------
Total GWOT Veterans                   403,089      384,107      787,196
------------------------------------------------------------------------
Living GWOT Veterans                  402,305      381,030      783,335
------------------------------------------------------------------------
GWOT In-Service Deaths                    784        3,077        3,861
------------------------------------------------------------------------
Total GWOT Veterans with Claims
  Decisions                            74,017      142,051      216,104
------------------------------------------------------------------------
Veterans Awarded Service-              63,943      134,558      198,501
 Connection
------------------------------------------------------------------------
Veterans Receiving Compensation        49,054      116,848      165,902
------------------------------------------------------------------------
Veterans Denied Service-               10,110        7,493       17,603
 Connection
------------------------------------------------------------------------
Veterans with Pending Claims
  (as of 10-31-07)                     17,615       21,078       38,693
------------------------------------------------------------------------
Veterans with Pending Reopened          4,366        5,279        9,645
 Claims
------------------------------------------------------------------------
Pending from First-Time Claimants      13,196       15,734       28,930
------------------------------------------------------------------------
Total GWOT Veterans Filing
 Disability
  Claims *                             87,213      157,785      245,034
------------------------------------------------------------------------
* Includes ``Total GWOT Veterans with Claims Decisions'' and ``Pending
  from First-Time Claimants.''


    Disabilities are evaluated according to VA regulations, and the 
extent of the disability is expressed as a percentage from zero percent 
to 100 percent disabling, in increments of 10 percent. Veterans with 
more than one service-connected disability receive a combined 
disability rating.
    The chart below includes GWOT veterans awarded combined service-
connected disability ratings from zero percent to 100 percent, 
regardless of whether the veteran receives monetary compensation.


                               Chart #7  GWOT Veterans Awarded Service-Connection
                                       (by Combined Degree of Disability)
----------------------------------------------------------------------------------------------------------------
                   Combined Degree                       Reserves Guard        Active Duty           Total
----------------------------------------------------------------------------------------------------------------
          0%                                                      12,043              16,192             28,235
----------------------------------------------------------------------------------------------------------------
         10%                                                      16,351              25,495             41,846
----------------------------------------------------------------------------------------------------------------
         20%                                                       9,015              19,179             28,194
----------------------------------------------------------------------------------------------------------------
         30%                                                       7,025              19,036             26,061
----------------------------------------------------------------------------------------------------------------
         40%                                                       6,109              17,029             23,138
----------------------------------------------------------------------------------------------------------------
         50%                                                       3,292              10,200             13,492
----------------------------------------------------------------------------------------------------------------
         60%                                                       3,702              11,012             14,714
----------------------------------------------------------------------------------------------------------------
         70%                                                       2,310               6,886              9,196
----------------------------------------------------------------------------------------------------------------
         80%                                                       1,684               4,671              6,355
----------------------------------------------------------------------------------------------------------------
         90%                                                         736               1,905              2,641
----------------------------------------------------------------------------------------------------------------
        100%                                                       1,676               2,953              4,629
----------------------------------------------------------------------------------------------------------------
    Total                                                         63,943             134,558            198,501
----------------------------------------------------------------------------------------------------------------


Note: Includes corporate data. Previous reports included CPMR only.


                  Chart #8  Ten Most Frequent Service-Connected Disabilities for GWOT Veterans
                                      (Both Active Duty and Reserve/Guard)
----------------------------------------------------------------------------------------------------------------
               Diagnostic Code                                  Diagnosis Description                     Count
----------------------------------------------------------------------------------------------------------------
   6260                                                                                      Tinnitus    64,085
----------------------------------------------------------------------------------------------------------------
   5237                                                                                              Lumb56,633l or cervical strain
----------------------------------------------------------------------------------------------------------------
   6100                                                                             Defective hearing    52,902
----------------------------------------------------------------------------------------------------------------
   9411                                                                Post Traumatic Stress Disorder    34,148
----------------------------------------------------------------------------------------------------------------
   5260                                                                                              Limi30,572
----------------------------------------------------------------------------------------------------------------
   5271                                                                                              Limi29,200tion of the ankle
----------------------------------------------------------------------------------------------------------------
   5242                                                           Degenerative arthritis of the spine    23,157
----------------------------------------------------------------------------------------------------------------
   5299                                               Generalized, Elbow and Forearm, Wrist, Multiple    21,999
                                                                    Fingers, Hip and Thigh, Knee and Leg, Ank  , Foot,
                                                                           Spine, Skull, Ribs, Coccyx
----------------------------------------------------------------------------------------------------------------
   7101                                             Hypertensive vascular disease (essential arterial    21,931
                                                                                        hypertension)
----------------------------------------------------------------------------------------------------------------
   5024                                                                                 Tenosynovitis    20,582
----------------------------------------------------------------------------------------------------------------


Insurance Program Traumatic Injury Benefit
    Traumatic Servicemembers' Group Life Insurance (TSGLI) is a 
traumatic injury protection rider under Servicemembers' Group Life 
Insurance (SGLI) that provides for payment to any member of the 
uniformed services covered by SGLI who sustains a traumatic injury that 
results in certain severe losses. Through October 31, 2007, 6,877 
active duty servicemembers and veterans have applied for TSGLI. Of 
those, 3,979 were filed by GWOT veterans, and 2,142 of those received 
benefits.


                             Chart #9a  GWOT Veterans Who Applied for TSGLI Benefits
                                                    (by Age)
----------------------------------------------------------------------------------------------------------------
                      Age Group                           Reserve Guard        Active Duty           Total
----------------------------------------------------------------------------------------------------------------
Under 20                                                              --                   1                  1
----------------------------------------------------------------------------------------------------------------
20-29                                                                619               1,541              2,160
----------------------------------------------------------------------------------------------------------------
30-39                                                                578                 431              1,009
----------------------------------------------------------------------------------------------------------------
40-49                                                                502                  95                597
----------------------------------------------------------------------------------------------------------------
50-59                                                                186                   3                189
----------------------------------------------------------------------------------------------------------------
60-69                                                                 18                  --                 18
----------------------------------------------------------------------------------------------------------------
Unknown                                                               --                   5                  5
----------------------------------------------------------------------------------------------------------------
    Total                                                          1,903               2,076              3,979
----------------------------------------------------------------------------------------------------------------


Note: The totals above reflect veterans whose claims have been 
approved, have been denied or are currently pending.


                              Chart #9b  GWOT Veterans Who Received TSGLI Benefits
                                                    (by Age)
----------------------------------------------------------------------------------------------------------------
                      Age Group                           Reserve Guard        Active Duty           Total
----------------------------------------------------------------------------------------------------------------
Under 20                                                              --                   1                  1
----------------------------------------------------------------------------------------------------------------
20-29                                                                335                 990              1,325
----------------------------------------------------------------------------------------------------------------
30-39                                                                242                 272                514
----------------------------------------------------------------------------------------------------------------
40-49                                                                135                  54                189
----------------------------------------------------------------------------------------------------------------
50-59                                                                 42                  --                 42
----------------------------------------------------------------------------------------------------------------
60-69                                                                  1                  --                  1
----------------------------------------------------------------------------------------------------------------
Unknown                                                               --                   3                  3
----------------------------------------------------------------------------------------------------------------
    Total                                                            755               1,320              2,075
----------------------------------------------------------------------------------------------------------------



                            Chart #10a  GWOT Veterans Who Applied for TSGLI Benefits
                                                   (by Gender)
----------------------------------------------------------------------------------------------------------------
                        Gender                            Reserve Guard        Active Duty           Total
----------------------------------------------------------------------------------------------------------------
Female                                                                99                  53                152
----------------------------------------------------------------------------------------------------------------
Male                                                               1,796               2,016              3,812
----------------------------------------------------------------------------------------------------------------
Unknown                                                                8                   7                 15
----------------------------------------------------------------------------------------------------------------
    Total                                                          1,903               2,076              3,979
----------------------------------------------------------------------------------------------------------------


Note: The totals above reflect veterans whose claims have been 
approved, have been denied or are currently pending.


                              Chart #10b  GWOT Veterans Who Received TSGLI Benefits
                                                   (by Gender)
----------------------------------------------------------------------------------------------------------------
                        Gender                            Reserve Guard        Active Duty           Total
----------------------------------------------------------------------------------------------------------------
Female                                                                25                  33                 58
----------------------------------------------------------------------------------------------------------------
Male                                                                 741               1,336              2,077
----------------------------------------------------------------------------------------------------------------
Unknown                                                                2                   5                  7
----------------------------------------------------------------------------------------------------------------
    Total                                                            768               1,374              2,142
----------------------------------------------------------------------------------------------------------------


Home Loan Guaranty Program
    VA's home loan guaranty program has been helping veterans purchase 
homes for more than 60 years. VA guaranteed home loans are made by 
banks and mortgage companies to veterans, servicemembers and eligible 
reservists. With VA backing a portion of the loan, veterans can receive 
a competitive interest rate without a down payment, making it easier to 
buy a home.
    This benefit can be used more than once if needed to (1) refinance 
an existing VA guaranteed loan at a lower interest rate or (2) to 
purchase a home that will again be used as the person's primary 
residence (eligible to do this normally after paying off any previous 
loans.)


                          Chart#11  HomeLoanGuarantyProgramParticipationbyGWOTVeterans
----------------------------------------------------------------------------------------------------------------
                                                           Reserve Guard       Active Duty           Total
----------------------------------------------------------------------------------------------------------------
GWOT Veterans with VA Loan                                         103,419             78,003            181,422
----------------------------------------------------------------------------------------------------------------
Total Loans Made to GWOT Veterans                                  159,613            115,161            274,774
----------------------------------------------------------------------------------------------------------------
Dollar Amount of All Loans to GWOT Veterans               $18,111,753,284    $14,437,024,155    $32,548,777,439
----------------------------------------------------------------------------------------------------------------


Education Programs

    The chart below reflects participation by GWOT veterans in VA 
education benefit programs since September 11, 2001. Participants may 
have been entitled to more than one benefit. For example, a reservist 
may have received Chapter 1606 benefits until he or she became eligible 
to receive Chapter 1607 benefits. This participant would be reported in 
both columns in the chart below.


             Chart #12  Education Program Participation Among GWOT Veterans Since September 11, 2001
----------------------------------------------------------------------------------------------------------------
                Type of Training                    Chapter 30      Chapter 1606      Chapter 1607       Total
----------------------------------------------------------------------------------------------------------------
Graduate                                                  6,509             5,867             3,292      16,711
----------------------------------------------------------------------------------------------------------------
Under Graduate                                           59,894            71,796            22,443     157,219
----------------------------------------------------------------------------------------------------------------
Junior College                                           73,355            47,657            12,111     134,166
----------------------------------------------------------------------------------------------------------------
NCD                                                      17,213             6,920             2,426      27,027
----------------------------------------------------------------------------------------------------------------
    Total                                               156,971           132,240            40,272     335,123
----------------------------------------------------------------------------------------------------------------


    Montgomery GI Bill Active-Duty (Chapter 30) provides up to 36 
months of education benefits for degree and certificate programs, 
flight training, apprenticeship/on-the-job training, and correspondence 
courses. Generally, benefits are payable for 10 years following release 
from active duty.

    Montgomery GI Bill Selected Reserve (Chapter 1606) provides up to 
36 months of education benefits to members of the reserve elements of 
the Army, Navy, Air Force, Marine Corps, and Coast Guard, and members 
of the Army National Guard, and the Air National Guard. This benefit 
may be used for degree and certificate programs, flight training, 
apprenticeship/on-the-job training, and correspondence courses. 
Benefits generally end the day a member separates from the Selected 
Reserve or National Guard. For those who are activated, eligibility is 
extended beyond separation for a period of time equal to time served on 
active duty plus 4 months.

    Reserve Educational Assistance Program (REAP) (Chapter 1607) 
provides educational assistance to members of the Reserve components 
called or ordered to active duty in response to a war or national 
emergency as declared by the President or Congress. This new program 
makes certain reservists who were activated for at least 90 days after 
September 11, 2001, eligible for education benefits or eligible for 
increased benefits.

Vocational Rehabilitation and Employment (VR&E) Program_Chanter 31

                                  Chart #13  VR&E Activity Among GWOT Veterans
                     (Includes participation either prior to and following GWOT deployment)
----------------------------------------------------------------------------------------------------------------
                       Current Case Status                           Reserve Guard      Active Duty      Total
----------------------------------------------------------------------------------------------------------------
Applicant                                                                       376              881      1,257
----------------------------------------------------------------------------------------------------------------
Employment Services                                                             134              370        504
----------------------------------------------------------------------------------------------------------------
Evaluation and Planning                                                       1,025            2,326      3,351
----------------------------------------------------------------------------------------------------------------
Extended Evaluation                                                             165              355        520
----------------------------------------------------------------------------------------------------------------
Independent Living                                                               45               58        103
----------------------------------------------------------------------------------------------------------------
Interrupted                                                                     253              679        932
----------------------------------------------------------------------------------------------------------------
Rehabilitation to Employability                                               1,943            5,916      7,859
----------------------------------------------------------------------------------------------------------------
Unknown                                                                          86               24        110
----------------------------------------------------------------------------------------------------------------
Current Participants                                                          4,027           10,609     14,636
----------------------------------------------------------------------------------------------------------------
Rehabilitated                                                                   696              733      1,429
----------------------------------------------------------------------------------------------------------------
Discontinued                                                                    290              294        584
----------------------------------------------------------------------------------------------------------------
    Total VR&E Participants                                                   5,013           11,636     16,649
----------------------------------------------------------------------------------------------------------------


    Applicant: A veteran's case is assigned to applicant status when 
the VA receives an application (VAF-1900) for services under Chapter 
31.

    Evaluation and Planning: Determination of feasibility of a 
vocational goal and/or evaluation of the veteran's ability to function 
independently within the veteran's family and community.

    Extended Evaluation: Determine the current feasibility of the 
veteran with a serious employment handicap to achieve a vocational 
goal.

    Rehabilitation to Employability: Services and training necessary 
for entry into employment in an identified suitable occupational 
objective.

    Independent Living Program: Services that are needed to enable a 
veteran to achieve maximum independence in daily living, including home 
accommodations, counseling, and educational services, as determined 
necessary.

    Employment Services: Services to assist in obtaining and/or 
maintaining suitable employment.

    Rehabilitated: The goals of a rehabilitation/employment/independent 
living program have been substantially achieved.

    Interrupted: Temporary suspension of the program warranted due to a 
veteran's individual circumstances.

    Discontinued: All services and benefits are terminated.

    Serious Employment Handicap: A significant impairment of a 
veteran's ability to prepare for, obtain, or maintain employment, as 
determined by a VA counselor.

Sources

    DoD:

      Defense Manpower Data Center (DMDC) East, cumulative 
count of servicemembers deployed to OEF/OIF, from September 11, 2001 
through July 2007.
      DMDC West, extract of OEF/OIF servicemembers discharged 
to civilian status from September 2001 through July 2007.
      The DMDC list of 787,196 deployed GWOT veterans 
represents 50% of the cumulative deployed GWOT servicemember population 
of 1,575,201 through July 2007.

    VBA:

      Beneficiary Identification and Records Locator Subsystem 
(BIRLS), as of the end of the month October 2007.
      Compensation and Pension Master Record (CPMR), active 
records (``A'' type) as of the end of the month October 2007.
      CPMR, terminated records (``E'' type) as of the end of 
the month September 2007.
      Corporate records as of November 01, 2007.
      Pending Issue File (PI F), as of the close of business on 
October 31, 2007.
      Vocational Rehabilitation and Employment Service Chapter 
31 file, as of the end of the month September 2007.
      Loan Guaranty data, as of November 05, 2007.
      TSGLI file, as of October 31, 2007.
      Education Service data, as of the end of September 2007.

Questions
    Questions may be referred to the Office of Performance Analysis and 
Integrity at (202) 461-9040.

                               __________

                 Analysis of VA Healthcare Utilization
           Among U.S. Global War on Terrorism (GWOT) Veterans
                       Operation Enduring Freedom
                        Operation Iraqi Freedom
         VHA Office of Public Health and Environmental Hazards
                              October 2007

Current DoD Roster of Recent War Veterans

      Evolving roster development by DoD Defense Manpower Data 
Center (DMDC)

        In September 2003, DMDC developed an initial file of 
``separated'' troops who had been deployed to the Iraqi and Afghan 
theater of operations using proxy files: Active Duty and Reserve Pay 
files, Combat Zone Tax Exclusion, and Imminent Danger Pay data.
        In September 2004, DMDC revised procedures for creating 
periodic updates of the roster and now mainly utilizes direct reports 
from service branches of previously deployed OEF (Operation Enduring 
Freedom) and OIF (Operation Iraqi Freedom) troops.
        DMDC is actively addressing the limitations of the 
current roster to improve the accuracy and completeness of future 
rosters.

      Latest update of roster

        Provided to Dr. Kang, Veterans Health Administration 
(VHA) Environmental Epidemiology Service, on July 27, 2007.

      Qualifications of DoD's OEF/OIF deployment roster

        Contains list of veterans who have left active duty and 
does not include currently serving active duty personnel.
        Does not distinguish OEF from OIF veterans.
        Roster only includes separated OEF/OIF veterans with 
out-of-theater dates through May 2007.
        3,638 veterans who died in-theater are not included.

Updated Roster of OEF and OIF Veterans Who Have Left Active Duty

      751,273 OEF and OIF veterans who have left active duty 
and become eligible for VA healthcare since FY 2002.
        48% (362,237) Former Active Duty troops.
        52% (389,036) Reserve and National Guard.

Use of DoD List of War Veterans Who Have Left Active Duty
      This roster is used to check the VA's electronic 
inpatient and outpatient health records, in which the standard ICD-9 
diagnostic codes are used to classify health problems, to determine 
which OEF/OIF veterans have accessed VA healthcare as of June 30, 2007.
      The data available for this analysis are mainly 
administrative information and are not based on a review of each 
patient record or a confirmation of each diagnosis. However, every 
clinical evaluation is captured in VHA's computerized patient record. 
The data used in this analysis are excellent for healthcare planning 
purposes because the ICD-9 administrative data accurately reflects the 
need for healthcare resources, although these data cannot be considered 
epidemiologic research data.
      These administrative data have to be interpreted with 
caution because they only apply to OEF/OIF veterans who have accessed 
VHA healthcare due to a current health question. These data do not 
represent all 751,273 OEF/OIF veterans who have become eligible for VA 
healthcare since FY 2002 or the approximately 1.5 million troops who 
have served in the two theaters of operation since the beginning of the 
conflicts in Iraq and Afghanistan.
      Because VA health data are not representative of the 
veterans who have not accessed VA healthcare, formal epidemiological 
studies will be required to answer specific questions about the overall 
health of recent war veterans.
      Analyses based on this updated roster are not directly 
comparable to prior reports because the denominator (number of OEF/OIF 
veterans eligible for VA healthcare) and numerator (number of veterans 
enrolling for VA healthcare) change with each update.
      This report presents data from VHA's healthcare 
facilities and does not include Vet Center data or DoD healthcare data.
      The following healthcare data are ``cumulative totals'' 
since FY 2002 and do not represent data from any single year.
      The numbers provided in this report should not be added 
together or subtracted to provide new data without checking on the 
accuracy of these statistical manipulations with VHA's Office of Public 
Health and Environmental Hazards.
VA Healthcare Utilization from FY 2002 to 2007 (3rd QT) Among OEF and 
        OIF Veterans
      Among all 751,273 separated OEF/OIF Veterans
        35% (263,909) of total separated OEF/OIF veterans have 
obtained VA healthcare since FY 2002 (cumulative total).
          96% (253,730) of 263,909 evaluated OEF/OIF patients 
have been seen as outpatients only by VA and not hospitalized.
          4% (10,179) of 263,909 evaluated OEF/OIF patients 
have been hospitalized at least once in a VA healthcare facility.
VA Healthcare Utilization for FY 2002-2007 (3rd QT) by Service 
        Component
      362,237 Former Active Duty Troops.
        36% (132,194) have sought VA healthcare since FY 2002 
(cumulative total).
      389,036 Reserve/National Guard Members.
        34% (131,715) have sought VA healthcare since FY 2002 
(cumulative total).
Comparison of VA Healthcare Requirements
    The cumulative total of 263,909 OEF/OIF veterans evaluated by VA 
over approximately 5 years from FY 2002 to FY 2007 (3rd QT) represents 
about 5% of the 5.5 million individual patients who received VHA 
healthcare in any 1 year (total VHA patient population of 5.5 million 
in 2006).

          Frequency Distribution of OEF and OIF Veterans According to the VISN Providing the Treatment
----------------------------------------------------------------------------------------------------------------
                                                                                              OEF-OIF Veterans
                                                                                               Treated at a VA
             Treatment     Site                                                                  Facility *
                                                                                           ---------------------
                                                                                              Frequency      %
----------------------------------------------------------------------------------------------------------------
 VISN 1                                          VA New England Healthcare System        12,336     4.7
----------------------------------------------------------------------------------------------------------------
 VISN 2                                    VA Healthcare Network Upstate New York         7,460     2.8
----------------------------------------------------------------------------------------------------------------
 VISN 3                                  VA New York/New Jersey Healthcare System        10,255     3.9
----------------------------------------------------------------------------------------------------------------
 VISN 4                                      VA Stars & Stripes Healthcare System        12,709     4.8
----------------------------------------------------------------------------------------------------------------
 VISN 5                                              VA Capital Healthcare System         6,981     2.7
----------------------------------------------------------------------------------------------------------------
 VISN 6                                         VA Mid-Atlantic Healthcare System        14,437     5.5
----------------------------------------------------------------------------------------------------------------
 VISN 7                                                        VA Atlanta Network        18,941     7.2
----------------------------------------------------------------------------------------------------------------
 VISN 8                                            VA Sunshine Healthcare Network        22,107     8.4
----------------------------------------------------------------------------------------------------------------
 VISN 9                                           VA Mid-South Healthcare Network        15,527     5.9
----------------------------------------------------------------------------------------------------------------
 VISN 10                                             VA Healthcare System of Ohio         7,310     2.8
----------------------------------------------------------------------------------------------------------------
 VISN 11                               Veterans in Partnership Healthcare Network         9,462     3.6
----------------------------------------------------------------------------------------------------------------
 VISN 12                                                                VA Great Lakes He16,031re Sy6.1m
----------------------------------------------------------------------------------------------------------------
 VISN 15                                                     VA Heartland Network         9,310     3.5
----------------------------------------------------------------------------------------------------------------
 VISN 16                                      South Central VA Healthcare Network        22,950     8.7
----------------------------------------------------------------------------------------------------------------
 VISN 17                                     VA Heart of Texas Healthcare Network        16,181     6.1
----------------------------------------------------------------------------------------------------------------
 VISN 18                                          VA Southwest Healthcare Network        13,586     5.2
----------------------------------------------------------------------------------------------------------------
 VISN 19                                                VA Rocky Mountain Network        11,176     4.2
----------------------------------------------------------------------------------------------------------------
 VISN 20                                                     VA Northwest Network        15,249     5.8
----------------------------------------------------------------------------------------------------------------
 VISN 21                                                VA Sierra Pacific Network        12,050     4.6
----------------------------------------------------------------------------------------------------------------
 VISN 22                                     VA Desert Pacific Healthcare Network        21,559     8.2
----------------------------------------------------------------------------------------------------------------
 VISN 23                                            VA Midwest Healthcare Network        14,903     5.7
----------------------------------------------------------------------------------------------------------------
* Veterans can be treated in multiple VISNs. A veteran was counted only once in any single VISN but can be
  counted in multiple VISN categories. The total number of OEF-OIF veterans who received treatment (n = 263,909)
  was used to calculate the percentage treated in any one VISN.



                   Demographic Characteristics of OEF and OIF Veterans Utilizing VA Healthcare                                                                      Percent OEF/OIF Veterans (n =
                                                                                263,909)                                            Sex               Male                              88
                                                            Female                              12                                      Age Group                <20                               5
                                                             20-29                              52
                                                             30-39                              23
                                                                40                              20                                         Branch          Air Force                              12
                                                              Army                              65
                                                            Marine                              12
                                                              Navy                              11                                      Unit Type             Active                              50
                                                     Reserve/Guard                              50                                           Rank           Enlisted                              92
                                                           Officer                               8

Diagnostic Data
      Veterans of recent military conflicts have presented to 
VHA with a wide range of possible medical and psychological conditions.
      Health problems have encompassed more than 8,000 discrete 
ICD-9 diagnostic codes.
      The three most common possible health problems of war 
veterans were musculoskeletal ailments (principally joint and back 
disorders), mental disorders, and ``Symptoms, Signs and Ill-Defined 
Conditions.''
      As in other outpatient populations, the ICD-9 diagnostic 
category, ``Symptoms, Signs and Ill-Defined Conditions,'' was commonly 
reported. It is important to understand that this is not a diagnosis of 
a mystery syndrome or unusual illness. This ICD-9 code includes 
symptoms and clinical finding that are not coded elsewhere in the ICD-
9. It is a diverse, catch-all category that is commonly used for the 
diagnosis of outpatient populations. It encompasses more than 160 sub-
categories and primarily consists of common symptoms that do not have 
an immediately obvious cause during a clinic visit or isolated 
laboratory abnormalities that do not point to a particular disease 
process and may be transient.


       Frequency of Possible Diagnoses Among OEF and OIF Veterans
------------------------------------------------------------------------
                                                    (n = 263,909)
     Diagnosis (Broad ICD-9 Categories)     ----------------------------
                                               Frequency *      Percent
------------------------------------------------------------------------
Infectious and Parasitic Diseases (001-139)          28,665        10.9
Malignant Neoplasms (140-208)                         2,193         0.8
Benign Neoplasms (210-239)                            9,129         3.5
Diseases of Endocrine/Nutritional/Metabolic
 Systems
  (240-279)                                          50,968        19.3
Diseases of Blood and Blood Forming Organs            5,086         1.9
 (280-289)
Mental Disorders (290-319)                          100,580        38.1
Diseases of Nervous System/Sense Organs              83,273        31.6
 (320-389)
Diseases of Circulatory System (390-459)             39,633       15
Disease of Respiratory System (460-519)              49,464        18.7
Disease of Digestive System (520-579)                81,427        30.9
Diseases of Genitourinary System (580-629)           25,561         9.7
Diseases of Skin (680-709)                           38,791        14.7
Diseases of Musculoskeletal System/
 Connective System
  (710-739)                                         117,424        44.5
Symptoms, Signs and Ill Defined Conditions           93,093        35.3
 (780-799)
Injury/Poisonings (800-999)                          48,736        18.5
------------------------------------------------------------------------
* These are cumulative data since FY 2002, with data on hospitalizations
  and outpatient visits as of  June 30, 2007; veterans can have multiple
  diagnoses with each healthcare encounter. A veteran is counted only
  once in any single diagnostic category but can be counted in multiple
  categories, so the above numbers add up to greater than 263,909.



Frequency of Possible Mental Disorders Among OEF/OIF Veterans Since 2002
                                    *
------------------------------------------------------------------------
                                                    Total Number of GWOT
        Disease Category (ICD 290-319 code)             Veterans **
------------------------------------------------------------------------
PTSD (ICD-9CM 309.81)                                    48,559
------------------------------------------------------------------------
Nondependent Abuse of Drugs (ICD 305)                            40,320
------------------------------------------------------------------------
Depressive Disorders (311)                                       32,815
------------------------------------------------------------------------
Neurotic Disorders (300)                                         25,746
------------------------------------------------------------------------
Affective Psychoses (296)                                        18,069
------------------------------------------------------------------------
Alcohol Dependence Syndrome (303)                                 8,062
------------------------------------------------------------------------
Sexual Deviations and Disorders (302)                             4,550
------------------------------------------------------------------------
Special Symptoms, Not Elsewhere Classified (307)                  4,581
------------------------------------------------------------------------
Drug Dependence (304)                                             3,613
------------------------------------------------------------------------
Acute Reaction to Stress (308)                                    3,130
------------------------------------------------------------------------
* Note--These are cumulative data since FY 2002. ICD diagnoses used in
  these analyses are obtained from computerized administrative data.
  Although diagnoses are made by trained healthcare providers, up to one-
  third of coded diagnoses may not be confirmed when initially coded
  because the diagnosis is ``rule-out'' or provisional, pending further
  evaluation.
** A total of 100,580 unique patients received a diagnosis of a possible
  mental disorder. A veteran may have more than one mental disorder
  diagnosis and each diagnosis is entered separately in this table;
  therefore, the total number above will be higher than 100,580.
 This row of data does not include information on PTSD from VA's
  Vet Centers and does not include veterans not enrolled for VHA
  healthcare. Also, this row of data does not include veterans who did
  not have a diagnosis of PTSD (ICD 309.81) but had a diagnosis of
  adjustment reaction (ICD-9 309).
 81% of these veterans (32,700) had a diagnosis of tobacco use disorder
  (ICD-9 305.1).


Summary
      Recent OEF and OIF veterans are presenting to VA with a 
wide range of possible medical and psychological conditions.
      Recommendations cannot be provided for particular testing 
or evaluation--veterans should be assessed individually to identify all 
outstanding health problems.
      Thirty-five percent of separated OEF/OIF veterans have 
received healthcare from VA since 2002 compared to 35% in the last 
quarterly update. Although the percentage of war veterans seen by VA 
remained the same in this quarter, the percentage of OEF/OIF veterans 
receiving healthcare from VA and the percentage with any type of 
diagnosis will tend to increase over time as these veterans continue to 
enroll for VA healthcare and to develop new health problems, as true 
for other cohorts of military veterans.
      Because the 263,909 OEF and OIF veterans who have 
accessed VA healthcare were not randomly selected and represent just 
18% of the approximately 1.5 million recent OEF/OIF veterans, they do 
not constitute a representative sample of all OEF/OIF veterans.
      Reported diagnostic data are only applicable to the 
263,909 VA patients--a population actively seeking healthcare--and not 
to all OEF/OIF veterans.
         For example, the fact that about 38% of VHA patients' 
encounters were coded as related to a possible mental disorder does not 
indicate that approximately 1/3 of all recent war veterans are 
suffering from a mental health problem. Only well-designed 
epidemiological studies can evaluate the overall health of OEF/OIF war 
veterans.
      High rates of VA healthcare utilization by recent OEF/OIF 
veterans reflect the fact that these combat veterans have ready access 
to VA healthcare, which is free of charge for 2 years following 
separation for any health problem possibly related to wartime service.
         Also, an extensive outreach effort has been developed by VA to 
inform these veterans of their benefits, including the mailing of a 
personal letter from the VA Secretary to war veterans identified by DoD 
when they separate from active duty and become eligible for VA 
benefits.
      When a combat veteran's 2-year healthcare eligibility 
passes, the veteran will be moved to their correct priority group and 
charged all co-payments as applicable. If their financial circumstances 
place them in Priority Group 8, their enrollment in VA will be 
continued, regardless of the date of their original VA application.
Follow-Up
    VA will continue to monitor the healthcare utilization of recent 
Global War on Terrorism veterans using updated deployment lists 
provided by DoD to ensure that VA tailors its healthcare and disability 
programs to meet the needs of this newest generation of OEF/OIF war 
veterans.

                               __________


                            Contingency Tracking System (CTS) Deployment File for Operation Enduring Freedom & Iraqi Freedom
                                                                 As of: October 31, 2007
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                             Number of
                                                       Total        Number of Members with    Number of Members with    Total Number of       Members
                                                     Deployment     Only One Deployment \1\  More Than One Deployment     Members Ever       Currently
                                                       Events                                           \2\                 Deployed         Deployed
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army Active Duty                                         747,160                   309,604                   184,861            494,465         138,185
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army National Guard                                      234,214                   164,358                    31,694            196,052          23,864
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army Reserve                                             137,415                    88,651                    21,513            110,164          12,143
--------------------------------------------------------------------------------------------------------------------------------------------------------
Army Total \3\                                         1,118,789                   562,613                   238,068            800,681         174,192
--------------------------------------------------------------------------------------------------------------------------------------------------------
Navy Active Duty                                         417,409                   178,716                    98,210            276,926          35,894
--------------------------------------------------------------------------------------------------------------------------------------------------------
Navy Reserve                                              38,984                    21,258                     6,198             27,456           4,244
--------------------------------------------------------------------------------------------------------------------------------------------------------
Navy Total \4\                                           456,393                   199,974                   104,408            304,382          40,138
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air Force Active Duty                                    401,918                   134,669                    99,415            234,084          23,612
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air National Guard                                       116,638                    29,142                    28,952             58,094           3,079
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air Force Reserve                                         82,788                    16,585                    16,260             32,845           1,690
--------------------------------------------------------------------------------------------------------------------------------------------------------
Air Force Total \5\                                      601,344                   180,396                   144,627            325,023          28,381
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine Corps Active Duty                                 271,164                   104,786                    73,547            178,333          27,953
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine Corps Reserve                                      34,372                    26,712                     3,686             30,398           4,439
--------------------------------------------------------------------------------------------------------------------------------------------------------
Marine Corps Total \6\                                   305,536                   131,498                    77,233            208,731          32,392
--------------------------------------------------------------------------------------------------------------------------------------------------------
DoD Active Duty Total                                  1,837,651                   727,775                   456,033          1,183,808         225,644
--------------------------------------------------------------------------------------------------------------------------------------------------------
DoD National Guard Total                                 350,852                   193,500                    60,646            254,146          26,943
--------------------------------------------------------------------------------------------------------------------------------------------------------
DoD Reserve Total                                        293,559                   153,206                    47,657            200,863          22,516
--------------------------------------------------------------------------------------------------------------------------------------------------------
DoD Total                                              2,482,062                 1,074,481                   564,336          1,638,817         275,103
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coast Guard Active Duty                                    3,463                     2,439                       423              2,862             274
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coast Guard Reserve                                          232                       205                        10                215               3
--------------------------------------------------------------------------------------------------------------------------------------------------------
Coast Guard Total \7\                                      3,695                     2,644                       433              3,077             277
--------------------------------------------------------------------------------------------------------------------------------------------------------
Active Duty Total                                      1,841,114                   730,214                   456,456          1,186,670         225,918
--------------------------------------------------------------------------------------------------------------------------------------------------------
National Guard Total                                     350,852                   193,500                    60,646            254,146          26,943
--------------------------------------------------------------------------------------------------------------------------------------------------------
Reserve Total                                            293,791                   153,411                    47,667            201,078          22,519
--------------------------------------------------------------------------------------------------------------------------------------------------------
    Total                                              2,485,757                 1,077,125                   564,769          1,641,894         275,380
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Two or more deployment events with overlapping participation dates are considered a single deployment.
\2\ For purposes of counting ``deployments'' by member, location is not considered. Breaks between deployments or ``dwell times'' of less than 21 days
  are considered to be a single deployment in CTS. This is done in order to account for legitimate breaks in a deployment such as R&R or emergency
  leave.
\3\ Army Source: Joint Personnel Theater Database (JPTR), Deployed Theater Accountability System (DTAS) & Defense Finance and Accounting Service (DFAS)
  submissions for members earning Combat Zone Tax Exclusion (CZTE) or Imminent Danger Pay (IDP).
\4\ Navy Source: Individual Tempo (ITEMPO) & DFAS submissions for members earning CZTE or IDP.
\5\ Air Force Source: Deliberate Crisis Action Planning & Execution Segment (DCAPES) & DFAS submissions for members earning CZTE or IDP.
\6\ Marine Corps Source: Marine Corps Total Force System (MCTFS) Crisis File & DTAS.
\7\ Coast Guard Source: DFAS submissions for members earning CZTE or IDP.


                                          Veterans for Common Sense
                                              Post Office Box 15514
                                               Washington, DC 20003
                                                     (202) 491-6953
                                     www.VeteransForCommonSense.org
           VA Fact Sheet: Impact of Iraq and Afghanistan Wars
      Department of Defense Deployments, as of Oct. 31, 2007:
        Cumulative U.S. servicemembers deployed: 1,641,894
          Still remaining in the military: 854,698 (52%)
          Veterans eligible for VA healthcare and benefits: 
787,196 (48%)

      Veterans Health Administration (VHA), as of Dec. 21, 
2007:
        Patients treated: 263,909 (34% of veterans)
        Diagnosed with a mental health condition: 100,580 (38% 
of patients)
        Diagnosed with PTSD: 56,246 (21% of patients)
        Counseled at Vet Centers: 242,000 (31% of veterans)

      Veterans Benefits Administration (VBA), as of Nov. 14, 
2007:
        Filed a disability claim: 245,034 (31% of veterans)
        Still waiting for an answer: 38,693 (16% of claims 
filed)
        Approved for a PTSD claim: 34,138 (65% of VHA patients)
        Average wait time for BVA to process a claim: More than 
6 months

      Comparison of Active Duty with National Guard and 
Reserve:
        Veterans who served on Active Duty: 384,107 (49%)
        Veterans activated for Guard/Reserve: 403,089 (51%)
        Active Duty veterans with claims filed: 157,785 (41%)
        Guard/Reserve veterans with claims filed: 87,213 (22%)
        Active Duty veterans with claims rejected by VBA: 7, 
493 (5%)
        Guard/Reserve veterans with claims rejected by VBA: 
10,110 (14%)

      40 Year Estimate of War Costs by Harvard University, Jan. 
2007:
        New veteran patients: 700,000
        New veteran claims: 700,000
        Financial cost to U.S. taxpayers: $350 billion to $700 
billion
---------------------------------------------------------------------------
    Veterans for Common Sense is a nonpartisan organization providing 
information and advocacy on policies related to national security, 
civil liberties, veterans' healthcare and veterans' disability 
benefits. VCS is registered with the IRS as a nonprofit 501(c)(3) 
organization, and donations are tax deductible.

                               __________
                                          Veterans for Common Sense
                                              Post Office Box 15514
                                               Washington, DC 20003
                                                     (202) 491-6953
                                     www.VeteransForCommonSense.org
       DoD Fact Sheet: Casualties From Iraq and Afghanistan Wars

                 DoD Reports 72,043 Battlefield Casualties Among 1.6 Million Deployed Since 2001
----------------------------------------------------------------------------------------------------------------
                                                              Afghanistan War                     Total of Both
                     Casualty Category                             (OEF)        Iraq War (OIF)         Wars
----------------------------------------------------------------------------------------------------------------
                                                               Oct. 7, 2001-    Mar. 23, 2003-          Through
            Dates                                               Jan. 5, 2008      Jan. 5, 2008     Jan. 5, 2008
----------------------------------------------------------------------------------------------------------------
Total Deaths                                                             471             3,901            4,371
----------------------------------------------------------------------------------------------------------------
Total Wounded, Injured, and Ill                                        8,264            59,407           67,671
----------------------------------------------------------------------------------------------------------------
Total War Casualties                                                   8,735            63,308           72,043
----------------------------------------------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                  Deployment to War Zones                              Dates                  Servicemembers
----------------------------------------------------------------------------------------------------------------
Cumulative Number Deployed                                     Sep. 2001-Oct. 31, 2007                1,641,894
----------------------------------------------------------------------------------------------------------------
Deployed Twice or More                                         Sep. 2001-Oct. 31, 2007                  564,769
----------------------------------------------------------------------------------------------------------------
Source: Department of Defense
Afghanistan War (OEF): http://siadapp.dmds.osd.mil/personnel/CASUALTY/WOTSUM.pdf
Irag War (OIF): http://siadappdmdc.osd.mil/personnel/CASUALTY/OIF-Total.pdf


                   The Elusive `Seamless Transition'

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Copyright  2008, Proceedings, U.S. Naval Institute, Annapolis, 
                               Maryland 
                      (410) 268-6110 www.usni.org.

    Many wounded servicemembers discharged after serving in Iraq or
 Afghanistan must cope with confusing--and often conflicting--systems.
   In moving from 000 medical care and disability benefits to those 
                                provided
          by the VA. For some veterans, it can be a nightmare.
                             By Art Pine *

    In a perfect world, it would be a seamless transition. Severely 
wounded troops returning from Iraq and Afghanistan and discharged from 
the service would be able to get medical care and disability 
compensation payments--and a full range of benefits--from the 
Department of Veterans Affairs immediately. Red tape would be minimal. 
Counselors would help servicemember's cope with the paperwork and 
arrange for appointments. The veterans' military medical records would 
be waiting at VA facilities when they got there. Help for families 
would be readily available. Ideally, the entire transition would take 
no more than a month.
---------------------------------------------------------------------------
    * Mr. Pine, a former naval officer, is a veteran journalist who has 
worked as a Washington correspondent for the Baltimore Sun, Washington 
Post, Wall Street Journal, and Los Angeles Times. He is a frequent 
contributor to Proceedings.
---------------------------------------------------------------------------
    Instead, over the past 4 years, many returning Soldiers and 
Marines--a good number having lost arms or legs or suffered from 
traumatic brain injury (TBI) or post traumatic stress disorder (PTSD)--
have run into a bureaucratic nightmare. Confusing regulations have 
mandated separate physical examinations by the Department of Defense 
(DoD) and the VA, often with differing outcomes involving a 
servicemember's disability rating. The waiting time for VA compensation 
checks and other benefits frequently has ranged from 6 months to 2 
years--and appeals can prolong the process even more. The VA's own 
rulings have sometimes been inaccurate or inconsistent. And veterans, 
some of them unable to battle the bureaucratic dragons, have often come 
out the losers.
    Not surprisingly, the ``seamless transition'' problem, as it has 
come to be known, has exploded into a major controversy. A series of 
articles in the Washington Post a year ago, which highlighted the 
problems facing outpatients at Walter Reed Army Medical Center in 
Washington, has spawned several high-level investigations--including an 
independent review ordered by Defense Secretary Robert M. Gates and the 
separate Dole-Shalala report, written by a bipartisan commission--to 
look into the problem and make recommendations. Congress just passed 
legislation designed to fix some of the glitches.
    Under pressure from all sides, DoD and the VA have begun working 
together to correct some of the problems. Over the past few months, the 
two Departments have hired more counselors and ombudsmen to guide sick 
and wounded veterans through the transition process. They have 
established a pilot program that would provide for a single physical 
examination that would serve both the military and the VA. And they 
have placed VA-DoD ``recovery coordinators'' at major military 
installations to improve cooperation between the Departments.
    But some veterans' groups are skeptical that such efforts will 
solve the problem anytime soon. Paul Sullivan, a former VA official who 
now serves as executive director of Veterans for Common Sense, a 
Washington-based advocacy group that has focused on the seamless 
transition problem, argues that while the situation ``is getting 
better,'' it will take years--even decades--for the glitches to be 
fixed.
    ``The veterans don't have that kind of time,'' Sullivan says. 
``They should not have to wait.''
A Major Overhaul Needed
    Sullivan, a Gulf War veteran with 15 years' experience in dealing 
with the VA, advocates a major overhaul of the Department to 
significantly simplify its regulations and procedures, greatly enlarge 
its staff and make veterans' benefits a full-fledged entitlement 
program--much like Social Security--that isn't vulnerable to political 
whims. He also wants the VA to upgrade the qualifications of the 
counselors who help veterans apply for benefits, many of whom are 
retired senior enlisted personnel without legal training or college 
degrees.
    The congressional watchdog agency, the Government Accountability 
Office (GAO), also has called repeatedly for a major overhaul of VA 
procedures for determining disability compensation.
    By any standard, overhauling the current system wouldn't be cheap. 
Although no one seems to have firm figures on how much it would take to 
erase the problems, estimates range to tens of billions of dollars over 
the next few years. ``You have a systemic problem that can only be 
solved by simplifying the system,'' says Linda Bilmes, a Harvard 
University government expert who did a study on the seamless transition 
problem last year. ``It's inevitably going to take a long time to 
resolve.''
    Although the waiting time for VA medical care often is long, by far 
the lion's share of the complaints about the transition stem from the 
extended length of time it takes to obtain VA compensation benefits. On 
the whole, returning troops seem satisfied with the military medical 
care they receive, which is considered of high quality. And the 
separate VA healthcare system is readily available to newly discharged 
combat veterans, and is top-notch to boot. ``I don't think I ever got a 
complaint about the VA's medical care,'' says John F. Sommer Jr., 
national executive director of the American Legion, reflecting an 
upsurge in the Department's performance over the past decade. ``There's 
little problem with the quality of healthcare once people get into the 
system.''
    The frustrations stem not just from the VA, but also from the whole 
gamut of procedures and delays, starting with the military's own 
medical discharge procedures. The combination has created a 
bureaucratic obstacle course--and, often, a financial hardship for Iraq 
and Afghanistan veterans who try to make the shift. ``The problem is 
that veterans have to navigate among four separate systems--military 
medicine, military disability pensions, VA healthcare, and VA 
disability compensation benefits,'' says Sullivan of Veterans for 
Common Sense. ``It's terribly confusing for almost everybody.''


--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    ``The problem is that veterans have to navigate among four separate systems--military medicine, military
  disability pensions, VA healthcare, and VA disability compensation benefits,'' says Paul Sullivan of Veterans
                       for Common Sense. ``It's terribly confusing for almost everybody.''
----------------------------------------------------------------------------------------------------------------


The Nuts and Bolts
    Here's how the system works.
    Under longstanding regulations, seriously wounded troops are 
returned to one of a handful of military hospitals for medical 
treatment and recovery--primarily Walter Reed Army Medical Center in 
Washington, the National Naval Medical Center at Bethesda, Maryland, 
and Brooke Army Medical Center in San Antonio. After surgery or other 
treatment, they're put into rehabilitation programs for a while and 
then kept on as outpatients. Eventually, the military services' own 
physicians decide they've essentially done all they can for the medium-
term, and it's time to decide whether the servicemember should remain 
in the military or be discharged or retired.
    When that time comes, physicians on a medical evaluation board, or 
MEB, from the individual's service review the case and decide whether 
they think the servicemember involved is fit for duty. If he (or she) 
is deemed fit, he's kept on active-duty and transferred back to a 
``Warrior Transition Unit'' that helps manage his rehabilitation 
schedule and prepares him for another duty assignment. If he's not 
deemed fit, the board recommends that he be separated from the service. 
For those who are considered unfit, the next step is to decide whether 
the servicemember should be ``medically retired'' or merely discharged. 
Physicians on a physical evaluation board, or PEB, decide how disabled 
the servicemember has been made by the single specific injury that made 
him unfit for duty--a loss of limb or a serious head wound, for 
example. If it's 30 percent or more, the servicemember is offered 
retirement status, with a lifetime package that includes a pension, 
medical treatment for himself and his family, commissary privileges, 
and an array of other benefits.
    Those given disability ratings of zero to 20 percent are not 
offered retirement but instead are discharged, and given a lump-sum 
severance payment. DoD often informally advises these servicemembers to 
apply to the VA for medical care and compensation, where they have a 
prospect of receiving a higher disability for a servicemember who is 
suffering from mild traumatic brain injury or from PTSD, the process is 
especially daunting, Beck says. It's hard enough to navigate the system 
when your mental faculties are in place, but having a mental disability 
that makes it difficult for you to concentrate, for instance, makes 
following the process almost impossible, she says. Family members 
rarely have the expertise or familiarity with the system to be of much 
help. As a result, some veterans end up cash-strapped for months until 
the cash payments begin to flow. Others fall through the cracks 
entirely.
Not Always Easy
    But doing that isn't always easy. Although veterans of Iraq and 
Afghanistan are entitled to temporary VA medical care without 
conditions, they must undergo a separate physical exam to decide how 
much, if anything, they'll receive in compensation and benefits from 
the VA's Veterans Benefits Administration. They have to fill out 
significant amounts of paperwork. They must submit their complete 
medical records from the military, which often are incomplete or even 
illegible. And they are responsible for keeping their appointments with 
physicians, clinics, and bureaucrats, no matter what their physical or 
mental condition.
    Bewildering for many veterans is that the VA's own medical 
examination uses different criteria for assigning a disability rating 
than do the military's physical examination boards, and each of the 
four services has its own individual standards. DoD's physical 
evaluation is concerned only with the single specific injury (such as 
the loss of a limb) that has made the servicemember unfit for duty. By 
contrast, the VA examination looks at all the veteran's physical and 
mental ailments to determine the extent to which all of his service-
connected impairments have limited his capacity to function in the 
civilian workforce and thus what his lifetime compensation payments 
ought to be. So while the PEB might score a Soldier or Marine at 20 
percent, the VA could assign a score of 80 percent. To add to the 
problem, the just-discharged veteran faces an often-dizzying array of 
potential problems.
    The VA uses an electronic recordkeeping system, but until recently 
DoD medical records were largely kept on paper. Thus information can't 
be transferred between the two Departments automatically. In most 
cases, newly discharged servicemembers must carry their paper records 
to the VA by hand. If the records aren't complete, it's often difficult 
for an individual veteran to obtain the missing portions. If he 
overlooks a report--or doesn't know that it exists--he may never find 
out about the omission.
    The menu of VA and other government benefits including education 
grants and Social Security disability payments--is so large and complex 
that even experienced veterans' advocacy groups have trouble coping 
with it. The application form alone that veterans must fill out to 
obtain VA benefits is 26 pages long; the program descriptions and 
regulations fill a book half an inch thick; and the manual that 
staffers use to compile disability ratings is 2 inches thick.
Time-Consuming Process
    The process of making appointments with physicians, lab 
technicians, counselors, and bureaucrats is time-consuming and requires 
frequent followup by the veteran, particularly for those with multiple 
impairments, which involve several specialists and rehabilitation 
clinics. Dealing with the bureaucracy also is a problem. Veterans' 
organizations say their constituents too often receive letters that are 
contradictory or in error. It often takes hours of work and attention 
to straighten things out.
    ``It's like being on the phone with your health insurance company 
all day, every day,'' says Meredith Beck, national policy director for 
the Wounded Warrior Project, an advocacy group based in Jacksonville, 
Florida, that has focused on the seamless transition problem.
    For a servicemember who is suffering from mild traumatic brain 
injury or from PTSD, the process is especially daunting, Beck says. 
It's hard enough to navigate the system when your mental faculties are 
in place, but having a mental disability that makes it difficult for 
you to concentrate, for instance, makes following the process almost 
impossible, she says. Family members rarely have the expertise or 
familiarity with the system to be of much help. As a result, some 
veterans end up cash-strapped for months until the cash payments begin 
to flow. Others fall through the cracks entirely.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  NEW SECRETARY Retired Army Lieutenant General James Peake, a physician, was sworn in as Secretary of Veterans
Affairs on 20 December 2007. Here he takes his first tour of the new rehabilitation facilities at Walter Reed
Army Hospital and talks to Marine Lance Corporal Josh Bliell. Officials of both the VA and the various services
are seeking to simplify and accelerate the transition of wounded troops from one organization to the other.
----------------------------------------------------------------------------------------------------------------


    Both the GAO and veterans groups say the system isn't equipped to 
handle claims involving TBI, PTSD, and other mental problems 
efficiently. Critics say there's such a stigma attached to mental 
illnesses in the military that many returning soldiers won't report 
them.
What Went Wrong
    The roots of the whole seamless transition problem go well back 
into bureaucratic history. The DoD and VA procedures that have created 
it have been in force for decades--some dating back to the end of World 
War II. But the volume of returning veterans wasn't sufficient to clog 
the system then, and even during the Vietnam War the problem didn't 
come to public attention. Many seriously wounded Soldiers and Marines 
simply died on the battlefield, and the ones who did come home and were 
discharged, rather than retired, were sent to VA hospitals, where they 
were treated as inpatients.
    The post-9/11 attack on Afghanistan and invasion of Iraq (in 2001 
and 2003, respectively) changed all that dramatically. To begin with, 
the conflicts have gone on far longer than most top policymakers 
anticipated. In both wars, expectations were for a quick military 
victory, followed by a handover of power to the countries' own 
governments. A lengthy occupation, opposed by insurgents using IEDs, 
car bombs, and suicide bombers--and, eventually, extended and repeat 
deployments--weren't even on the drawing boards. Top U.S. generals and 
senior Bush Administration officials spoke of a quick campaign of 
``shock and awe'' in Iraq, followed by a prompt withdrawal of American 
troops.
    At the same time, improvements in military medicine have enabled a 
far greater share of seriously wounded troops to survive and return 
home for treatment. Better body armor protects more U.S. warfighters 
against explosions and bullets. Today's highly skilled medics can treat 
battlefield injuries more successfully, using new techniques such as 
one-handed tourniquets and clotting bandages. And rapid evacuation by 
helicopter is a matter of course. Today, only 10 percent of those 
wounded in battle ultimately die, compared to 30 percent in Vietnam. At 
the same time, the proportion of those losing arms or legs has doubled 
to 6 percent, from 3 percent before.
    To add to the strain on stateside facilities, the combination of 
near-miracle medical technology and heightened pressures for cost 
cutting has changed the way American medicine treats such cases--and 
perversely contributes to the seamless transition problem. Where 
previous generations of wounded veterans had been treated almost 
entirely in hospitals, now they're released to go home and return for 
medical attention solely as outpatients.
    Finally, the long occupation and the frequency of injuries from car 
bombs, IEDs, and suicide bombers have brought a sharp increase in cases 
of TBI and PTSD that the military had little experience in recognizing 
and treating in previous conflicts. (Those who suffered from PTSD 
during the Vietnam War were discharged and sent to VA hospitals.) It 
often compounds the physical wounds that the troops who served in Iraq 
and Afghanistan bring home.


--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  The rival and often lethargic DoD and VA bureaucracies showed little real enthusiasm for cooperating with one
    another to help fix the problems. And no one at the top--anywhere in government-- was pushing for a major
                                                    overhaul.
----------------------------------------------------------------------------------------------------------------


Overwhelming the System
    The combination of factors quickly overwhelmed both the military 
and the VA--and seriously exacerbated the glitches in the transition 
process. Before 2001, the year that the United States attacked 
Afghanistan, the number of pending claims for disability compensation 
stood at 69,000, and only a third of them had been in process for more 
than 6 months. By Fiscal Year 2007, which ended 30 September, the 
number had soared to 392,000 pending claims, and the VA was taking an 
average of 181 days to process them. For servicemembers who choose to 
appeal the VA's initial decision, the average time taken to resolve the 
case topped 650 days.
    ``It's too long, no doubt about it--much longer than I would 
like,'' concedes retired Navy Vice Admiral Daniel L. Cooper, the VA 
Under Secretary who heads the Department's Veterans Benefits 
Administration, the VA branch that deals with compensation and 
benefits. He says the Department hopes to bring processing time down in 
coming months.
    By early 2004, the potential magnitude of the seamless transition 
problem was clearly apparent. Veterans' groups were reporting 
increasing numbers of serious problems. The GAO was issuing reports 
pointing out significant failures in the system. And lawmakers were 
regularly expressing outrage about cases involving their constituents.
    Once the war in Iraq began, in March 2003, there were other 
pressures that made tackling the seamless transition problem elusive. 
With the conflict already proving more difficult than Washington had 
anticipated, the Bush Administration was reluctant to spotlight the 
greater-than-expected casualties. At the same time, the Federal Office 
of Management and Budget, faced with mushrooming domestic spending and 
a push for a smaller military, was leaning on departments and agencies 
to hold down nonmilitary spending. The VA sharply underestimated its 
own needs in FY 2006 and 2007, and had to seek billions of dollars in 
supplemental appropriations. The rival and often lethargic DoD and VA 
bureaucracies showed little real enthusiasm for cooperating with one 
another to help fix the problems. And no one at the top--anywhere in 
government--was really pushing for a major overhaul.
Slow Start
    As might be expected, the government's reaction--in the VA, DoD, 
the White House, and Congress--wasn't instantaneous. In August 2003, 
then-VA Secretary Anthony Principi formally recognized the problem and 
put together a ``Seamless Transition Task Force'' to tackle it within 
the Department. The group eventually issued a report, but little was 
done by the time Principi left at the end of 2004.
    What changed the equation was the February 2007 Washington Post 
series on Walter Reed, written by Dana Priest and Anne Hull. The 
articles became best known for exposing the dilapidated, mold-infested 
temporary housing units in the medical center's Building 18, in which 
severely wounded servicemembers and their families were living, but the 
most telling part of the series described the bureaucratic run-around 
they had received from hospital personnel who had been tasked with 
arranging for outpatient rehabilitation care, military disability 
ratings, and VA benefits.
    ``The Post series was about Walter Reed, but it described the same 
kinds of symptoms that exist in the seamless transition problem,'' says 
retired Lieutenant General Charles H. Roadman II, a former Surgeon 
General of the Air Force who later served on an independent DoD-
appointed commission charged with investigating conditions at Walter 
Reed.
    Walter Reed ``brought the problem into the national consciousness'' 
and led to a speedup in efforts to deal with the problem, says Paul 
Rieckhoft, executive director and founder of Iraq and Afghanistan 
Veterans of America, a New York-based advocacy group that has focused 
on the seamless transition problem.
    The horror stories are legion. Newspapers all over the country have 
been running articles about returning Soldiers and Marines who have 
experienced serious difficulties in obtaining medical care and 
compensation benefits, which often leave them in a major financial 
bind, and seriously depressed.
    Federal officials contend that some of the difficulties nationally 
may have been exaggerated. Although the United States has sent 1.6 
million combat troops to Iraq and Afghanistan since hostilities began, 
there have been 66,000 cases over that period in which servicemembers 
have been wounded, injured, or taken ill on the battlefield. The total 
number of Iraq and Afghanistan veterans who have lost a limb is about 
730--much lower than popular perceptions suggest. Indeed, there's a 
serious dispute over how big the seamless transition problem is. The 
VA's Vice Admiral Cooper estimates that after eliminating those wounded 
and severely ill Iraq and Afghanistan veterans who are granted medical 
retirements--and thus receive pensions from the military--the number 
adversely affected by the lack of a seamless transition to the VA 
amounts to fewer than 2,000 a year.
    But Sullivan of Veterans for Common Sense argues that that 
definition is too narrow--and misleading. ``It's true that there are 
about 2,000 servicemembers a year who are in the `very seriously 
wounded' category,'' he says, ``but the VA is now treating some 264,000 
veterans of the two conflicts,'' and even those who qualify for 
military medical care may apply for VA disability compensation 
payments, which particularly benefit those in lower ranks. ``The VA 
didn't prepare for this massive influx of claims,'' he says. ``It's 
trying to narrow the definition so they can say there's no problem.''


--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Critics question whether what is being done is really enough. Retired  Air Force Major General Charles H.
    Roadman II cautions that the  pilot projects, if successful, must be expanded rapidly, without  the usual
                bureaucratic delays. `There's a tendency to ``pilot''  things to death,' he notes.
----------------------------------------------------------------------------------------------------------------


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
  COMMAND INTEREST Defense Secretary Robert M. Gates and Admiral Edmund Giambastiani, then Vice Chairman of the
Joint Chiefs of Staff, meets with wounded troops at Walter Reed Army Medical Center in February 2007 to discuss
problems at the hospital expanded to include severe difficulties encountered by servicemembers moving from the
military medical system to VA healthcare.
----------------------------------------------------------------------------------------------------------------


Taking It Seriously
    In the wake of the Washington Post series, all sides have begun 
taking the problem more seriously. The Bush Administration has ordered 
three separate investigations of the system by bipartisan commissions 
that have released reports this year--a special Independent Review 
Group named by Defense Secretary Gates, which looked into the situation 
at Walter Reed and Bethesda; the President's Commission on Care for 
America's Returning Wounded Warriors, known popularly as the Dole-
Shalala Commission; and the Veterans' Disability Benefits Commission 
set up by Congress with members appointed by the President.
    Together, they have recommended a number of steps designed to ease 
the strain on the system: DoD and the VA should work together to 
streamline procedures for determining disability compensation, 
collaborate on providing more assistance to help returning veterans 
cope with the transition, bolster support for families, work toward 
making their electronic recordkeeping systems compatible with one 
another, and do more to identify and treat post traumatic stress 
disorder and mild traumatic brain injury.
    Congress has stepped into the fray, passing legislation, called the 
Wounded Warriors Act, last December designed to write some of the 
Commissions' recommendations into law. They range from streamlining and 
standardizing the procedures for calculating disability compensation 
and benefits to requiring DoD and the VA to develop joint policies on 
managing servicemembers' healthcare, including developing fully 
interoperable electronic health records. The law also mandates the 
development of a comprehensive DoD-VA policy to deal with TBI and PTSD. 
And it extends to 5 years the period for which newly discharged combat 
veterans can receive free medical care from the VA. Under previous law, 
the limit was 2 years.
    The VA and DoD also have begun working together to fix the process 
on their own. Secretaries of the two Departments have been meeting 
every Tuesday as part of a special joint Senior Oversight Group to 
hammer out proposals for streamlining their procedures and providing 
more help to severely wounded or ill veterans. In November, the two 
Departments announced a pilot project in the Washington, DC, area that 
will experiment with a single medical examination that can be used both 
by the military services and by the VA. Physicians from the VA will 
perform examinations that embrace the services' own standards, and 
military boards will use the data to determine whether a servicemember 
is fit for duty and whether he should be discharged or retired. The VA 
hopes to cut in half the time it takes to go through the physical 
examination process.
    The Army and Marine Corps have established Warrior Transition units 
for returning troops, in which a team of physicians, nurses, and case 
managers watches over each servicemember's care and helps him with the 
recovery process. The DoD and VA have set up early application Benefits 
Delivery at Discharge programs under which soon-to-be-discharged troops 
can begin applying for VA benefits 2 to 6 months before their 
discharge, enabling them to start receiving benefits within a month 
after their separation. They've hired special coordinators and 
ombudsmen to help smooth the bureaucratic process for newly separated 
veterans.
    ``We are taking this very, very seriously,'' says retired Navy Rear 
Admiral Patrick W. Dunne, the VA's assistant secretary for policy and 
planning, in an assurance that's repeated frequently by officials in 
DoD and the VA alike.
    And authorities are about to launch a feasibility study on how to 
make the DoD and VA computer systems interoperable so that medical 
records can easily be transferred from one Department to the other. A 
big problem in the past has been bureaucratic inertia, but the two 
systems also have serious structural differences that make it difficult 
to integrate them. After some initial improvements, VA and DoD 
physicians can read each other's records, look at x-rays and peruse 
reports, but they can't enter information of their own or search for a 
specific result or entry. Both agencies agree that more must be done.
Uncertain Outcome
    It's difficult to judge whether what's already on the books or in 
policymakers' sights will be sufficient to solve the problem. Stephen 
L. Jones, the principal deputy assistant secretary of defense for 
healthcare and a former Capitol Hill staffer, asserts that there still 
is enough impetus from last year's political brouhaha over the 
transition issue to keep the momentum going for the foreseeable future. 
``I hope that some of the system's critics are noticing the improvement 
already,'' he says.
    But critics question whether what is being done is really enough. 
Roadman, the former Air Force Surgeon General, for one, cautions that 
the pilot projects, if successful, must be expanded rapidly, without 
the usual bureaucratic delays. ``There's a tendency to `pilot' things 
to death,'' he notes. There also is the risk that the momentum may be 
interrupted by political events--the lame-duck year of the current 
Administration, the 2008 election, and the months of organizational 
efforts in any new Administration.
    ``My fear is that something big will happen to distract Congress 
and the public from focusing on the problem,'' says Beck of the Wounded 
Warrior Project. ``This is a difficult situation. It's not as clearly 
fixable as the mold on the wall of Building 18 at Walter Reed.''
    How quickly and how well the current plethora of steps--many of 
them substantial by any measure--will bring the disability benefits 
system closer to seamless transition for veterans returning from Iraq 
and Afghanistan still isn't clear. Much will depend on whether all the 
players involved can maintain the momentum between now and the time the 
new Administration is in place. The VA has a new secretary, retired 
Army Lieutenant General James B. Peake, a physician and decorated 
Vietnam War veteran, who will play a key role between now and then.
                               __________
                   Bureaucratic Nightmares: A Sampler
                         The Gunny's Run-Around
    When Marine Corps Gunnery Sergeant Tai Cleveland was injured during 
his deployment for Operation Iraqi Freedom 4 years ago, it wasn't 
supposed to be all that serious. ``At your age, everybody has back 
pain,'' a military physician told him.
    Thrown by a comrade during a hand-to-hand combat training exercise 
in August 2003, Cleveland landed on his back wearing a full field pack 
and armor, striking his head in the process. Doctors prescribed Motrin 
and Valium, but the pain only 
worsened, and the Gunny suffered chronic headaches. He began walking wit
h a limp.
    Shipped back to the States, Cleveland was sent to Walter Reed Army 
Medical Center in Washington, D.C., where an MRI revealed that he had 
several fractured vertebrae, previously undetected. By November 2004, 
he could hardly walk. Surgeons performed a spinal fusion, but the 
bracing rod became undone and lodged in his spinal canal, so they had 
to perform the operation again. Even so, ``You're going to walk 
again,'' doctors assured him.
    But the Gunny's condition worsened rapidly. The back pain and 
headaches persisted, and Cleveland became paralyzed from the waist 
down. As his wife, Robin, tells it, he also had begun to experience 
emotional difficulties--frequent loss of memory and flashes of anger at 
ordinary happenings or smells. And he began blaming everyone he saw. 
After 2 years as an inpatient at Walter Reed and confinement to a 
wheelchair, the Marine Corps began pressuring him to take retirement.
    ``Everything was setting him off','' Mrs. Cleveland recalls.
    He finally was separated from the Marines in January of last year, 
with a pen- sion--based on rank and time-in-service--
that was well below what he had expected.
    The disappointments continued when Tai Cleveland applied for VA 
benefits, his wife says. VA officials wouldn't approve any compensation 
payments for months because they said he wasn't really retired and 
couldn't qualify for benefits. The Department sent its letters and 
notices to the wrong mailing address, and the Clevelands never received 
them. VA physicians in Richmond seemed not to take the case seriously, 
Mrs. Cleveland says. (One physician told the Gunny, ``There's nothing 
wrong with your arms. I'll have you back to work in 2 weeks or so.''). 
And while the VA finally assigned Gunny Cleveland an 80 percent 
temporary disability rating, by December of last year he still hadn't 
received his final disability determination, which presumably will 
fully take into account his TBI and other impairments.
    Meanwhile, Mrs. Cleveland says, the toll on the entire family has 
been enormous. Even apart from the strains you'd expect when a father 
comes home in the Gunny's condition, the financial and personal 
hardships were enormous. Mrs. Cleveland, an accountant who ran her own 
business in Alexandria, Virginia, had to shut down her firm to care for 
her husband, now 42, and take him back and forth to medical 
appointments--losing $45,000 worth of income that had been earmarked to 
help pay college tuition for two of her children. The Clevelands 
depleted their savings. And they eventually had to ask a service-
related charity for help. ``Tai took the brunt of it, but the family 
took the collateral damage,'' Mrs. Cleveland says.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                               __________
                        The Strung Out Corporal
    In July 2005, Marine Corporal Kevin Blanchard returned from Iraq on 
a gurney.
    A combat engineer, he'd been hit by a roadside bomb and taken to a 
nearby field hospital. Filled with shrapnel, and with his left leg 
amputated below the knee, he was flown back to Washington for 
treatment. During a year at the National Naval Medical Center in 
Bethesda and Walter Reed Army Medical Center, he underwent surgery 30 
times, along with treatment for mild traumatic brain injury, and spent 
weeks on end in rehabilitation. He was finally medically retired in 
July 2006. In line with standard procedures, he received a relatively 
small pension based on only his most critical ailment--loss of his 
leg--and on his rank and time-in-service.
    It took yet another year for Corporal Blanchard, now 25, to get his 
full disability compensation benefits from the VA, which would reflect 
his full array of service-connected ailments and would be linked to his 
limited ability to work in the civilian world without regard to his 
rank and years of service.
    ``I didn't receive any response to my VA application for 2 full 
months,'' he says. ``Then I called my VA case manager, and it took 
another 3 months to get an appointment'' for initial processing. The 
various stages of the processing procedure were ``spaced out over 4 
more months,'' he says, with a temporary lower-level payment until the 
full 100 percent disability was approved. In the meantime, Corporal 
Blanchard says, he drew down the savings he'd managed to put away while 
he was still on active duty.
    ``They should have been able to do something [to expedite his 
claim] right there at the hospital [Bethesda or Walter Reed],'' he 
says.
                               __________
                          The Confused Marine
    Marine Corporal Ruben Ramirez knew he wasn't himself when he left 
Iraq in 2004 for his next duty station in Japan, but he brushed it off 
as inconsequential. It was only when he got back to the United States 
in May 2005 that he realized just how sick he'd been. Plagued by 
nightmares, anxiety attacks, and frequent thoughts of suicide, he would 
lock himself in his room and struggle with bouts of severe depression.
    After leaving the service in mid-2005, Mr. Ramirez went to the VA 
for a checkup, and came out with a diagnosis that jolted him--severe 
post traumatic stress disorder, liver damage, bilateral hearing loss, 
and tinnitus (permanent ringing in the ears). After some time in a VA 
psychiatric center, he applied for medical care and compensation 
payments. Unable to work, he was hoping that a Federal check each month 
would help pay the bills.
    But 2 years later the VA denied his entire claim for disability 
compensation payments, Mr. Ramirez said--contending that he had 
contracted these ailments before he joined the Corps in 2001, and 
leaving him without any disability benefits at all. They also sent him 
a bill for part of his physical exam. He says he can't afford to get 
private care and isn't eligible for military medical care. He's on the 
last of his medicine now. (Ironically, the Social Security 
Administration, using the same military medical records, later awarded 
him a modest disability pension, a small fraction of what VA might have 
approved.)
    ``I don't understand,'' he says. ``I know I didn't have these 
problems before I joined the Corps, or I never would have been able to 
sign up in the first place. Their own doctor said they were real. You 
don't get PTSD without going to Iraq or some other war zone. We saw 
enough there to make it stay with you for a good long time.''

                                 
          Prepared Statement of Cheryl Beversdorf, RN, MHS, MA
                 President and Chief Executive Officer,
                National Coalition for Homeless Veterans
    The National Coalition for Homeless Veterans (NCHV) appreciates the 
opportunity to submit testimony to the House Veterans Affairs Committee 
regarding the U.S. Department of Veterans Affairs (VA) budget request 
for Fiscal Year 2009.
    Established in 1990, NCHV is a nonprofit organization with the 
mission of ending homelessness among veterans by shaping public policy, 
promoting collaboration, and building the capacity of service 
providers. NCHV is the only national organization wholly dedicated to 
helping end homelessness among veterans.
    The majority of NCHV members, which includes nearly 280 
organizations in 48 States, the District of Columbia, Puerto Rico and 
Guam, provide the full continuum of care to homeless veterans and their 
families, including emergency shelter, food and clothing, primary 
healthcare, addiction and mental health services, employment supports, 
educational assistance, legal aid and transitional housing.
    In 2007, VA reported that about 196,000 veterans are homeless on a 
given night and 400,000 veterans experience homelessness at some time 
during the year. The VA reports its homeless veteran programs serve 
100,000 veterans annually, and NCHV member community-based 
organizations (CBOs) serve another 150,000.
    VA officials report that the partnership between the VA and 
community-based organizations has substantially reduced the number of 
homeless veterans each night by more than 25 percent since 2003--a 
commendable record of achievement that must be continued if this Nation 
is to provide the supportive services and housing options necessary to 
prevent homelessness among the newest generation of combat veterans 
from Operations Iraqi Freedom and Enduring Freedom (OIF/OEF).
FY 2009 VA Budget--Homeless Veteran Programs
    Congress has established a number of programs within VA to address 
homelessness among veterans. The primary goal for these programs is to 
return homeless veterans to self-sufficiency and stable independent 
living. The major homeless veterans programs administered by the VA 
include the Homeless Providers Grant and Per Diem (GPD) program, which 
includes transitional housing, supportive services centers, special 
needs grants, GPD program liaisons, and Stand Down support; the HUD-
Veterans Affairs Supported Housing (HUD-VASH) program; the Multifamily 
Transitional Housing Loan Guarantee Program; and the Compensated Work 
Therapy Transitional Residence program. Homeless veterans also receive 
primary medical care, mental health and substance abuse services at VA 
medical centers and community-based outpatient clinics (CBOCs) through 
the Health Care for Homeless Veterans (HCHV) program.
    The landmark Homeless Veterans Comprehensive Assistance Act of 2001 
(P.L. 107-95) established new program authorities and reauthorized 
longstanding homeless programs within the VA. While the authorization 
law set explicit funding levels for many of the VA homeless programs 
and authorities, actual annual spending levels are set by the VA 
Secretary via allocation of funds from the VA medical services account, 
which are appropriated by Congress.
    VA homeless veteran programs function not only as a safety net for 
homeless veterans unable or hesitant to access emergency shelter, 
transitional housing or supportive services organized for the general 
population, they also function as a safety valve when other VA programs 
fail to reach veterans at a high risk of homelessness, such as veterans 
with chronic mental illnesses, addictions and extreme economic 
hardships.
    Our testimony will focus on these homeless veteran assistance 
initiatives, most of which owe their effectiveness and successes to the 
leadership of this Committee. We have testified many times about the 
need for transitional housing and services for veterans in crisis, and 
celebrate the reduction in homelessness among these deserving men and 
women during the last 5 years. As we continue that legacy, we must also 
provide supports that will prevent homelessness among OIF/OEF veterans 
returning from war.
Homeless Provider Grant and Per Diem Program
    The Homeless Provider Grant and Per Diem Program (GPD) is the 
Nation's largest VA program to help address the needs of homeless 
veterans and supports the development of transitional, community-based 
housing and the delivery of supportive services. The program's goals 
are to help homeless veterans achieve residential stability, increase 
their skill levels and income, and achieve greater self-determination. 
The GPD program provides competitive grants to community-based, faith-
based and public organizations to offer transitional housing and 
service centers for homeless veterans. The GPD program is an essential 
component of the VA's continuum of care for homeless veterans, assuring 
the availability of social services, employment supports and direct 
treatment or referral to medical treatment. The program also funds GPD 
liaisons who provide program oversight, inspections and outcomes 
reporting essential to the success and efficiency of grant recipients.
    In September 2007 the General Accountability Office (GAO) presented 
testimony before the Subcommittee on Health of this Committee regarding 
homeless veterans programs, and reported that an additional 11,100 
transitional housing beds are needed to meet the demand presented by 
current VA estimates of the number of homeless veterans in need of 
assistance. This need does not yet include the increased requests for 
services expected from OIF/OEF veterans over the next 3 to 5 years.
    The Consolidated Appropriations Act of 2008, which became Public 
Law 110-161 on December 26, 2007, provided for $130 million, the fully 
authorized level, to be expended for the GPD program. Based on GAO's 
findings and VA's projected needs for additional GPD beds, NCHV has 
concerns about the $138 million authorization for FY2009 and believes a 
$200 million authorization is needed. An increase in the funding level 
for the next several years would help ensure and expedite VA's program 
expansion targets. It would provide critical funding for service, or 
drop-in, centers--the primary portal that links veterans in need with 
the people who can help them. It would guarantee continued declines in 
veteran homelessness, and provide for scaling back the funding as 
warranted by the VA's annual Community Homelessness Assessment, Local 
Education and Networking Group (CHALENG) reports. The GPD program has 
evolved into a homelessness prevention network as much as a proven 
intervention care and treatment collaborative partner with the VA.
Special Needs Grants
    The VA provides grants to VA healthcare facilities and existing GPD 
recipients to assist them in serving homeless veterans with special 
needs including women, women who have care of dependent children, 
chronically mentally ill, frail elderly and terminally ill veterans. 
Initiated in FY 2004, VA has provided special needs funding to 29 
organizations totaling $15.7 million. The VA Advisory Committee on 
Homeless Veterans 2007 report states the need and complexity of issues 
involving women veterans who become homeless are increasingly 
unexpected. Recognizing women veterans are one of the fastest growing 
homeless populations, the Committee recommended future notices of 
funding availability target women veteran programs including special 
needs grant offerings. P.L. 109-461 authorizes appropriations of $7 
million for FY 2007 through FY 2011 for special needs grants. The 
increased risks of homelessness among each of these populations 
warrants funding for special needs grants above the currently 
authorized level. Additional funding for the Grant and Per Diem Program 
would address this need.
HUD-VASH
    The joint HUD-VA Supported Housing Program (HUD-VASH) provides 
permanent housing and ongoing treatment services to harder-to-serve 
homeless veterans with chronic mental health, emotional and substance 
abuse issues. NCHV was pleased that P.L. 110-161 included $75 million 
to be used for 7,500 Section 8 vouchers for homeless and disabled 
programs. Under this program, VA must provide funding for supportive 
services to veterans receiving rental vouchers. The FY2009 VA budget 
must reflect a significant increase in funding these services.
    We believe the $7.8 million in the FY2009 VA budget proposal was 
agreed upon before the dramatic increase in HUD-VASH vouchers became 
law. Based on historical data that shows each housing voucher requires 
approximately $5,700 in supportive services--such as case management, 
personal development and health services, transportation, etc.--we 
estimate approximately $45 million will be needed to adequately serve 
7,500 or more clients in HUD-VASH housing units. Rigorous evaluation of 
this program indicates this approach significantly reduces the 
incidence of homelessness among veterans challenged by chronic mental 
and emotional conditions, substance abuse disorders and other 
disabilities.
Multifamily Transitional Housing Loan Guarantee Program
    This initiative authorizes VA to guarantee 15 loans with an 
aggregate value of $100 million for construction, renovation of 
existing property, and refinancing of existing loans to develop 
transitional housing projects for homeless veterans and their families. 
First authorized in 1998, only two projects have survived beyond the 
initial planning stages--in Chicago and San Diego--and only St. Leo's 
in Chicago has been developed.
    While we believe this program seemed promising in its original 
design and intent, the real-life difficulties in long-term coalition 
building, planning and economic hardships developers have encountered 
to date strongly suggest a much more practical and streamlined program 
should be developed to address the critical supportive housing needs of 
homeless veterans and those at serious risk of homelessness due to 
chronic health problems and poverty.
    A congressionally mandated analysis of 2000 U.S. Census data in 
FY2006 revealed approximately 1.5 million veterans are living below the 
Federal poverty level. The GAO and VA's own reports indicate an 
immediate need for more than 11,000 additional transitional housing 
beds for homeless veterans. And combat veterans from and--now in the 
fourth year of their repatriation--are requesting assistance in 
increasing numbers at VA and community-based service providers. The 
need for increased service capacity is immediate, and many community-
based providers have successfully developed additional transitional and 
longer term residential opportunities for their clients. We believe the 
resources earmarked for the Multifamily Transitional Housing Loan 
Guarantee Program might be better allocated to support projects that 
can be developed and brought online more swiftly.
Compensated Work Therapy/Transitional Residence (CWT/TR) Program
    In VA's Compensated Work Therapy/Transitional Residence (CWT/TR) 
Program, disadvantaged, at-risk, and homeless veterans live in CWT/TR 
community-based supervised group homes while working for pay in VA's 
Compensated Work Therapy Program (also known as Veterans Industries). 
Veterans in the CWT/TR program work about 33 hours per week, with 
approximate earnings of $732 per month, and pay an average of $186 per 
month toward maintenance and up-keep of the residence. The average 
length of stay is about 174 days. VA contracts with private industry 
and the public sector for work done by these veterans, who learn new 
job skills, relearn successful work habits, and regain a sense of self-
esteem and self-worth. We are pleased to see the additional funding 
provided for in the FY2009 proposed budget.
Mental Health Programs
    Virtually every community-based organization that provides 
assistance to veterans in crisis depends on the VA for access to 
comprehensive health services, and without exception their clients 
receive mental health screenings, counseling and necessary treatment as 
a matter of course. These services are well documented, and case 
managers report this information to the VA as prescribed in their grant 
reports. Followup services--counseling, substance abuse treatments, 
outpatient therapies, medication histories and family support 
initiatives--are also monitored closely and reported in client case 
files.
    Despite significant challenges and budgetary strains, the VA has 
quadrupled the capacity of community-based service providers to serve 
veterans in crisis since 2002, a noteworthy and commendable expansion 
that includes, at its very core, access to mental health services and 
suicide prevention. The development of the VA Mental Health Strategic 
Plan from 2003 through November 2004, and its implementation over the 
last 3 years with additional funding this Committee fought for, has 
increased the number of clinical psychologists and other mental health 
professionals at VA medical centers, community-based outpatient clinics 
(CBOCs) and VA Readjustment Counseling Centers (Vet Centers). We 
believe the VA budget proposal would facilitate further implementation 
of the Mental Health Strategic Plan.
    We strongly recommend, however, that more attention be directed to 
simplifying and expanding access to community mental health clinics for 
OIF/OEF veterans in communities not well served by VA facilities. 
Current regulations allow a veteran to apply for authorization to 
access services at non-VA facilities, but the process is often 
frustrating and problematic, particularly for a veteran in crisis. 
Protocols should be developed to allow the VA and community clinics to 
process a veteran's request for assistance directly and immediately 
without requiring the patient to first apply at a VA medical facility. 
In the interest of maximizing the immediate benefit of mental health 
supports and minimizing the risk of harmful and even suicidal responses 
by a veteran to debilitating pressures--perceived or real--this 
initiative should be universal and well publicized.
Conclusion
    The National Coalition for Homeless Veterans thanks this Committee 
for its service to it's veterans in crisis. It has been a long and 
difficult campaign, but hundreds of thousands of lives have been 
restored and thousands of lives have been saved. We are honored to work 
alongside the Congress, the Administration, our Federal partners, and 
the service provider network that has transformed policy into hope and 
redemption for these deserving men and women. What we have learned in 
the last 20 years is the greatest promise we can offer the new 
generation of combat veterans coming home from and--we are prepared to 
honor your service, help heal your wounds, and ensure you enjoy the 
blessings of the freedom you have preserved.

                                 
                    Prepared Statement of Rick Jones
   Legislative Director, National Association for Uniformed Services
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee:
    On behalf of the National Association for Uniformed Services 
(NAUS), I am pleased to present testimony to you concerning the 
Department of Veterans Affairs (VA) budget request for fiscal year 
2009.
    First we would like to thank you, Mr. Chairman, and the Members of 
this Committee for your hard work in adding substantial funding to the 
FY 2008 VA Budget including a $3.7 billion discretionary amount for the 
President, who requested those funds for the VA in January. This 
funding was sorely needed to take care of not only the troops returning 
from combat overseas, but also for those who have been in the VA 
healthcare system for many years.
    The National Association for Uniformed Services celebrates its 40th 
year in representing all ranks, branches and components of uniformed 
services personnel, their spouses and survivors. NAUS membership 
includes all personnel of the active, retired, Reserve and National 
Guard, disabled veterans, veterans community and 
their families. We support our troops, remember our veterans and honor t
heir service.
    As you approach issues this year, NAUS highly commends the 
recommendations of the Veterans' Disability Benefits Commission (VDBC) 
and the President's Commission on Care for America's Returning Wounded 
Warriors (the so-called Dole/Shalala Commission). The VDBC focused on 
all veterans, while the scope of the Dole/Shalala Commission 
concentrated on combat-injured troops. NAUS is pleased that its 
President, retired Army Major General Bill Matz, actively served on the 
Veterans' Disability Benefits Commission.
    The final report of the Veterans' Disability Benefits Commission 
has received glowing praise from most veterans service organizations, 
and we highly endorse those recommendations. We firmly believe that the 
recommendations of the Veterans Disability Benefits Commission should 
be used by the Committee as a road map to improvements in the Nation's 
recognition of the service given by our honored veterans.
    The National Association for Uniformed Services strongly urges the 
Committee to give close study to the recommendations from the Veterans' 
Disability Benefits and, where appropriate, merge them with those of 
the Dole/Shalala Commission.
    We also urge you to work with your colleagues on the Senate 
Veterans' Affairs Committee to establish an Executive Oversight 
Committee, as recommended by the VDBC, to track and ensure that there 
is sufficient and substantial followup and implementation of the 
recommendations made by both Commissions.
Funding for the Department of Veterans Affairs (VA) Healthcare
    The National Association for Uniformed Services firmly believes 
that the veterans healthcare system is an irreplaceable national 
investment, critical to the Nation and its veterans. The provision of 
quality, timely care is considered one of the most important benefits 
afforded veterans. And our citizens have benefited from the advances 
made in medical care through VA research and through VA innovations as 
well, such as the electronic medical record.
    The National Association for Uniformed Services endorses The 
Independent Budget recommendation for a medical care budget of $42.8 
billion, an increase of $3.7 billion more than this year's operating 
budget and approximately $1.6 billion more than the Administration's 
request.
    We ask that Members of the Committee give the same effort in 
fighting for our veterans that our veterans did in fighting for us. It 
is the right thing to do for the men and women who have given so much 
in service to our country.
    In this regard, Mr. Chairman, the National Association for 
Uniformed Services appreciates your work in the bipartisan push to 
better fund veterans healthcare and benefits in the current fiscal 
year. Rejecting the fees and new charges for veterans and spending more 
on care for those returning from the battles in Iraq and Afghanistan is 
warmly welcomed. It will help veterans receive the kind of care they 
deserve for the sacrifices they made.
    Never again should a situation occur in the VA health system as 
happened at James A. Haley VA Medical Center in Tampa and Bay Pines VA 
Medical Center in St. Petersburg last year.
    The National Association for Uniformed Services is informed that 
the Haley Medical Center was on ``divert'' status for critical patients 
27 percent of the time between Jan. 1, 2006, and Oct. 1, 2007, or the 
equivalent of about 170 days. VA figures reviewed by the St. Petersburg 
Times showed the hospital had diverted all patients, regardless of 
condition, 16 percent of the time over this period.
    Since 2000, Bay Pines Medical Center diverted patients far more 
frequently than any other hospital in Pinellas County. In 2006, records 
show it diverted veterans during 1,150 hours about 48 days, or 13 
percent of the time.
    VA medical center officials stated they were looking after the 
welfare of their pa- 
tients by diverting them to facilities that had the space and facilities
 to care for them.
    The National Association for Uniformed Services believes that no VA 
medical facility should have to refuse to admit patients due to lack of 
resources. We understand that personnel issues and lack of qualified 
doctors and nurses could influence admissions, but these are conditions 
that should only occur very seldom and for only very short periods of 
time. Our veterans deserve to know that the medical center and related 
facilities nearest to them will be open, staffed and ready when needed.
NAUS strongly supports lifting the ban on veterans classified as 
        Priority 8
    The National Association for Uniformed Services strongly supports 
lifting the ban on veterans classified as Priority 8. Continuation of 
denial of access to VA healthcare for these veterans, only devalues the 
service of those who seek care. Restoration of Priority 8 access could 
be started by enrolling those veterans who can identify private or 
public healthcare insurance. This would also allow the VA to identify 
sources and bill for reimbursement for care received by these veterans.
    Current policy enrolls all veterans returning from Iraq and 
Afghanistan at Priority 6 level initially, for a period of up to 5 
years after they return from combat. If they request treatment, they 
are assessed and given any appropriate disability levels. However, once 
enrolled in the VA healthcare system they are not disenrolled and may 
only qualify for a Priority 7 or 8 level once their illness or injury 
is treated. We don't disagree with this decision but question why 
veterans from prior conflicts or periods of service before the OEF/OIF 
period are not afforded the same consideration.
    Veterans of WWII, Korean War, Vietnam War and other periods, many 
of whom are older and infirm, are not being afforded similar 
opportunity for timely access to the VA healthcare system. They deserve 
equal consideration.
NAUS strongly opposes user fees
    One legislative proposal contained in the VA budget request would 
establish a series of enrollment fees based on the income of certain 
veterans classified as Priority 7 and Priority 8 veterans. The VA 
budget request also proposes to increase co-pays for medications for 
those same Priority 7 and Priority 8 veterans to $15 from $8 for a 30-
day supply. The National Association for Uniformed Services believes 
that to charge any veteran enrolled in the VA healthcare system more 
than a fair amount is not what we, as a Nation, should do. This 
diminishes the service these men and women gave to the country.
Disability Claims Backlog
    For many years the backlog of claims for benefits has grown larger 
despite the best efforts of the Veterans Benefits Administration (VBA). 
An increase in the numbers of claims by veterans of earlier conflicts 
asking for increases in compensation as their disabilities worsen and 
the initial number claims from veterans of the OEF/OIF conflicts are a 
major factor in the growth of the backlog.
    A decision several years ago to divert part of the VBA budget 
earmarked for computer hardware and software upgrades to hire more full 
time employees was only partly successful. In the long run, it possibly 
hurt processing time more by not replacing older computers with newer 
versions designed to handle the volume of claims being received.
    Funding in the currently operating fiscal year 2008 VA 
appropriation provides VBA the resources necessary to hire an 
additional 3,100 full-time claims processors by the end of the current 
fiscal year. There remains, however, an enormous backlog of claims yet 
to be attended. At the close of January, VBA had more than 650,000 
compensation and pension claims pending decision. More than 26 percent 
of those claims have been pending in the VBA system for more than 180 
days.
    At the recent briefing on the 2009 VA Budget, VA Under Secretary 
for Benefits, Adm. Daniel Cooper, expressed confidence that recent and 
continuing hiring and training efforts will allow the VBA to 
significantly reduce the workload and go a long way in their efforts to 
cut the average processing time for claims to 145 days for FY 2009. We 
hope that the Under Secretary is correct in his estimates.
    The monetary benefits are essential to the lives of veterans and 
their families. Decisions which sometimes take years to resolve, have 
resulted in financial hardships for many including loss of homes and 
declarations of bankruptcy. We must speed up the decision process so 
not one more veteran has to suffer for lack of funds they deserve.
Restructuring the Current Disability System
    The Veterans' Disability Benefits Commission and the Presidents 
Commission on Care of Returning Wounded Warriors both recommended that 
the disability and compensation systems for DoD and VA should be 
restructured.
    Under the proposed change, DoD would maintain the authority to 
determine fitness to serve. For those found unfit for duty, VA would 
then determine the extent of disability and initiate the disability 
compensation and benefits programs, eliminating the needless 
redundancy.
    This would be a more streamlined system that better supports the 
needs of those transitioning between active duty and veteran status. It 
would reduce the current complexities of processing claims and help 
veterans seeking disability compensation gain their awards in a more 
timely fashion. Since it is a principal mission of the Department, VA 
is in the best position to simplify the disability determination and 
compensation process.
MGIB Improvements
    When the original GI Bill of Rights was passed at the close of 
World War II, it expressed our Nation's gratitude for the ``Greatest 
Generation's'' fight against tyranny, and it formed the foundation of 
the prosperity that flourished following the war's end.
    Our military and its missions have changed a great deal since then 
and the current Montgomery GI Bill, as supportive as it is, needs to be 
improved to reflect the tremendous contributions of our servicemembers.
    The National Association for Uniformed Services believes the SR-
MGIB program should be removed from the darkness of DoD management, 
where it has been neglected, to the light of VA jurisdiction, where the 
general program has been given the serious attention it deserves.
    The MGIB serves well the all-volunteer force by improving the way 
servicemen are recruited and retained. By making these much-needed 
improvements, we can help the program continue to meet its intended 
purpose for years to come.
``Seamless Transition'' Between the DoD and VA
    Efforts in 2007 have seen significant progress in the major 
stumbling block of electronically transferring DoD medical records to 
the VA. We urge both sides to continue to work together and continue 
this excellent progress. Soon we may be able to take the term 
``seamless transition'' out of our vocabulary, at least as it relates 
to healthcare.
    Another part of this transition was recognized by both the 
Veterans' Disability Benefits Commission and the Dole/Shalala 
Commission when they both recommended that the DoD, specifically each 
service, make the determinations for fitness for service and that the 
VA be the sole determining agency for the percentage of disability.
    A test program has been in operation in the Washington, D.C., area 
since November 2007. Although no official reports have been made in 
regards to how the test is progressing, several anecdotal reports from 
various servicemembers indicate they are pleased with the results. The 
National Association for Uniformed Services believes that an expansion 
of this program to the entire DoD and VA should be made a high 
priority.
Prescription Drug Assistance
    Mr. Chairman, we are disappointed that little consideration has 
been given to those veterans who have been prohibited from enrollment 
in VA's healthcare system under a decision made by the Secretary on 
Jan. 17, 2003.
    The National Association for Uniformed Services urges the Committee 
to review this policy and provide a measure of relief to allow 
Medicare-eligible veterans to gain access to VA's prescription drug 
program.
    As a result of the VA decision to restrict new enrollments, a great 
number of veterans, including Medicare-eligible veterans, are denied 
access to VA. The National Association for Uniformed Services 
recognizes that VA fills and distributes more than 100 million 
prescriptions annually to 5 million veteran-patients. As a high-volume 
purchaser of prescriptions, VA is able to secure a significant discount 
on medication purchases.
    Enrolled veterans can obtain prescriptions, paying $8.00 for each 
30-day supply. However, veterans not enrolled for care before Jan. 2003 
are denied an earned benefit that similarly situated enrolled veterans 
are able to use.
    NAUS, again, asks the Committee to consider legislation that would 
allow Medicare-eligible veterans to gain a measure of relief and get a 
break on prescription drug pricing.
    We recommend the Committee authorize Medicare-eligible veterans, 
currently banned from the system and paying retail prices or using the 
newly established Part D program, access to the same discount provided 
VA in their purchase of prescriptions.
    This issue is a win-win situation. Providing the discount would not 
cost the government a cent. Medicare-eligible patients would pay the 
same price VA pays. And these veterans would see value returned in the 
benefit each earned through military service.
Medical and Prosthetic Research
    At the recent VA budget roll-out, Veterans Service Organizations 
questioned why the medical research budget recommended reducing funding 
levels below those of fiscal year 2007. The response focused on the 
fact that 2008 increases in VA research resulted from supplemental 
funding, not regular funding. It was also stated that recommendation, 
despite being lower than previous levels, was sufficient to cover VA 
research needs.
    The National Association for Uniformed Services finds it 
incredulous that supplemental funding increases of $2 million in 2007 
and $54 million for 2008 have answered the research matters at VA. With 
little known about traumatic brain injury, PTSD and various other 
combat-related conditions, reductions in research is not a wise 
decision. This reduction is especially ill-advised as our troops remain 
in combat, and will probably do so for the foreseeable future, and more 
of our brave servicemen and women will likely be affected by TBI and 
PTSD.
    One need only to visit Ward 57 at Walter Reed Hospital or the VA 
prosthetics ward at the Washington VA Medical Center to see the result 
of cutting-edge research and development in prosthetics. The VA has 
long led the Nation in prosthetics development. The National 
Association for Uniformed Services urges the Committee to increase the 
budget for medical and prosthetic research.
Medicare Subvention
    The National Association for Uniformed Services supports 
legislation to authorize Medicare reimbursement for healthcare services 
provided to Medicare eligible veterans in VA facilities. Medicare 
subvention will benefit veterans, taxpayers and VA.
    Medicare subvention is a ``Win-Win'' situation for all. VA would 
receive additional, non-appropriated funding. Medicare eligible 
veterans would receive world-class medical treatment in a system that 
our government has provided for their care. And taxpayers would see the 
costs of Medicare-provided care reduced, because medical services can 
be provided by the VA at lower costs than in the private sector.
    In addition, direct billing between VA and the Centers for Medicare 
and Medicaid Services (CMS) would reduce opportunities for fraud, waste 
and abuse of the Medicare system.
    We urge Members of the Committee to consider legislation to enable 
Medicare subvention.
Construction
    The budget request for 2009 for all Construction, both major and 
minor projects, has been reduced by $855 million. We question the 
wisdom of reductions in this account.
    In 2004 the VA completed a long study called Capital Asset 
Realignment for Enhanced Services (CARES). In it the VA laid out a 
well-researched plan to close some assets, build new ones and move some 
others. The plan stated good reasons for doing this. One of which is 
that the many major building assets are outdated and cost too much to 
maintain.
    With good progress currently being made in the building and 
acquisition of new facilities, now is not the time for VA to reduce 
funding for these purposes. We urge Members of the Committee to re-
examine these cuts and if warranted, which we believe will be the case, 
restore the funding to a sufficient level necessary to upgrade VA 
facilities and assets.
VA Nursing Home Construction, Grants for State Extended Care Facilities
    The National Association for Uniformed Services urges Members of 
the Committee to recognize the growing long-term care needs of 
America's veterans.
    VA is a nationally recognized leader in providing quality nursing 
home care. One of the settings for nursing home expenditures is in 
State veterans' nursing homes. As America's aging veterans population 
grows older, affordable State nursing homes remain an attractive 
pathway for veterans' nursing care close to home.
    The National Association for Uniformed Services strongly supports 
additional funding for the State veterans' nursing home program. It is 
important that we do so because despite projections of decline in the 
overall veterans population, from 24.3 million to 20 million over the 
present decade, it is projected simultaneously that the number of those 
aged 75 and older will increase from 4 million to 4.5 million and the 
number of those over 85 will more than double, from about 640,000 
currently to nearly 1.3 million in 2012.
    VA reports that a number of State nursing home facilities, already 
planned and approved for construction, are hung up because current year 
funding falls short of needs. In the current year, the Priority 1 
backlog stands at 92 validated construction projects, submitted by 23 
States. In addition, it is our understanding that funding for nursing 
home construction in smaller States, like Utah, fall behind the 
schedule of funding for larger States due to VA decision methodology.
    With VA paying about one-third the cost of care in State veterans' 
nursing homes, the shortfall of funding in the State program needs to 
be addressed. To continue reductions to this program is the wrong way 
to go in planning for the care needs of an aging veterans population.
    As one of our members said, ``The Nation's old warriors are getting 
a double whammy. The Congress and Administration team up to speak for 
veterans' nursing homes then refuse to ``walk the talk'' by withholding 
the funding required to make nursing homes happen, especially in States 
smaller than New York. Conclusion: they speak with forked tongue.''
    The Administration request for $85 million will fund fewer than 25 
of the 92 projects ready for construction. VA is unable to support the 
proposed new State veterans homes without a NAUS-endorsed increase of 
$115 million above the Administration request.
Merchant Mariner Belated Thank You
    On behalf of the nationwide membership of the National Association 
for Uniformed Services (NAUS), we thank Members of the Committee for 
its favorable actions on H.R. 23, ``The Belated Thank You to the 
Merchant Mariners of World War II Act.''
    NAUS commends your strength of leadership in recognition of heroic 
service put forth during World War II by the thousands of young men who 
volunteered for service in the United States Merchant Marine. These 
forgotten heroes have struggled for more than six decades for 
acceptance among their military brethren and the public. And it is 
unthinkable that these brave men should be given a cold shoulder by the 
Nation they proudly served.
    Mr. Chairman, the National Association for Uniformed Services 
believes that it is now time for the United States to recognize 
properly these individuals for their exceptional contribution and 
strength of effort. They helped preserve the freedoms we enjoy today.
    On behalf of a grateful Nation, we urge you to extend these 
benefits to those once young men who went to sea as crewmembers of the 
Merchant Marine during World War II. Your action in taking up this bill 
and ensuring its passage by the entire House is much appreciated by 
NAUS and the surviving Merchant Mariners of that era.
    There are not many of them left. They have aged with their country. 
But age does not disguise the heroic contribution those now almost-
ancient mariners gave to help secure the American victory in World War 
II. They certainly deserve recognition and a very belated ``thank you'' 
from a grateful Nation. We now ask your colleagues in the Senate take 
action soon and produce a similar outcome as this Committee initiated.
Appreciation for Opportunity to Testify
    As a staunch advocate for veterans, the National Association for 
Uniformed Services recognizes that these brave men and women did not 
fail us in their service to country. They did all our country asked and 
more. Our responsibility is clear. We must uphold our promises and 
provide the benefits they earned through honorable military service.
    Mr. Chairman, you and your Committee Members are making progress. 
We thank you for your efforts and look forward to working with you to 
ensure that we continue to protect, strengthen, and improve veterans 
benefits and services.
    Again, the National Association for Uniformed Services deeply 
appreciates the opportunity to review the previous actions of Congress 
and look ahead to the upcoming year.
                                 
      Statement of Friends of VA Medical Care and Health Research

             President's FY 2009 Budget Proposal for the VA Medical and Prosthetic Research Program
----------------------------------------------------------------------------------------------------------------
                                                            FY 2009 President's      FY 2009 FOVA Recommendation
                 FY 2008 Appropriation                            Proposal
----------------------------------------------------------------------------------------------------------------
         $480                                                                 $442                         $555
----------------------------------------------------------------------------------------------------------------


    On behalf of the Friends of VA Medical Care and Health Research 
(FOVA)--the diverse coalition representing more than 80 national 
academic, medical, and scientific societies; voluntary health and 
patient advocacy groups; and veteran-focused organizations--thank you 
for your continued support of the Department of Veterans Affairs (VA) 
Medical and Prosthetic Research Program. We are deeply concerned about 
the President's proposed fiscal year (FY) 2009 budget for the VA 
research program. A time of war is not the time to cut research on the 
grievous injuries being suffered by veterans of the Afghanistan and 
Iraq wars.
    FOVA Recommendations: For FY 2009, FOVA recommends an appropriation 
of $555 million for VA medical and prosthetics research and an 
additional $45 million for necessary research facilities upgrades 
appropriated via the VA minor construction account.
    Prior Year Support: FOVA thanks the Committee for its strong 
support of VA research as evidenced by your FY 2008 views and estimates 
with regard to the VA Medical and Prosthetic Research Program. The 
Committee's recommendation--$480 million--was a $69 million increase 
over the previous fiscal year and the President's FY 2008 proposal. 
Your support for the program undoubtedly encouraged both chambers to 
adopt your recommendation as the program's final appropriation. FOVA 
encourages you to develop a views and estimates statement for FY 2009 
that reflects this same commitment to medical research for the benefit 
of veterans, and ultimately, all Americans.
    VA Research Improves Veterans' Lives: The VA Medical and Prosthetic 
Research Program is one of the Nation's premier research endeavors, 
attracting high-caliber clinicians to deliver care and conduct research 
in VA healthcare facilities. The VA research program is patient-
oriented and focused entirely on prevention, diagnosis, and treatment 
of conditions prevalent in the veteran population. Recent successes to 
which VA has contributed include the implantable cardiac pacemaker, a 
new vaccine for shingles, and state-of-the-art prosthetics, including a 
new bionic ankle.
    President's Budget Request Falls Short: Considering the proven 
success of the VA research program, FOVA is disappointed with the 
President's proposal of $442 million for VA research in FY 2009. The 
proposal fails to maintain funding at the level appropriated in FY 
2008. If enacted, the proposed $38 million (8%) cut will lead to 
significant programmatic reductions and will impede research advances 
in diseases and injuries that impact the veteran population. According 
to the President's proposal, VA will have to cut funding for research 
in central nervous system injury by 20%; acute and traumatic injury, 
military occupations and environmental exposure, and substance abuse by 
18%; and mental illness by 15%. The cuts are counter to the Committee's 
report language calling for ``additional research in the areas of 
mental health--especially the causes, prevention, mitigation, and 
treatment of post traumatic stress disorder (PTSD) . . . the full 
spectrum of traumatic brain injury; [and] substance abuse.'' The 
President's budget request assumes the cut in the VA R&D account will 
be made up by large increases in Federal funding from other agencies, 
nonprofits, and private industry which we are skeptical will 
materialize.
    Research Advances Require Sustained Investment: While FOVA 
appreciates the significant increase in funding approved last year, a 
one-time investment in research will not lead to the medical advances 
required to improve the lives of the Nation's veterans. VA research 
grants are awarded on a 3- to 5-year cycle; funding must be maintained 
over the grant cycle to sustain the investigator's research. Cuts in 
funding require VA to cut award levels for ongoing projects, thus 
diminishing productivity and output. In addition, funding fluctuation 
may limit the number of investigators willing to enter--and remain in--
the VA system. The VA research program offers a dedicated funding 
source to attract and retain high-quality physicians and clinical 
investigators to the VA healthcare system, who in turn provide first-
class healthcare to our Nation's veterans. FOVA encourages the 
Committee to consider the long-term needs of veterans and VA 
investigators when promoting future funding allocations for the 
program. The coalition encourages Congress to support planned growth 
for the VA research budget over the course of the next 3 years to 
continue the upward trajectory of the program in an orderly fashion.
    Thank you for considering our views.

                                 
                     Statement of Hon. Jeff Miller
         a Representative in Congress from the State of Florida
    Thank you, Mr. Chairman, for holding this hearing to discuss the 
fiscal year 2009 funding for the Department of Veterans Affairs.
    I am committed to our responsibility to ensure that the budget we 
adopt will continue to meet both the complex needs of our new 
generation of younger veterans as well as maintain and improve the 
quality of services for our older veterans.
    I would first like to congratulate Secretary Peake for his recent 
confirmation as VA Secretary and thank him for his appearance before us 
today. You have an important task before you, and the Members of this 
Committee look forward to working with you in responding to the 
emergent challenges in taking care of our veterans.
    I also appreciate the Veterans Service Organization representatives 
for participating in our hearing today. Your outlook on funding 
recommendations for veterans programs and input into the budget is of 
great value to me in this process.
    It is satisfying to see that after this Committee uncovered 
weaknesses in the process VA used to develop its healthcare budget in 
2005, the budget request for subsequent fiscal years has become more 
transparent. The Department proposes nearly $39 billion for VA 
healthcare--the largest amount ever requested by any Administration.
    However, I would be remiss in not expressing my concern about the 
inclusion of legislative proposals to establish enrollment fees and 
increases in pharmacy co-payments for certain veterans without service-
connected conditions similar to requests that Congress has rejected 
year after year.
    Having chaired the Subcommittee on Disabilities and Memorial 
Affairs in the past, I am encouraged that the budget includes planning 
to reduce compensation processing time and improve accuracy.
    In the State of Florida, the VA patient workload is among the 
highest in the Nation and the demand for VA healthcare continues to 
grow, especially in Okaloosa County, the center of my Congressional 
District.
    When they released their report several years ago, the Capital 
Asset Realignment for Enhanced Services (CARES) Commission identified 
this Florida Panhandle region as underserved for inpatient care. In 
fact, it is the only market area in the VISN, VISN 16, without a 
medical center.
    The absence of a VA inpatient facility continues to be one of the 
biggest concerns of veterans who live in this area. Currently, many of 
these veterans have to drive to Mississippi to receive inpatient care.
    Bringing a full service VA hospital to the first district is 
something I have fought for since I first came to Washington and will 
continue to do. I look forward to working with the Department in 
support of VA's overall capital construction program to address the 
issue of providing timely access to inpatient healthcare for veterans 
living in and around Northwest Florida.
    Collectively, we share the same goal of providing exceptional 
service to those who have served in our Armed Forces and sacrificed so 
much for our freedom.
    I hope that this hearing will point the way toward close 
cooperation among all of us as advocates of our Nation's veterans to 
respond to their constantly evolving needs and those of their families.

                                 
                  Statement of Hon. Harry E. Mitchell
         a Representative in Congress from the State of Arizona
    Thank you, Mr. Chairman.
    I appreciate you holding a hearing to discuss the President's 
Budget Proposal for FY-09.
    Since this Congress convened last January we have made veterans' 
affairs a top priority. Unfortunately, this budget undermines all of 
our hard work.
    Last year, we passed a VA appropriations bill which made the 
single-largest investment in veterans' healthcare in the 77-year 
history of the agency.
    We passed the Joshua Omvig Suicide Prevention Act.
    And we passed important Wounded Warrior Legislation, which would 
not have been possible without your leadership and the work of this 
Committee.
    These are all important first steps . . . but years of neglect and 
lack of oversight at the VA has left much more to be done.
    A year ago The Washington Post broke their investigative story 
about the poor quality of care at Walter Reed Army Medical Center. As 
Chairman of the Oversight and Investigations Subcommittee, I was 
especially upset and appalled.
    Our Nation's veterans have served honorably to protect us and our 
country. We have an obligation to treat them the dignity and respect 
they have earned.
    The first line of defense against waste, fraud, and abuse is the 
independent and nonpartisan Office of Inspector General. The IG is one 
of the best ways of ensuring accountability at the VA during a time of 
war.
    Unfortunately, the President proposes we reduce the IG's budget to 
$77 million for FY 2009, a 5 percent decrease from last year. It is 
absolutely irresponsible to make deep cuts to the VA's watchdog when 
hundreds of thousands of veterans need the VA to make improvements.
    The Oversight and Investigations Subcommittee will hear from VA 
officials next week to find out how we can afford this cut at a time 
when we need serious accountability.
    I am also stunned by the President's irresponsible proposal to 
slash the Medical and Prosthetic Research budget to $442 million for FY 
2009, an 8 percent cut, and the proposed reduction in veterans' 
rehabilitation research by more than 7 percent.
    I simply can't believe the President wants to deny our war-wounded 
veterans the option of having cutting-edge prosthetics.
    Our wounded warriors have unique injuries and require unique 
prosthetics. It is our responsibility to make sure they have the tools 
they need to lead healthy and productive lives following their 
injuries.
    Last year, we were able to look past the President's irresponsible 
VA proposals and win strong bipartisan support for appropriate funding 
levels. I know we can do the same this year.
    I am looking forward to hearing from our witnesses today, and I 
yield back.
                   MATERIAL SUBMITTED FOR THE RECORD

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                      March 7, 2008
Honorable James B. Peake, M.D.
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 Department of 
Veterans Affairs Budget Request for Fiscal Year 2009'' on February 7, 
2008, I would appreciate it if you could answer the enclosed hearing 
questions by the close of business on April 18, 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

                               __________
                        Questions for the Record
                   The Honorable Bob Filner, Chairman
                   House Veterans' Affairs Committee
                            February 7, 2008
 The Department of Veterans Affairs Budget Request for Fiscal Year 2009

    Question 1(a): The VA research program has proven to be incredibly 
successful, even with its modest budget in comparison to other research 
entities. Evidence of VA research success includes the discovery of a 
shingles vaccine in 2005, exemplary discoveries in prosthetics, and the 
implementation of a clinical trial of psychotherapy to treat post 
traumatic stress disorder. However, VA researchers face the fact that 
the amount of funding they can receive for a grant award is capped at 
$125,000 per year for a period of 3 to 4 years. In comparison, National 
Institutes of Health researchers receive on average up to $360,000 per 
year for a period of 5 years. Even with differences in salary support 
included in these numbers, the discrepancy between the grant 
allocations is significant. Can you give the Committee your reasoning 
to hold the research cap at $125,000 year-to-year, despite the obvious 
inflationary factors of the cost of labor, supplies, equipment, 
reagents, drugs, procedures, etc.

    Response: The Department has maintained the pre-clinical research 
funding cap at $125,000 per year in order to maintain the diversity in 
breadth of the investigator base. Where appropriate, we will increase 
funding individual research projects with the resources provided in the 
President's budget submission.
    In addition, a large number of projects have received budget 
supplements of up to $25,000 with the appropriations provided in fiscal 
year (FY) 2007 and FY 2008.

    Question 1(b): Considering VA researchers' productivity in spite of 
their limited resources, do you believe VA researchers would be more 
productive if the VA research funding cap was increased?

    Response: The Department of Veterans Affairs (VA) researchers use 
all funds provided in an extremely effective manner. Where appropriate, 
the Department is able to increase funding for individual research 
projects with the resources provided in the President's budget 
submission and those increases will result in continued high 
productivity.

    Question 2(a): VA has implemented the Capital Asset Realignment for 
Enhanced Services (CARES) program to prepare the Department for meeting 
the healthcare needs of veterans in modern healthcare facilities. CARES 
documented a $300-400 million need for construction and upgrading VA 
research infrastructure, particularly its research laboratories. Yet we 
understand that VA expects your Research Infrastructure Evaluation and 
Improvement Project, directed at reviewing the overall function and 
performance capabilities of research space and infrastructure, to take 
another 3 years to complete. Can you provide us with additional 
information on the research facility needs of the program and a 
preliminary estimate for research infrastructure costs?

    Response: As part of VA's research infrastructure evaluation and 
improvement project, a detailed questionnaire regarding current 
research space allocation and condition was disseminated to all field 
sites to gather preliminary information. Preliminary results showed a 
need for research infrastructure corrections across the system. To 
better document and prioritize issues identified in the preliminary 
assessment, a comprehensive evaluation instrument designed to ensure a 
thorough and consistent systemwide review of research space was 
developed and tested at three pilot sites.
    In 2007, VA selected a contractor to complete the research facility 
site visit infrastructure reviews. Since September 2007, 15 site visits 
have been conducted at locations across the country. In a 3-year span, 
approximately 70 site visits will be completed. Because the research 
infrastructure evaluation and improvement project is still underway, a 
cost estimate is not yet available.

    Question 2(b): During the next 3 years as the Research 
Infrastructure Evaluation and Improvement Project proceeds, what are 
your plans to improve research space and facilities?

    Response: Over the next 3 years, VA plans to thoroughly assess a 
large number of sites to identify any deficiencies in research 
infrastructure and create an amelioration plan and prioritization list, 
accordingly. An added benefit of the site visit infrastructure reviews 
is the opportunity to provide a de-brief to facility management, 
highlighting deficiencies and needs at each location, encouraging some 
more timely corrective actions.

    Question 2(c): What research infrastructure projects have the 
Research Infrastructure Evaluation and Improvement Project identified 
to date, and what are the prospective costs of those projects?

    Response: Because the research infrastructure evaluation and 
improvement project is still underway, a list of research facility 
projects and costs is not yet available.

    Question 3(a): Your budget says you intend to cut some programs 
that this Committee believes are very high VA research priorities, 
including studies in traumatic brain injury, polytrauma, mental health 
(with emphasis on PTSD), burns, amputations and eye injuries from Iraq 
and Afghanistan. As indicated in your budget request, how were these 
particular research studies targeted for reduction, specifically 
studies of central nervous system injury to be reduced by 20%; studies 
of acute and traumatic injury, military occupations and environmental 
exposure and substance abuse, reduced by 18%; and studies in mental 
illness, reduced by 15%?

    Response: VA's strong commitment to research on mental illnesses, 
including post traumatic stress disorder (PTSD), and substance abuse, 
and injuries to the brain, spinal cord, and extremities has been 
reflected in constant growth in the number of projects and funding over 
the last few years. As a result of the supplemental appropriation in FY 
2007 and the emergency appropriation in FY 2008, there have been 
considerable investments in expensive equipment such as high-resolution 
magnetic resonance imagers that will be used to enhance VA research in 
these areas. Over the next few years these investments will pay off in 
better understanding and treatments of these disorders, but the very 
large increases were ``one-time'' expenses that have effectively met 
the immediate needs for enhancing the strong ongoing research programs.

    Question 3(b): Is your decision to cut these projects consistent 
with your public statements to highlight the needs of OIF/OEF veterans, 
in both your healthcare and research programs? How so?

    Response: Healthcare Programs. VA uses an actuarial model to 
forecast patient demand and associated resources needs for healthcare. 
Actuarial modeling is the most rational way to project the resource 
needs of a healthcare system like the Veterans Health Administration 
(VHA). The estimates in the FY 2009 President's submission represent 
the best possible estimates based on the information available at that 
time. VA estimates it will require $1 billion in FY 2008 to treat 
293,345 Operation Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) 
unique patients and nearly $1.3 billion in FY 2009 to treat 333,275 
OEF/OIF unique patients. Based on our experience in FY 2007 and for FY 
2008 to date the 14-percent increase (39,930) in workload and 20-
percent increase ($216 million) in funding appear realistic.
    Research Programs. The FY 2009 budget request for medical and 
prosthetic research includes $252 million for research directed at the 
full range of health issues of OEF/OIF veterans, including traumatic 
brain injury (TBI) and other neurotrauma, PTSD and other post-
deployment mental health, prosthetics and amputation healthcare, 
polytrauma, and other health issues. In addition, the quality and 
effectiveness of the investigators carrying out this research is 
reflected by their success in drawing funding for veterans research 
from other Federal agencies and from the private sector. For example, 
these non-VA sources contributed on the order of 100 million dollars 
for mental health and substance abuse research in FY 2007. Due in part 
to VA capital investment and vigorous VA efforts to develop Federal and 
private partnerships to develop new treatments for PTSD, we expect non-
VA funding to grow substantially in the next few years.

    Question 4: In recent years, the government has invested a lot more 
in Federal research, especially biomedical research at NIH, NSF, CDC 
and also at DoD. But VA's research program investments have lagged and 
shown only very modest growth over the past 10 years. This year, the 
Administration would actually reduce the program by $38 million over 
the FY 2008 funded level, and would hope that NIH and other funders 
would step up and fill the void. VA touts its research and researchers 
as world-leading. Normally, organizations, whether in the private or 
public sectors, are rewarded when they do well. Given that the VA 
research program is remarkably productive and necessary to both current 
and future veterans, how can you justify cutting your investment in VA 
research and allowing your research facilities and laboratories to 
continue deteriorating?

    Response: VA remains committed to increasing the impact of its 
research program. We have carefully prioritized our research projects 
to ensure they continue to address the needs of both current and future 
veterans. The FY 2009 budget request includes $252 million for research 
directed at the full range of health issues of OEF/OIF veterans, 
including TBI and other neurotrauma, PTSD and other post-deployment 
mental health, prosthetics and amputation healthcare, polytrauma, and 
other health issues. Additional research funding priorities covered by 
the FY 2009 budget request include aging and geriatrics, chronic 
diseases and health promotion, personalized medicine, women's health, 
and long-term care. VA researchers also continue to successfully 
compete for and receive funding from other Federal and non-Federal 
research sponsors that provide additional resources for VA's research 
program.

    Question 5(a): The VA's FY 2009 budget submission includes 
proposals that would institute a tiered annual enrollment fee, increase 
pharmaceutical co-payments, and eliminate the VA's current practice of 
offsetting third-party billings of first-party debt. The VA's budget 
estimates that these proposals would provide receipts of $379 million 
in FY 2009, $464 million in FY 2010, and $2.3 billion over 5 years and 
$5.2 billion over 10 years. Please provide the Committee with the 
estimated number of enrollees and unique patients, by year, for the 
period of FY 2009 to FY 2019 that VA estimates will choose not to 
enroll and choose not to seek VA healthcare.

    Response: The tiered enrollment fee for Priority 7 and 8 enrollees 
would be $250 for veterans with family incomes between $50,000 and 
$74,999; $500 for veterans with family incomes between $75,000 and 
$99,999; and $750 for veterans with family incomes equal to or greater 
than $100,000 beginning in FY 2010.
    Approximately 1 percent of Priority 7 enrollees have incomes 
greater than $50,000 and VA estimates that few, if any, will be 
assessed the enrollment fee. VA estimates approximately one-half of the 
estimated 1.7 million Priority 8 veterans will not be subject to the 
tiered enrollment fee (income less than $50,000). Of the 852,000 
Priority 8 veterans assessed the tiered enrollment fee; VA estimates 
that 440,000 will choose not to pay the enrollment fee.
    Priority 8 enrollees who do not currently use the VA healthcare 
system (46 percent did not use VA in 2007) and low users of VA 
healthcare services are expected to choose not to pay the enrollment 
fee. This information is based on the results of the 2007 VHA survey of 
enrollees, which found that 92 percent of Priority 8 enrollees have 
some type of public or private healthcare coverage other than VA. 
However, Priority 8 enrollees who are not insured are likely to pay the 
enrollment fee and remain in the VA healthcare system.
    As shown in the table below, VA estimates approximately 444,000 
enrollees, or 144,000 patients, would choose not to pay the annual 
enrollment fee in 2010.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                    Impact of Tiered Annual Enrollment Fee and Increased Pharmacy Co-pay, FY 2009-18
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                              FY2009     FY2010     FY2011     FY2012     FY2013     FY2014     FY2015     FY2016     FY2017     FY2018
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unique Enrollees                                   0    444,085    437,635    452,752    446,032    439,050    432,281    425,914    420,499    414,589
--------------------------------------------------------------------------------------------------------------------------------------------------------
Unique Patients                                    0    143,808    141,431    146,422    143,605    140,910    138,411    136,112    134,086    131,845
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Question 5(b): Since healthcare dollars are ``discretionary,'' by 
what mechanism would these receipts be considered ``mandatory'' and 
what is the policy rationale for deeming these receipts mandatory 
spending?

    Response: The Administration made a policy decision that classified 
these veterans' fees as mandatory receipts in order to ensure that the 
appropriation funding for veterans healthcare was not adversely 
impacted should Congress not enact the fees. If the fees were proposed 
as discretionary, then the scoring rules of development of the 
President's budget would have required direct appropriation offset in 
the amount of the anticipated collections. To avoid this potential of 
veteran healthcare funding shortfall in the President's budget request, 
the fees were proposed as mandatory fees with deposit to the Treasury.

    Question 6: The VA's FY 2009 budget request provides nearly $8 
million in response to the Dole/Shalala report. With the recent 
enactment of Wounded Warrior provisions in the National Defense 
Authorization Act, what additional resources will you need in FY 2009, 
above and beyond the $8 million you have slated for meeting the 
recommendations of the Dole/Shalala report, to comply with the 
appropriate provisions of this law?

    Response: VA and the Department of Defense (DoD) are working 
together to implement the provisions of Dole-Shalala Commission and the 
most recently passed National Defense Authorization Act (NDAA). VA has 
awarded a $3.2 million contract to Economic Systems, Inc. of Falls 
Church, Virginia to perform a 6-month study to develop options for a 
new quality of life benefit and a new long-term transition benefit for 
participants in VA's vocational rehabilitation & employment program 
(Chapter 31). The findings from this study are intended to inform the 
Department's decisionmaking process regarding key components of 
recommendation two of the Dole-Shalala Commission to completely 
restructure the disability and compensation systems. Until all 
implementation plans are complete we will not be able to fully estimate 
costs.

    Question 7: Your FY 2009 budget submission estimates a total 
increase of 90,000 unique patients, which includes an estimated 
increase of OEF/OIF veterans of 40,000. This increase includes an 
estimated increase of 2,621 Priorities 7 and 8 veterans. In light of 
your historical experience in estimating workload increases from year-
to-year, how confident are you that your estimated overall increase of 
1.6 percent is accurate? How confident are you that you will only see 
an additional .2-percent increase in Priority 7 and 8 veterans?

    Response: The annual patient projections that are generated by the 
VA enrollee healthcare projection model are a function of the projected 
enrolled population and the mix and intensity of workload for those 
enrollees as projected by the model. The patient projections are then 
adjusted to account for those veterans who seek only non-modeled 
services such as vet centers.
    The following chart presents the accuracy of the model supporting 
the 2004 through 2007 VA healthcare budgets. The projections were 
adjusted to reflect policies that were not implemented, such as 
enrollment fees and pharmacy co-payment increases.
    The differences between the projections and what actually happened 
have become closer over the years. A significant reason is that 
initially there was limited enrollment trend data in the years just 
after eligibility reform available to inform the model. For example, 
when the model that supported the 2004 budget was developed, VHA only 
had actual enrollment data from 1999 to 2001 to inform the analysis, 
and the data showed significant variability.
    In addition, components of the model methodology and data sources 
are continually updated. For example, the model supporting the 2004 
budget relied on projections for the veteran population (VetPop) that 
were based on the 1990 Census. VetPop has since been updated with data 
from the 2000 Census, and the updated VetPop has been incorporated into 
later models.
    The 2007 enrollment projections and actuals reflect an improved 
methodology for identifying enrollee deaths. This reduced both the 
projected and actual number of enrollees for 2007 as compared to 
earlier years.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                         Accuracy of Actuarial Model Projections
---------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                VETERAN ENROLLEES                         VETERAN PATIENTS \1\
                                                                   -------------------------------------------------------------------------------------
                            Fiscal Year                                Actuarial                    Percent       Actuarial     EFY Actuals    Percent
                                                                    Projections \2\   FY Actuals   Difference  Projections \2\                Difference
--------------------------------------------------------------------------------------------------------------------------------------------------------
    2004                                                                 7,130,921    7,419,851        -3.9%        4,796,105    4,622,155         3.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    2005                                                                 7,860,389    7,655,562         2.7%        4,835,534    4,768,304         1.4%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    2006                                                                 7,941,971    7,872,438         0.9%        4,885,820    4,845,062         0.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
    2007 \3\                                                             7,618,345    7,833,446        -2.7%        4,834,305    4,872,030        -0.8%
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes veteran patients who used services projected by the model. Does not include veteran patients who only used dental, readjustment counseling,
  LTC, or foreign medical program services.
\2\ Adjusted to reflect policies not implemented, such as enrollment fees and rx co-payment increases.
\3\ The FY 2007 enrollment projections and actuals reflect an enhanced methodology to identify enrollee deaths, which reduced both the projected and
  actual enrollment numbers.


    VA believes the 0.2 percent estimated increase in Priority 7 and 8 
veteran patients is a reasonable estimate. Approximately 75 percent of 
the Priority 7 and 8 patient populations are in Priority 8. The 
Priority 7 patient population is growing slowly because of the 
relatively small size of the non-enrolled Priority 7 veteran 
population. In addition, the Priority 8 population is reduced each year 
because of mortality; therefore the actual growth in the combined 
Priority 7 and 8 populations over time is slowing.

    Question 8: The VA's FY 2009 budget proposes spending $3.9 billion 
on mental health, a $319 million increase over FY 2008. This increase 
includes a 44-percent increase in spending for the Mental Health 
Initiative, a 12-percent increase in VA Domiciliary care, and 4-percent 
increases for Inpatient Hospital care, Psychiatric Residential 
Rehabilitation treatment, and Outpatient care. Do you feel confident 
the increases in areas other than your Mental Health Initiative are 
sufficient to meet the ever-growing demand on mental healthcare 
services faced by the VA?

    Response: The proposed $319 million increase in mental health 
spending represents the sum of a $161 million increase in the Mental 
Health Initiative and a $158 million increase in mental health spending 
through the veterans equitable resource allocation (VERA), all in 
medical care funding. Together the funding will be adequate both to 
address the needs of returning veterans and to enhance services for 
veterans of all eras.
    To put the projected increases in funding in perspective, we 
calculate that it is sufficient to support the recruitment and hiring 
of over 3,200 new mental health staff members. This is an extraordinary 
number of new positions for any health system, especially in light of 
VA's already filling of more than 3,800 new mental health staff 
positions over the past 2\1/2\ years.

    Question 9: The VA has requested a 44-percent increase in funding 
for the Mental Health Initiative. In November 2006, the GAO reported 
that VA failed to fully allocate the resources that had been pledged 
for the Mental Health Initiative in FY 2005 and FY 2006. Have the 
resources provided in the past for this initiative been fully 
allocated? In your opinion, what innovative care and treatment 
capabilities have been developed through the Mental Health Initiative 
that would not have been realized through simply providing increases in 
other mental health programs?

    Response: Funding allocated for the Mental Health Initiative is 
projected to increase from $370 million in 2008 to $531 million in 
2009, an increase of $161 million or 43.5 percent. As noted in the 
question, the Government Accountability Office (GAO) raised concerns 
about under-execution of these funds in FY 2006. However, in FY 2007, 
$306 million was allocated for the Mental Health Initiative and $325 
million was actually spent, an excess of over 6 percent and a measure 
of VA's commitment to provide access to high quality mental health 
services.
    The Mental Health Initiative has supported the implementation of 
the VHA Comprehensive Mental Health Strategic Plan. In this, it has 
supported major enhancements for mental health services. Specific 
initiatives have included:

      Enhancing access through major increases in staffing.
      Increases mental health services available in community-
based outpatient clinics (CBOC).
      Developing services for patients with serious mental 
illness in rural areas.
      Expanding program for homeless veterans.
      Promoting the integration of mental health with primary 
care.
      Increasing mental health services for older adults across 
care settings.
      Transforming specialty mental health services to 
emphasize rehabilitation and recovery.
      Establishing mental health services to address the 
specific needs of returning veterans.
      Implementing a comprehensive strategy for suicide 
prevention.

    Question 10: In December, this Committee held a hearing on 
``Stopping Suicides: Mental Health Challenges within the U.S. 
Department of Veterans Affairs.'' In light of the alarming increase in 
the suicide rate among veterans, is the VA doing anything differently 
today regarding this issue than you were doing 6 months ago? How do you 
think the VA can better address this painful issue--does it include 
more resources, more data collection, novel approaches to providing 
care and services?

    Response: VA's information on suicide rates depends upon gathering 
information on veterans' causes of death from medical examiners in 
communities throughout America as processed by the States and the 
Federal Center for Disease Control and Prevention (CDC). This is a 
rigorous process that takes time. The data that are available from CDC 
goes through the end of 2005.
    Studies on returning veterans have demonstrated that the rates of 
suicide among those who served in OEF/OIF is not significantly greater 
than those for age, sex, and race matched individuals from the general 
U.S. population. Studies on veterans who received care from VHA 
demonstrated rates of suicide that are somewhat higher than those for 
age and sex matched individuals from the community. However, there has 
been no significant increase in rates between 2001 and 2005. Moreover, 
the observed elevation in rates can be probably best attributed to 
greater mental and physical illness as well as disability in the VA 
population.
    VA is rapidly implementing its program for suicide prevention by 
enhancing mental health services and by supplementing its mental health 
programs with initiatives that target suicide more directly. It was 
approximately 1 year ago that VA began to hire suicide prevention 
coordinators in each of its medical centers, and somewhat over 6 months 
ago that it partnered with the Substance Abuse and Mental Health 
Services Administration to develop hotline services specifically for 
veterans. Both of these programs have continued to grow over the past 6 
months. One recent advance has been the implementation of a program in 
which the suicide prevention coordinators have been identifying 
veterans who survive suicide attempts and others at high risk so their 
monitoring and care can be enhanced. VA's suicide prevention programs 
continue to advance. Some enhancements will be based on established 
evidence, while others will require new research and intervention 
development.
    One of the most important strategies for suicide prevention must be 
de- stigmatizing mental illness and promoting its treatment. This can 
be best accom- 
plished by delivering the message that access to high quality mental 
health services is available to veterans through the VA, and that the 
treatments provided are effective.

    Question 11: On July 31, 2007, the VA submitted a ``White Paper on 
the VA Disability Claims Processing Workforce.'' The report listed a 
total of 3,100 new hires funded through the FY 2007 appropriation 
(400), the FY 2007 supplemental (800), and the FY 2008 House 
Appropriations recommended level (1,900). The VA projected an end-of-
year staffing level for Compensation and Pension of 9,068 FTE (direct) 
and 10,998 FTE (direct) for FY 2008. The VA's FY 2009 budget submission 
provides a 2007 level of 8,353 FTE (direct) and estimates an FY 2008 
level of 10,304 FTE. The VA's estimate for FY 2009 is 10,998, the same 
level the VA projected in July for the end of FY 2008. The VA's budget 
request for FY 2009 estimates an additional 694 direct FTE (for a total 
of 10,998) over the FY 2008 current level (10,304). Why is the VA now 
estimating the same FTE levels for FY 2009 as you projected, back in 
July, for the end of FY 2008?

    Response: The table below illustrates the Veterans Benefits 
Administration's (VBA) 2008 and 2009 budget for compensation and 
pension (C&P) direct personnel as of September 30 of each year. The 
onboard full time employees (FTE) are the actual staffing levels. 
Cumulative FTE levels translate the onboard FTE's annual employment 
period into its equivalent fraction of the year, which explains why the 
cumulative and onboard FTE levels differ when FTE are employed for less 
than a full year. VBA will continue to hire throughout the fiscal year 
to meet the 2008 end-of-year goal of 10,998 onboard direct C&P FTE.


------------------------------------------------------------------------
                                                  FY 2008      FY 2009
------------------------------------------------------------------------
On-Board FTE                                        10,998       10,998
------------------------------------------------------------------------
Cumulative FTE                                      10,304       10,998
------------------------------------------------------------------------


    Question 12: If Congress has already provided the resources to 
bring this staffing level up to the level you now project for FY 2009, 
haven't we already paid for this increased level, and shouldn't the 
resources you propose in FY 2009 to reach this level result in a 
greater number of claims processors by the end of FY 2009?

    Response: FY 2008 VBA funding supports 14,857 FTE. Inasmuch as one 
FTE equals one employee for a full year and we are in an upward hiring 
trend, we will end the year with 15,570 employees onboard. About 1,900 
of those will be onboard less than a full year and therefore will not 
equate to a full FTE for FY 2008. In FY 2009, VBA plans to maintain the 
onboard FTE at a constant level of 15,570 throughout the year and 
anticipates the 2009 cumulative FTE will equal the onboard FTE, since 
no additional hires are projected for FY 2009.

    Question 13: How much, overall, do you estimate that it would 
require over the next 5 years in Major Construction funding for the VA 
to fully meet the CARES recommendations?

    Response: The Department estimates that it will, at a minimum, 
require maintaining a funding stream consistent with what has been 
recently authorized and appropriated (over the past 5 years) to 
continue effectively implementing the major medical facility 
construction requirements needed to provide improved and efficient 
healthcare delivery services to veterans. All future capital needs are 
evaluated, along with other VA needs on annual basis, and all funding 
decisions are reflected in the President's budget submission.
    As reflected in the FY 2009 VA budget submission there are 
currently 40 ongoing VA major medical facility projects. Including the 
President's 2009 budget request, VA will have received more than $5.5 
billion to date in major and minor construction for projects and other 
related to CARES since FY 2004. As also shown in the budget submission, 
the future funding needs for these existing ongoing projects is 
currently $2.3 billon. Along with the existing projects, a number of 
potential major medical facility projects are also listed in the VA 
budget submission. The list of potential projects are updated each year 
as part of the annual VA capital investment process, and projects may 
be added or deleted from this list.

    Question 14(a): The VA's FY 2009 budget requests $83 million for 
facility activations. The VA states that this level will enable the VA 
to open 51 CBOCs. Last year, VA requested $21 million and currently 
plans on opening 64 CBOCs. In light of the estimate of opening fewer 
CBOCs in 2009, is the VA requesting fewer resources for activations in 
FY 2009 than it is spending in FY 2008?

    Response: The $83 million for facility activations is for the non-
recurring startup costs related to major construction projects, not to 
open new CBOCs. The only increased funding requested for new CBOCs is 
for the estimated new workload that will be created which is estimated 
at approximately $300,000 per CBOCs in the first year and approximately 
$35,000 in the second year. This equates to $19,008,000 in FY 2008 (64 
new CBOCs x $297,000 = $19,008,000). The estimate for FY 2009 is also 
$19,008,000 (which is divided $9,504,000 in medical services and 
$9,504,000 in medical facilities).
    The FY 2009 computation is as follows:


------------------------------------------------------------------------------------------------------------------------------------------------
51 new CBOCs  $300,000 =                            $15,300,000
------------------------------------------------------------------------
64 CBOCs year 2  $35,000 =                           $2,240,000
------------------------------------------------------------------------
Estimate for other one-time costs and inflation               $1,468,000
------------------------------------------------------------------------
  Total                                                      $19,008,000
------------------------------------------------------------------------


    Question 14(b): Please provide details on which facilities the VA 
plans on activating in 2008 and which facilities it plans on activating 
in 2009?

    Response: There are 64 CBOCs planned for activation in 2008. CBOC 
activation sites for 2009 has not been decided, we are reviewing the 
2009 recommendations.


                                              2008 CBOC Activations
----------------------------------------------------------------------------------------------------------------
            VISN                    CBOC         VISN              CBOC              VISN           CBOC
----------------------------------------------------------------------------------------------------------------
   4                                    Dover      9                        Berea     16             Stillwater
----------------------------------------------------------------------------------------------------------------
   4                               Monongalia      9               Grayson County     16                Branson
----------------------------------------------------------------------------------------------------------------
   5                              Andrews AFB      9                      Hamblen     16              Eglin AFB
----------------------------------------------------------------------------------------------------------------
   6                          Charlottesville      9                      Hawkins     16             Pine Bluff
----------------------------------------------------------------------------------------------------------------
   6                                  Hickory      9                       Hazard     18            Miami/Globe
----------------------------------------------------------------------------------------------------------------
   6                                   Hamlet      9                      Madison     18        SE Tucson Urban
----------------------------------------------------------------------------------------------------------------
   6                                 Franklin      9                      Bolivar     18            Thunderbird
----------------------------------------------------------------------------------------------------------------
   6                                         Lynch 9rg             Carroll County     19               Cut Bank
----------------------------------------------------------------------------------------------------------------
                                                   9                  Dyer County     19                       Lewistown
----------------------------------------------------------------------------------------------------------------
   7                                    Aiken      9      Harriman (Roane County)     19            West Valley
----------------------------------------------------------------------------------------------------------------
   7                             Childersburg      9                 Hopkinsville     20            North Idaho
                                                               (Christian County)
----------------------------------------------------------------------------------------------------------------
   7                              Spartanburg      9    Jellico (Campbell County)     20          NW Washington
----------------------------------------------------------------------------------------------------------------
   7                              Stockbridge      9                  McMinnville     20    West Metro Portland
                                                                  (Warren County)
----------------------------------------------------------------------------------------------------------------
                                                   9               Philips County     20      South Puget Sound
----------------------------------------------------------------------------------------------------------------
   8                                   Camden      9          Pigeon Forge Clinic     22          Orange County
----------------------------------------------------------------------------------------------------------------
   8                                  Jackson      9                 Scott County     23               Bellevue
----------------------------------------------------------------------------------------------------------------
   8                                   Putnam                                         23                Carroll
----------------------------------------------------------------------------------------------------------------
                                                  10                        Parma     23           Cedar Rapids
----------------------------------------------------------------------------------------------------------------
   15                                 Daviess                                         23               Holdrege
----------------------------------------------------------------------------------------------------------------
   15                              Hutchinson     11                Alpena County     23           Marshalltown
----------------------------------------------------------------------------------------------------------------
   15                          Jefferson City     11                   Charleston     23             Shenandoah
----------------------------------------------------------------------------------------------------------------
   15                                    Knox     11                 Clare County     23                 Wagner
----------------------------------------------------------------------------------------------------------------
   15                            Graves Co KY     11               Elkhart County     23              Watertown
----------------------------------------------------------------------------------------------------------------


    Question 14(c): Please provide the Committee with the average cost 
to activate a CBOC and the costs that the VA estimates for activations 
for a major medical facility.

    Response: In FY 2007, the average cost to activate a CBOC, 
including the cost of staff, was $4.4 million. These costs including 
the cost to activate are included in the budget requests of each of the 
three separate appropriations but there is no separate identification 
of either the operating or activation costs of CBOCs.
    The FY 2009 included $83 million for facility activations which was 
for the non-recurring startup costs related to major construction 
projects. This is based on an estimated 10 percent of the project cost 
for non-recurring activation costs which are requested in the year 
these startup costs must be obligated.

    Question 15: The VA's budget request for Medical Facilities 
estimates $9.5 million in obligations for CBOCs. Please provide the 
Committee with the average cost for a CBOC. Also, please provide a list 
of obligations for CBOCs and the number of CBOCs (consistent with the 
data found on pages 1d-4 and 1D-6 of the FY 2009 submission) over the 
last 5 years and any estimates regarding obligations planned for CBOCs 
from FY 2009 to FY 2013.

    Response: The $9.5 million in the medical facilities appropriation 
for CBOCs in FY 2009 is computed as shown below. There is also $9.5 
million in the medical services appropriation. The only increased 
funding requested for new CBOCs is for the estimated new workload that 
will be created which is estimated at approximately $300,000 per CBOCs 
in the first year and approximately $35,000 in the second year. This 
equates to $19,008,000 in FY 2008 (64 new CBOCs  $297,000 = 
$19,008,000). The estimate for FY 2009 is also $19,008,000 (which is 
divided $9,504,000 in medical services and $9,504,000 in medical 
facilities).
    The FY 2009 computation is as follows:


------------------------------------------------------------------------------------------------------------------------------------------------
51 new CBOCs  $300,000 =                            $15,300,000
------------------------------------------------------------------------
64 CBOCs year 2  $35,000 =                           $2,240,000
------------------------------------------------------------------------
Estimate for other one-time costs and inflation               $1,468,000
------------------------------------------------------------------------
  Total                                                      $19,008,000
------------------------------------------------------------------------


    Below are the total annual decision support system (DSS) costs for 
CBOCs and the average per CBOC: For example in FY 2007, if one divides 
the total cost by the average cost, the number of CBOCs is 663 which is 
less than the 731 reported in the budget. The reason for this is that 
some CBOC are in multiple locations under one contract but are only 
counted once for cost purposes and are counted as multiple CBOCs for 
facility count purposes. Two examples of this are: Veterans Integrated 
Service Network (VISN) 9 St. Charles has 10 CBOC locations under a 
single station number for cost purposes and VISN 6 Danville has nine 
CBOC locations but only a single station number for cost purposes. 
There are a total of 28 locations that are counted once for cost 
purposes, but actually have multiple CBOCs ranging from 2 to 10.


------------------------------------------------------------------------
                                 Total Cost (SB)     Average Cost ($M)
------------------------------------------------------------------------
FY 2003                                   $2.086                 $3.311
------------------------------------------------------------------------
FY 2004                                   $2.352                 $3.647
------------------------------------------------------------------------
FY 2005                                   $2.541                 $3.885
------------------------------------------------------------------------
FY 2006                                   $2.713                 $4.181
------------------------------------------------------------------------
FY 2007                                   $2.935                 $4.426
------------------------------------------------------------------------
Estimates
------------------------------------------------------------------------
FY 2008                                   $3.182                 $4.426
------------------------------------------------------------------------
FY 2009                                   $3.421                 $4.501
------------------------------------------------------------------------


    Estimates for FY 2010 and beyond will not be available until the 
submission of the FY 2010 President's Budget.

    Question 16: VA Office of Rural Health--$1 million and 1 FTE: is 
this sufficient? Studies indicate that over 40 percent of veterans 
returning from OEF/OIF come from rural communities. Rural communities 
have supplied a disproportionate share of veterans due to large 
contingents of National Guard and Reserve servicemembers. Over a year 
ago, Congress mandated the creation of the Office of Rural Health. Your 
FY 2009 budget requests $1 million and 1 FTE for 2009. Given the scope 
of the office--to conduct studies and develop policies and programs to 
meet the health needs of the rural veteran population, a population 
already presenting challenges in the provision of healthcare--do you 
believe that one FTE is sufficient to carry out the responsibilities of 
this office?

    Response: The Office of Rural Health (ORH) is currently staffed 
with a director and a health systems specialist which meets our current 
demands. We will increase staff as needed. To complement current ORH 
staff, ORH leverages expertise from a range of other VHA offices, VISN 
rural health consultants in the field, and is directly supported by the 
Assistant Deputy Under Secretary for Health for Policy and Planning, 
which provides the staff resources of the Office of Strategic Planning 
and Analysis as well as the Office of Enrollment & Forecasting. ORH 
also uses contracts which allow ORH to leverage rural health expertise 
with rural health leaders, academic institutions, and rural health 
organizations outside VA to assist with operational and strategic 
planning, coordination of research initiatives, and the development of 
pilot programs.

    Question 17(a): The VA's FY 2009 budget request for long-term care 
estimates an Average Daily Census (ADC) level of 11,000 for nursing 
home care. The Veterans Millennium Health Care and Benefits Act (P.L. 
106-117), which was enacted in 1999, requires the VA to maintain an ADC 
of 13,391. With the veterans' population demographically growing older, 
there would seem to be a concomitant increase in demand for nursing 
home care. Does the VA plan to submit a budget request for long-term 
care that meets these statutory obligations for nursing home care?

    Response: VA's philosophy is to provide long-term care services in 
the least restrictive environment that is safe for the veteran. The 
increasing availability of home and community-based non-institutional 
extended care services both in VA and in the private sector during the 
decade since the Millennium Act was developed has resulted in stable or 
falling nursing home occupancy in both sectors even as the population 
has aged. VA will continue to meet the statutory requirement to provide 
nursing home care for all veterans with a service-connected disability 
rating of 70 percent or more who need such care and seek it from VA. 
There are no current plans to seek additional funding for nursing home 
care beyond that required to maintain current capacity.

    Question 17(b): How much more long-term care funding would be 
required to meet the VA's statutory mandate to maintain an ADC of 
13,391.

    Response: Based on VA's FY 2009 budget request, an additional $664 
million would be needed to maintain an average daily census (ADC) of 
13,391 in VA nursing home care units.

    Question 18: According to the ``Priority List of Pending State Home 
Construction Grant Applications'' for FY 2008, VA is facing a backlog 
of $553 million in Priority 1 projects. Priority 1 projects are those 
projects that already have State funding to start construction. In 
light of this increasing backlog, how can the Administration justify a 
proposed cut in this account of $80 million?

    Response: VA anticipates that the FY 2009 funding request will be 
sufficient to fund all Priority Group 1, Subpriority 1 (Remedies for 
Life/Safety) projects for State veteran homes.

    Question 19(a): Your report to the Committee, dated February 26, 
2008, states that VA believes 2013 would be the first year it would be 
able to allow enrollment of new Priority 8 veterans. If the enrollment 
ban were lifted, allowing the enrollment of new Priority 8 veterans, on 
October 1, 2008, how many additional resources, overall and by specific 
appropriation account, would the VA estimate would be needed to handle 
the increased demand and workload?

    Response: VA's strategic analysis identified significant challenges 
with regard to building the capacity, both in terms of infrastructure 
and staffing, required to re-open enrollment for Priority 8 veterans in 
the near term without severely disrupting VA's ability to provide 
timely, high quality care to eligible veterans. This analysis 
demonstrated that 2013 would be the soonest that VA would be able to 
put in place the needed infrastructure to accommodate increases in 
demand. The report also noted meeting staffing requirements within this 
timeframe would remain a challenge due to nationwide healthcare 
workforce shortages. VA estimates that the treatment cost in 2013 for 
this policy change is $3.1 billion excluding any additional capital 
requirements.
    Under current enrollment policy, VA's projected demand for 
healthcare services is expected to increase over the next several 
years. While enrollment growth has slowed since the suspension of 
enrollment in Priority 8, the volume of healthcare services required by 
enrollees continues to grow due to the aging of the enrolled 
population. VA will need to continue to build capacity in the coming 
years to meet this increased need for healthcare services from eligible 
veterans. Providing healthcare services to these new Priority 8 
enrollees would require that VA develop additional capacity beyond the 
growth needed under the current enrollment policy. For example, VA will 
need to grow ambulatory services 15 percent by 2013 under the current 
enrollment policy and by a total of 24 percent under full enrollment 
(including Priority 8 veterans). Further, the growth in demand for VA 
healthcare services varies significantly across the VA healthcare 
system. For example, to meet the combined increase in demand for 
services under both current enrollment policy and full enrollment in 
2013, some areas will have to grow ambulatory services by as much as 45 
percent. Without first building the needed infrastructure and staff 
capacity, VA would be unable to accommodate the large increase in 
workload without compromising quality and timeliness of care.

    Question 19(b): If the level to qualify as a Priority 7 veteran was 
increased to 150 percent of the Geographic Means Test beginning on 
October 1, 2008, how many additional veterans does the VA estimate 
would be allowed to enroll for VA medical care with such a change and 
what additional resources would be required to meet this increased 
demand, overall and by appropriation account, for FY 2009.

    Response: VA is conducting an analysis to assess the impact on 
enrollment and utilization by increasing the income thresholds of the 
geographic means test thresholds which vary by county and number of 
dependents. VA will provide the results of this analysis to the 
Committee when the analysis is completed.

                               __________
                  The Honorable John J. Hall, Chairman
       Subcommittee on Disability Assistance and Memorial Affairs
                   House Veterans' Affairs Committee

    Question 1: In your testimony, you said the President's Budget 
Request would allow for improvement in the timeliness and accuracy of 
claims processing. This has been VA Strategic Plan Goal Number One 
since at least 2003, but the backlog has only gone up since that time. 
Can you provide some clear, concise and measurable objectives for 2009 
that will realistically result in improvements that Congress can track?

    Response: VBA continues its efforts to reduce the pending claim 
inventory and improve claims processing timeliness. Disability 
compensation and pension claims receipts requiring a rating decision 
are projected to increase to 854,904 in 2008 and 872,002 in 2009. VBA 
has set aggressive performance targets to successfully address this 
significant increase in claims. Measurable performance objectives 
established for FY 2009 include 145 days, on average, to process 
compensation and pension rating claims, an accuracy rate of 92 percent 
for rating related claims, and an end-of-year inventory of 
approximately 300,000.

    Question 2: You have listed as a major goal for 2009 to reduce the 
timeliness of processing a claim from 183 days to 145 days. At one 
point, the goal was 125 days. I recently convened a hearing in which a 
private employment plan reminded me that they are obligated under the 
ERISA law to process claims in 45 days and can do it in 3 days. How is 
it fair to veterans that you do not have the same goals as the private 
sector?

    Response: There is no private sector model of claims processing 
(private insurance, Federal Employees' Compensation Act, etc.) that has 
a benefits system as complex as VA's. The following requirements set VA 
apart from other entities that process claims:

      VA is required to establish that the claimed disability 
was incurred in, aggravated by, or otherwise determined to be a result 
of military service, often many years after discharge from service.
      Under the Veterans' Claims Assistance Act (VCAA), VA has 
the duty to assist the claimant in gathering evidence needed to support 
their claim. Specific notification requirements must be followed.
      VA must determine the veteran's ability to earn income at 
a level equal to a non-disabled veteran.
      VA must determine the amount of compensation to award 
based on a combined disability rating evaluation, as well as process 
any ancillary benefits to which the veteran may be entitled.

    Rightly, the laws governing VA are designed to benefit veterans. 
However, as a result, the system under which claims are adjudicated 
imposes legal requirements that create inherent delays in claims 
processing.
    Recently, the CNA Corporation appeared before the Veterans' 
Disability Benefits Commission. CNA compared the VA disability 
compensation program to similar Federal disability programs and 
explored lessons learned from other programs. Some of the areas 
considered were claims processing, performance measurement, quality, 
training, staffing, costs, and processing sites. CNA concluded that, 
except for timeliness, VA does not appear to be under-performing in 
comparison with other disability programs and that recent training 
improvements and hiring initiatives seem promising for improving VA 
timeliness in the long term.

    Question 3: Your projection for the volume of claims receipts is 
projected to reach 872,000 in 2009, which is an increase in the 
backlog. Isn't that counterproductive to everything you are talking 
about doing to improve C&P services?

    Response: The disability claims workload from returning war 
veterans and veterans from earlier periods has continuously increased 
since 2000. VBA's annual rating claims receipts grew 45 percent from 
2000 to 2007. In 2008 and 2009, we anticipate receipts will increase to 
854,904 and 872,002 respectively. However, as rating receipts increase, 
VBA's national production level is also expected to increase to 878,205 
in 2008 and 942,706 in 2009. The increase in staffing across the Nation 
has prepared VBA for this projected increase in workload. With a 
workforce that is sufficiently large and correctly balanced, VBA can 
process rating claims in a timely and efficient manner. We project that 
our pending rating inventory will decrease in 2008 and 2009 with a 
projected end-of-year inventory of approximately 300,000 in 2009.

    Question 4: Neither in the budget proposal, nor in your testimony 
do I see how you are going to deal with the nature of the complexity of 
claims by using more modern tools. I recently held a hearing on using 
Artificial Intelligence to automate the claims processes and we heard 
from several very credible experts on its use in the private sector and 
its potential for VA, but I don't see it as a priority in the budget. 
Online Access and Virtual VA do not change the fact that the Regional 
Offices still print a paper record and manually rate claims. Where in 
the Budget, do you include a request for an automated decision support 
system?

    Response: VBA, in collaboration with the Office of Information and 
Technology (OIT), is developing the paperless delivery of veterans 
benefits initiative. This initiative will employ a variety of enhanced 
technologies to support end-to-end claims processing. In addition to 
imaging and computable data, we will also incorporate enhanced 
electronic workflow capabilities, enterprise content and correspondence 
management services, and integration with our modernized payment 
system, VETSNET. Similarly, we are also exploring the utility of 
business-rules-engine software to both manage workflow and potentially 
to support improved decisionmaking by claims processing personnel.
    To fully develop this initiative, funded through $20 million 
appropriated in the FY 07 supplemental, VBA will engage the services of 
a lead systems integrator (LSI). The LSI will work closely with VA to 
fully document our business and systems requirements for an end-to-end 
claims process supported by technology. While this process will be 
enhanced by the advanced technologies this is fundamentally a business 
transformation effort. Business process modeling and resulting 
improvements will be a key feature in this effort, building upon the 
claims processing study recently completed by IBM Global Business 
Systems.
    In addition, the FY 2009 budget request calls for $17 million for 
expansion of our existing imaging and electronic file repository, 
Virtual VA. This funding will ensure that we are able to make 
demonstrable progress in our current efforts to enhance claims 
processing through technology as we develop the longer term plan. This 
longer-term plan will move us toward a more automated decision-support 
system built upon a claims process that is less reliant on paper 
records.

    Question 5: I see that C&P programs are requesting an additional 
$14 million or a 17 percent increase over last year. Does that include 
the $20 million supplemental funds VBA got last year?

    Response: We assume that this question refers to the compensation 
(only) medical exam pilot program, page 2A-2 of the 2009 Budget 
Submission. The funding for contract exams in the benefits budget 
supports the 10 pilot sites in Atlanta, Boston, Houston, Los Angeles, 
Muskogee, Roanoke, Salt Lake City, San Diego, Seattle, and Winston-
Salem. The $20 million in supplemental funds VBA received last year for 
contract exams is included in the general operating expenses (GOE) C&P 
request. The six sites funded by the GOE appropriation are Cleveland, 
Indianapolis, St. Louis, Des Moines, Lincoln, and Waco.

    Question 6: You mentioned in your testimony that you are enacting 
some of the Dole/Shalala Commission recommendations, but those are 
somewhat limited. You did not mention the 113 recommendations from the 
Veterans' Disability Benefits Commission, which was a much more in 
depth study since it ran for over 2 years and not just 4 months. What 
is your plan to deal with those recommendations; especially with the 
issues they raised surrounding the VA Schedule for Rating Disabilities, 
Quality of Life payments and presumption?

    Response: VA is in the process of evaluating all of the 
recommendations from the Veterans' Disability Benefits Commission and 
the Dole-Shalala Commission. The 113 recommendations made by the 
Veterans' Disability Benefits Commission fall into categories based on 
what organization has been assigned action: VA, DoD, Congress, some 
combination, or no action required. There are 36 assigned to VA alone, 
and they are being worked by the organization under which the activity 
or responsibility falls. In response to the recommendations made by 
both of these commissions, a contract was awarded in February 2008 to 
study long-term transition payments, quality-of-life payments, and 
earnings-loss payments. The final draft report is expected on July 28, 
2008. The contract completion date is August 11, 2008. Any decisions on 
changes to the rating schedule, including consideration of quality-of-
life issues, must await the outcome of the study. The Department is 
tracking progress on all of the recommendations on which we share 
responsibility. VA organizations are updating the status of each 
recommendation to reflect ongoing and completed actions.

    Question 7: What about the Global War on Terror Heroes Task Force 
your predecessor chaired? What are you going to do with those 
recommendations?

    Response: In April 2007, Secretary Nicholson submitted the task 
force on Returning Global War on Terror (GWOT) Heroes report to the 
President. The report contained 25 recommendations--which included 100 
action items with implementation dates--to improve the delivery of 
Federal services to returning servicemembers. The 90 actions items with 
target dates on or before March 1, 2008, are completed or commenced as 
required.
    The task force recommendations have resulted in the enhanced 
delivery of VA services to veterans, and VA continues to seek ways to 
improve. Senior leaders within VA are accountable for ensuring the 
remaining GWOT task force implementation actions in the areas of 
information technology enhancements and VA/DoD data exchange are 
implemented in a timely manner.

    Question 8: A single DoD/VA disability evaluation process has been 
advocated by most of the recent Commissions and Task Forces and 
certainly seems to have support among the veterans' community. I 
understand the pilot is underway, but should conclude shortly. What are 
your views on taking such a step with DoD and what would be the next 
phase toward implementation of a single exam process?

    Response: VA initiated a pilot of the single disability examination 
system (DES) with DoD on November 29, 2007. VA has been actively 
participating in regular reviews with DoD to evaluate the ongoing 
progress and effectiveness of the National Capital Region (NCR) DES 
pilot program. VA believes that data from the current workload must be 
analyzed and concerns addressed prior to any consideration of expanding 
the pilot.

    Question 9: At a previous hearing, VA staff were unable to tell me 
what happened to the Office of Seamless Transition, which has now 
become a VHA/DoD Outreach Coordination Office--how has VBA been dropped 
from the process? How are newly disabled veterans who seem to have a 
difficult enough time in getting claims processed supposed to navigate 
the system without this level of support? Why was Congress not informed 
about such a major realignment and our input not included?

    Response: In January 2005, the Under Secretary for Health (USH) 
established the Office of Seamless Transition (OST) to assist 
servicemembers in their transition from DoD to VA. In addition to VHA 
employees, OST was supported by VBA, which provided staff to help with 
benefits issues. Two active duty Marine Corps officers and one Army 
officer were also detailed to the office. The mission of OST was to 
ensure that every severely injured or ill servicemember returning from 
combat received priority consideration and world-class service within 
VA.
    In the late summer of 2007, VHA reorganized the OST into three 
components: the OEF/OIF Program Office; the Care Management and Social 
Work Service; and the Office of OEF/OIF Outreach, recognizing that 
separate focuses had evolved with respect to efforts on behalf of our 
Nations' returning servicemembers. The USH created the OEF/OIF Program 
Office as a direct report. On an ongoing basis, the executive director 
of the office collaborates with DoD on policy and course direction 
related to transition of healthcare services for servicemembers as they 
move between DoD and VHA. The office also works with other offices in 
VA and VBA to specify remedies for barriers and challenges as they are 
identified. In response to public law, such as components of the NDAA 
that require VHA actions, the office facilitates the development of 
action plans that assure the intent of such issuances are met fully and 
timely, including any that require joint action with other VA or DoD 
offices.
    In response to a need for higher-level clinical case management, 
VHA created the Care Management and Social Work Service within the 
Office of Patient Care Services (PCS) in October 2007. The new 
service's placement under PCS takes advantage of the synergistic 
alignment with the polytrauma and rehabilitation and mental health 
chief consultant offices, and other clinical specialties, which are 
deemed critical for internal coordination of veterans' care. The 
office's mission is to coordinate patients' healthcare and provide 
family support. This office has staff detailed from VBA for support on 
benefit issues, and from active duty military officers. The office 
works closely with OEF/OIF program directors and case managers at VA 
medical centers, VBA offices, and DoD discharge staff to ensure a 
smooth transition to VA services at locations nearest to the veteran's 
residence after their military discharge. This coordination allows 
enhanced identification of these veterans at their local VA facilities 
for continuity of medical care and processing of benefits claims.
    The third component of focus is the Office of OEF/OIF Outreach, 
which provides a national focus on VHA's systematic efforts to identify 
new veterans and to provide information on services available to them. 
The office's military liaison coordinator assures that VHA participates 
in National Guard and Reserve's post deployment health reassessment 
(PDHRA) activities and assists in coordinating the pre- and post-
deployment briefing. This office also receives lists from DoD of 
servicemembers who are in the physical evaluation board process, and 
sends this information to the local VHA office where the servicemember 
resides. The local VHA office sends a letter from the Secretary with 
information about VA. For those leaving active duty due to service 
connected medical problems, the outreach effort is intensified to 
ensure a full understanding of the VA compensation process and 
vocational rehabilitation and employment programs. VA briefings on 
healthcare services and benefits are conducted at townhall meetings and 
include VHA and VBA staff who assist and present to family readiness 
groups and to unit drill activities near the home of returning National 
Guard/Reservists. Current efforts are underway to reach out using a 
call center to those who are separated from the military and have not 
used VA healthcare to encourage them to consider VA as an option as 
they need services.

    Question 10: I have heard that there has been some confusion over 
the clothing allowance. It used to be adjudicated and paid by VBA. Now 
VHA has oversight and the veteran must go to a VAMC to apply.

    Response: Although VHA has assumed responsibility for the clothing 
allowance program, the process for application does not require the 
veteran to report to the VA medical center (VAMC) to apply. The veteran 
can fill out the form (VAF-8679) and mail it to the local VAMC 
prosthetics department. If he does not have a form, he can call and one 
will be mailed to him. VHA is also in the process of placing this form 
on the Web site to be downloadable and fillable. The only time a 
veteran may be asked to come to a VAMC is to determine if he meets the 
qualifications for a clothing allowance and this generally applies only 
to those non-static veterans whose medical condition is subject to 
change.

    Question 11: Is this not adding another step to the process?

    Response: No additional steps have been added to the process, as a 
matter of fact, there has been elimination of the steps when the 
application had to be sent from VBA to VHA for determination of non-
static allowances. Now the determination is made and the processing of 
payment made at the same time.

    Question 12: Additionally, if VBA does not inform the veteran, and 
I have seen decision letters that no longer inform amputees and other 
eligible veterans about the benefit, how do they know it even exists?

    Response: With all new awards of service connection, VA Form 21-
8764, Disability Compensation Award Attachment is included with the 
decision letter. The attachment includes an explanation of the clothing 
allowance benefit. It also instructs veterans to contact the 
prosthetics department at the nearest VHA facility to apply for the 
benefit. This information is also provided in VA's annual publication, 
Federal Benefits for Veterans and Dependents, which is available at 
many VA facilities and also electronically on VA's Web site.

    Question 13: Furthermore, some of the OIF/OEF amputees are getting 
their prosthesis through TRICARE contracts and are not using VAMCs, so 
how are they going to get their clothing allowance?

    Response: The veteran only needs to complete the application (VAF 
8679) and send it to the local VA prosthetics department, who will 
review his rating and if service connected for the condition, the staff 
will establish the veteran as ``static'' and no further action will be 
required.

    Question 14: I am very concerned, as I am sure we all are, about 
the caregivers of the severely injured servicemembers and I appreciate 
the pilot programs underway to assist them. But my concern is with 
providing them with other resources and would like to hear your opinion 
on creating a caregiver allowance and extending CHAMPA eligibility to 
them, even if they are not the veteran's dependent.

    Response: VA will study this option. VA has come to appreciate the 
importance of support to family caregivers whose severely injured loved 
ones transition into VA healthcare.

    Question 15: What is the current status of the Vets Center in 
Middletown, NY?

    Response: The lease for the Middletown Vet Center (726 East Main 
Street, Suite 201, Middletown, NY 10940) was signed on September 28, 
2007. The property is currently being built-out and the projected move-
in date is April 14, 2008. The team leader, two counselors and the 
office manager positions have been filled and staff are providing 
services in temporary space donated at the Orange County Veterans' 
Service Office, Port Jervis, Monticello and Newburg CBOCs. The first 
client was provided service on December 27, 2007.

    Question 16: Regarding the CARES process at the Hudson Valley VA 
System I believe the VA must do what is best for our veterans, not what 
is most beneficial for the VA bureaucracy. What is the status of the 
Enhanced Use Lease process for these hospitals and what principles do 
you believe should guide the VA in this decision?

    Response: VA's guiding principles when using the enhanced use 
leasing program are to produce developments that provide direct 
benefits to veterans with much needed healthcare and services that VA 
does not offer, not a benefit of VA's bureaucracy. Examples are 
assisted living facilities, transactional and permanent housing for 
homeless veterans, continuous care retirement communities, low income 
senior housing and other in-kind considerations. These types of 
services are put in place with veterans' preference and priority 
placement as well as the conveyance of the property value as a discount 
to the veteran's costs when occupying the facilities.
    At Montrose VA expects to facilitate the provision of those types 
of services and healthcare with a developer/lessee that will be 
selected through a full and open competition. The enhanced use leasing 
process will formally begin in the summer of 2008 at a public hearing 
to present VA's concepts to the community and stakeholders to receive 
input and comments. The process is expected to have 2 phases. The first 
phase will be immediate for the land and buildings currently available 
due to underutilization and vacancy. The second phase will be the 
remaining land and buildings that will be available after the VA's 
capital plan for Montrose and Castle Point is completed.

    Question 17(a): What stage is the performance bonus review process 
in?

    Response: The Department concluded its 2007 Senior Executive 
Service (SES) performance review process on December 7, 2007.

    Question 17(b): What do you think of the level of bonuses that were 
paid out last year to Senior Executive Service officials at the VA?

    Response: In January 2008, I reviewed the changes made to the VA 
SES performance review process including the level of bonuses that were 
paid out last year. I believe the distribution and level of bonuses 
paid to our SES officials was based on VA's overall performance as a 
Department and the individual performance of each executive who 
received a bonus.

    Question 17(c): Do you intend to take a more active oversight role 
in the process than your predecessor?

    Response: While serving as Acting Secretary, Deputy Secretary 
Gordon H. Mansfield modified various components of VA's SES performance 
review process. Deputy Secretary Mansfield's modifications resulted in 
more accountability on the part of every SES member and enhanced the 
credibility and integrity of VA's SES performance management system. 
These modifications also promote a Department-wide service delivery to 
our Nation's veterans and their families. I fully support the 
modifications he made and will continue the active oversight 
implemented by Deputy Secretary Mansfield.

    Question 18: In 2004, Congress enacted the Veterans Health Programs 
Improvement Act of 2004 (P.L. 108-422). Section 201 of the Act 
authorizes VA to make subsidy payments to the States to assist State 
veterans homes in recruiting and retaining nursing personnel to reduce 
nursing shortages. I understand VA personnel have been developing 
regulations to carry out the intent of Congress, but those regulations 
have not been published, now nearly 4 years after passage. As required 
by Section 201(b) of the Act, ``[t]he Secretary shall establish such 
interim procedures as necessary so as to ensure that payments are made 
to eligible States under that section commencing not later than June 1, 
2005, notwithstanding that regulations under subsection (j) of that 
section may not have become final.'' What are the causes for the long 
delay in promulgating these regulations, and what are the Department's 
plans to implement these provisions of law?

    Response: It was necessary for VA to define the scope of coverage 
for different categories of nurses and analyze the extent of nursing 
shortages and the efficacy of different recruitment and retention 
incentives. Consultation with State Veterans Home stakeholders was 
undertaken to be sure the final regulation would be compatible with 
their needs. The proposed regulation was published in the Federal 
Register on April 11, 2008, and is currently outstanding for a 60-day 
public comment period from the date of publication.

    Question 19: When can State veterans homes expect to see these 
regulations published?

    Response: The proposed regulation was published in the Federal 
Register on April 11, 2008, and is outstanding for a 60-day public 
comment period from the date of publication. Following that period, VA 
will respond to any public comments received and publish the regulation 
as quickly as possible thereafter.

    Question 20: In Section 211 of the Veterans Benefits, Health Care, 
and Information Technology Act of 2006 (Public Law 109-461), the 
Department is authorized and required to provide severely disabled 
service-connected veterans (70% disabled or greater) with equitable 
access to State veterans homes, by reimbursing homes the full cost of 
care for these veterans, as well as for any veteran whose primary need 
for nursing home care is due to a service-connected disability. That 
Act also requires VA to furnish prescription medications to veterans in 
State homes to treat their service-connected disabilities, and 
medication for any disabilities of veterans who have service-connected 
disabilities rated at 50 percent or more disabling. The Department has 
not implemented this law, whose effective date was March 22, 2005. 
Currently, the VA is contracting with private sector nursing homes to 
deliver care to these veterans. A GAO report on VA Long Term Care 
(March 2006) found that the State veterans home program can provide 
higher quality of care to veterans at a much lower cost for services. 
What is the Department's plan to implement these measures, and what are 
the assumed costs or savings that would result from implementation?

    Response: VA must establish a new regulation in order to implement 
these measures. The regulation has been drafted and was placed in the 
concurrence process on February 14, 2008. After departmental 
concurrence is received, it will be reviewed by the OMB, published as a 
proposed rule in the Federal Register for a 60-day mandatory public 
comment period, revised if necessary in response to public comments, 
and then published as a regulation in the Federal Register.

    Question 21: When can State veterans homes expect to see these 
authorities implemented?

    Response: VA will proceed to implement these measures as quickly as 
possible thereafter.

    Question 22: In 2006, this Committee received testimony from the 
President of the National Association of State Veterans Homes as 
follows: ``States have presented over $400 million in projects that are 
presently pending before VA. Also, a February 2006 VA survey of States 
documented that $161 million will be required in life-safety projects 
alone over the next few years. We believe that the total backlog of all 
conceivable State construction projects, including increased capacity 
to meet rising demand in California, Texas, Florida and other States, 
could easily top $1 billion.'' Last year, Congress provided $165 
million in funding for construction grants for State extended care 
facilities. This year, the Administration's budget submission requested 
only $85 million for this program. What is the current dollar total of 
backlogged requests for new construction or renovation under this 
program from State homes? Of this amount how much is requested by State 
homes for construction of vital life and safety repairs and upgrades 
and how many new bed-producing projects, with their costs, are pending 
in VA's construction backlog?

    Response: There are 178 initial applications included in the FY 
2008 State home construction grant program, with an estimated cost to 
VA of $971,624,000. Of these, 39 applications are for life and safety 
repairs ($97,198,000), 97 are for renovations of existing State 
veterans homes ($245,917,000) and 42 are new bed-producing projects 
($628,509,000). Only 92 of the 178 initial applications have certified 
the commitment of State matching funds required to make them eligible 
for a VA grant. These 92 applications have an estimated cost to VA of 
$535,467,000, including $80,353,000 for 19 life safety projects, 
$78,949,000 for 53 renovation projects, and $376,165,000 for 20 new 
bed-producing projects.

    Question 23: Based on the Department's contacts with the States, 
please estimate the number of construction project requests you expect 
to receive this year, with their estimated costs.

    Response: The States do not consistently inform VA of its plans. VA 
will not know the cost or priority of new grant applications for 
certain until after August 15, 2008, which is the deadline for 
submission of applications to be considered for inclusion in the FY 
2009 priority list.

    Question 24: What criteria did the Department use to determine a 
funding level of $85 million for the State extended care grant program 
for Fiscal Year 2009?

    Response: VA anticipates that the FY 2009 funding request will be 
sufficient to fund all Priority Group 1; Subpriority 1 projects 
(Remedies for Life/Safety).

    Question 25: Congress is in receipt of numerous reports that VHA, 
NCA and VBA are contracting out Federal functions to contractor 
performance without conducting cost comparisons, which is clear 
violation of the OMB A-76 Circular, governmentwide competition rules 
that apply to the VA, as well as FY 2008 VA appropriations language 
that makes even clearer that the VA must comply with these 
competitions. VA acknowledges that 80% of the blue collar jobs 
contracted out is held by veterans including disabled veterans. Will 
you commit to ensure that your Department follows the circular and the 
law, in order to ensure that VA is in compliance with the law and that 
the interests of the taxpayer and veterans seeking Federal employment 
are well served?

    Response: VA is committed to following the Circular and the law. In 
addition to OMB A-76 Circular, VA must also comply with title 38, 
section 8110 which states ``Notwithstanding any other provision of this 
title or of any other law, funds appropriated for the Department under 
the appropriation accounts for medical care, medical and prosthetic 
research, and medical administration and miscellaneous operating 
expenses may not be used for, and no employee compensated from such 
funds may carry out any activity in connection with, the conduct of any 
study comparing the cost of the provision by private contractors with 
the cost of the provision by the Department of commercial or industrial 
products and services for the Veterans Health Administration unless 
such funds have been specifically appropriated for the purpose.'' 
Federal positions are not being directly converted to contractor 
performance in contravention of the Circular or the law. VHA ensures 
that it complies with OMB A-76 Circular, Performance of Commercial 
Activities, title 38, section 8110 and other applicable laws. VA 
submits the Annual Section 305 report required by Public Law 100-262, 
Veterans' Health Care Eligibility Reform Act of 1996. All VHA 
contracting activities are required to provide an annual certification 
and, to report all FTE that are converted to contract performance 
during the given fiscal year.

    Question 26: You stated at the hearing that a significant share of 
the IG's work was done through contractors. Please provide the 
Committee with an inventory of the number of contractors used by the IG 
over the last 5 years, the functions they performed, the dollar amount 
and share of the IG budget that was used to pay contractors, and when 
and how contractor performance has been evaluated, to determine if it 
is cost effectiveness to continue to contract out this work.

    Response: Over the last 5 years, the Office of Inspector General 
(OIG) contracted for work related to the annual audits of VA's 
consolidated financial statements (CFS) and the Federal Information 
Security Management Act (FISMA) as shown in the table below. Although 
the majority of the CFS work was performed by contractors, until FY 
2007, most of the FISMA work was performed by OIG personnel.
    Before FY 2005, OIG provided narrative comments but no rating for 
contractor performance. For FY 2005 through FY 2007 OIG evaluated the 
contractor's interim performance for the following areas as required by 
the Office of Acquisition and Logistics, Acquisition Operations 
Service:

      Contractor's compliance with initial performance 
schedule.
      Effectiveness of contractor's schedule tracking system.
      Contractor's ability to adapt to customer initiated 
schedule changes.
      Contractor's ability to plan, develop, track and preserve 
project management documentation.
      Effectiveness of the contractor's use of teaming.
      Ability of contractor to work with the customer.

    OIG will provide a final rating of (1) highly effective, (2) 
effective, (3) marginally effective, or (4) ineffective at the end of 
the contract performance period.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                  Share of OIG
                                                                                                      Contract       Budget
                           Fiscal Year                                        Contractor               Amount       (percent-      Purpose of Contract
                                                                                                                    rounded)
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2007                                                                           Deloitte & Touche LLP$3,705,493      5 percent         Annual CFS audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2007                                                                           Deloitte & Touche LLP 1,013,550      1 percent       Annual FISMA audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2006                                                                           Deloitte & Touche LLP$3,611,915      5 percent         Annual CFS audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2006                                                              Internet Security Systems, Inc.       25,000    .04 percent   Penetration testing for
                                                                                                                                            FISMA audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2005*                                                                          Deloitte & Touche LLP 3,496,204      5 percent         Annual CFS audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2005                                                              Internet Security Systems, Inc.       25,000    .04 percent   Penetration testing for
                                                                                                                                     annual FISMA audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2004                                                                           Deloitte & Touche LLP 4,302,739      7 percent         Annual CFS audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
 2003                                                                           Deloitte & Touche LLP 4,190,734      7 percent         Annual CFS audit
--------------------------------------------------------------------------------------------------------------------------------------------------------
* The OIG awarded a new contract in FY 2005 for the annual CFS audit through competition, which resulted in a lower price.


    Question 27: P.L. 108-445 requires the Department to report to 
Congress annually for 5 years after implementation of the physicians' 
pay bill to determine if the law is helping with recruitment and 
retention of physicians. The reports during the first 2 years must also 
address how many VA medical dollars are still being spent on contract 
care rather than in-house medical staff. Congress has still not 
received a single report even though the law took effect over 2 years 
ago. When is the Department going to comply with these reporting 
requirements?

    Response: The annual report on physicians pay was provided to the 
Chairman and Ranking Members of the Senate and House Committees on 
Veterans' Affairs and the House Subcommittee on Health on November 16, 
2007.

    Question 28: P.L. 108-445 also encouraged the VA to offer its RNs 
alternative work schedules that are regularly available to nurses in 
the private sector. How many facilities have offered AWS since the law 
took effect over 2 years ago, and how many nurses per facility are 
working AWS?

    Response: VA implemented two alternate schedules authorized by 
Public Law 108-445. The 36/40 work schedule that authorizes nurses to 
work three regularly scheduled 12-hour shifts within an administrative 
work week and be paid for a full 40-hour work week, and the 9 month/3 
month work schedule that authorizes nurses to work full-time for 9 
months with 3 months off-duty within a fiscal year and be paid at 75 
percent of the full time rate.
    The law gives the direction for establishing the two work 
schedules; however no facility is mandated to use them. Individual 
facilities may choose to offer the alternative work schedule (AWS) if 
they believe these schedules would benefit its posture of retaining 
well qualified staff as an employer of choice.
    Currently there is no mechanism to centrally track the complete use 
of the AWS per facility and by individual because of limitations in the 
personnel and accounting integrated data (PAID) and enhanced time and 
attendance (ETA) systems. For example, nurses who are authorized to 
work the 36/40 AWS (36/40 AWS) whose tour of duty cross administrative 
work weeks presents timekeeping challenges in the ETA system. The 
Office of Human Resources Management, Work Life and Benefits Service is 
currently researching and considering solutions that can be quickly 
implemented to resolve these problems.

                               __________
                       The Honorable Joe Donnelly
                   House Veterans' Affairs Committee

    Question 1: VA has said that the budget would provide sufficient 
resources to virtually eliminate the time a patient has to spend 
waiting for an appointment to see a doctor by the end of 2009. While 
that is an admirable goal, is it realistic, and what are some of the 
steps you plan to take to ensure that will happen?

    Response: The access list in March of 2008 was 28,724, a reduction 
of 126,977 since March 2007. (The access list is defined as all 
patients on the electronic wait list or those with an appointment but 
waiting more than 30 days beyond their desired date). VA is working 
diligently to ensure that patients do not have lengthy waits for clinic 
appointments and we expect to have the access list down to 25,000 by 
the end of FY 2008 and virtually eliminated by September 2009.

    Question 2: VA has said that the budget would provide sufficient 
funds to reduce the disability claims backlog by 24 percent (to 
298,000) by the end of 2009. Is this realistic, and what are some of 
the steps you plan to take to ensure that will happen? Also, can we go 
further to reduce the backlog and wait time even more, and if so, is 
this an issue of funding, or whether we can fundamentally change how 
the system works?

    Response: VA has embarked on an extensive hiring and training 
initiative to reduce the pending inventory. The goal of reducing the 
claims inventory to 298,000 by the end of 2009 is realistic if claims 
receipts do not exceed projections.
    Court cases and legislative changes can result in an unforeseen 
increase in claims. Current law also imposes requirements that create 
inherent delays in the claims process.

    Question 3: Do you believe there is adequate funding in this budget 
for mental health, ensuring returning veterans are better screened for 
potential problems, and providing care for those in need? How will 
increased funds be used to accomplish this goal?

    Response: VA's proposed budget for FY 2009 includes $3.9 billion to 
continue to improve access to mental health services across the 
country. This is an increase of $319 million, or 9 percent, above the 
2008 level. These funds will help VA continue to deliver exceptional, 
accessible mental healthcare. Our strategy for improving access 
includes increasing mental healthcare staff, over 3,800 new mental 
health professional and support staff have been hired since FY 2005, 
resulting in a total of almost 17,000 mental health staff in the VA 
system. In addition to growth in staff, the enhancement funding 
supports new care models, such as integration of mental health services 
into primary care sites and training of mental health staff to provide 
psychotherapies with particularly strong evidence bases, as research 
has become available to identify such treatment models. We have 
expanded our tele-mental health program, which allows us to reach about 
20,000 additional patients with mental health conditions each year.
    The budget also include funds for the Mental Health Initiative, 
which focuses on enhancing access to all mental health programs, 
including those for OEF/OIF veterans, increasing recovery oriented 
services, integrating care between mental health and primary care, and 
promoting a national model for suicide risk identification and 
prevention.


----------------------------------------------------------------------------------------------------------------
                    Dollars in Thousands                        2007 Actual     2008 Estimate     2009 Estimate
----------------------------------------------------------------------------------------------------------------
Mental Health Initiative                                           $352,835          $370,029          $531,283
----------------------------------------------------------------------------------------------------------------


    As part of its efforts to increase access to mental health services 
in the most appropriate setting, a portion of Mental Health Initiative 
funding is directed toward increased staffing for outpatient mental 
health programs in 2008 and 2009. In addition, VA is planning to 
increase the number of intensive outpatient substance abuse programs. 
This effort reflects the continued transition from inpatient care to 
more effective intensive outpatient care for treating substance abuse 
problems.


----------------------------------------------------------------------------------------------------------------
                    Dollars in Thousands                        2007 Actual     2008 Estimate     2009 Estimate
----------------------------------------------------------------------------------------------------------------
Outpatient                                                       $1,421,340        $1,523,990        $1,584,424
----------------------------------------------------------------------------------------------------------------


    Mental Heath Initiative funds are being used to increase funding 
for suicide prevention.


----------------------------------------------------------------------------------------------------------------
                    Dollars in Thousands                        2007 Actual     Estimate 2008     Estimate 2009
----------------------------------------------------------------------------------------------------------------
Suicide Prevention                                                   $8,635           $15,472           $15,509
----------------------------------------------------------------------------------------------------------------


    These funds have been used to establish a National Suicide 
Prevention Center of Excellence in Canandaigua, New York, which has 
established a national suicide hotline and a comprehensive public 
health education approach within VHA to increase awareness of the issue 
of suicide, emphasizing that suicide prevention is the responsibility 
of all VA employees. In addition, VHA has funded suicide prevention 
coordinators at each medical center to provide local awareness on 
preventing suicide among veterans as well as recognizing veterans at 
high risk for suicide, and providing appropriate care. Ongoing funds 
will expand the Center, provide additional training opportunities, and 
support and expand the roles of the facility-based suicide prevention 
coordinators.
    Increased funding levels reflect the VA OEF/OIF enrollees' unique 
healthcare usage patterns, particularly for mental health services. For 
example OEF/OIF enrollees are expected to need more than eight times 
the number of post traumatic stress disorder (PTSD) residential 
rehabilitation days than non-OEF/OIF enrollees. OEF/OIF enrollees also 
have an increased need for inpatient acute psychiatric care and 
outpatient psychiatric and substance abuse treatment.

    Question 4: When will VA lift the ban on enrolling Priority 8 vets? 
What is your estimate for the amount of additional resources needed in 
order to allow you to lift this enrollment ban?

    Response: VA estimates it would require a budgetary increase of 
$3.1 billion, not including additional infrastructure costs, to provide 
healthcare services to an additional 1.4 million Priority 8 enrollees 
and approximately 750,000 patients in 2013, the first year VA believes 
it could put in place the necessary infrastructure to accommodate the 
increase in workload associated with reopening enrollment Priority 8 
veterans.
    To understand the full magnitude of the cost of re-opening 
enrollment such an endeavor must be viewed within a long-term strategic 
framework, namely the estimated 5-year cost of $16.9 billion and the 
10-year cost of $39.2 billion. These estimates represent the costs of 
providing healthcare services to these new Priority 8 enrollees but do 
not include the capital costs needed to build the associated 
infrastructure. Further, VA's strategic analysis identified significant 
challenges with regard to building the capacity, both in terms of 
infrastructure and staffing, required to re-open enrollment for 
Priority 8 veterans in the near term without severely disrupting VA's 
ability to provide timely, quality care to eligible veterans.
    Under current enrollment policy, VA's projected demand for 
healthcare services is expected to increase over the next several 
years. While enrollment growth has slowed since the suspension of 
enrollment in Priority 8, the volume of healthcare services required by 
enrollees continues to grow due to the aging of the enrolled 
population. VA will need to continue to build capacity in the coming 
years to meet this increased need for healthcare services from 
currently eligible veterans. Providing healthcare services to these new 
Priority 8 enrollees would require that VA develop additional capacity 
beyond the growth needed under the current enrollment policy. For 
example, VA will need to grow ambulatory services 15 percent by 2013 
under the current enrollment policy and by a total of 24 percent under 
full enrollment (including Priority 8 veterans). Further, the growth in 
demand for VA healthcare services varies significantly across the VA 
healthcare system. For example, to meet the combined increase in demand 
for services under both current enrollment policy and full enrollment 
in 2013, some areas will have to grow ambulatory services by as much as 
45 percent. Without first building the needed infrastructure and staff 
capacity, VA would be unable to accommodate the large increase in 
workload without compromising quality and timeliness of care.

    Question 5: We know you are doing your best to ensure that OIF and 
OEF veterans receive the necessary medical care. What are you doing 
about ensuring the VA's ability to provide care for all veterans, in 
both urban and rural areas, in our clinics and hospitals around the 
country?

    Response: VA monitors its ability to provide care through a series 
of internal and external measures with special emphasis on quality and 
access. VA has improved access to care for veterans in both urban and 
rural areas through a variety of mechanisms to include additional 
outpatient access points, technology, sharing agreements and purchased 
care.
    CBOCs enhance access to all veterans. VA has opened over 570 new 
CBOCs since 1995. With regard to veterans residing in rural areas, VA 
operates or contracts for care at 100 outpatient clinics located in 
areas considered rural or highly rural. CBOCs offer veterans a full 
array of primary care, mental healthcare, and in some instances 
specialty care services in communities where they live and work.
    VA uses the latest advances in information technology with the use 
of telehealth technology. Telehealth involves the use of electronic 
information and communications technologies to provide and support 
healthcare when distance separates the participants. These new 
information technologies help support care delivery in the home, 
allowing veteran patients to enjoy better health and to continue living 
independently. Telehealth also serves to increase access to specialty 
care for conditions such as cardiac disease, mental health, diabetes, 
post-surgical followup and rheumatology. VA is designating lead 
clinicians to formalize these projects into models of care that can be 
implemented nationally to increase access to specialty care for 
veterans in rural areas. This will begin with mental health, surgery, 
rheumatology and endocrinology. Telehealth models have been developed 
to link VAMCs and CBOCs. These models encompass the clinical, 
technology and management processes involved in providing services to 
remote CBOCs.
    Telehealth technology has the potential to extend the reach of 
other established programs such as home-based primary care, mental 
health intensive case management and primary and ambulatory care into 
rural and urban areas. Extending these services outside current 
geographical boundaries and into rural areas reduces unnecessary 
hospital admission and alleviates patient travel burden.
    VA is involved in many sharing agreements to maximize resources. 
Sharing of healthcare resources results in enhanced healthcare benefits 
for veterans; reduced costs and minimized duplication of resources and 
services.
    VA provides care through the fee basis program to enhance access to 
care outside of VA facilities. In FY 2007, VA purchased over $2 billion 
in care for our Nation's veterans. VA has implemented a demonstration 
project (Project HERO) intended to assess VA's ability to leverage 
contracts on a large scale for these needed services. This project, 
implemented in four VISNs, requires vendors to meet these internal VA 
access standards, provide facilities alternatives to care when internal 
resources are not available, and improve sharing of clinical 
documentation associated with these external services.
    VA established the Office of Rural Health to meet the unique needs 
of veterans residing in rural areas. This office collaborates with 
other program offices to assess multiple care delivery models to ensure 
veterans in rural and remote locations have available services. This 
includes tools such as mobile healthcare vans, expanded use of 
telehealth tools and additional care coordination with home health 
providers.
    These multiple options allow VA to be effective and efficient in 
providing care for all veterans, in both urban and rural areas.

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                  February 27, 2008

Honorable James B. Peake, M.D.
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Secretary Peake,

    In reference to the full Committee hearing on the Department of 
Veterans Affairs Budget Request for Fiscal Year 2009, held on February 
7, 2008, I would appreciate a response to the questions listed below. 
Please respond to these questions no later than March 27, 2008.

    1.  With respect to the mileage deductibles for travel 
reimbursements, are these deductibles being collected from veterans who 
are traveling long distances to VA medical facilities, and if not, 
could you please provide documentation on when this practice stopped?
    2.  What is VA doing to increase the number of doctors, nurses, 
mental health professionals and other specialty practitioners in order 
to provide better access to care to our veterans?
    3.  Regarding the VA medical center in San Juan, Puerto Rico, why 
has the VA proposed large expenditures for the existing facility in San 
Juan, when there is a proposal to replace that facility?
    4.  When a security breach occurs with a physician's personal 
computer which has received a waiver from the Secretary, who will 
ultimately be held responsible for the costs of the breach?

    It would be appreciated if you could provide your answers 
consecutively on letter size paper, single-spaced. Please restate the 
question in its entirety before providing the answer.
    Thank you for your cooperation in this matter.

            Sincerely,
                                                        Steve Buyer
                                          Ranking Republican Member

                               __________

                        Questions for the Record
          The Honorable Steve Buyer, Ranking Republican Member
                  House Committee on Veterans' Affairs
                            February 7, 2008
   Department of Veterans Affairs Budget Request for Fiscal Year 2009

    Question 1: With respect to the mileage deductibles for travel 
reimbursements, are these deductibles being collected from veterans who 
are traveling long distances to VA medical facilities, and if not, 
could you please provide documentation on when this practice stopped?

    Response: Currently, the Department of Veterans Affairs (VA) does 
collect deductibles from most veterans' travel reimbursements, 
including those who travel long distances. However, 38 U.S.C. 111 
allows VA to waive the deductibles in cases of ``severe financial 
hardship,'' which VA defines in regulations. Under the current 
regulation, 38 C.F.R. 17.144, VA may limit findings of severe hardship 
for situations including loss of employment, sudden illness or a 
disability that causes a veteran's income to fall below the maximum 
pension level, currently $13,092.
    We are amending the regulation to reflect the new $0.285 (28.5 
cents) mileage payment and the new deductible of $7.77 for each one-way 
trip.

    Question 2: What is VA doing to increase the number of doctors, 
nurses, mental health professionals and other specialty practitioners 
in order to provide better access to care to our veterans?

    Response: With involvement from the VA Healthcare Retention and 
Recruitment Office (HRRO), the Office of Management Support, the Office 
of Mental Health Services, the Office of Nursing, and the Office of 
Patient Care Services, VA has developed comprehensive recruitment 
initiatives to attract and retain healthcare professionals to the 
Veterans Health Administration (VHA).
    Consolidated data from the 2008-2012 Veterans Integrated Service 
Network (VISN) Workforce Succession Strategic Plans identified 10 
occupations as national priorities for recruitment and retention. The 
programs offered through HRRO provide assistance to 8 of these top 10 
occupations: registered nurses, physicians, pharmacists, practical 
nurses (LPN/LVN), diagnostic radiology technologists, medical 
technologists, physical therapists, and medical records technicians.
    The Employee Incentive Scholarship program (EISP) impacts the 
recruitment and retention of health professionals required throughout 
the agency. Over 92 percent of the scholarships went to employees; 187 
scholarships were awarded to pharmacists for advanced degrees.
    The Education Debt Reduction program (EDRP) provides up to $48,000 
of education loan repayment for qualified student debt. It is used as 
both a recruitment tool by being offered in vacancy announcements of 
hard-to-recruit/retain occupations, and as a retention tool by 
spreading out loan payment reimbursements yearly over a maximum of 5 
years.
    VA has taken several actions at multiple levels to promote the 
recruitment and retention of qualified mental health professionals in 
VHA. The VA HRRO, the Office of Management Support, and the Office of 
Mental Health Services have developed a comprehensive mental health 
enhancement recruitment initiative that includes several new 
recruitment resources, including employee incentive referral initiative 
and recruitment brochure development, on targeted and general 
advertising.
    Furthermore, VHA closely tracks the hiring status of newly awarded 
mental health enhancement positions and backfill positions designed to 
support the implementation of the Mental Health Strategic Plan. The 
hiring status of these new positions is tracked on a monthly basis 
through an online reporting system. These data are reviewed monthly by 
program staff and VHA leadership. In addition, the recently implemented 
mental health staffing performance monitor tracks the hiring status of 
newly awarded mental health positions and backfill positions against 
pre-set targets.
    Rates of hiring have increased significantly, following the 
implementation of the new mental health recruitment resources. Since 
fiscal year (FY) 2005, when VA began implementing its Mental Health 
Strategic Plan, 3,827 (out of 4,326) newly awarded mental health 
enhancement positions have been hired (figures are as of the end of 
January 2007). The vast majority (3,355) of these newly hired staff are 
mental health professionals. The remaining (472) positions include 
support staff essential for cost-effective provision of services.

    Question 3: Regarding the VA medical center in San Juan, Puerto 
Rico, why has the VA proposed large expenditures for the existing 
facility in San Juan, when there is a proposal to replace that 
facility?

    Response: There is currently a plan in place to upgrade facilities 
in San Juan through a combination of a significant amount of new 
construction and renovation. The Congress has funded, and construction 
is already underway for the construction of a new bed tower of 225,000 
gross square feet (GSF) that will contain 314 inpatient hospital beds. 
This will relocate all of the nursing units out of the existing tower 
and into this modern, seismically safe new building.
    In addition, in FY 2008, funding was provided in the appropriation 
for the construction of a new administrative building of approximately 
100,000 square feet to enable administrative space to vacate the 
hospital to permit needed expansion of some clinical programs. The 
request in FY 2009 will fund the construction of new clinical space 
(120,000 GSF) on top of the ambulatory care center.
    When the administration building and the new clinical space are 
completed, the existing bed tower will be demolished and the lower 
floors of the existing hospital will be remodeled (222,000 GSF). The 
opportunity to make these improvements will be much less costly than 
constructing a replacement hospital and will provide the modern 
facilities needed to serve veterans.

    Question 4: When a security breach occurs with a physician's 
personal computer which has received a waiver from the Secretary, who 
will ultimately be held responsible for the costs of the breach?

    Response: In cases where we grant a waiver to a physician for the 
use of a personal laptop, VA accepts the risk that the laptop could be 
compromised. Therefore, it is VA's responsibility to pay for the costs 
of a resulting data breach, such as credit monitoring services.
    From lessons learned as a result of the major data breach 
experienced in 2006 and the 2007 data breach at one of its research 
centers, VA is aggressively addressing information/data security. A top 
priority of the Secretary of Veterans Affairs is for the Department to 
set the Gold Standard for Data Security. In order to achieve this 
priority, VA is implementing systemwide strategies that promote data 
security awareness among employees as well as a change in the culture 
and capability in all facilities and remote locations. [OMB comment: 
Statement from Vol. 2, p. 4-A-5 of 2009 budget submission.]
    It is the intent of the VA Chief Information Officer to continue to 
reduce the use of other equipment where we can, especially when there 
is a demonstrated need to work remotely. VA plans to use government 
furnished equipment (GFE) in cases where staff need to work while on 
travel or from home.
    While it would be very difficult to completely eliminate the use of 
other equipment, in order to reduce the associated risk, VA is 
implementing a new remote access solution called remote enterprise 
security compliance update environment (RESCUE). This will ensure that 
VA data are not remotely downloaded to an unencrypted laptop or 
desktop. RESCUE will be able to determine if a user is accessing the VA 
network through GFE or other equipment. If the user is signing on 
through a piece of other equipment, the access will be limited to a Web 
browser, and data cannot be saved locally or printed. The user will be 
able to continue to work in a restricted area.

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                      March 7, 2008

Carl Blake
National Legislative Director
Paralyzed Veterans of America
801 18th Street, NW
Washington, DC 20006

Dear Carl:

    In reference to our Full Committee hearing on ``The Department of 
Veterans Affairs Budget Request for Fiscal Year 2009'' on February 7, 
2008, I would appreciate it if you could answer the enclosed hearing 
questions by the close of business on April 18, 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 Independent Budget
                                                    Washington, DC.
                                                      April 3, 2008

Honorable Bob Filner
Chairman
House Committee on Veterans' Affairs
335 Cannon House Office Building
Washington, DC 20515

Dear Chairman Filner:

    On behalf of The Independent Budget, we would like to thank you for 
the opportunity to present our views on the FY 2009 budget for the 
Department of Veterans Affairs (VA). Only through cooperation between 
the veterans' service organizations and the members of the Committee 
can we hope to attain an adequate level of funding to provide timely 
and quality healthcare and benefits services.
    We have included with our letter a response to each of the 
questions that you presented following the hearing on February 7, 2008. 
Thank you very much.

            Sincerely,

                                                 Joseph A. Violante
    Raymond C. Kelley
                                      National Legislative Director
    National Legislative Director
                                         Disabled American Veterans
    AMVETS

                                                    Dennis Cullinan
    Carl Blake
                                      National Legislative Director
    National Legislative Director
                      Veterans of Foreign Wars of the United States
    Paralyzed Veterans of America

                               __________

    In the past, The Independent Budget has not included amounts 
attributable to Medical Care Collections in your budget estimates. This 
year, you have included collections in your baseline for FY 2008 and 
these amounts are included in your FY 2009 Medical Services estimate. 
In your testimony you again state this year that ``medical care 
collections should be a supplement to, not a substitute for, real 
dollars.'' VA's collections estimates over the last few years have been 
reasonably accurate.

    Question 1: Why does The Independent Budget believe that 
collections are not ``real dollars''?

    Response: The aforementioned quote does not imply that we do not 
believe that medical care collections are ``real dollars.'' It is 
simply meant to reflect our belief that funding for Department of 
Veterans Affairs (VA) healthcare programs should be provided in full 
with federally appropriated dollars. Our budget recommendations this 
year better reflect this policy position that we have long supported. 
The Administration, year-after-year, chooses to include medical care 
collections as part of its overall funding authority for Medical 
Services. In the past, the VA did a very poor job of meeting 
collections estimates that it formulated its operating budget on. We 
will not deny that in recent years, the VA has done a much better job 
of meeting its collections estimates. However, we remain concerned 
about a process that is grounded in so much uncertainty, especially in 
light of the fact that shortages between what the VA estimated it would 
collect and what it actually collected have never been funded.
    As such, we believe that the cost of medical care services should 
be provided for entirely through direct appropriations. In order for 
The Independent Budget recommendation to best reflect what we believe 
the total funding needs of the VA healthcare system for FY 2009 to be, 
we had to use the maximum appropriation amount included in P.L. 110-161 
for VA medical care and add the projected medical care collections to 
that amount to formulate a real baseline.
    Despite this fact, we realize that political considerations will 
not allow for the policy for which The Independent Budget for FY 2009 
advocates as it relates to medical care collections. With this in mind, 
we cannot openly oppose a funding level that approaches our bottom line 
recommendation for funding, even if collections are considered as a 
component.

    Question 2: How would The Independent Budget recommend that this 
$2.5 billion in estimated collections, roughly 6 percent of the medical 
care appropriations request, be utilized?

    Response: We believe that this money could be reinvested in various 
programs that are part of the Veterans Health Administration (VHA) or 
the entire VA. First and foremost, we believe that a large portion of 
the money collected can be devoted to capital investment projects. The 
VA has not adequately addressed the long list of projects identified by 
the Capital Asset Realignment for Enhanced Service (CARES) process. 
Moreover, as explained in the Construction section of The Independent 
Budget, the VA should be reinvesting 5 to 7 percent in its capital 
infrastructure each year. However, the VA currently only reinvests 
about 2 percent.
    We also remain concerned that the VA falls well below the 
requirement for long-term care capacity (defined as average daily 
census) as mandated by P.L. 106-117, the ``Millennium Health Care 
Act.'' A portion of the money achieved through medical care collections 
could be used to correct this deficiency. Additionally, the VA could 
invest this money in State Extended Care facilities which support the 
VA long-term care program.
    We also believe this money could be used to properly staff the 
Office of Rural Health so that it can better fulfill its mission. The 
Independent Budget believes that this new office has not lived up to 
the expectations placed on it. However, the VA has not set this office 
up for success. It is telling that the VA plans on devoting only $1 
million and one new full-time employee (FTE) to this office in FY 2009. 
This will bring the Office of Rural Health up to three FTE. This is 
wholly unacceptable, particularly given the fact that rural healthcare 
access might be the single biggest healthcare issue facing the VHA.
    Finally, we would suggest some of the resources generated through 
medical care collections could be used to make the VA more competitive 
in the market for hiring critical staff. The VA is at a significant 
competitive disadvantage when trying to hire certain healthcare 
professionals. This is particularly true of nurses, rehabilitation 
specialists, and specialized care doctors.

    Question 3: Since collections are reimbursements or payments for 
medical services rendered, shouldn't this money be utilized to offset 
the cost of providing healthcare?

    Response: Historically, the purpose of collections has not had a 
direct bearing on the utilization of such funds throughout the 
evolution of what is now the Medical Care Collections Fund (MCCF). When 
the VA collection authority was initially established in 1986 to seek 
reimbursement from third-party health insurers, collections were meant 
to be utilized as a deficit reduction tool. It then evolved into a tool 
to offset VA's healthcare budget in 1997, and expanded to become a 
medical care utilization tool in 1999 by allowing VA to increase cost-
sharing on veterans. In doing so however, such funds were supposed to 
be used to reduce medical care waiting times and to reduce the burden 
of cost sharing on veterans for medications and prosthetics. In 2003, 
MCCF was created to consolidate revenue accounts, thus increasing the 
total amount of collections available to further offset VA's healthcare 
budget.
    While the purpose and utilization of collections has evolved, as 
mentioned previously, we continue to hold the belief that collections 
supplement the cost of providing healthcare. Veterans' healthcare 
should not be dependent upon an uncertain funding mechanism like 
medical care collections. However, as we also discussed, we realize 
that political considerations will not allow for the policy by which 
The Independent Budget for FY 2009 believes funding for VA healthcare 
services should be provided. In the meantime, we cannot openly oppose 
the use of collections to provide for medical care services so long as 
the total of appropriated dollars and actual collected dollars meets 
the funding levels that we believe are necessary to operate the VA 
healthcare system.

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                      March 7, 2008

Kerry Baker
Associate National Legislative Director
Disabled American Veterans
807 Maine Avenue, SW
Washington, DC 20024

Dear Kerry:

    In reference to our Full Committee hearing on ``The Department of 
Veterans Affairs Budget Request for Fiscal Year 2009'' on February 7, 
2008, I would appreciate it if you could answer the enclosed hearing 
questions by the close of business on April 18, 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 Independent Budget
                                                    Washington, DC.
                                                     April 12, 2008

Honorable Bob Filner
Chairman
House Committee on Veterans' Affairs
335 Cannon House Office Building
Washington, DC 20515

Dear Chairman Filner:

    On behalf of The Independent Budget, I would like to thank you for 
the opportunity to present our views on the FY 2009 budget for the 
Department of Veterans Affairs (VA). Only through cooperation between 
the veterans service organizations and the Members of the Committee can 
we hope to attain an adequate level of funding to provide timely 
quality healthcare and benefits services.
    I have included with this letter a response to the questions that 
you presented following the hearing on February 7, 2008. Thank you very 
much.

            Sincerely,
                                                        Kerry Baker
                            Associate National Legislative Director
                                         Disabled American Veterans

                               __________

Claims Processors

    The Independent Budget (IB) recommends an increase of $381 million 
for the General Operating Expenses account, which provides funding for 
the Veterans Benefits Administration. This recommendation is $286 
million over the Administration's request. Your testimony states that 
``Congress should authorize 12,184 FTE for FY 2009.'' The VA estimates 
a total FTE number for Disability Compensation, Pension and Burial of 
12,120 for FY 2009, a difference of 64 FTE below your recommended 
level.

    Question: Providing these additional FTE would cost approximately 
$5 million. If we provide this additional increase of $5 million to 
meet your FTE target, do you still believe that we should provide the 
remaining $281 million of your requested increase or will you provide 
the Committee with an updated GOE recommendation?

    Response: As an overall concept, it is important to note that we do 
not believe that the increase in VBA funding in the Administration's FY 
2009 budget submission is enough to meet basic inflation and the 
annualized pay raise (2.9 percent). Our assumption for general 
inflation applied to VBA accounts is approximately 3.2 percent. In 
order for the VBA recommendation to cover the annualized pay raise and 
this projected inflation rate alone, it would take approximately $80 
million; however, the Administration request is only $44 million over 
FY 2008 funding appropriated levels.
    The VA also assumed a lower starting level for FTE for Comp & Pen 
for 2008. We cannot explain this discrepancy.
    As for the budget itself, the VA requests 703 additional FTE for 
Comp & Pen at a cost of $48.7 million. We recommend an increase of 825 
FTE for Comp & Pen at a cost of $78.3 million. The VA assumes the 
lowest possible cost for all new FTE. VA assumed a lower average cost 
per FTE for 2009 than they did in FY 2008 and FY 2007, for which we 
believe to be unrealistic. We do not assume that the VA will only hire 
new claims adjudicators at the lowest possible salary.
    The largest single difference in our budget recommendation is 
reflected in the ``Summary of Discretionary Appropriation Highlights.'' 
The VA assumes net reductions due to reimbursements and unobligated 
balances for Compensation & Pension (C&P) that are $145 million more 
than we project in our budget recommendations. The two items listed 
above make up the vast majority of the difference in our C&P 
recommendations and by extension our VBA recommendations.
    We recommend 160 additional FTE for education at a cost of $14.3 
million. The VA only anticipates an increase of 20 FTE at a cost of 
$4.3 million. The IB recommends an increase of 115 FTE for Vocational 
Rehabilitation and Employment (VR&E), at a cost of $12.5 million. The 
VA actually projects a decrease in FTE for VR&E in FY 2009. These two 
FTE elements account for approximately $23 million more in the IB 
recommendations than the Administration recommends.
    The VA projects essentially no increase in obligations for 
Insurance. Given that its current FY 2008 estimate starts out $5 
million less than our recommendation, we end up with a difference of 
approximately $10 million for FY 2009.
    The sum of the differences listed above totals approximately $244 
million. Other minor differences can be attributed to our assumed pay 
increase of approximately 3.0 percent. Likewise, we attribute other 
differences in our budget recommendation to not having the exact 
information available for VA's baseline amounts for FY 2008 when we 
begin developing our recommendations.
    Based on the above, we continue to recommend the respective 
increase called for in The Independent Budget.
