[House Hearing, 111 Congress]
[From the U.S. Government Publishing Office]




 
                THE U.S. DEPARTMENT OF VETERANS AFFAIRS
                  BUDGET REQUEST FOR FISCAL YEAR 2010

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

                                HEARING

                               before the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             MARCH 10, 2009

                               __________

                            Serial No. 111-6

                               __________

       Printed for the use of the Committee on Veterans' Affairs

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                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY MCNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   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

                               __________

                             March 10, 2009

                                                                   Page
U.S. Department of Veterans Affairs Budget Request for Fiscal 
  Year 2010......................................................     1

                           OPENING STATEMENTS

Chairman Bob Filner..............................................     1
    Prepared statement of Chairman Filner........................    57
Hon. Steve Buyer, Ranking Republican Member......................     2
Hon. Brian P. Bilbray............................................    15

                               WITNESSES

U.S. Department of Veterans Affairs, Hon. Eric K. Shinseki, 
  Secretary, U.S. Department of Veterans Affairs.................     5
    Prepared statement of Secretary Shinseki.....................    57

                                 ______

American Legion, Steve Robertson, Director, National Legislative 
  Commission.....................................................    47
    Prepared statement of Mr. Robertson..........................    96
American Veterans (AMVETS), Raymond C. Kelley, National 
  Legislative Director...........................................    35
    Prepared statement of Mr. Kelley.............................    79
Disabled American Veterans, Kerry Baker, Assistant National 
  Legislative Director...........................................    32
    Prepared statement of Mr. Baker..............................    63
Iraq and Afghanistan Veterans of America, Paul Rieckhoff, 
  Executive Director.............................................    43
    Prepared statement of Mr. Rieckhoff..........................    89
Paralyzed Veterans of America, Carl Blake, National Legislative 
  Director.......................................................    30
    Prepared statement of Mr. Blake..............................    61
Veterans of Foreign Wars of the United States, Dennis M. 
  Cullinan, Director, National Legislative Service...............    34
    Prepared statement of Mr. Cullinan...........................    70
Veterans for Common Sense, Paul Sullivan, Executive Director.....    42
    Prepared statement of Mr. Sullivan...........................    83
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................    45
    Prepared statement of Mr. Weidman............................    90

                       SUBMISSION FOR THE RECORD

Mitchell, Hon. Harry E., a Representative in Congress from the 
  State of Arizona...............................................   142

                   MATERIAL SUBMITTED FOR THE RECORD

Letters:

    Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans 
      Affairs, to Hon. Phil Roe, U.S. House of Representatives, 
      letter dated April 20, 2009, Regarding Percentages of 
      Budget Funding for Care of World War II, Vietnam Veterans, 
      and Veterans of Other Eras.................................   143
    Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans 
      Affairs, to Hon. Bob Filner, Chairman, Committee on 
      Veterans Affairs, letter dated April 20, 2009, Regarding 
      Advocacy Training..........................................   143

Post-Hearing Questions and Responses for the Record:

    Hon. Steve Buyer, Ranking Republican Member, Committee on 
      Veterans' Affairs, to Hon. Eric K. Shinseki, Secretary, 
      U.S. Department of Veterans Affairs, letter dated March 18, 
      2009, and VA responses.....................................   144
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Hon. Eric K. Shinseki, Secretary, U.S. Department of 
      Veterans Affairs, letter dated March 23, 2009, transmitting 
      questions from Chairman Filner, Hon. Michael Michaud and 
      Hon. Joe Donnelly, and VA responses........................   147
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Carl Blake, National Legislative Director, Paralyzed 
      Veterans of America, Kerry Baker, Assistant National 
      Legislative Director, Disabled American Veterans, Dennis 
      Cullinan, National Legislative Director, Veterans of 
      Foreign Wars of the United States, Raymond C. Kelley, 
      National Legislative Director, AMVETS, letters dated March 
      23, 2009, and joint response letter from The Independent 
      Budget, letter dated April 30, 2009........................   150
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
      Paul Sullivan, Executive Director, Veterans for Common 
      Sense, letter dated March 23, 2003, and VCS responses......   155
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs to 
      Paul Rieckhoff, Executive Director and Founder, Iraq and 
      Afghanistan Veterans of America, letter dated March 23, 
      2009, and IAVA responses...................................   159
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs to 
      Richard Weidman, Executive Director for Policy and 
      government Affairs, Vietnam Veterans of America, letter 
      dated March 23, 2009, and VVA responses....................   160
    Hon. Bob Filner, Chairman, Committee on Veterans' Affairs to 
      Steve Robertson, Director, National Legislative Commission, 
      American Legion, letter dated March 23, 2009, and response 
      letter dated March 26, 2009................................   161

Reports:

  U.S. Department of Veterans Affairs American Recovery and 
    Reinvestment Act (ARRA) Agency Plans and Reports:

    FY 2009 Veterans Health Administration--Medical Facilities 
    Non-Recurring Maintenance (NRM) and Energy Projects--
        Expenditures Plan........................................   164
        Expenditure Plan by Category.............................   244
        Expenditure Plan by State................................   245

    FY 2009 Veterans Health Administration--Grants for State 
    Extended Care--
        Expenditure Plan.........................................   247
        Expenditure Plan by State................................   251

    Veterans Benefits Administration--Hiring Temporary Claims 
      Processors.................................................
    Expenditure Plan.............................................   252

    Veterans Benefits Administration--Support for Economic 
      Recovery Payments Expenditure Plan.........................   253

    FY 2009 National Cemetery Administration Monument and 
    Memorial Repairs--
        Expenditure Plan.........................................   254
        Expenditure Plan by Category.............................   281
        Expenditure Plan by State................................   282

    Information Technology Expenditure Plan......................   284

The Independent Budget for the Department of Veterans Affairs, 
  Fiscal Year 2010, a Comprehensive Report and Policy Document 
  Created by Veterans for Veterans...............................   285


                THE U.S. DEPARTMENT OF VETERANS AFFAIRS
                  BUDGET REQUEST FOR FISCAL YEAR 2010

                              ----------                              


                        TUESDAY, MARCH 10, 2009

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

    The Committee met, pursuant to notice, at 2:33 p.m., in 
Room 345, Cannon House Office Building, Hon. Bob Filner 
[Chairman of the Committee] presiding.
    Present: Representatives Filner, Snyder, Michaud, Herseth 
Sandlin, Hall, Perriello, Teague, Donnelly, Space, Walz, Buyer, 
Moran, Boozman, Bilbray, Bilirakis, and Roe.

              OPENING STATEMENT OF CHAIRMAN FILNER

    The Chairman. Well, everybody is quiet for an Army General. 
I have never seen it like this, Mr. Secretary. I want to wait 
for some of our colleagues to show up. We apologize for keeping 
you waiting, we had a series of votes just at the time the 
hearing was scheduled to start. I will wait for some of my 
Republican colleagues and then we will get started. Mr. Buyer 
is here now so we will begin this hearing.
    Mr. Secretary, we thank you for joining us. I know you are 
used to going to battle alone, and I see you have nobody on 
your wings here today, so good luck.
    I want to make sure, before we start, that I ask unanimous 
consent that all Members may have 5 legislative days to revise 
and extend their remarks, and that written statements be made 
part of the record. Hearing no objection, so ordered.
    Today's hearing is on the preliminary budget submission 
from the U.S. Department of Veterans Affairs (VA) for our next 
fiscal year.
    A few weeks ago the Administration submitted a preliminary 
budget, and it is a document that provides what they call ``top 
line'' budget numbers and brief discussions regarding 
Administration priorities.
    I must say, Mr. Secretary, we are pleased to see that, even 
with this summary you had about a 10-percent increase in 
discretionary funding, and about a 20-percent increase in the 
mandatory accounts, for a 15-percent increase over all.
    I will say to you, sir, that since The Independent Budget 
(IB) was first put out, a budget put together by our veterans 
service organizations (VSOs), yours is the first Administration 
budget to exceed The Independent Budget, and we are very happy 
that has occurred. I hope you can be proud of that. I have been 
using The Independent Budget as my bible for the last 17 years. 
We know that the budget request calls for $25 billion increase 
over the next 5 years. We haven't had an Administration budget 
like that for a long, long time, so thank you, sir, and it 
looks like you understand, and the Administration understands, 
the importance of veterans in the budget.
    We know these out-year numbers are not binding figures, but 
they are a good start. You put some interesting things in 
there, and I think the Committee shares your policy 
formulations.
    For example, the decision to bring in the Priority 8 
veterans, 500,000 as I understand it, is what many of us have 
wanted for a long time.
    I think you also expand concurrent receipt, and again, many 
Members on this Committee have been working on this issue for a 
long, long time, so we thank you for that. We are looking 
forward to meeting the needs of our veterans in the coming 
year.
    From looking at your Senate testimony and the testimony of 
some of the veterans' organizations, there is a controversial 
policy recommendation in the budget concerning collections--
third-party collections.
    We believe, Mr. Secretary, that you can meet your numbers 
for revenue, income, and third-party collections, without any 
policy changes, that is, by using existing authorities. We 
believe we can do that with the numbers you have created, 
without having to get into policy recommendations on third-
party collections, and still meet the revenue needs that you 
have forecast in your budget.
    In fact, both Mr. Buyer and I have been talking over the 
last several years with people who think that we are leaving 
hundreds of millions, if not billions, on the table from third-
party collections, and we are both committed to seeing that you 
realize that without going into any policy shifts with regard 
to service-connected veterans.
    Again, thank you for being here, thank you for the 
leadership that you have shown in your short time on the job. 
We are looking forward to working with you over the next 4 
years, and I will now yield to the Ranking Member, Mr. Buyer.
    [The prepared statement of Chairman Filner appears on p. 
57.]

             OPENING STATEMENT OF HON. STEVE BUYER

    Mr. Buyer. Thank you, Mr. Chairman, and good afternoon. It 
is my pleasure once again to welcome Secretary Shinseki back to 
the Committee, and thank you for appearing here today. I look 
forward to your testimony. I also look forward to hearing from 
the second panel of witnesses from the veteran service 
organizations.
    Mr. Secretary, the funding increases outlined in your 
budget is welcomed. Overall, it is also a move in the right 
direction.
    I do have some concerns, particularly with regard to the 
out-year numbers, and that is the gamesmanship that occurs in 
this town. And so when all is put together, the budget views 
and estimates, I will also try to make these projections with 
regard to the out-years.
    It is a gamesmanship that is occurring through the Office 
of Management and Budget (OMB), and not that you haven't lived 
with this when you were over at U.S. Department of Defense 
(DoD), but if we are going to put together a budget, we want to 
be realistic with regard to those out-years, we really need to 
prepare for them. And kind of what is happening is, there is so 
much lumped on the front end it is trying to make it look as 
though they are more fiscally responsible in the out-years.
    I want to die in the out-years, okay? That way I will live 
forever. That is just the way we do budgets in this town.
    The Chairman. I want to make an amendment to that.
    Mr. Buyer. So I can live forever?
    [Laughter.]
    Mr. Buyer. Well, maybe you will be right there with me and 
we will create a lot of energy for a lot of years for somebody.
    A number of factors, I believe, are going to place great 
demand, Mr. Secretary, on the VA, and so when I am talking 
about the out-years I think we have to prepare to handle it.
    President Obama announced the draw down of the combat 
troops in Iraq, which will contribute to an increase in 
veterans seeking VA benefits and services over the next 2 to 3 
years, the Priority 8's being enrolled, and I know we are 
moving incrementally what type of political pressures are there 
going to be from the veterans service organizations to even 
make--to accelerate that, especially at a time when we have the 
economic circumstances that we do. You couple that with medical 
inflation, that tells me that the outline--the out-year numbers 
are too low in the budget that you have submitted to us.
    Regardless of what the numbers are, it will require, I 
believe, bold action to ensure that the VA's health and 
disability systems are effective in delivering timely and 
quality service to our veterans.
    I am also concerned about a proposal, and I have spoken to 
you about it, reportedly considering the billing of third-party 
insurers for the treatment of service-connected disabilities.
    I told you in private, which I will also say public, I will 
be a good listener to your proposal; however, I believe that 
the proposal is contrary to our basic national obligation, and 
that is just how I feel. But that is my opinion, and I want to 
be a good listener to what you are proposing to us, and we will 
have it properly vetted.
    So we will treat your proposal with respect, and we will 
figure out where it lies.
    I also have a growing concern about the VA's ability to 
handle the thousands of claims it will receive next fall for 
the new GI Bill benefits.
    As you know, I requested the VA Office of Inspector General 
assessment of the system being implemented to administer the 
new program. We must have a candid view of any problems as far 
in advance as possible, to ensure the VA is ready and capable 
when the new delivery system comes online.
    The men and women of our Armed Forces do not hesitate when 
called upon to defend our Nation, and I think we, as the 
government, owe them the timely delivery of the benefits that 
they have earned.
    Veterans will be relying on the VA to make timely GI Bill 
payments to them and their schools next fall, and it is 
incumbent on Congress and the VA to make sure the program works 
as it was intended.
    Also, when you appeared here last month, I expressed my 
concern over varying quality of care standards with regard to 
veterans' grave sites.
    The Battle Monuments Commission sets, I believe, the gold 
standard. It is followed closely by the National Cemetery 
Administration. But I am not pleased, however, by the 
appearance of two cemeteries that are maintained by the 
National Park Service. Andersonville in Georgia and Andrew 
Johnson Cemetery in Greenville, Tennessee.
    They have improved--they have improved it, and I have 
shared the pictures with you, but it is still--we should not 
have three tiers of standards with regard to how we honor those 
who came before us.
    So I am close to the conclusion that the best solution 
would be to transfer the jurisdiction of these two open 
cemeteries to the VA, and I welcome your thoughts on that idea.
    You had told me that you were going to be speaking with the 
Secretary of the Interior, so I anticipate if you could share 
that with the Committee, I would appreciate it.
    I do want to note my particular agreement with the 
provision in the budget summary that states that the highly 
disabled veterans who are medically retired will be eligible 
for concurrent receipt.
    When I served on the Armed Services Committee and chaired 
Personnel, I had $25 million and I took that and I popped the 
lid off the issue of concurrent receipt, and did it for the 100 
percent disabled combat veterans. And that was the beginning of 
what you are now bringing to us, a budget for full concurrent 
receipt and it has taken about 10 years for this to happen.
    So I agree with your proposal, in fact it is similar to a 
provision I have that is in one of the Noble Warrior 
Initiatives I have introduced. I also introduced the Armed 
Forces Disability Retirement Enhancement Act to simplify the 
military disability retirement and ensure that those found 
unable to serve will automatically receive retirement benefits 
based on rank and years in service. This is another issue we 
have discussed.
    The Chairman has his ideas, I have mine, Danny Akaka has 
his, everybody has got a lot of ideas on how to do this one. We 
welcome your input.
    And with that Mr. Secretary, I appreciate you being here, 
there are a lot of issues to discuss today.
    [Ron Walters, Director of Finance and Planning, National 
Cemetery Administration, Department of Veterans Affairs, 
provided the requested technical assistance by telephone to 
Committee staff on March 30, 2009.]
    The Chairman. Again, welcome Mr. Secretary. We are all, I 
think, knowledgeable of your outstanding record of service and 
personal sacrifice to our Nation having served with honor and 
dignity for 38 years in the United States Army, in Vietnam, in 
Bosnia, Afghanistan, Iraq, before your retirement as the 34th 
Chief of Staff of the Army.
    You have been called a ``soldier's soldier.'' We are 
looking forward to you being the ``veterans' veteran.''
    We welcome you today and the floor is yours.

         STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY,
              U.S. DEPARTMENT OF VETERANS AFFAIRS

    Secretary Shinseki. Chairman Filner, thank you, and Ranking 
Member Buyer, thank you for having me here today, and other 
Members--distinguished Members of this Committee.
    Thank you for this opportunity to present an overview of 
the 2010 Budget for the Department of Veterans Affairs.
    I appreciate also the opportunity I have had to speak with 
a number of the Committee Members in preparation for testimony 
during what has been a very busy legislative session, but 
regret that I was not able to get to everyone, but that is 
something I will correct in the future.
    Let me also acknowledge and thank the leaders of our 
veteran service organizations who are here today sitting in our 
audience.
    President Obama has charged me with transforming the VA 
into a 21st century organization. Not change for the sake of 
change, not nibbling around the edges, but a fundamental and 
comprehensive review of all that we do for veterans before 
moving boldly to acknowledge new times, new demographic 
realities, and leveraging new technologies to renew our 
commitment to veterans wherever they live.
    I have been conducting that comprehensive and fundamental 
review for about 7 weeks now, and would like to offer a quick 
status about what I have learned since my last appearance 
before this Committee.
    New GI Bill. An outside consultant was hired to conduct a 
quick-look study to validate our plans and procedures for 
executing this large new program of educational benefits. The 
quick look was completed on 27 February, and it validated what 
we are doing and provided--validated the procedures and 
processes that we have in place and are executing, but provided 
us eight additional risk factors to consider. I have accepted 
them all except for one, which I accommodated internally.
    I am satisfied that we will get veterans who apply in time 
into schools this fall. It remains high risk because of the 
compressed timelines we have faced since legislation was 
passed, but we have mitigated that risk responsibly, and at 
this point I consider the risk an acceptable one.
    The 2009 plan for the new GI Bill will be a computer-
assisted manual system. Computer assisted, but manual exercise. 
We hope to move to a fully automated system in 2010. We are 
just not able to get all the pieces in place this year.
    But for 2009, user testing of the interim information 
technology (IT) solution was completed, phase one training for 
our newly hired 530 employees began yesterday, and I get 
updates on how we are progressing there.
    The final regulation is at OMB, the contingency plan is 
finished, and final coordination is under way.
    In my opinion all is in order to meet the August 2009 
implementation date.
    We still have multiple milestones to meet before then, and 
I will continue to keep the Committee updated as we achieve 
them.
    Paperless. Our goal is to re-engineer the claims process 
into a fully paperless environment by 2012.
    A leads system integrator has been on board since October 
2008 reviewing our business processes and beginning key design 
deliverables, which we expect by August of this year.
    Application developers will begin building specific 
components in early fiscal year 2010, capitalizing on recent 
successes with VETSNET and leveraging funding that should be 
available in next year's budget.
    We are already processing loan guarantees, insurance, and 
education claims electronically, and plan to conduct a business 
transformation pilot at the Providence Regional Office later 
this fiscal year.
    In conjunction with this paperless initiative DoD and VA 
have met three times now to address the potential for 
automatically enrolling all military personnel into the VA upon 
entry into the armed forces. We call this initiative uniform 
registration. We are in agreement about the goodness of such a 
system and have people working toward making it a reality.
    Uniform registration will push both of us, both DoD and VA, 
to create a single electronic record that would govern how we 
each acknowledge, identify, track, and manage each of our 
clients, active and reserve component, who populate both of our 
departments, from the moment they first take the oath of 
allegiance in uniform.
    Our management decisions will be better, faster, more 
consistent and fair, and less subject to lost files or 
destroyed claims. Such electronic records would have a 
personnel component and a medical component.
    We have benefited from the insights and experience and 
advice of Secretary Gates and Deputy Secretary Lynn about not 
trying to build a single large database, so we are committed to 
doing this smartly and differently from some of our past hard 
lessons learned.
    Electronic health record. In the VA's experience the EHR, 
electronic health record, has figured prominently in the growth 
and quality of medical services.
    In 1997, we rolled out an enterprise-wide update to our 
EHR. We have been in EHR for about 20 years, but in 1997 we 
rolled out this enterprise-wide update.
    Two years later, by 1999, that update provided a clinical 
data repository, including privacy protection, with real-time 
data flow across the entire system with clinical decision 
support and clinical alert templates, notification systems, and 
disease management features.
    Today it has an imaging capability, EKGs, any test that has 
ever been taken as part of this, studies, procedures, 
endoscopies, scan documents are--can be part of this file.
    International observers have called it--I will say some 
international observers have called it the gold standard in 
clinical informatics.
    What has been the impact? Between 1996 and 2004 this 
updated electronic medical record enabled VA's ability to 
handle a 69 percent-increase in patients and reduced the 
workload by 35 percent, and hold the cost--the medical 
treatment steady when the cost of health care across the 
country was increasing significantly.
    Now some would suggest that the VA's lower costs of 
treatment were as much a function of its lean budget in some of 
those years as they were of efficiencies and delivered 
services, and I think that is fair. But lean budgets were not 
just visited on the VA in those years, but at Medicare and 
other institutions as well, where costs rose 26 percent. So 
there is a variance between what our performance has been.
    On the backlog. I have not made much headway in 
understanding or solving this dilemma, other than to 
acknowledge that it is a significant obstacle to building trust 
with veterans and the organizations that represent them.
    I am not sure that I have a valid working definition for 
the backlog, but I am working personally to develop that valid 
definition. Not to define myself out of a problem, but if a 
claim is initiated today and I ask is it part of the backlog 
tomorrow and the answer is yes, there is no way for me to fix 
that. I have to define the backlog in a way that gives me an 
opportunity to measure it and then to set about correcting it.
    So this is what I am about. And unless I can validly define 
and measure the backlog I would have a hard time fixing it, and 
I am about fixing it.
    Our efforts to institute uniform registration and create a 
single electronic record will lay a foundation for eventually 
controlling the inputs to the backlog dilemma, but I must find 
ways to control and reduce the backlog as it exists today, and 
for the time being it is a brute force exercise. I put more 
people into handing these claims, because that is the only way 
to get measurable process. I am not sure that is the solution 
for the long term, and paperless becomes important to this 
consideration.
    So having provided you this quick update, let me now report 
that our proposed 2010 budget is critical of realizing both the 
President's vision for the 21st Century VA, and also my 
opportunity to set about correcting some of these issues that I 
have described for you.
    The proposal would increase VA's budget. As the Chairman as 
pointed out, $112.8 billion, up $15 billion, or a 15 percent-
increase from the 2009 enacted budget. This is the largest 
dollar and percentage increase ever requested by a President 
for veterans.
    Nearly two-thirds of the increase, $9.7 billion, would go 
to mandatory programs, which would increase it by 20 percent. 
The remaining third, $5.6 billion, would be discretionary 
funding and would increase that account by 11 percent.
    The total budget would be almost evenly split between 
mandatory funding, $56.9 billion, and discretionary funding, 
$55.9 billion.
    The 2010 budget funds the new GI Bill, and would allow a 
gradual expansion of health care eligibility to Priority Group 
8 veterans who have been excluded from VA care since 2003. An 
expansion of up to 550,000 new enrollees by 2012. Further, it 
contains sufficient resources to ensure that we will maintain 
our quality of health care for veterans, which today sets a 
national standard in my opinion, with no adverse impact on wait 
times for those--or quality for those already enrolled.
    The 2010 budget provides greater benefits for veterans who 
are medically retired from active duty by phasing in an 
expansion of concurrent receipt eligibility to military 
disability retirees.
    The proposal allows highly disabled veterans to receive 
both their military retired pay and VA disability compensation 
benefits.
    The budget provides resources to effectively implement the 
Post-9/11 GI Bill and streamline the disability claims process.
    It supports additional specialty care in such areas as 
aging, women's health, mental health, homelessness, 
prosthetics, vision and spinal cord injury, and it helps extend 
VA services to rural communities, which lack access to care 
today.
    The details of the President's budget are still being 
finalized and should be available in April, at which time I am 
happy to come back and address this Committee again.
    So while I lack budgetary detail on specific programs and 
activities today, I do however look forward to answering your 
questions and am prepared to take those questions now.
    Thank you, Mr. Chairman.
    [The prepared statement of Secretary Shinseki appears on p. 
57.]
    The Chairman. Thank you, Mr. Secretary.
    When I think about some of the issues that have been 
brought up over the last decade, issues that were thrown on the 
table and nobody listened to them, it is sort of scary to hear 
you come back with all them--so we are really glad to have you 
here today.
    Mr. Michaud, I will recognize you for 5 minutes, please.
    Mr. Michaud. Thank you very much, Mr. Chairman, Ranking 
Member for having this hearing.
    First, I also want to thank you, Mr. Secretary, for coming 
here, and look forward to working with you as we move forward 
over the next couple of years to make sure that we provide 
adequate funding in a timely manner for our veterans.
    I do have one question, but I also have a comment. I want 
to follow up on Congressmen Buyer's remark.
    You mentioned the backlog and building trust with veterans 
organizations and with veterans. Having not seen the budget 
language, I have heard the same rumors that I am sure a lot of 
Members here have heard, about the Administration, whether it 
is OMB, whether it is the President, whoever it is, I don't 
know, want to have third-party payment on service-connected 
disability.
    If that is in the budget, I will not be supporting the 
budget. It is unconscionable, and it is an insult to our 
veterans who have been hurt overseas.
    So hopefully you will give that message to OMB as it 
relates to third-party collections for the disabled veterans. 
It is just unbelievable that anyone would ever think of doing 
that in this budget.
    So hopefully it will not be in the budget, but that is what 
the rumor is out there. Hopefully you will do everything you 
can do to persuade those who are pushing this, if fact they 
are, not to include it.
    My comment is that I would like to commend everything that 
you had mentioned about the budget outline that focuses on 
access and services for post-traumatic stress disorder (PTSD), 
traumatic brain injury (TBI), and our rural veterans.
    As you know, Maine is a very rural state. We have a large 
number of veterans in Maine, and I look forward to working with 
you to provide our veterans with greater access to PTSD 
services.
    Can you offer the Committee your ideas on how VA plans to 
make these services available to rural veterans? And could you 
offer the Committee your assurance that the VA will work with 
Congress to ensure that these priorities will be enacted into 
law to take care of our veterans?
    Secretary Shinseki. Certainly, Congressman.
    I will tell you that I have been engaged in discussions 
about the rural health issues with a number of Members of this 
Committee, as well as other Committees, and I am sensitive when 
I look at a map about how much of the country is either rural 
or highly rural, and that provides challenges.
    I think for us the movement in the VA away from singular 
hospitals as the only measure of health care deliverability to 
other options that included community-based outpatient centers 
(CBOCs), outreach clinics, mobile clinics, and so forth is the 
right move, and it has been under way for some time now, we are 
just building more capacity here. But it does reach not only 
the veterans who can't get to the hospital, but gets to those 
areas where there are no hospitals, and I will continue to 
treat this as a priority.
    I think you know that we are implementing a rural health 
pilot project involving mobile clinics at four of our Veterans 
Integrated Network Services (VISNs), and we will look to the 
goodness that comes out of that to inform us on how much faster 
and what else we can do in that area, but I am sensitive to the 
issue and this will continue to be a priority.
    Mr. Michaud. Well, I want to thank you very much for making 
it a priority, because those are a lot of the complaints that 
we hear. For those of us who are from rural areas it is that 
whole access issue, so I really appreciate your making that a 
priority, look forward to working with you, and really 
appreciate your willingness to meet with Members of Congress on 
both sides of the aisle to get our concerns and hear them in 
advance before you move forward with policy. I really 
appreciate that.
    And I realize that you have a boss as well, and you have to 
deal with OMB, so hopefully you will deliver that message, and 
when we meet--or when I meet with the OMB director I will be 
delivering that message personally as it relates to collections 
for soldiers who are injured on the battle field.
    So thank you once again, Mr. Secretary, for coming here 
today, appreciate it.
    Secretary Shinseki. May I just add a point here? That is a 
consideration. It is not in the budget, but it is a 
consideration, and I will be sure that your concerns are 
delivered.
    And again, we are talking in health care the two aspects of 
this are delivery of health care and the financing of it, and 
this is about the financing.
    I want to assure you that there should be no concern about 
the delivery, that we will provide the best quality health care 
we can to our veterans. That is not discussable.
    Mr. Michaud. Thank you.
    The Chairman. Thank you, Mr. Michaud.
    Mr. Moran.
    Mr. Moran. Mr. Chairman, thank you very much.
    General, thank you for joining us today, and thank you for 
the opportunity I had to visit with you in my office earlier 
this year.
    There are a couple of bills that are being implemented, or 
should be implemented, by the Department of Veterans Affairs in 
this current year.
    One, you mentioned in your testimony, the GI Bill, and I 
look forward to working with you on this bill. I hope you will 
spend a lot of time with veterans and with financial aid 
officers at universities and technical colleges trying to make 
certain that we do this in a very effective manner.
    Second is the implementation of a bill that I introduced 
that became law last November.
    You mentioned four VISNs in an implementation of mobile 
vans in rural areas. There is also another rural program that 
we created in the last Congress that you will be implementing, 
and I want to stress that how it is implemented is so 
important, because I want this program to succeed.
    And that is that if there is no outpatient clinic or VA 
hospital within a certain distance of our veterans, that in 
four VISNs you are to implement a pilot program in which you 
contract with local providers to provide those services to 
veterans.
    One of those VISNs is, in fact, the two VISNs that I 
represent in the state of Kansas, are included in that pilot 
program, and I would love to have the opportunity to visit with 
the appropriate staff, personnel at the Department of Veterans 
Affairs about this implementation if you could make that 
possible.
    In addition to those two implementations, I would be 
delighted to hear your thoughts about health care provider 
recruitment and retention.
    As I listen to my VISN directors and hospital 
administrators within the part of the VA that I represent or 
the geography that I represent, the Department of Veterans 
Affairs is no different than the private sector in many ways 
regarding to the inability to attract and retain the necessary 
health care professional. It is particularly true I think in 
specialties, but specialties dealing with mental health, mental 
illness, at a time in which the need seems to be a priority of 
ours.
    And finally, I would like your comments on advanced 
appropriations. My understanding, from comments that you made 
and that President Obama made, is that the Administration would 
be supportive of legislation allowing for advanced 
appropriations.
    It is my understanding that there is some belief that you 
are now talking about a timely funding as compared to advanced 
appropriations, and I was interested in knowing the difference 
between those two phrases. And I thank you, sir.
    Secretary Shinseki. I am not sure I can answer the last 
question there, but let me start with the beginning.
    We need to be better at recruiting and retaining health 
care professionals and workers for rural areas.
    The VA is working with the National Rural Recruitment 
Retention Network to one, to be linked in with them, but also 
to get better at the business of training our people, our 
recruiters on how to do this. So we are taking that on.
    There are incentives for recruitments such as the Education 
Debt Reduction Program. And besides that, we also look at the 
opportunity to employ an outreach clinic, which is not a full-
time clinic in a given area, but we will go for a period of 
time, set up a clinic, bring in all the health care 
professionals we need, and conduct the clinic for a regular, 
but limited time, and see as many patients as need to be seen.
    The patient load is not enough to keep that clinic open 
full-time, but it gives us an opportunity to one, see what the 
needs are, and also address some of these issues.
    Regarding advance appropriations. I believe a couple 
testimonies ago I indicated that I think even then that I said 
my preference was for timely budgets.
    My experience with continuing resolutions always pointed up 
some difficulties for those of us that had missions to execute, 
especially where health care and other services were concerned, 
and if timely budgets were not available, then advanced 
appropriations may be an appropriate alternate way of looking 
at this.
    I now understand that timely budgets are what we are going 
to do, and so that is what I am going to go to work on, my 
piece of it.
    Mr. Moran. Mr. Secretary, thank you.
    It is pleasing to me that you are able to speak on behalf 
of Congress, that we are going to do our work in a timely 
fashion and avoid continuing resolutions. I hope your optimism 
is founded.
    The Chairman. Thank you, Mr. Moran.
    Ms. Herseth Sandlin.
    Ms. Herseth Sandlin. Thank you, Mr. Chairman.
    Secretary Shinseki, thank you for being here today, thank 
you for your testimony. We had a chance to visit again earlier 
this week, and I look forward to continuing to work with you to 
strengthen and transform the VA to meet the needs of our 
Nation's veterans.
    Thank you for helping craft the largest ever increase in VA 
funding. I appreciate the VA's commitment to assuring that it 
has the resources it needs to meet a very long list of 
challenges; however, Congress must also conduct proper 
oversight to ensure that taxpayer dollars are spent wisely and 
that programs are implemented effectively, and more funding 
can't alone guarantee better services, aggressive oversight is 
also needed.
    Now as you know I serve as the Chairwoman of the Economic 
Opportunity Subcommittee, and along with the distinguished 
Ranking Member, Mr. Boozman, we have been working closely in 
our oversight capacity with Keith Wilson, Director of the 
Education Service, and Stephen Warren, the Principal Deputy 
Assistant Secretary for the Office of Information and 
Technology. And just recently on February 26 we held yet 
another oversight hearing to review the VA's process in 
implementing in Post-9/11 GI Bill, which you addressed in your 
opening remarks.
    Now at that hearing, Mr. Wilson and Mr. Warren indicated 
what you have indicated today, that the VA remains on schedule 
to implement this new benefit by the August 1st, 2009 deadline. 
And while we remain cautiously optimistic that the program will 
continue to move ahead on schedule, we also know that any 
disruptions to the plan will likely cause the VA to miss that 
deadline.
    Now in your opening statement, you indicated that the 
fiscal year 2010 VA budget will fully implement both the short-
term and long-term goals of the Post-9/11 Veterans Education 
Act, and I appreciate your continued support for the program, 
and I encourage you to be up front and open with the Committee 
if any problems arise or if any additional resources are 
needed.
    Could you perhaps address or share your thoughts on the 
concerns that have been recently expressed regarding the 
variance of the benefit by schools, by states, and how we can 
go about addressing those concerns without disrupting the 
August 1st deadline?
    Secretary Shinseki. I understand there has been some 
concern expressed. I am not totally familiar with all of them. 
I am told they are not a single concern, but I am on a timeline 
right now that is fairly precise.
    New forms are going to be available on 28 April. Veterans 
apply for certificates of eligibility, 1 May. VA processes 
enrollment information from schools and authorizes payment, 8 
July. Tuition fee payments are issued to schools beginning 
first week in August. Housing allowance, books, supplies, 
stipends, et cetera, 2 September.
    It is a very tight timeline. I am willing to work these 
issues. I am just concerned that if I have to pull back the 
regulation that it has taken us 8 to 9 months to put in place 
to adjust them and to undo some of the programs that we have 
already put in place and have begun training on, that it risks 
this timeline.
    So I am happy to take on the concerns. I am not sure that I 
can do it this year and also meet the August start dates.
    Ms. Herseth Sandlin. I appreciate your thoughts.
    Secretary Shinseki. I will analyze that.
    Ms. Herseth Sandlin. Mr. Secretary, we look forward to 
working with you on that.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Boozman.
    Mr. Boozman. Thank you very much.
    Again, we appreciate your service, and I really look 
forward to working with you in the future, and we appreciate 
you being here.
    The forward budgeting, again, that seems to me like it--I 
know you have been in a situation where because of continuing 
resolutions and things like that you start having to juggle 
money around, but it does seem like if that were done 
correctly, and I don't really have the answer to it, but it 
does seem like something that we really ought to look to in the 
sense that when you start juggling funds around like that when 
we put the agencies in those situations, and Congress is the 
one that is doing that, and I think, you know, if you look at 
past Presidents, it is not a partisan thing, you know, it 
happens on both sides regardless of who is in the White House, 
regardless of who is controlling Congress, but it does seem 
like that is a way to actually save some money. That, you know, 
you would be in a situation where you could better look at your 
budget and then again actually save some money from not 
juggling around.
    So that is something that is going to be coming up again. I 
would just encourage you to really look at that and then give 
us some good ideas and some good guidance as to, you know, if 
that is possible to implement.
    The other thing is--you know, I am excited about hearing 
that we have the potential to increase our Category 8s as far 
as serving them.
    One of the concerns though, that we have had is that we 
have worked really hard to get our times down and things, is 
that we do that and then we don't put the resources in place, 
the added personnel, the added infrastructure and things like 
that, and so then we go back to the waiting times that we have 
worked so hard.
    I understand the importance of that. My dad was in the Air 
Force for 20 years and was a recruiter, and a lot of these 
individuals, you know, were told that they were going to get 
health care and things, and so I think it is an important 
commitment, something we need to do.
    Can you comment on that? I guess at some point in time we 
are going to have 525,000 additional Category 8s, so half a 
million people. Can you talk to us a little bit how you are 
prepared to do that?
    Secretary Shinseki. Yes. The timeframe of establishing this 
program, beginning in June of this year out to 2013 and hitting 
that 550,000 potential enrollee mark is designed to let us get 
it started, and then adjust as we go. I mean, if it is possible 
to go faster then certainly we can do that, if not then we need 
to slow things down.
    The issue here is to ensure that we don't put at risk any 
of the programs or any of the quality of services being 
provided to enrollees today, to veterans who enroll today, and 
so that--your question is appropriate. I will have to look at 
this as we start and increase the program.
    As I indicated, the first year up to 266,000, which is a 
significant number. We think we can handle that.
    Mr. Moran. I thank the gentleman from Arkansas for 
yielding.
    Mr. Secretary, is your philosophy or your belief that all 
veterans should be covered? All Category 8 veterans should be 
included in the health care delivery system, and it is just a 
matter of getting us to that point in an orderly fashion that 
doesn't cause a detriment to the rest of the system? Or do you 
believe that under a certain set of criteria those veterans 
should be served?
    And I thank the gentleman for yielding.
    Secretary Shinseki. Priority Group 8 veterans are veterans. 
What distinguishes their entitlements right now is 
circumstances that have to do with economics or location, but 
they are veterans.
    If it is within my ability to reach them, I don't know how 
to not include them in the consideration.
    Whether I can find ways to reach the affordability factor 
here, I don't know, but this is why this program is phased in 
over a period out to 2013. That will give us an opportunity to 
assess how we are doing and ensure that we are maintaining the 
quality standards I am describing here, and then make decisions 
at some point down the road.
    To answer your question, whether all Priority 8 Group 
veterans should be included, today I can't tell you how many 
are in the Priority Group 8. I need to come to some way of 
estimating that before I can fully answer your question.
    Mr. Moran. Thank you, Mr. Secretary, thank you, Mr. 
Chairman.
    The Chairman. Thank you.
    Mr. Hall.
    Mr. Hall. Thank you, Mr. Chairman and Ranking Member Buyer, 
and thank you Mr. Secretary for your service, and for the 
President and you showing the overwhelming support of veterans 
that you have shown in this budget. The first time I believe in 
our history where an Administration has proposed a budget that 
exceeded the recommendation of The Independent Budget.
    And I also want, as the representative from New York's 19th 
District, home of your alma mater, West Point, to say that the 
veterans in my district are especially proud of you and 
supportive of your service now as Secretary.
    In regards to the budget, I understand you can't go into 
specifics, but I would like to ask you about PTSD in 
particular.
    As you know, I have a bill introduced in this Congress that 
would establish service in the theater of combat as a 
presumptive stressor for the occurrence of PTSD.
    For too long, I believe veterans have had to leap through 
hoops or over hurdles to prove specific events that caused 
their trauma, and my bill would remove this burden if they 
served in the uniform of this country in a war zone.
    Can you tell us your thoughts on how the VA could 
facilitate such treatment and compensation for PTSD and how the 
budget would play a role in this?
    Secretary Shinseki. Are you referring here to the 
determination of precursor for PTSD based on----
    Mr. Hall. A presumptive stressor being established in this 
legislation.
    Secretary Shinseki. I would start out by first pointing out 
that I am not a clinician here, and so I rely on those experts 
who help me understand what might be the precursors for 
validating PTSD as a condition.
    I do know firsthand that you don't have to be in combat to 
go through trauma that could result in PTSD. I think there are 
ample cases of assaults on women that give us an understanding 
that that is enough of a traumatic experience to create the 
conditions for PTSD.
    So my sense here is this is an area that requires a 
clinicians determination, but I would--I would also say that I 
have been in operational zones where servicemembers have been 
exposed to conditions that were horrific enough, they were not 
involving combat, and PTSD determinations were made on those 
individuals being in an operational environment.
    I am willing to work with you in trying to understand how 
we best address this issue, PTSD, and TBI issues, which we are 
trying to put our arms around with regard to mental health as 
an area for us to spend more effort in.
    Mr. Hall. Thank you, sir.
    And the legislation does require diagnosis of the symptom, 
so it is not just having been there, and I appreciate your 
comments on different people handling different experiences in 
a different way, but I thank you and look forward to working 
with you on developing and refining that legislation.
    Regarding the IT progress that is being made in response to 
legislation this Committee passed, can you tell us--give us an 
update as to where the Department's efforts are in this area 
and how confident you are that when the IT account level is 
established it will be sufficient to meet the requirements 
mandated by Congress?
    Secretary Shinseki. You are looking for where we are going 
to put our priorities?
    Mr. Hall. Well and just sort of an update to tell us 
somewhat about the paperless--moving toward a paperless claims 
system.
    You also talked about, you and the Secretary of Defense, 
which I think is a terrific idea, having single enrollment so 
that starting with new servicemen and women that record would 
then hopefully continue and already be in the system, and that 
will obviously help future cases. But in terms of our existing 
veterans population, how is it being approached and what kind 
of progress are you making so far in moving toward paperless 
claims in particular I am concerned with?
    Secretary Shinseki. In terms of just the IT arena, we are 
strengthening our network security operation in terms of tools, 
standardizing desktop systems and components, and beginning to 
put into place our process for determining how to attack the 
backlog.
    Based on our experience with what the electronic health 
record did for us in terms of health care between 1997 and 
2004, we are looking to have the same kind of effect by smartly 
introducing IT into this area of adjudication.
    As I think I have mentioned before, 11,100 adjudicators 
today--actually it is 11,300 since the last time I was here to 
testify. That is a leadership issue, that is a training issue, 
but it is still a brute force solution that right now the way I 
get faster at this is to hire more people.
    I am not sure that that is the solution, and I am looking 
for a way to address this quickly, and IT is very much a part 
of this.
    Mr. Hall. Thank you, sir.
    Thank you, Mr. Chairman.
    The Chairman. Thank you.
    Mr. Bilbray.

           OPENING STATEMENT OF HON. BRIAN P. BILBRAY

    Mr. Bilbray. Let me start all over again by saying I want 
to thank you for your fresh approach.
    But actually, Mr. Secretary, I want to say sincerely I 
appreciate your fresh approach. There is a lot of people that 
have had your hot seat, and believe me it will be tough, and I 
just want to say that I think that we are starting off on a 
good footing. I think it is something that both sides can 
really hope for your success, pray for your success, but more 
importantly work together for your success. And as son of a 
veteran both of deceased veterans and a mother who still are 
getting benefits from your organization, your department, I 
appreciate your approach to this.
    My only warning to you is that 2 years from now, let us 
just hope we have that much of a positive, and that is a 
challenge of all of us working together.
    And I just have to tell you personally being a personal 
friend of the Chairman, believe me, he can be a tough overseer. 
He can be one of the toughest guys I have ever worked with, 
especially when you are at your end of the dais, so I look 
forward to your success. I look forward in a few years being 
able to look the Chairman in the eye and matching him success 
for success. So good luck, okay?
    Secretary Shinseki. Thank you.
    The Chairman. Thank you, I guess, Mr. Bilbray.
    Mr. Perriello.
    Mr. Perriello. Good afternoon.
    Let me begin by thanking Chairman Filner and Ranking Member 
Buyer for convening this important hearing on the Department of 
Veterans Affairs. Let me also thank everyone on the Committee 
for their prayers and thoughts for my family during my absence 
over the last couple of weeks due to the loss of my father, who 
was proud to have worn the uniform of the U.S. Army.
    Secretary Shinseki, I want to echo the sentiments of my 
colleagues in welcoming you back to the Committee, and for all 
of your service to this country when you wore the uniform and 
in your current capacity.
    It is indeed exciting to see such an unprecedented 
commitment to veterans, and it is a timely moment for this 
leadership surge as we see the unprecedented convergence of 
some very severe challenges. Veterans returning home to a very 
bleak job market, returning home to a bleak housing market, and 
dealing with the unprecedented mental health challenges of PTSD 
and TBI.
    It is a great time to have your leadership and a very 
challenging time in terms of living up to the pledge we have 
made to our veterans.
    I would also like to recognize the VSOs present here today 
for their work in preparing The Independent Budget, which has 
been met, matched and exceeded. Thanks also for increasing 
intergenerational cooperation between veterans past and 
present. It has been very helpful to all of our offices to be 
able to share your breath of wisdom.
    As a representative of a rural district, I just wanted to 
ask you two questions. One, specifically what commitments we 
are ready to make to ensure we are taking care of those 
veterans returning to rural areas? And two, the strategies for 
addressing the specific challenges of the current economic 
environment into which our veterans are returning.
    Secretary Shinseki. Congressman, I think I will quote 
President Obama here when he says, ``That veterans lead in lost 
jobs, homelessness, substance abuse, and a tendency toward 
being part of that suicide discussion.''
    And so, my sense is that if we are able to help up front, 
first order of things here matter. If veterans come home and we 
have a good way to identify who they are, get them into our 
programs. For those who are injured, get them safely and 
completely through the vocational rehab process.
    I know that right now we are not doing very well at that. 
Many of them indicate interest, lesser numbers show up, and 
even fewer complete the program. Some of that has to do with 
economics, and I need to get inside of that. But we show that 
if they will complete that program the opportunity for 
placement and successfully getting a job is much higher.
    Both Secretary Donovan from the U.S. Department of Housing 
and Urban Development (HUD) and I have appeared before the 
Coalition for Homeless Veterans to hear them primarily, but 
then for the both of us to commit to working on the homeless 
veteran issue in this country. It used to be about 240,000, 
today it is 154,000.
    I would like to tell you that there are some programs out 
that there that we have found to have been successful in 
reducing by 40 percent that number. And again, these are 
estimates, so I am a little reluctant to put a hard pencil on 
it, but I am told that we have reduced those numbers 
significantly.
    If we can get these veterans back and keep them from going 
homeless I think we have a much better chance with our 
programs. If it is substance, abuse to get them off of it. If 
it is educational initiatives, to get them engaged in 
vocational rehab training, and get them situated for turning a 
page and being successful in the next phase of their lives.
    These are all successful people, they were successful in 
uniform, and our responsibility here is to get them back on 
that track again.
    If we can do that up front, and that requires the VA 
working with DoD to get this transition into our programs, 
working with education for those issues, working with the U.S. 
Department of Health and Human Services (HHS) for the health 
care issues, working with labor on jobs, and HUD for housing, 
we have a much better opportunity to reduce the 154,000 
homeless veterans today to something significantly less.
    Mr. Perriello. Well, I just want to commend you for your 
support of vocational and on-the-job training programs. For 
many of the veterans in my district this is a top priority. The 
GI Bill, expansion in education has been great.
    I have authored a bill, which would expand on-the-job 
training. Vocational and skills training programs are really a 
lifeline to living wage jobs in my area, so I commend your 
support of this and look forward to working with you on it.
    The Chairman. Thank you.
    Mr. Roe.
    Mr. Roe. Thank you, Mr. Chairman, and thank you General for 
coming by the other day and visiting my office.
    And it just, as I was sitting here I remember when I was in 
college when the entire budget of the United States was $100 
billion, and now the VA budget is over $100 billion this year.
    Just a couple of comments. One, on the Category 8 veterans. 
I was glad to hear you say in your testimony, or your answer I 
should say, that veterans are veterans.
    And we may have talked, I think, last week in my office 
about a veteran that I know that is a sheriff in a county, and 
the county is so poor that they can't provide health benefits 
for their county employees. No county employee has health 
insurance. This veteran makes a little bit more money as a 
sheriff of the county than is allowed apparently, and I am not 
sure what that number is, and I don't know whether this 10 
percent-boost will help him or not, but he should be able to go 
to the VA medical center in his district, which is close by, 
and I am glad to hear you say that, and I would like to work 
with you to make that--and this Committee, to make that happen 
for all veterans.
    On the backlog. I was just wondering if you know any of 
the--or do you know the demographics of our veterans population 
now that they are currently using the VA?
    And the reason I bring that up is because just looking at 
this budget going forward it doesn't seem like that it is 
realistic. If we raise it 10 percent this year and then look at 
a 2 percent basically, which is not going to be inflation for 
the next several years, that doesn't seem to be adequate to me 
to do that.
    Would you comment on that?
    Secretary Shinseki. Well, I would just offer that timely 
budgets allow us to work the budget that is being considered, 
just as we did this one. And I think I would share the concern 
looking out that more work needs to be done as we get to those 
budget years to get resource levels where the priorities that I 
think we will be facing will be appropriately addressed.
    It also touches, I won't say directly, but it also touches 
on the issue of advanced appropriations. Because sitting here 
looking out several years and trying to figure out how to put 
that in place I think is the reason that timely budgets become 
discussable.
    And I will accept Mr. Moran's caution here. I was not 
suggesting that I could do this, I was just suggesting that I 
will do my part.
    Mr. Roe. I guess the question I am asking is, as we look at 
the veterans that are currently using our facilities, 1,500 or 
so World War II veterans are dying every day. And what percent 
of the VA budget is going to caring for them and then the other 
Vietnam veterans and so forth that we know are going to be 
around a while longer?
    Secretary Shinseki. I am sure there is a number, Mr. Roe. I 
will try to go figure it out, but I don't have that detail 
today.
    Mr. Roe. Yeah, that is very important in going forward in 
to know whether your resources are going to be--whether you may 
have less demand, who would know.
    Secretary Shinseki. Yes, our Vietnam veterans are today the 
largest population of our veterans.
    Mr. Roe. So that obligation is going to be going on for a 
while.
    Secretary Shinseki. Right.
    [An April 20, 2009, follow-up letter from Secretary 
Shinseki to Congressman Roe, regarding the percentage of the 
budget going to care for World War II, Vietnam Veterans and 
other veterans of other eras, appears on p. 143.]
    Mr. Roe. I guess the other question we talked about we are 
changing this electronic medical record. And to answer Mr. 
Hall, it is going to be more money than you think it is going 
to be. We did that in our own office and changing our medical 
records to electronic medical records was a very expensive 
undertaking and a lot more laborious than we thought it was 
going to be, but I think it is essential that we do that.
    And what I would recommend you looking at doing, it worked 
for us, is any new veteran that comes in enter them into the 
EHR system. And exactly what we were talking about, when a 
soldier is signed up today enter them into the system. And then 
as you have an active file open up do that person. One that is 
working along just fine get to them later. And I think you will 
find that works pretty--and of course the archive files, I 
wouldn't fool with them unless something came up.
    Mr. Bilbray. Would the gentleman yield on that point?
    Mr. Roe. Yes, the gentleman yields.
    Mr. Bilbray. Yes, I would have to echo that strongly. 
Rather than having to go back and recapture old information, 
actually phasing it in is by far a much more effective way to 
be able to implement the program, and I just have to really 
reinforce what the doctor is pointing out here, and I yield 
back.
    Mr. Roe. Thank you. Yes, that is the method we used and it 
worked fairly well. It will be hard, it will be difficult any 
way to do, but I look forward to getting that started and 
getting done, because I think that is going to be part of being 
able to get that information out there and handling it 
appropriately to get this backlog of 900,000 people. And I 
agree with you, are you a backlog when you just--are you 
900,001 if you sign up today then you will be part of the 
backlog.
    So thank you.
    Secretary Shinseki. If I might. Electronic health records 
have other benefits, and I know there is cost associated with 
it. But for example, in 1996 patient records were available to 
the doctors about 60 percent of the time, today with our 
electronic health records, 100 percent of the time a doctor has 
a record with a patient, and not just the form, but every chest 
x-ray, every brain scan, every blood test for the history of 
this patient is available so that the doctor can make some 
longitudinal decisions based on what has happened here.
    In 1996, the VA lagged industry in terms of pneumonia 
vaccinations for patients over age 65 at about 28 percent. 
Today we are at 94 percent, and all of this is information 
available to health care providers to make the right decisions.
    And I think that this increases the quality of health care 
and reduces the cost, because it is preventative. It also 
allows us to do our part in reducing that figure that is out 
there about 100,000 patients falling victim to medical errors 
or poor decisions because of lack of current records. So there 
are other returns here.
    The Chairman. Thank you.
    Mr. Walz.
    Mr. Walz. Well thank you, Mr. Chairman, and thank you Mr. 
Secretary once again for being here.
    The Chairman mentioned it might be a little lonely there, 
but you know there are plenty of people that have your back. I 
see some friendly faces. I see Paul Rieckhoff and Rick Weidman 
and Steve Robertson and others, they are always there for you. 
They are always there and they speak for millions of veterans, 
and we are all in this together.
    So I really appreciate your assessment on the GI Bill, your 
very candid assessment of this claims backlog. I think that is 
refreshing to let us get at it. I think your assessment that it 
is going to take brute force might be the only way to do it 
right now, but it gets us back to how do we make sure that 
start to reduce that and we start to get smart in the future?
    I agree with you, and this electronic medical record is a 
big one.
    And I will throw one in on top of that, that you said that 
there are people that believe that is the best. I represent the 
Mayo Clinic, and they always echo that, that the way that the 
VA handles their medical records is the best in the world, and 
they pioneered the procedure, and they have done it on a 
massive scale themselves too.
    And so Dr. Roe's cautions about this, it is very--it is 
much more difficult than creating a database, and it is much 
more than just putting things into the computer, it is how we 
use them and the ease of use to not only save money but to 
improve patient care.
    I just have one question. I am very excited too about your 
opening comments. When you were here last time you talked about 
a uniform approach to registering folks--when they raise their 
hand to defend this Nation they have also raised their hand to 
be part of the VA system--and a way to get to that.
    So my question deals with seamless transition. I brought it 
up before. The Chairman has been very proactive on this and has 
allowed me to ask some of these questions, then to move 
forward.
    My question deals with how are we going to get to that? 
Because the one thing I always know whenever I am in this 
Committee room, nobody from DoD is ever here, and that poses 
quite a problem. It is very difficult on interoperability, and 
this is one of the questions I want to ask.
    I, too, am very pleased with the budgeting and all that, 
but I am also concerned, many of these issues do need the 
funding, but it is more than just the funding, it is 
intelligent funding, it is how we use them, it is how we force 
that seamless transition in interoperability.
    So I just want to ask maybe a generalized question on this. 
How do we go about that?
    In the National Defense Authorization Act last year, and 
the year before, there were some initiatives in there to get 
going on this. There was one very specific one on the Eye Care 
Center of Excellence. And the VA, under Secretary Peake, I 
think, took a very proactive forward-leaning approach and got 
after it. DoD, I have a hard time getting phone calls returned, 
and it takes a story in USA Today to start pushing, okay, we 
are going to get going on this. I think they do a very good 
job. You have been there; I have been there. They see 
themselves as war fighters. They also have to understand with a 
little bit of front help on this we can also take care of these 
warriors during their lifetime.
    So I would just like to ask, I know it is a bit subjective 
and a general question. How do we bridge that gap? How do we 
get interoperability? How do we--those of us in this room--make 
sure that Chairman Skelton's Committee is ready to sit down 
with Chairman Filner's Committee to figure this seamless 
transition out once and for all? So please.
    Secretary Shinseki. Well, the way I have approached this is 
to take this on at Secretary Gate's and my level, and he is 
been more than forthcoming. I have met with him personally 
three times. We have discussed this issue. And I will tell you 
not everybody in the room was necessarily in agreement on 
whether to do this, but with his leadership and his 
determination, we are moving forward on uniform registration, 
and that will become the forcing function. If we agree to that, 
then the electronic record becomes a by-product of that 
decision.
    Mr. Walz. And the timeline on that? You were looking at 
2012, or did I hear that correctly? That is kind of the----
    Secretary Shinseki. Well, that is for going paperless 
inside our claims adjudication process.
    Mr. Walz. Okay.
    Secretary Shinseki. I don't know how soon. 2012 would be 
well off the timeline.
    Mr. Walz. How is that funding mechanism going to work? When 
we fund for the VA and the DoD how do we ensure these--this 
seamless part, this compatibility, these joint operations? How 
do we ensure that funding is steady, and as I said, 
intelligent, and we are not duplicating, we are not creating 
our own silos and the things that we have done for years and 
years and year? Do you have any vision on that?
    Secretary Shinseki. Well, there is always the tendency for 
that to happen.
    This will require leadership on both of our parts to agree 
on a single electronic record, and force the people that are 
going to be the users of that record.
    If it is our medical personnel, bring doctors and nurses 
from both sides into a room, a small room, and have them define 
for us what that electronic record ought to look like.
    We each have one today. The problem is they are not 
identical, and while you can extract information from each 
other's systems, it is not fully open architecture where you 
can pass the entire record, which is the problem we have today. 
We can't take the record when an individual transitions.
    So we need to get at that, but it is going--that is a 
leadership issue here. And we both left our own systems with 
probably design and upgrade to our current system, and that is 
what we are against.
    We want to come up with a system that is going to serve 
both of us, and whatever it looks like that is the requirement 
we should be building to.
    Mr. Walz. Well, I appreciate that, and I feel great 
confidence in the two leaders we have there, and so that is 
comforting as a first start.
    Thank you. I yield back.
    The Chairman. Thank you.
    Mr. Bilirakis.
    Mr. Bilirakis. Appreciate it very much, and thank you for 
your service, General.
    I have one question regarding concurrent receipt. I 
understand that the budget will expend funding for concurrent 
receipt. Can you elaborate a little bit?
    Thank you.
    Secretary Shinseki. Concurrent retirement disability 
compensation is going to be put into place over the next 4 or 5 
years, but it begins 2010 with the highest disability 
categories, and then incrementally, so that in the 2013, 2014 
timeframe we are looking at the 10 and 20 percent military 
disability retiree having that entitlement in place.
    Mr. Bilirakis. As far as medical retirees, my understanding 
is that if you have less than 20 years you will receive up to 
50 percent of the VA rating; is that correct, General?
    Secretary Shinseki. I don't have the details exactly of 
what less than 20 years in this category, but I would be happy 
to provide you the details that will address the entitlements 
in 2010, and then each there after.
    Mr. Bilirakis. Thank you. Thank you very much, we would 
like that.
    Secretary Shinseki. It is a cascading set of military 
disability retiree from the highest categories down to 10 and 
20 percent in the 2013, 2014 timeframe.
    Mr. Bilirakis. Okay, I would like those details. Thank you, 
sir.
    Secretary Shinseki. Okay.
    [The VA subsequently provided the following information:]

                CONCURRENT RETIREMENT AND DISABILITY PAY

      CRDP is a ``phased-in'' restoration of military retired 
pay first authorized by the Defense Authorization Act of 2004, 
effective January 1, 2004-retroactive payments started in September 
2006.
      The Defense Authorization Act of 2005 eliminated the 
phase-in of veterans entitled to a schedular 100 percent-evaluation.
      The Defense Authorization Act of 2008 eliminated the 
phase-in requirement for individual unemployability recipients, 
retroactive to January 1, 2005.
      Retiree must have 20 years of service and be evaluated at 
50 percent or more.
      CRDP is retired pay, is taxable and enrollment is 
automatic.
      VA computes the CRDP amount based upon Base Rate and 
Phase-in schedule.


------------------------------------------------------------------------
                             2004 Base Rate
-------------------------------------------------------------------------
   Combined Disability Evaluation                CRDP Payable
------------------------------------------------------------------------
100%...............................                                $750
------------------------------------------------------------------------
 90%...............................                                $500
------------------------------------------------------------------------
 80%...............................                                $350
------------------------------------------------------------------------
 70%...............................                                $250
------------------------------------------------------------------------
 60%...............................                                $125
------------------------------------------------------------------------
 50%...............................                                $100
------------------------------------------------------------------------



----------------------------------------------------------------------------------------------------------------
                                                Phase-in Schedule
-----------------------------------------------------------------------------------------------------------------
                                                                    Waived compensation payable in addition to
                              Year                                               base year amount
----------------------------------------------------------------------------------------------------------------
2005............................................................                                            10%
----------------------------------------------------------------------------------------------------------------
2006............................................................                                            28%
----------------------------------------------------------------------------------------------------------------
2007............................................................                                         49.60%
----------------------------------------------------------------------------------------------------------------
2008............................................................                                         69.76%
----------------------------------------------------------------------------------------------------------------
2009............................................................                                         84.88%
----------------------------------------------------------------------------------------------------------------
2010............................................................                                         93.95%
----------------------------------------------------------------------------------------------------------------
2011............................................................                                         98.18%
----------------------------------------------------------------------------------------------------------------
2012............................................................                                         99.64%
----------------------------------------------------------------------------------------------------------------
2013............................................................                                         99.96%
----------------------------------------------------------------------------------------------------------------


      VA has released over 100,272 CRSC and CRDP retroactive 
payments totaling over $286 million.
      As of May 1, 2009, 256,329 military retirees are 
receiving CRDP.
                       CRDP NEW CHAPTER 61 COHORT
      2010 budget expands benefits to include chapter 61 
disability retirees with less than 20 years of service at all 
disability levels, not just 50 percent and above.
      2010 budget for CRDP totals $47 million.
      New chapter 61 cohort has separate phase-in schedule 
based on combined degree of disability.


------------------------------------------------------------------------
                            Phase-in Schedule
-------------------------------------------------------------------------
                Year                    Combined Degree of Disability
------------------------------------------------------------------------
2010                                                         100% & 90%
------------------------------------------------------------------------
2011                                                          80% & 70%
------------------------------------------------------------------------
2012                                                          60% & 50%
------------------------------------------------------------------------
2013                                                          40% & 30%
------------------------------------------------------------------------
2014                                                        All Ratings
------------------------------------------------------------------------


      Key point: The amount available for either CRSC or CRDP 
is the amount of retired pay earned (2.5 percent  years served 
 base pay).

    The Chairman. Thank you.
    Mr. Snyder.
    Secretary Shinseki. Once the budget is completed.
    Mr. Snyder. Thank you, Mr. Secretary. I am sorry I was not 
here for your opening statement.
    I wanted to just make one comment, and then give you your 
softball question for the day so that--the only comment I want 
to make is we are waiting on the details of the budget is, one 
of the issues that has come up through the years is in a way, I 
think, it has been a double counting of Federal research 
dollars. And by that I mean, I will just use some numbers that 
are not realistic, but let us suppose you have a pool of money 
at National Institutes of Health (NIH) of $50 million and the 
Veterans Health Administration is able to get $10 million of 
that to help with their VA research, and then we see a budget 
number that says oh, we have--they put $40 million, they have 
$50 million of research dollars, and you add those numbers up 
and you say we have $100 million of research going on, when in 
fact we only have $90 million of research because the money 
gets, you know, the NIH folks and the Congress that look at it 
say oh, we have a good number here, and we look at this number 
and say oh, it is a good number here, but in fact, it is a 
double counting of money. And I would encourage you to sort 
those numbers out in a way that is transparent.
    I hope that the VA will be competitive, that VA researchers 
will be competitive for other sources of funds, but let us not 
try to fool anyone into thinking that somehow we have this 
great plussed up number, if in fact what we are doing is 
counting on good researchers to get dollars from other sources.
    I think we need a good healthy number that involves your 
dollars, and that is one of those issues that several of us 
have been following along through the years, and have been 
pleased with the quality of research that can come out of the 
VA system.
    My softball question is this. You are a guy who came out of 
a system, a fairly dramatically different system, that you have 
committed almost all of your adult life to and you are now into 
a new system. You have had several months to get up to speed 
and look at the culture that you are in and all the details.
    What have been your biggest surprises, either good ones or 
bad ones as you have spent the last several months getting up 
to speed on the VA system?
    Secretary Shinseki. I guess surprises, I guess would be the 
number of reports I sign and send to Congress. I was surprised 
at the number of reports I submit daily. And I think in time I 
hope to earn the trust of the Committee that I am on a good 
track and doing the right things, and where it meets your needs 
I will provide every report, and where it is less useful I 
would look for an opportunity to come to an agreement on how we 
harmonize those requirements, because they are pretty 
significant.
    There are other surprises, but that was the one that stood 
out.
    Mr. Snyder. I think that is something that probably a lot 
of us would be interested in working on. It is really easy for 
us to include in some bill we need a report on this without--we 
probably should have a requirement that they have a number on 
it. You know, this is the 102nd report that is required by the 
Secretary, but I think that is certainly something that a lot 
of us would be interested in looking at to make the reporting 
information more streamline.
    Thank you, Mr. Secretary.
    The Chairman. Mr. Buyer.
    Mr. Buyer. We are going to have different interpretations 
here, since Mr. Bilirakis asked his question. It is a very 
complex issue, because we have multiple disability systems, and 
trying the figure out who is in and who is going to be left out 
of this type of proposal and their different interpretations by 
what is out there. So I am at a little disadvantage.
    Dr. Snyder is right, we don't have the details and it is 
hard for us. Even this Friday, it is truly Friday the 13th for 
us, because we have to deliver our budget views and estimates 
without any details. And I am not picking on you, it is just 
even when we changed Administrations in 2001, the same thing 
happened. We just didn't have the details.
    So I just want you to know we are going to come and do some 
real questions for the record on the concurrent receipt so we 
can better understand how you are going to implement this.
    One of the other questions I have. The status of the VA 
report on--the VA economic recovery report. Do you know what 
the status is on that report?
    Secretary Shinseki. I don't, but I will get you that.
    Mr. Buyer. You have 30 days to get it to Congress when the 
President signed it into law. Has it left your desk and gone to 
OMB?
    Secretary Shinseki. I don't know. I mean, it is not to 
your----
    Mr. Buyer. Well you would know if you have signed it, so it 
is not to your----
    Secretary Shinseki. I don't recall, but I will get you an 
answer today.
    [The VA Reports on the American Recovery and Reinvestment 
Act were provided to the Committee and appear on p. 164.]
    Mr. Buyer. Okay.
    With regard to several initiatives, this--I have had a 
couple discussions, and you know it is one of my pet peeves 
now, is this multiple standards for cemeteries. And I would 
love for the leadership of the VSOs to take on these kinds of 
issues. I think they are important. And have you had a 
discussion with the Secretary of Interior?
    Secretary Shinseki. I have not had that opportunity as of 
yet, but I do intend to do so. I have had my staff look into 
the background of these two cemeteries that you have mentioned, 
and others.
    Mr. Buyer. Okay.
    Secretary Shinseki. There is a difference in management and 
a difference in standards. We are trying to assess what it 
would cost if we were asked to assume responsibility for these 
two cemeteries and what capabilities it would require at this 
time.
    Mr. Buyer. Okay.
    Secretary Shinseki. And what it would take.
    Mr. Buyer. Thank you for doing that, and I will wait for 
your response.
    [Ron Walters, Director of Finance and Planning, National 
Cemetery Administration, Department of Veterans Affairs, 
provided the requested technical assistance by telephone to 
Committee staff on March 30, 2009.]
    Mr. Buyer. With regard to the Priority 8s. We received a 
briefing in a report from the VA. It is titled, ``Analysis of 
the Requirements to Reopen Enrollment of Priority 8 Veterans.'' 
So this was dated January 1st, and they do--excuse me--of last 
year, so this would be January 1st of 2008. And there was an 
analysis done based off of--hold on--VA's actuarial model. 
``The enrollee health care projection model projects that 
reopening enrollment to Priority 8s will increase enrollment in 
2013 by 1.4 million and patients by approximately 750,000 over 
the current enrollment policy.''
    So when I read your budget, you are going to do a target 
opening up to 550,000. So when I look at this, when I compare 
the VA's actuarial model to the target that is being projected 
that it would be false then for anyone to infer that you are 
planning on opening up the enrollment to everyone. Would that 
be accurate?
    Secretary Shinseki. At this point the enrollment target is 
up to 550,000.
    Mr. Buyer. All right. Well then all I can rely on, Mr. 
Secretary, is the VA's actuarial model that shows that patients 
would be enrolled potentially 750,000. And I just bring that up 
as a point to make sure that no one believes that it is going 
to be opened up to all the 8s.
    The great caution has been is the issue on building 
capacity.
    Secretary Shinseki. Right.
    Mr. Buyer. And even some of the VSOs have now been able to 
voice concern for us to watch this and be very careful as the 
8s come in.
    The 8s are individuals who have 91 percent, who have access 
to other forms of health care and so we want to make sure that 
we do not diminish that timely and accurate high quality health 
care that you have shared with all of us.
    Secretary Shinseki. You have my assurance, I think I have 
said that several times. The quality that we provide and access 
we provide today is something we won't jeopardize.
    Mr. Buyer. The last thing I wanted to make you aware of. 
The Energy and Commerce Committee passed out legislation last 
week dealing with tobacco. And because the Congress recently 
passed an S-Chip Bill that increased taxes on cigarettes, in 
order to pay for this new tobacco legislation by Mr. Waxman, 
there is a hole in his bill. So he has come up now with a 
quote, a pay-for. And one of the pay-fors is mandating Federal 
employees enrollment in the Thrift Savings Plan.
    So I just want to make you aware that Congress is 
considering the mandating of all Federal employees in the 
Thrift Savings Plan, and that is going to have an impact upon 
your Department.
    It will have a tremendous impact upon DoD, because I 
authored the Thrift Savings Plan for DoD. And when I did that I 
didn't have sufficient budget room and I made it an option for 
members of the military, and there isn't a match.
    So if Congress is about to do this, I have now alerted the 
Armed Services Committee, they have joint referral here because 
we are about to mandate on Federal, you know, the personnel 
pension benefits of the military as a pay-for on smoking.
    But I just want to make you aware of something that is 
moving through Congress, because it is going to impact your 
employees.
    Secretary Shinseki. Thank you.
    Mr. Buyer. I yield back.
    The Chairman. Thank you, Mr. Buyer. Thank you, Mr. 
Secretary.
    I just want to make a few points. The first one is on the 
GI Bill. We understand the pressures on you to do this on time 
and the problem with any changes.
    As Ms. Herseth Sandlin said, some inequities have come to 
our attention. For example, if you live in the bay area of 
California, and go to Stanford, the VA will pay $30,000; if you 
go to Berkeley it will pay $10,000, if you go to San Francisco 
State it will pay $4,000. It is a function of our system, but 
there are some unfairness. If you live in a state that has 
purposely kept tuition at public universities low as a way to 
make sure that all of our young people do get education, they 
are going to be reimbursed at a level that really does not 
match their actual costs.
    When the Senate passed the GI Bill, Senator Warner put in a 
provision called the Yellow Ribbon provision, which essentially 
gives an additional subsidy to high tuition, mainly private, 
schools. Nobody thought, at the time, about a provision to help 
those low-tuition schools who might be under funded.
    I hope that we can get a recommended change very, very 
quickly. If we can't we will have to wait until the following 
year. This is an issue that is coming to the attention of many 
of the Members, because their universities are now figuring out 
how they will be affected.
    If you live in Georgia, by your figures, the maximum public 
grant is about $1,200. Not only is that probably too low for 
real education costs since they are subsidizing it, but it 
would be hard to get the full payment for any college in 
Georgia under the formulas that we are using. This can be 
multiplied all across the Nation.
    I am not sure whether we have to have a major change in 
terms of a standard fee that we are going to pay, or a floor, 
or a reverse Yellow Ribbon provision for the low tuition 
states. I think we are heading into a real problem that we have 
to fix fast. As I have told you, we need to work to get a quick 
formula to make it more equitable and maybe work on a long-term 
fix later. That is one thing that I think we have to try to do 
quickly.
    On the claims backlog, I think you put it very elegantly, 
when you said, ``right now I am using brute force, I am not 
sure whether that is the actual way to go.''
    If you want to use the word transformative for this system, 
I think you have to have a whole different approach. I have 
suggested a couple that can get us pretty far down the road.
    Number one, our Vietnam veterans who are suffering from 
Agent Orange disabilities have suffered for three decades or 
more. First, we said Agent Orange didn't do anything to you. 
Then we said well maybe, and maybe if you stepped a foot in 
this province, and now there is a whole, you know, bureaucratic 
presumptive thing about which diseases are covered. So if you 
were in the blue waters off the shore and the blue skies above 
are on the boarder of Laos, and you know, Cambodia or even in 
Guam handling cargo, you are ineligible.
    I think we have to breakthrough that and say, ``if you were 
there we should care.'' Maybe define the field of action and 
just honor those claims. Get them off our books and off the 
shoulders of these veterans. People walk around for decades 
fighting the VA. They think the VA means ``veterans 
adversary,'' and we have to say thank you for your service, 
stop fighting us, we are going to honor those claims. Because 
we know too much about Agent Orange now and how much damage it 
causes to start going through all the bureaucratic procedures. 
You don't have to comment on this now, sir, but at some point I 
would like to hear your thoughts on this.
    Additionally, however we count those backlog claims and I 
would refer you to the so-called Linda Bilmes proposal based on 
the IRS model, the Internal Revenue Service (IRS) which used to 
be one of the most dysfunctional agencies in America. When you 
file your 1040, and you have a refund coming, you get your 
check in weeks. That is amazing, 3 weeks. Subject to audit. So 
they will look at it at some time in the future. Why not have 
VA do the same thing? If a veteran submits a claim with the 
required medical documentation and aided by a certified 
veterans service officer, let VA accept the claim, subject to 
audit.
    You could get all those claims off the books very quickly 
and change the function of thousands of workers who appear that 
their sole job is to call veterans a liar once they submit 
their claim. They are looking for problems. Let us have them 
look for answers.
    I think there is a whole transformative, if I may steal 
your word, sir, way of looking at the backlog of claims and 
starting a new system.
    On the subject of PTSD, I ask that when you meet with 
Secretary Gates, you let him know that the quickest thing DoD 
can do to help us do our job is a mandatory physical evaluation 
before they leave the service for PTSD and TBI. It is simple to 
say, but it doesn't happen. There are different rules if you 
are in the Guard and Reserves or active duty.
    Right now they claim they have mandatory screening, and the 
VA does when a veteran comes into the hospital, but it is a do-
it-yourself questionnaire. There is no real discussion with 
competent medical personnel. And, if they are in denial or they 
don't want to be bothered and they want to get home, they know 
which boxes to check no and yes to get out of there quickly.
    So a do-it-yourself form does not do the job for us. I 
think Secretary Gates can order it pretty quickly, because it 
varies widely and some are getting it done, but most are not. 
That is a disservice to all of these young men and women when 
they leave the Armed Forces.
    One last thing if I may, sir. You mentioned to Mr. Snyder, 
when he asked you about surprises in your new role, and you 
said one of the things you want to do is work cooperatively 
with the Committee with regards to reporting requirements. We 
are very grateful for that and what that means.
    It is one of those issues that I think many of us get 
frustrated about in Congress. It is important that the VA and 
the Committee work together to find solutions.
    I think you have to see us as a good source of expertise 
and help. The VSOs are on the frontline every day, and when 
they report things, we can take it to the bank. We know that is 
what is happening.
    We are out there in the same way. We get information from 
the VSOs, but we are out at the hospitals, we are at the 
clinics, we are talking to our constituents all the time, and 
people come to us--we are a magnet.
    When talking about interoperability of the electronic 
records, for example, we have been in discussions with 
Microsoft and other companies that know how to solve this 
problem, and yet the VA has not been very open to their 
suggestions.
    On the subject of third-party collections, we have vendors 
who have showed us simple systems at no cost to the VA which 
could increase our collections dramatically. Unfortunately, 
when we get this information, the VA tends to close itself off 
from these ideas, but we believe they are good ideas.
    We know how to separate the chaff from the wheat too, even 
though we are not in your organization.
    I, and every one of my Committee Members, get presentations 
of new technologies to deal with the problems your organization 
faces every day--our organization, I should say. For example, 
we have seen a non-invasive procedure for veterans who have had 
TBI or other problems with vision, to expand their field 50 
percent and allow them to read, and yet they can't get the VA 
to talk to them.
    I just had a visit today from a company whose products are 
used all around the Nation, but they can't get into the VA to 
share their product for early detection of oral cancer. If you 
can detect oral cancer, and a doctor knows more than I do, 
right away or in its early stages, it is going to be far 
cheaper and far more effective to treat than if you have to 
wait and see it only by visual inspection. This company has a 
method of dealing with it that can give very early detection. 
The company can't even get in the front door with the VA.
    So we come with a lot of this information, and I hope that 
you will be very open. I know you have visited us personally, 
you have shown that you will listen, and I just want to say 
again, use us as a resource.
    We are not here to beat you over the head, we are not here 
just to oversee, we are part of a group that can help. Our 
constituents are on the line every day and we come committed to 
the service of our veterans. I hope you will look at those as 
helpful suggestions some time, not political interference.
    Thank you. I will give you the last word or as much time as 
you would like for your conclusion. We appreciate your candor 
and your willingness to listen and your effectiveness in the 
future.
    Secretary Shinseki. Thanks, Mr. Chairman.
    Again, as I said in the beginning, thank you for this 
opportunity to be here. I always look at this as an opportunity 
to establish a good dialog and solve some of the issues that we 
are both wrestling with that are focused on just one thing and 
that is our veterans and what more and better we can do for 
them.
    For the comments about the backlog. Advocacy training, you 
know, as small as that might be does make a difference. I mean 
if the approach to performing that responsibility is favoring 
the veteran, it will make a lot of difference on how people see 
the outcomes. So I will take that on.
    [An April 20, 2009, follow-up letter from Secretary 
Shinseki, regarding advocacy training appears on p. 143.]
    Secretary Shinseki. And I would ask you not to misconstrue 
my response to Mr. Snyder as any kind of complaining about the 
reports I submit. I am happy to submit reports if they are 
useful. I was just surprised at the volume of reports, some of 
them going back a long time that I wondered whether we were 
addressing current issues. That was the point of my 
observation.
    But again, I thank you for this opportunity to appear 
before the Committee, and my opportunity to work with each of 
you, and then all of you collectively in helping me with this 
mission.
    Thanks, Mr. Chairman.
    The Chairman. Thank you. And I think Secretary Rumsfeld 
heard you say that and he called up President Bush and--oh, 
that was your last testimony.
    Thank you, sir. It was great to have you here.
    We will start with our second panel right away. Thank you.
    We are very pleased to have our second panel here today. I 
don't think you have heard testimony where you got so many 
compliments as the VSOs who have helped us, so we thank you for 
being here, and thank you for continuing to do your jobs.
    We have representatives from the Paralyzed Veterans of 
America (PVA), Disabled American Veterans (DAV), the Veterans 
of Foreign Wars (VFW), and American Veterans (AMVETS). Carl 
Blake is the National Legislative Director for PVA.
    Welcome, Carl. You have the floor.

   STATEMENTS OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, 
PARALYZED VETERANS OF AMERICA; KERRY BAKER, ASSISTANT NATIONAL 
  LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; DENNIS M. 
 CULLINAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS OF 
   FOREIGN WARS OF THE UNITED STATES; AND RAYMOND C. KELLEY, 
   NATIONAL LEGISLATIVE DIRECTOR, AMERICAN VETERANS (AMVETS)

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman.
    On behalf of the co-authors of The Independent Budget 
seated here I would like to thank you for the opportunity to 
present our views regarding the funding requirements for the 
Department of Veterans Affairs Health care System for fiscal 
year 2010.
    We are pleased to see that the initial information provided 
by the Administration suggests a very good budget for the 
fiscal year 2010.
    The discretionary funding levels provide for a truly 
significant increase.
    I find it a little amusing that you say we got so much 
praise, because I felt like The Independent Budget got beat up 
a little bit there.
    A number of people made the comment that the 
Administration's budget actually came out above The Independent 
Budget, which is great, I am not down playing that at all, but 
given my interest in budget matters, I would be interested in 
having the opportunity to dig a little deeper into the details 
and make up the one single number that we have from the VA 
right now and see where we are actually at when we get to April 
and May and June and on down the line in the budget process, 
but we certainly look forward to the opportunity.
    For fiscal year 2010 The Independent Budget recommends 
approximately $46.6 billion for total medical care, an increase 
of $3.6 billion over the fiscal year 2009 operating budget 
level.
    The IB recommends approximately $36.6 billion for medical 
services. This recommendation includes approximately $34.6 
billion for current services, $1.2 billion for the projected 
increase in patient workload, and $800 million for policy 
initiatives. And I won't explain those in much detail because 
they are laid out in more detail in the full IB.
    For medical support and compliance the IB recommends 
approximately $4.6 billion, and for medical facilities 
approximately $5.4 billion.
    The amount for medical facilities includes an additional 
$150 million for non-recurring maintenance (NRM) for the VA to 
begin addressing the massive backlog of infrastructure needs 
beyond those addressed through the recently passed stimulus 
bill. And again, we appreciate Congress providing that 
additional funding. It is a known fact that the infrastructure 
needs in the VA are probably one of the biggest needs that 
there are.
    The IBVSO's contend that despite the recent increases in VA 
health care funding, VA does not have the resources necessary 
to completely remove the prohibition on enrollment of Priority 
Group 8 veterans who have been blocked from enrolling in VA 
since January 2003 at this time.
    However, we believe that it is time for the VA and the 
Congress, with our assistance, and with the Committee's 
assistance, to develop a workable solution to allow all 
eligible Priority Group 8 veterans to begin enrolling in the 
system.
    For medical and prosthetic research, The Independent Budget 
recommends approximately $575 million. This represents a $65 
million increase over the fiscal year 2009 appropriation level.
    We are particularly pleased that Congress has recognized 
this critical need for funding in the medical and prosthetic 
research account in the last couple of years.
    Research is a vital part of veterans health care and an 
essential mission for our national health care system.
    Mr. Chairman, we would like to express our sincere thanks 
for your instruction of H.R. 1016, the ``Veterans Health Care 
Budget Reform and Transparency Act of 2009.''
    Moreover we would like to extend our thanks to the Members 
of the Committee who have agreed to cosponsor this important 
legislation. I look forward to working with the Committee to 
move this legislation forward.
    This funding mechanism will provide an option that the 
IBVSOs believe is politically more viable than mandatory 
funding and is unquestionably better than the current process.
    Finally, Mr. Chairman, I would like to express our serious 
concerns that we have regarding the policy proposal that has 
been discussed here today, elegantly referred to as third-party 
reimbursement for veterans with service-connected conditions.
    I think the Secretary's testimony before the Senate this 
morning sort of affirmed our worst fears that this is something 
that the Administration is seriously considering, and I am not 
so certain that the overall budget number that has been 
presented thus far does not include, or does include, the 
funding, which the Secretary testified is soon to be about $500 
million in that additional budget for fiscal year 2010.
    We just simply find it unacceptable that a veteran would 
have his third-party insurance billed for conditions and 
disabilities and injuries that were incurred while in service 
of this Nation.
    We understand the fiscal difficulties that this country 
faces right, I think we all understand that, but placing the 
burden of those fiscal problems on the men and women who have 
already served and sacrificed a great deal for this country is, 
as I believe Dr. Snyder or Mr. Michaud put, unconscionable.
    We strongly urge Congress to investigate whether such 
proposal is actually moving forward, I get the sense that it 
is, and to forcefully reject it if it is brought before you.
    With that, Mr. Chairman, I would be happy to answer any 
questions.
    Thank you for the opportunity to testify.
    [The prepared statement of Mr. Blake appears on p. 61.]
    The Chairman. Thank you.
    Kerry Baker is the Assistant National Legislative Director 
for the DAV.
    Welcome Mr. Baker.

                    STATEMENT OF KERRY BAKER

    Mr. Baker. Mr. Chairman, Ranking Member, and Members of the 
Committee.
    It is a pleasure to be here today on behalf of The 
Independent Budget. Today I will focus on issues affecting the 
Veterans Benefits Administration (VBA).
    On behalf of VBA, we have come before you for many years 
requesting additional funding to reverse its chronic history of 
under staffing. You have answered that call.
    In just the past few years VA has hired over three thousand 
additional claims processors and more continue to be hired as 
we speak.
    This year the IBVSOs recommend that Congress adopt both 
short and long-term strategies for improvements. Strategies 
focused on VBA's IT infrastructure, as well as the claims and 
appeals process.
    We are also seeking improvements in training, 
accountability, and quality assurance.
    To improve the claims process VBA must do more to upgrade 
its IT infrastructure. It must also be given more flexibility 
to manage those improvements.
    Despite growing problems with the claims process, Congress 
has steadily reduced funding for IT initiatives over the past 
several years.
    In fiscal year 2001, Congress provided $82 million for IT 
initiative. By 2006, that funding had fallen to $23 million.
    Congress has however noticed the disconnect between IT and 
improvements in claims processing.
    Section 227 of the Veterans Benefits Improvement Act of 
2008 places new requirements on VA to closely examine all uses 
of current IT and comparable outside IT systems with respect to 
claims processing.
    Following that examination, VA is required to develop a new 
plan to use these and other relevant technologies to reduce 
subjectivity, avoid remands, and reduce variances in VA 
Regional Office disability ratings.
    Section 227 will require VBA to examine IT systems that it 
has been attempting to implement and improve for years.
    We believe this examination will reveal the progress that 
has been impeded due to lack of direct funding to underwrite IT 
development.
    The IBVSOs believe a conservative increase of at least 5 
percent annually in IT initiatives is warranted.
    VA should give the highest priority to the review required 
by the Benefits Improvement Act of 2008, and double its efforts 
to ensure these ongoing initiatives are fully funded and 
establish their goals.
    Further, the Secretary should examine the impact of IT 
centralization under the Chief Information Officer (CIO), and 
if warranted, shift the responsibility for their management 
from the CIO to the Under Secretary for Benefits.
    Additionally, as long stated by the IBVSOs, VA must invest 
more in training adjudicators and decisionmakers. It should 
also hold them accountable for higher standards of accuracy.
    The VBA's problems, caused by a lack of accountability, do 
not begin in the claims and development process nor the rating 
process, they begin in the training program.
    A lack of accountability during training reduces, or even 
eliminates, employee motivation to excel.
    The VA should undertake an extensive training program to 
educate its adjudicators on how to weigh and evaluate medical 
evidence, and should require mandatory and comprehensive 
testing by all trainees, as well as the claims process and 
appellate staff.
    In addition to training, accountability is the key to 
quality, however, there is a gap in quality assurance for 
purposes of individual accountability and decision making.
    In the STAR Program, the sample drawn each month from a 
Regional Office workload is simply too inadequate to determine 
individual quality.
    The Veterans Benefits Improvement Act of 2008 requires VA 
to conduct a study on the effectiveness of the current employee 
work credit system and work management system. The legislation 
requires VA to submit a report to Congress which must explain 
how to implement a system for evaluating VBA employees no later 
than October 31st, 2009.
    This is a historic opportunity for VA to implement a new 
methodology, a new philosophy by developing a system with 
primary focus on quality through accountability. Probably 
undertaking the outcome would result in a new institutional 
mindset across VBA, one that achieves excellence and changes a 
mind set focused on quantity to one focused on quality.
    The IBVSOs believe the VA's upcoming report must 
concentrate on how the VA will establish a quality assurance 
and accountability program that will detect, track, and hold 
responsible those employees who commit errors.
    VA should generate this report in consultation with veteran 
service organizations most experienced in the claims process.
    That concludes my statement. It has been an honor to 
testify before you today.
    [The prepared statement of Mr. Baker appears on p. 63.]
    The Chairman. Thank you, sir.
    Dennis Cullinan, is the National Legislative Director of 
the VFW. Welcome, Mr. Cullinan

                STATEMENT OF DENNIS M. CULLINAN

    Mr. Cullinan. Thank you very much, Mr. Chairman. 
Distinguished Members of the Committee, it is certainly a 
pleasure to be here today, and I want to extend a thanks of the 
men and women of the Veterans of Foreign Wars in including us 
in today's most important discussion.
    As you are aware, the VFW handles the construction portion 
of the IB budget, and I will limit my remarks to that.
    VA's most recent asset management plan provides an update 
of the state of Capital Asset Realignment for Enhanced Services 
(CARES) projects, including those only in the planning or 
acquisition process. It shows a need of future appropriations 
to complete these projects of $2.195 billion.
    Meanwhile VA continues to identify and re-prioritize 
potential major construction projects. In a November 17, 2008, 
letter to the Senate Veterans' Affairs Committee, Secretary 
Peak said that the Department estimates that the total funding 
requirement for major medical facility projects over the next 5 
years would be in excess of $6.5 billion.
    One thing that is clear, the VA needs a significant 
infusion of cash for its construction priorities. VA's own 
studies validate this.
    In light of these things, the IB recommendations for fiscal 
year 2010, major construction, is $1.123 billion. With respect 
to minor construction we recommend $827 million. We need to 
increase spending on non-recurring maintenance. For years the 
IBVSOs have highlighted the need for increased funding for the 
non-recurring maintenance account. Projects in this area are 
essential because if left undone it can really take their toll 
on a facility, leading to more costly repairs in the future, 
and the potential of a need for a minor construction project, 
perhaps even major.
    Beyond the fiscal aspects, facilities that fall into 
disrepair can create access difficulties and impair patient and 
staff health and safety. And if things do develop into a larger 
construction projection, because their repairs were never done, 
it creates an even larger inconvenience and safety issues for 
veterans and staff.
    VA must dramatically increase funding for non-recurring 
maintenance in line with a two to 4 percent-total that is 
industry standard so as to maintain clean, safe, and sufficient 
facilities.
    VA needs an NRM budget of at least $1.7 billion. Portions 
of NRM accounts should continue to be funded outside of the 
bureau formula so that funding is allocated to facilities that 
actually have the greatest maintenance needs.
    Congress should also consider the strengths of allowing VA 
to carryover some maintenance funds from one fiscal year to 
another so as to reduce the temptation some VA hospital 
managers have of inefficiently spending their NRM money at the 
end of the fiscal year.
    It has come to our attention that something like 60 percent 
of NRM funding is expended in the final quarter of the fiscal 
year. That just is not good management.
    VA must protect the deterioration of its infrastructure and 
declining capital asset value. The last decade of under funded 
construction budgets has meant that the VA has not adequately 
recapitalized its facilities. Recapitalization is necessary to 
protect the value of VA's capital assets through the renewal of 
physical infrastructure. This ensures safe and fully functional 
facilities long into the future.
    VA's facilities have an average of over 55 years and it is 
essential that funding be increased to renovate, repair, and 
replace these aging structures and physical systems.
    Accordingly, using the five to 8 percent-industry standard, 
VA's capital budget should be between $4.24 and $6.8 billion 
per year in order to maintain its infrastructure.
    Congress and the Administration must ensure that adequate 
funds for VA's capital budget so that VA can properly invest in 
its physical assets, product their value, and to ensure that 
the departments can continue to provide health care in safe and 
functional facilities long into the future.
    I would add here that the IBVSOs and the VFW are very 
appreciative of Congress' actions in the additional funding 
they have provided over at the past several fiscal years to 
tend to VA's physical infrastructure needs.
    The last thing I want to mention here is the IBVSOs are 
concerned with VA's recent attempts to back away from the 
capital infrastructure blueprints laid out by CARES.
    To put it briefly, there has been an increased interest on 
privatization in providing contract care. The IBVSO support 
contract care were necessary; however, we wish that the 
Congress would guard jealously against over excessive use of 
private facilities. VA's capital infrastructure and its own 
resources must be protected.
    Thank you Mr. Chairman, that concludes my statement.
    [The prepared statement of Mr. Cullinan appears on p. 70.]
    The Chairman. Thank you.
    Raymond Kelley is the Legislative Director for AMVETS. 
Thank you for being here, sir.

                 STATEMENT OF RAYMOND C. KELLEY

    Mr. Kelley. Thank you, Mr. Chairman, thank you for holding 
this hearing today and inviting AMVETS to testify on behalf of 
The Independent Budget.
    As a partner of The Independent Budget, AMVETS devotes a 
majority of its time with the concerns of the National Cemetery 
Administration, and I would like to speak directly to the 
issues and concerns surrounding NCA.
    In fiscal year 2008, $195 million was appropriated for the 
operations and maintenance of NCA, $28.2 million over the 
Administration's request, with only $220,000 in carryover. NCA 
awarded 39 of 42 minor construction projects that were in the 
operating plan. The state cemetery grant service awarded $37.3 
million of the $39.5 million dollars that was appropriated. 
Additionally, $25 million was invested in the National Shrine 
Commitment.
    NCA has done an exceptional job of providing burial options 
for 88 percent of all veterans who fall within the 170,000 
veteran within 75-mile radius threshold model. However, under 
this model no new geographical area will become eligible for a 
national cemetery until 2015.
    An analysis shows that five areas with the highest veteran 
population will not become eligible for national cemeteries 
because they will not reach the 170,000 person threshold.
    Lowering the population threshold to 100,000 veterans would 
immediately make several areas eligible for a national 
cemetery, regardless of any change in the mile radius 
threshold.
    A new threshold model must be implemented so more of our 
veterans will have access to this earned benefit.
    The Independent Budget recommends an operations budget of 
$241.5 million for NCA for fiscal year 2010 so it can meet the 
increasing demands of interment, grave site maintenance, and 
related essential elements of cemetery operations.
    Congress should include as part of NCA's appropriations $50 
million for a first stage of a $250 million 5-year program to 
restore and improve the condition and character of existing NCA 
cemeteries.
    The Independent Budget recommends that Congress 
appropriates $52 million for the State Cemetery Grant Program. 
This funding level would allow the program to establish six new 
cemeteries that will provide burial options for 179,000 
veterans who live in regions that currently have no reasonable 
access to state or national cemeteries.
    The national average cost for funeral and burial in private 
cemeteries has reached $8,555, and the cost of a burial plot is 
$2,133.
    Based on accessibility and the need to provide quality 
burial benefits, theIndependent Budget recommends that VA 
separate burial benefits into two categories. Veterans who live 
within the inside VA accessibility threshold model and those 
who live outside the threshold.
    For veterans who live inside the threshold the service-
connected burial benefit should be increased to $6,160. Non-
service connected veterans burial benefit should be increased 
to $1,918. And the plot allowance should increase to $1,150 to 
match the original value of the benefit. For veterans who live 
inside the threshold the benefits for service connected burial 
should be $2,793. The amount provided for non-service connected 
burial will be $854, and the plot allowance will be $1,150.
    This will provide a burial benefit at equal percentages, 
but based on the average cost of a VA funeral and not on a 
private funeral cost that will be provided for those veterans 
who do not have access to state or national cemeteries.
    The new model will provide a meaningful benefit for those 
veterans whose access to state and national cemetery is 
restricted, as well as provide an improved benefit for eligible 
veterans who opt for private burial.
    Congress should also enact legislation to adjust these 
burial benefits for annual inflation.
    This concludes my testimony, and I am happy to answer any 
questions at this time.
    [The prepared statement of Mr. Kelley appears on p. 79.]
    The Chairman. Thank you, Mr. Kelley.
    Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman. The panel, can you 
guys talk--first of all, thank you all for being here and thank 
you for your testimony.
    Can you talk to us a little bit about how you feel like--we 
have heard the plans to significantly increase the Category 8s, 
Priority 8s, which is a very good thing. Can you tell us, 
though, any concerns about perhaps by what you feel like we 
need to do as far as capacity, concerns about maybe unwanted 
consequences that we don't realize it might have on some of 
your membership?
    The Chairman. Mr. Cullinan.
    Mr. Cullinan. Mr. Boozman, if I might first.
    A big concern of ours is that VA not be inundated with 
Category 8 veterans. We want to see them flow into the system, 
we want to make sure that the quality and timeliness of care is 
maintained, and we also view it as essential that this be a 
cooperative venture between the Department and the Congress.
    And it is funny, Chairman Filner, you mentioned that 
earlier, that at times it seems that the executive branch views 
the Legislative Branch's expertise as being somehow different 
than theirs, and I suppose it is different, but it is essential 
as well, so that is what got to be--we need close oversight of 
what is going on, and a cooperative venture with the Secretary 
and VA.
    Mr. Blake. Mr. Boozman, can I add something?
    Let me say that I think just at first glance the 
Administration's plan as it relates to this roll out of 
$500,000 additional through the next I think 5 fiscal years 
essential is how it is laid out without any real details seems 
like a doable solution budget wise, because I think it can be 
much easier managed that way.
    Interestingly, as we were developing The Independent Budget 
one of the troubles we had is sort of pinning down this 
Priority 8 Group number, because I don't think anybody really 
knows what the number may actually be. But from what we have 
been told by some officials at the VA, the actual number of 
folks who have been turned away from the VA physically since 
this enrollment ban went into place is pretty close to the 
$550,000 that is apparently the target for the next 5 fiscal 
years.
    So I can easily see where the idea that this is where the 
initial target would come from, but going forward I think there 
are a lot of dynamics that by rolling it out will allow us to 
better judge this going forward. Because I am not sure that the 
utilization patterns, at least in the short term, would be like 
what Priority Group 8 may have been in the past, and we just 
don't know what the current economic state of the country might 
have.
    I mean, there are so many factors, but I think that without 
a lot of information the Administration has at least outlined a 
good plan that seems reasonable, and if managed correctly, and 
as Dennis mentioned with that adequate oversight, could be 
done.
    Mr. Boozman. Okay. Again, I guess the only thing I think we 
have to be careful, it just doesn't seem like the out-year 
budget numbers really seem to--are a little bit questionable, 
you know, when you start.
    Again, you know, it is good news that we are in the process 
of moving forward, but I would agree with you all in a sense 
that it is just something that we need to work together to make 
sure that it is done in a way such that, you know, we have 
worked so hard to get ourselves in a much better situation 
where we were a few years ago with everyone working together, 
and I would hope that we would continue in that regard.
    Let me just ask one other thing real quick. The VA budget 
request assumes a 33 percent-increase in the medical care 
collections fund for a total of $3.4 billion. VA estimates only 
about $2.5 billion in collections for fiscal year 2009 and 
2010. That seems a little bit optimistic.
    Did you all notice that in regard to the budget?
    Mr. Blake. I would say it definitely stands out, which I 
think is relevant as it relates to the discussion we had about 
third-party reimbursements for service-connected veterans.
    Now again, the devil is in the details, we don't know what 
makes up that estimate. It is a significant jump, given what we 
have seen sort of the recent history as we have gotten into 
this area of the $2 billion dollar realm for collections. There 
have been sort of marginal increases in estimates year after 
year, and it seems like a pretty significant jump.
    But again, I go back to my point from my testimony that 
what the Secretary said this morning was that they have 
estimated that under this third-party billing for service 
connected they could generate as much as $500 million. Now 
whether that is actually in, that $3.4 billion or not is 
unclear. I think the Secretary sort of said it wasn't, but I 
find it hard to believe with that significant of an increase 
that it would not be. So it is sort of remains to be seen.
    Mr. Cullinan. Mr. Boozman and Mr. Chairman, we were 
startled too in reviewing the numbers when we saw this. It was 
over $1 billion increase, and that is before we heard the 
rumors about the possible inclusion of this abhorrent idea of 
charging insurance companies for service-connected care.
    And I would have to say too, that in recent fiscal years, 
VA has been doing very well with respect to collections, so a 
33 percent-increase is inexplicable without something pretty 
extraordinary.
    Mr. Boozman. Thank you, Mr. Chairman.
    The Chairman. Mr. Walz.
    Mr. Walz. Well thank you all again for everything you do 
and for coming here. And as I have said, the last 2 years and I 
need to say it again and I also will as long as I am in this 
job, a Presidential budget is a suggestion. Article 1 of the 
Constitution puts it here. So I share your concern too.
    The third-party billing thing does not fly, and I am not 
deaf to the need to make sure we use every dollar wisely, 
making sure we are cutting down on waste and getting 
efficiencies, but as I have said it, and I will continue to say 
it, we are not going to balance this fiscal mess on the backs 
of veterans, so this is a bad idea at a bad time. It would be 
bad at any time.
    But with that being said, here is a conundrum I want you to 
help me with a little bit. I too share your concerns of making 
sure this issue on private contracting and some of those types 
of things.
    The thing I hear about coming from a rural district is that 
it is easier access to care, and I literally have veterans who 
say I live in the shadow of the Mayo Clinic, but I've got to 
get on the bus to go to Minneapolis.
    Now my concern is making sure, just like you and you have 
stressed it very clearly, keeping the core issues of the VA 
funded and working. We have expanded some CBOCs. We are going 
to get one in my district, another one which I think is on the 
right track.
    I would like to ask you, how do we go back and talk to 
those veterans about it?
    And I want to thank each and every one of your 
organizations for bringing this out there, because you can see 
from a veteran's perspective where they are saying heck, I just 
wish I had a card and could walk in the Mayo and get everything 
done.
    That is the way they see it. They don't realize, well, that 
is maybe because you could walk in the Mayo and do it, you are 
not one of our veterans who has the core issues that need to be 
cared for at the VA, the research dollars and everything else.
    So I just want to hear from each of you maybe on that, if 
you have some--just some ideas on what you think and how do we 
talk about that.
    Mr. Cullinan. Mr. Walz, I would say, first of all right now 
VA has authority to provide contract care in certain rural 
areas, and we think they should use it more, and we would ask 
this Committee and the Congress to ensure that they do.
    There is a pilot program going on now that was just 
initiated. We think there could be some valuable results coming 
out of that. That remains to be seem, what ideas come out of 
that. And of course in certain parts of the country, while a 
mobile clinic and that kind of thing isn't the equivalent of a 
CBOC, we are certainly not a hospital, it is a lot better than 
nothing, and greater utilization of these should be made as 
well.
    With respect to the Mayo Clinic that is a tough one.
    Mr. Blake. Mr. Walz, one thing I would suggest too is we 
have all sorts of advocated for supporting the Office of Rural 
Health and the VA, and yet I am not sure that that office has 
been really given a fighting chance. It has had a very small 
budget, a very small staff, and yet from my perspective the 
rural health care issue, while maybe not targeting the biggest 
population of veterans, is dealing with what is maybe one of 
the biggest--maybe the biggest access related issue.
    And so I think there needs to be some focus on plussing up 
the operations of the Office of Rural Health and giving them 
the ability to sort of manage this. That is not the say that 
they force things into the VA, but figure out the best ways to 
work about these problems.
    I agree with Dennis entirely, the VA has the authority as 
it relates to fee basis for contract care in rural setting, and 
for years since I have been here we have batted around the idea 
of what constitutes rural and that sort of thing.
    As far as getting at the veterans themselves, Dennis 
mentioned mobile clinics. Another thing, some of this is an 
outreach effort to these folks out there, and particularly in 
the extremely rural areas.
    I would say we have been pleased to see how the VA has 
rolled out their mobile Vet Centers, and what the capabilities 
of those are, and I believe there may be a desire to expand 
that program further, but you get at these folks and figure out 
where the needs are and you can kind of use that as an arm to 
adjust its access and the delivery of care going forward also.
    Mr. Walz. And I just had one final thing if I could, just 
that I am really focused on this seamless transition thing.
    It sounds like to me that maybe we are getting close. I 
know many of you have said yeah, I have heard that for 20 
years. It seems different this time, and I have watched this 
for a long time too.
    Do you see any concerns or areas that you think need to be 
addressed first, or are you optimistic after you heard what the 
Secretary had to say today? From each of you as far as seamless 
transition goes and making sure that we see that as a way to 
cut down some of the systemic problems.
    Mr. Kelley. Mr. Walz, Ray Kelly from AMVETS.
    There has been a continuation of we are 2 years away from 
having an IT solution or a transition solution. I will believe 
it when I see it. I take it to heart that he says he is going 
to do it, I believe that he is going to put every effort into 
making that happen, but again, I will believe it when I see it.
    Mr. Baker. There are a lot of things that sound promising 
to us. I don't believe we have had the chance to discuss the 
idea about enrolling somebody in VA as soon as they come into 
the military. That is something I would like to discuss with 
everybody. I know the Benefits Delivery at Discharge program 
has become paperless. I know that assisted in the seamless 
transition. The VONAP system, while not necessarily restricted 
to people coming off of active duty, it is paperless.
    You know, the key thing is right now transferability with 
the medical files between the VA and the DoD. If that could 
become seamless--somebody mentioned the DoD is never in this 
room--you need them here for that. But if you could accomplish 
that, then you have just taken a very large step.
    Mr. Blake. Mr. Walz, I would say that through the Senior 
Oversight Committee I think we have seen at least the biggest 
stab at trying to fix seamless transition since I have been 
here. I mean, I feel like there is a real commitment to 
addressing this now because of that entity and the level of 
focus being placed on it, but again, I go back to what my 
colleagues have said about seeing it and believing it, so.
    Mr. Walz. We can quote President Reagan on this one, ``We 
will trust but verify.'' That needs to be our manta around 
here.
    Well thank you all, thank you Mr. Chairman.
    The Chairman. Thank you, and again, we thank you for being 
here.
    My sense is, and this is just from my political 
understanding, the message that you have been sending out about 
the third-party issue has been received at the White House. I 
don't think, frankly, that you should spend too much time 
worrying about it. That is my sense. You have other more 
important things to do.
    You were wondering where the money is coming from, for 
example, if they didn't have a policy change. I think I 
mentioned several times in the earlier hearing that we believe 
there are systems available to the VA that will dramatically 
increase their collection rate, but they have just not taken 
them up. I hope the new Secretary will look at it differently.
    Both Mr. Buyer and I have been involved with this issue 
together. We think there are hundreds of millions of dollars on 
the table, if not more, and that we hope to really dramatically 
increase that without the kind of policy change you were 
worried about.
    Just one last question. I mentioned within the context of 
the GI Bill, the situation of the inequity of low tuition 
states. Have you all been in contact about this? Has that been 
expressed by anybody? Any of the colleges? Do you see it as a 
real problem that we need to correct right away?
    Mr. Cullinan. Mr. Chairman, we are aware of the problem. 
And the real issue comes down, there are certain states where 
this in-state tuition is low, but since the money for the GI 
Bill tuition flows directly to the university it doesn't impact 
the veteran directly. However, if a veteran wants to go to a 
private institution in that state he or she are out of luck, 
unless the Yellow Ribbon Program, which is an opt in if the 
university cuts in, it still represents an inequity.
    We would like to see some kind of--this addressed somehow. 
I mean, one approach may be to establish a different floor for 
those veterans in those particular states that are going to 
private institutions.
    So I am not saying that an institution that charges $1,200, 
I think that was the sum that was cited earlier, should get 
more than that. However, if a veteran wants to go to a pricier 
and private institution that say costs $1,200 a year, that 
difference should somehow be accommodated.
    The Chairman. I mean, you have two big problems. One, some 
of the high tuition established rates are not really the rates.
    Mr. Cullinan. Yeah.
    The Chairman. I mean, it is artificial. There is tuition 
discounting in there that we have to be careful of.
    On the other hand, California is one state that I know very 
well, the tuition rates are artificially low. As you said, they 
shouldn't get more than their public tuition, but it costs more 
to educate a student in those states than the public published 
tuition.
    We have to watch for abuse at one end, but I think we have 
to help the universities at the other end.
    Mr. Cullinan. And the veterans they serve, sir.
    The Chairman. Yes, sir.
    Thank you very much, we appreciate your testimony, and as 
always, we will continue to keep in touch.
    We will now hear from the third panel. Please come forward. 
Mr. Sullivan, the Executive Director of Veterans for Common 
Sense (VCS) will be the first to testify. We look forward to 
your testimony.

 STATEMENTS OF PAUL SULLIVAN, EXECUTIVE DIRECTOR, VETERANS FOR 
  COMMON SENSE; PAUL RIECKHOFF, EXECUTIVE DIRECTOR, IRAQ AND 
AFGHANISTAN VETERANS OF AMERICA; RICHARD F. WEIDMAN, EXECUTIVE 
DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM VETERANS OF 
 AMERICA; AND STEVE ROBERTSON, DIRECTOR, NATIONAL LEGISLATIVE 
                  COMMISSION, AMERICAN LEGION

                   STATEMENT OF PAUL SULLIVAN

    Mr. Sullivan. Veterans for Common Sense thanks the Chairman 
and the Ranking Member for inviting Veterans for Common Sense 
to testify here today about the 2010 VA budget. Last month, 
President Barack Obama and VA Secretary Eric Shinseki announced 
they would increase VA's budget to a new record high of $113 
billion. This $15 billion increase far exceeds or highest 
expectations.
    With that money, Veterans for Common Sense urges Congress 
to focus on five key measures to monitor VA during 2010. Maybe 
cut down some of those reports.
    Those five areas are health care mental health care suicide 
prevention, reducing homelessness, and eliminating the 
disability benefit claim backlog.
    VCS asks you to focus on three budget questions when 
dealing with the VA.
    First, we ask you to ask VA, does VA have enough funding, 
staffing, and legislative guidance to accurately process all 
disability claims within 30 days?
    Second, does VA have enough funding, staffing, and 
legislative guidance to provide all patients with quality 
physical and mental health care within 30 days?
    And the third question, does VA have enough information to 
answer both of those two questions.
    This is bottom up budgeting that we support. We want VA to 
say yes, we can provide this information. And asking these 
questions is essential because of VA's past history of failing 
to plan properly and VA's continual underestimation of the 
number of Iraq and Afghanistan war veterans seeking care.
    In February 2008, VA told this Committee it expected to 
treat about 333,000 Iraq and Afghanistan War veterans in 2009; 
however, by September 2008 VA had already treated more than 
400,000.
    Based on the current rate of more than 10,000 first time 
patients flooding into VA each month, VA may expect a total of 
520,000 Iraq and Afghanistan War veteran patients by September 
2009.
    In contrast, Secretary Shinseki's testimony a little while 
ago said that the VA expects 419,000 patients this year.
    Summarized from our written statement, VCS recommends five 
priorities for VA's 2010 budget.
    First, VCS urges Congress to streamline VA's claim system 
and quickly pass Chairman Hall's Combat PTSD Act, H.R. 952. 
There are more than 105,000 Iraq and Afghanistan war veterans 
already diagnosed by VA with PTSD; however, only 42,000 receive 
service-connected disability compensation for PTSD.
    In 2008, the Institute of Medicine concluded there is a 
link between deployment to a war zone and PTSD. With a new law 
or a regulation based on science, VA can improve the lives of 
1910s of thousands of disabled veterans with PTSD during an 
economic crisis when their needs are most acute.
    Second, in a manner similar to PTSD, VCS urges Congress to 
streamline claims for TBI.
    Third, we urge you to improve seamless transition and bring 
VA to our veterans by expanding VBA.
    VA should open permanent offices at military bases and at 
more cities so veterans can meet face to face with VA staff 
about claims, including their new GI Bill benefits.
    Fourth, Congress needs to expand research to better 
understand Gulf War illnesses.
    In 2008, the Research Advisory Committee on Gulf War 
veterans' illnesses confirmed up to 210,000 Gulf War veterans 
remain ill.
    We ask you to please support $30 million for competitive 
research in the Congressionally directed medical research 
program to search for treatments, which is what the Gulf War 
veterans want.
    Fifth and finally, VCS would like Congress to insist that 
veterans play a key role in any proposed truth commission 
suggested by Senator Leahy investigating Administration actions 
between 2001 and 2008.
    In 2008, the Houston Chronicle editorialized that 
servicemembers and veterans bore the brunt of the enormous 
policy failures of the last Administration.
    If we are to truly understand the mental health needs of 
our war veterans, then we must make sure our history books 
accurately reflect the fact that the Vietnam War, the Gulf War, 
and the Iraq War were each initiated by the executive branch 
using misleading statements and without preparing a plan to 
care for veterans when they came home, and this is a betrayal 
of our veterans who are serving our country and our 
Constitution.
    Thank you.
    [The prepared statement of Mr. Sullivan appears on p. 83.]
    The Chairman. Mr. Paul Rieckhoff is from the Iraqi and 
Afghanistan Veterans of America (IAVA). Mr. Reickhoff?

                  STATEMENT OF PAUL RIECKHOFF

    Mr. Rieckhoff. Thank you, sir.
    On behalf of IAVA and our more than 125,000 members and 
supporters, I want to thank you for inviting Iraq and 
Afghanistan Veterans of America to testify today regarding the 
VA budget for fiscal year 2010.
    I would also like to thank you for your commitment to our 
Nation's veterans. From the passage of the new GI Bill to the 
dramatic increases in veterans health care funding, the 
remarkable legislative victories we have seen for veterans in 
the last 3 years would not have been possible without your 
leadership.
    At IAVA we are committed to making sure that no 
servicemember and/or veteran is ever left behind. Our mission 
is to improve the lives of the more than 1.8 million Iraq and 
Afghanistan veterans and their families. And as veterans are 
coming home from Iraq and Afghanistan to the worst economy in 
decades, we need to show real support for our troops and 
veterans.
    Over all, we are pleased with the limited information 
currently available about the 2010 budget. The top line numbers 
for veterans discretionary funding is about $1.2 billion higher 
than the amount recommended by the leading veterans services 
organizations, including IAVA in The Independent Budget.
    The budget plans increases funding by $25 billion over 5 
years, and this funding will be critical if we are to provide 
proper care and support for the surge of new veterans who will 
be coming home from combat in the coming years.
    We are also pleased to see the renewed focus on mental 
health care in the DoD budget, including comprehensive TBI 
registry and the roll back of concurrent receipt limitations 
that unfairly cut benefits available to disabled military 
retirees.
    We are also pleased to see the Administration's plan to 
expand VA health care access to about 500,000 moderate income 
veterans. It is a good first step, although we would like to 
see it happen faster.
    About 1.8 million veterans lack health insurance, and over 
500,000 have been denied VA health care because their income 
level was too high. IAVA believes that every single veteran 
should be eligible for VA health care.
    From what we have seen the budget looks strong, but the 
devil is in the details. Until we have had the opportunity to 
go through this budget line by line in April we cannot entirely 
endorse the plan.
    Above all, we must ensure that this budget does not rest on 
increased co-pays, premiums, and fees for veterans.
    Our biggest disappointment about the current budget is that 
the President has not opted to include advance appropriations 
to the VA in this proposal.
    Advanced appropriations doesn't cost any additional money. 
It gives VA hospitals and clinics advance notice of the funding 
they will receive for the following year. Right now VA 
hospitals have no way of knowing what their budget will be next 
year, and when the budget is passed late, and it usually is, 
they often have to ration the care they give to veterans.
    The bottom line is that VA budget delays hurt veterans, 
veterans of all generations. And I want to tell you about one 
of those veterans that would definitely benefit from advanced 
appropriations.
    Ray Leal served as a marine in Fallujah during some of the 
heaviest fighting earning a bronze star with valor as a private 
first class almost unheard of for a troop of that rank. When he 
returned to southern Texas his VA hospital was over 5 hours 
away. He is a tough marine and he is a boxer, but he shouldn't 
have to fight to get care at a veteran's hospital.
    At his nearest outpatient clinic there is just one 
psychologist taking appointments only 2 days a week. The 
psychologist only works 2 days because that Texas clinic, like 
many VA clinics and hospitals, has to stretch its funding to 
make sure the money lasts the whole year. They don't know how 
much funding they will have next year because the VA budget is 
routinely passed late. For the millions of veterans like Ray we 
must fix this broken funding system.
    Advanced appropriations is a common sense solution that 
President Obama supported as a candidate, and it is something 
we would have liked to have seen in the budget.
    If the Obama Administration is not going to lead on the 
fight for advanced appropriations, we need Congress to step in.
    A number of Members on this Committee, including of course 
Chairman Filner, have already proven to be key allies in the 
fight for advanced appropriations, and we thank them for their 
leadership and support.
    IAVA is proud to endorse H.R. 1016 and S. 423.
    We will work with Committees in any way we can to move this 
legislation forward. With your help we can ensure that veterans 
are not kept waiting, as they have been in the 19 of the last 
22 years while Congress plays politics with the budget.
    Last month President Obama traveled to Camp Lejeune to 
announce the eventual draw down of combat troops in Iraq. And 
no matter what you think about this plan, one thing is clear, 
the new strategy in Iraq will create a surge of new veterans 
coming home in 2009 and 2010.
    America needs to be ready, and the 2010 veterans budget 
will be a crucial first step.
    Thank you for your time, and we look forward to working 
with you.
    [The prepared statement of Mr. Rieckhoff appears on p. 89.]
    The Chairman. Thank you, Mr. Rieckhoff, and thank you for 
representing our newer veterans when they come back.
    Richard Weidman, Executive Director for Policy and 
government Affairs of Vietnam Veterans of America (VVA). 
Welcome.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. Thank you, Mr. Chairman, and thank you to your 
distinguished colleagues on both sides of the aisle for the 
opportunity for us to represent our views here today. Over all, 
first let me say that we endorse The Independent Budget and 
associate ourselves with their figures, particularly when it 
comes to construction, which needs to be speeded up and not 
slowed down. And those within VHA who take the attitude that we 
will never again build a free-standing hospital need to be--
find another way to contribute to the good of the world and be 
replaced with people who understand what the core mission of 
the VA is.
    We looked at, as we do every year, the Center for Medicare 
and Medicaid services and the inflation rate that they are 
projecting for medical inflation, and they are upping theirs by 
3.6 percent. And so we use that in calculating that we need a 
$1.4 billion, assuming that there were no more people that came 
into the VA and that VA had adequate staff to meet the full 
needs of people at this point, which in fact they don't.
    So we recommend another $2 billion on top of that just for 
just VHA in order to expand organizational capability and front 
load the staff needed to take care of the new veterans coming 
through the door. Not just those who serve in Iraq and 
Afghanistan and elsewhere within the world, but of new 
registrants who are qualified with moving forward with 
restoration of ability of Category 8--so-called Category 8s to 
be about to use this system.
    We had asked VA repeatedly for 4 years now to do a 
migration study about people who were refused treatment who 
were Category 8s, how many of those ended up either being led 
into the VA hospital eventually because they became service 
connected but were much sicker and, therefore, more expensive 
to treat when they came in, and how many of those people ended 
up indigent because they couldn't work and therefore gained 
admission that way? And they continue to come up with excuses, 
and perhaps when the Committee asks you will get the answer to 
that question looking back to January of 2003.
    We recommend a significant increase in research and 
development to $750 million for the next fiscal year for 2010, 
and moving up in increments to bring that research total to 
well over a billion dollars by the end of 5 years on an 
annualized basis with ordinary inflation increases from that 
point forward.
    NIH does not do veteran health research. They flat won't do 
it. Even the grants they give to VA they do not take a person's 
military history as a variable and a possible confounder in the 
studies that they conduct at the VA. And therefore we know DoD 
is not going to do it because they always want to continue to 
have deniability, particularly about the environmental wounds; 
therefore, all we have left is the VA.
    For the first time in many years, VA has not--VVA has not 
signed on to the Friends of VA Medical Research and Health 
Care. And the reason is they pledge not to ask for any 
earmarks.
    It would be irresponsible of us not to ask for earmarks in 
a changing of the course of the leadership of research and 
development when they are not funding a single study related to 
the long-term health care of Agent Orange at the moment, nor I 
might add, except for those earmarked items and studies are 
they funding--looking at the long-term health care effects of 
environmental hazards in the first Gulf War.
    So we have a real problem with the way in which they are 
going, and ask that you again ask Mr. Edwards to include an 
earmark in the budget legislation requiring the VA to obey the 
law and complete the National Vietnam Veteran Readjustment 
Study replication, thereby making it a robust mortality, 
morbidity study of Vietnam veterans, and that they set aside 
$20 million additionally out of R&D funds, specifically for 
study of long-term consequences of Agent Orange, and in 
addition to that $15 million to go to MFUA or the Medical 
Follow-up Agency of the Institute of Medicine of the National 
Academy of Sciences, which is the repository for all of the 
wealth of data of the ranch hand study, which has now ended, 
but all that data needs to be put into modern computerized 
format in order to make it accessible for research.
    Mr. Chairman, I am over time, and I appreciate your 
indulgence. I would just add two things if I may.
    One is the idea of having a specific line item for outreach 
is important.
    We just started and launched last month the Veterans Health 
Council initiative working with the private sector to inform 
providers and through providers to inform veterans, 80 percent 
of whom don't go anywhere near the VA, of their rights and 
benefits, and more importantly, what are the health care 
dangers that they should be looking for in themselves, and what 
their family should be looking for in their health based on 
when and where they serve? But if it is everybody's 
responsibility, it is nobody's responsibility, and outreach 
continues to be very haphazard from VA.
    Last but not least, we appreciate all of your leadership on 
getting the advanced funding, Advanced Appropriations Act 
through, and we look forward to working with you on that, and 
hope that this year you will, despite the fact of having new 
leadership at the very top of VA, look to his own words, that 
what is wrong with the VA at almost every level is leadership 
and accountability, and we need to have much more stringent and 
much more in-depth oversight of VA's function in the coming 
year.
    Thank you very much, Mr. Chairman.
    [The prepared statement of Mr. Weidman appears on p. 90.]
    The Chairman. Thank you.
    Steve Robertson is Director of National Legislative 
Commission for the American Legion.
    Welcome, Mr. Robertson.

                  STATEMENT OF STEVE ROBERTSON

    Mr. Robertson. Thank you, Mr. Chairman and Members of the 
Committee.
    The American Legion appreciates the opportunity to be able 
to participant in this hearing on President Obama's top line 
budget request, and in fact the American Legion has sent a 
letter to the White House telling them that we support the top 
line numbers that they have recommended.
    I would be remiss if we too did not express our 
appreciation to you and your colleagues for passing the fiscal 
year 2009 budget on time at the start of the fiscal year.
    I am sure when Secretary Shinseki sits around the cabinet 
table he realizes what an advantage he has in this transition 
period with having a budget, while many of his colleagues at 
that table are still waiting on theirs. We have been there 
before and we understand the situation.
    Speaking of the budget, we too want to thank you Mr. 
Chairman for your leadership on the Advanced Appropriation 
Legislation, and I assure you we will do everything we can in 
our power to make that a reality.
    We also want to thank you for the stimulus package and the 
many provisions that were in there that specifically related to 
veterans. But one particular thing I would like to highlight is 
the money that was set aside for construction within the VA, a 
lot of the non-recurring maintenance, and we would hope that 
service of veteran-owned businesses and especially those 
businesses owned by disabled veterans would be given some 
consideration in awarding a lot of the contracts that will be 
done in VA facilities.
    With the President's budget outline that we have of two 
pages, which is a lot easier to read than the five or six 
volumes that we normally get, looking at the highlights the 
American Legion supports all of the highlighted items based 
upon seeing the final details.
    The area that is dealing with Priority Group 8 veterans. 
The American Legion has always advocated that every veteran be 
entitled to their earned benefit. And a lot of people don't 
realize it, but there has been continuous flow of Priority 8 
veterans into the system even though the prohibition is in 
place.
    Veterans that are Operation Enduring Freedom (OEF), 
Operation Iraqi Freedom (OIF) veterans initially show up as a 
Priority Group 6, and then as their 5 years expires they are 
reassigned to whatever priority group that they are supposed to 
go to, so many of them will wind up into 8s, which brings up an 
interesting point.
    If an OEF or OIF veteran does not enroll in the VA during 
this 5-year period, has a seamless transition that is the 
smooth transition, and at some point later on down the road 
decides that they want to come to the VA under the prohibition 
if they made a successful transition, they probably wouldn't be 
allowed into the VA system because they would be a Priority 8 
veteran. So we are basically punishing them for a seamless 
transition.
    The other area that we are really concerned about is the 
homelessness of our veterans. We keep talking about the 
homelessness of your veterans and we are forgetting about the 
families, especially the children.
    We have a lot of single parents that are now in the 
military, and when they become homeless they have children, and 
I am not sure that the VA is adequately prepared to deal with a 
family--a homeless family situation.
    The GI Bill, the exchange we have had about the equity and 
the inequity. I am having problems grasping what the situation 
is. As long as the tuition is going straight to the university, 
if I decide to go to Louisiana Tech or Louisiana College or LSU 
or Tulane that is my decision. The goal is to get a college 
education. And I am not worried about somebody going to 
Stanford and getting more money sent to their university, that 
does not bother me, I want to get a degree. And I think that is 
what we need to stay focused on.
    The original GI Bill paid the university full tuition 
wherever you got accepted. So if you went to Louisiana Tech, 
yeah you got a little less money than if you went to Harvard.
    The Chairman. But Steve, the way the system is set up, let 
us assume you have no money. If the cap in a state is low, you 
may not be able to go to any of the higher tuition colleges you 
want to, because it doesn't pay enough based on the formula. 
You are limited to the cap and the addition from the Yellow 
Ribbon provision. You can't necessarily go to the college you 
want if it has a high tuition. If you are going to a lower 
tuition school, the services provided may be more than you are 
paying, which hurts that university.
    Mr. Robertson. Well, I am not worried about the university, 
sir, I am worried about the student.
    The Chairman. Well, it hurts the services. If they are not 
getting the money that it really costs to educate they are not 
going to provide the services, whether it is rapid movement in 
the admissions department or counseling services, they just may 
not be able to provide it. I think it affects the quality to 
the veteran of how we are going to reverse the institution.
    Mr. Robertson. Well, we will look into it more, sir, but I 
would rather get this thing done on time than trying to tinker 
with it, and possibly----
    The Chairman. It may be the situation for the first year, 
but I don't think we should neglect these inequities.
    Mr. Robertson. Yes, sir.
    The third-party reimbursement rumor concerning service-
connected disabilities, we are adamantly against that. We 
signed the letter along with many of the other organizations to 
the White House expressing our deep concerns about that 
concept.
    We have been asked many, many times if there is a short 
fall where is the money going to come from? And the American 
Legion still believes that when the whole concept of 
eligibility reform was passed in 1996 many of the veteran 
service organizations believed that the concept was to bring 
veterans in along with their health insurance.
    Right now over half of the VA patient populations, if you 
asked them who is your primary health care provider, the answer 
is Medicare. I have Part A, I have Part B, why can't I bring my 
dollars to the VA?
    Right now the VA is subsidizing Medicare in the billions of 
dollars. Medicare is not a health care provider. Medicare is an 
insurance company, and I do not understand why VA cannot be 
reimbursed for treatment of non-service connected medical 
conditions that are allowable under the VA--I mean, under the 
Medicare reimbursement. And it just seems that we are just 
giving Medicare a windfall.
    The Chairman. I agree with you, Steve. Should we take on 
this issue right now?
    Mr. Robertson. If you are bringing in Priority Group 8 
veterans and you are trying to figure out how to pay for them 
and you are trying to figure out to have the resources to hire 
extra doctors, nurses, providers, et cetera, that is a logical 
revenue train.
    The Chairman. If you all are willing to work with us we 
will take that on, I will agree with you.
    There is the argument from the average American, that we 
are just taking it from one pocket and putting in the other, 
because they are both government programs. But, as you know, we 
are hurting the Department of Veterans Affairs in that 
situation.
    Mr. Robertson. Sir, I have been paying Medicare since the 
day I started working. That is a benefit that I am entitled to. 
If I don't go to the VA and I go down the street it works, the 
reimbursements are going to be made. That is when I become 
Medicare eligible. But I can go down the street and use my 
benefits.
    If I choose to go to a VA, I should be able to take my 
health care dollars with me. And if I have a supplemental, then 
VA should be allowed to bill the supplemental, as it currently 
does.
    So I believe that this----
    The Chairman. I think that we have to take on that fight.
    Mr. Robertson. Well, I would prefer that over charging a 
triple amputee for his medical costs. And a lot of insurance 
companies have caps, and once you have reached that cap, what 
is his family going to do if they have a medical condition and 
the veterans' services are so severe that----
    The Chairman. I understand. Again, I think that is off the 
table, but I believe we still have to figure out how we are 
going to bring in those dollars.
    Mr. Robertson. Yes, sir. Well again, we look forward to 
working with you and your staff--your capable staff on 
addressing these problems.
    The Chairman. Were you familiar with the previous bills 
that we did on this so-called Medicare Subvention? Was that 
inadequate or do we have to re-look at that?
    Mr. Robertson. Sir, the problem was that it was a false 
assumption. They said that before you could collect money you 
had to render the services that you would have rendered any 
way.
    There is nothing in the entire title 38 that you qualify 
for VA because you are Medicare eligible. That is not a 
criteria. Somebody in OMB or Congressional Budget Office or 
some puzzle palace came up with this idea that it was an 
obligation of the VA to treat Medicare eligible patients. There 
is nothing.
    What qualifies you for treatment in the VA is honorable 
military service. I don't care if you are 21 or 121, there 
shouldn't be any veteran ever turned away from a VA hospital if 
that is their best choice.
    The Chairman. Yes, I agree. I was just wondering when there 
was previous legislation on Medicare Subvention if it was 
adequate, or do we have to re-look at that too?
    Mr. Robertson. You have to re-look at it because of the way 
that it was--the assumption was that VA would have to treat all 
of the patients that they are currently treating that are 
Medicare eligible before they could bill anybody else, and that 
is just a false--somebody made the law, somebody can change it.
    The Chairman. All right, we look forward to working with 
you on that, because as you know, it is a win-win for America. 
The cost is cheaper in the VA than it is for private care.
    Mr. Robertson. I will be making another bet with you, Mr. 
Chairman, it would probably reduce the amount of fraud, waste, 
and abuse in Medicare billing, because VA has no incentive to 
try to falsely bill Medicare for services. It is a government 
to government agency.
    The Indian Health Services has been doing it for years. It 
is the principal behind TRICARE For Life.
    So for somebody to tell me one government agency can't bill 
another government agency, that is false, and I am sure the 
Public Health Service probably does it as well.
    The Chairman. Thank you, sir.
    Mr. Robertson. Yes, sir.
    [The prepared statement of Mr. Robertson appears on p. 96.]
    The Chairman. Mr. Boozman.
    Mr. Boozman. Thank you, Mr. Chairman, and again we 
appreciate you all being here and the testimony today was 
excellent.
    I think that the good news I am hearing from today is that 
it seems like there is starting to get real consensus that we 
have to do something about the budgeting process. And as I told 
the Secretary, I think that is something that doesn't cost us 
anything, we are actually going to save a lot of money in doing 
that and reap the savings. And again, it doesn't matter 
whichever party is in power, that has just been a real problem 
for many, many years.
    As you know we are, Ms. Herseth Sandlin and I, really are 
working hard to try and get, with your all's help and everybody 
else's help, trying to get things implemented. We have some 
things arises, you know, like we have been discussing today. I 
think the key though is we have to get the thing on plan, you 
know, without tinkering too much. It is too much to ask as they 
go forward.
    So I guess my thing is, you know, we need to help and go 
forward. I can say that because I was a supporter of Ms. 
Herseth Sandlin's bill that I think was much easier, and we 
wouldn't have, you know, the complexity that we are in now, and 
yet, you know, this is just a very difficult thing to 
implement, and it really is going to take all of us working 
together, and yet the good news is it is a tremendous benefit 
and it is going to make a real difference in the lives of lots 
of veterans.
    You mentioned, Mr. Robertson, about homeless children, you 
know, in the--are you aware of H.R. 293? It is the homeless 
women veterans and homeless veterans--I am sorry--H.R. 293, but 
it addresses homeless. Are you aware of that bill at all?
    Mr. Robertson. My concern is that VA, it is going to take 
legislation to prompt them to start focusing on the homeless 
family as opposed to the homeless veteran. And sometimes, you 
know, my guess, it is my military background, I believe you 
lead rather than follow, and I think that that is the mindset 
that the VA needs to take is how do we address the problem that 
exists? Not, you know, ignore it until somebody tells us to do 
it.
    Mr. Boozman. No, I agree, and I think again, I have not--we 
are in the process, you know, of really looking hard at that 
bill. I was wondering if any of you all had any--if you feel 
like that bill would help address that particular problem.
    Mr. Robertson. I believe it would push the VA in that 
direction. But again, a lot of what I am hearing is that a lot 
of the homeless veterans with families are winding up in 
grandma and grandpa's house, and they are not showing up in 
homeless shelters per se. But I think it is something that 
needs to be addressed, and I am not sure it is being properly 
addressed at the right level.
    Mr. Boozman. Okay, thank you all.
    Yes, sir.
    Mr. Rieckhoff. We are seeing Iraq and Afghanistan vets walk 
into our office, and it is hard to get a grasp on the numbers. 
But the numbers at this point are manageable and there is a 
definite shortage of transitional housing. There is definitely 
a lack of a comprehensive understanding of what these folks are 
facing as a family. We are seeing single parents, sometimes 
both parents deployed, which is really unprecedented.
    But I also want to address the issue of the GI Bill 
oversight if I could, sir, for a second.
    I think we have two issues. One we have the execution 
piece, and I think Mr. Chairman, you were right to focus on 
that and Ms. Herseth Sandlin was as well. Your questions were 
dead on, and we have to work out this issue of the fee and 
tuition disparity, and we have to have a fair, simple way of 
addressing this, but there is a larger problem, and it is a 
communications problem. And I think all of us here are kind of 
at the tip of the spear facing veterans who have serious 
questions about where this legislation stands, where this 
benefit stands. Is it going to be ready by August? How is it 
going to be implemented? And the VA's got an opportunity here 
to get ahead of the curve.
    When August hits we are preparing for a boatload of phone 
calls and e-mails from vets who don't understand this benefit. 
So we have a communications problem, and I think that that is 
an area where the VA could sort of reframe the way they look at 
technology.
    The conversation here today focusing on technology was 
outstanding, but it is largely focused on the backlog and 
internal operations. If the VA has an opportunity now to 
utilize technology to look at it as an outreach opportunity and 
a communications tool, and that is how your generation looks at 
it. So you know, General Shinseki's got some new folks coming 
in that have an understanding of that element, and that may be 
an opportunity for them to really break some ground.
    Our generation is going to look to the GI Bill, for some of 
them as their only point of contact with the VA. It is going to 
make or break I think the VA's relationship with huge 
percentages of my population, guys and women who served in Iraq 
and Afghanistan. And if they mess it up, they are going to be 
dealing with a reputation issue for a long time to come.
    Mr. Boozman. Excuse me, I will let you in a second, but I 
would agree with that, and yet again, in being pretty close to 
this thing as you all know and both sides working very hard, 
because what we all want is when that, you know, when that 
August date comes that we have a very successful transition 
into the new system. And right now it is, you know, we have had 
several hearings, you know, we are pushing forward, and those 
are really--those are updates, those aren't adversarial at all. 
I mean, that is just how can we help you? You know, what can we 
do? As are I think you all are. You know, how can we help? How 
can the VSOs push this thing forward?
    But I think right now a lot of those questions, to be 
honest, they are really formulating right now, they are 
figuring it out, and so it is difficult to communicate, you 
know, what you are really not sure of yet, but that is the next 
step.
    We have asked them to do a tremendous amount, and the good 
news is I think that they really are rising to the occasion. I 
can't speak for them, but I do think that is part of it, and I 
know Ms. Herseth Sandlin, you know, is committed to doing 
whatever it takes to get it done.
    Mr. Rieckhoff. Yeah, I think it is a tremendous opportunity 
for us all to work together, sir, but if you look at the VA's 
Web site it looks like it was created in the Gulf War, and if 
you look for GI Bill resources and how to navigate this new 
benefit you are probably going to come to one of our Web sites, 
rather than to the VA.
    Mr. Boozman. I think that is a point well taken.
    Mr. Rieckhoff. And I think the VSOs have stepped up and are 
trying to fill a critical gap right there.
    The Chairman. Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman, and thank all of you for 
sticking it out late here. I thought when the Chairman left 
earlier he was going to pick the pizza up for us or something, 
so I appreciate you being here.
    I have to tell you your advocacy for veterans is something 
I am truly appreciative of. As a dues paying member of some of 
these organizations that have testified today I am getting my 
money's worth, I can tell you that, so thank you very much.
    A couple of questions. Of course the advanced 
appropriations issue is a big one for several reasons. One is 
we think it obviously allows for the programming and the care 
of our veterans, which is our first and foremost concern, but I 
think all of us realize too in these challenging economic times 
it is a way to be efficient with our resources, and I think we 
need to continue to push the Administration.
    If this is truly about a change and not business as usual, 
I think this is smart, I think it is efficient, I think it 
could work. And I think one of the things is, is that with any 
deliberative body having a deadline is important, because 
otherwise nothing gets done until everybody asks, how come we 
don't get anything done until right before we recess or 
whatever? That is the nature of it because it is the give and 
take on all that. But if there is no drop dead deadline there, 
no one gets really serious about it.
    And I can tell you, I have been absolutely ashamed as we 
finished the appropriations process for the VA and sat on it as 
leverage against 12 other appropriation bills. We could deliver 
this if we work together and put the pressure on and you help 
us put the pressure on each one of us, deliver the darn thing 
by October 1st.
    Since I have been here the last 2 years it was ready to go, 
it wasn't delivered when it should have been. So I don't think 
we should back away 1 inch from asking this to happen. I think 
it is the right thing to do. I think it is obviously the right 
thing for veterans, and it is good stewardship to the public's 
money.
    So I thank all of you for taking that one up.
    Rick, I just had a question on this, because I am very 
curious about this. This is the type of stuff again being data 
driven, this migration study. Am I right to understand we never 
got an answer on that? We don't know what those numbers are?
    Mr. Weidman. That is correct, sir.
    Mr. Walz. And you were talking about in January of 2003. 
Was that something that VA took it upon themselves to do, or 
were they directed by Congress to do that?
    Mr. Weidman. No, it was a decision by the Secretary of 
Veterans Affairs to temporarily limit the registration of new 
Category 8s, that is what I was talking about.
    Mr. Walz. Okay.
    Mr. Weidman. And at a briefing 4 weeks later of the VSOs on 
the CARES process we saw the projections for 2023, and it was 
no Category 8s, and I said whoa, go back to that slide.
    Mr. Walz. Okay.
    Mr. Weidman. Why are you using those figures? We were told 
to. By whom? And it turns out that it didn't become temporary 
anymore, it was built into the long-term planning and into the 
CARES plan for the physical plant of freezing out Category 8s. 
And so basically we were sold a pig in a poke.
    Mr. Walz. Okay, well very good, I am very appreciative of 
that.
    Last question I just throw out as you heard me ask the last 
panel on this. The two questions I had, this conundrum of 
trying to deliver care, especially in rural areas, without 
diminishing the core services and delivery at the VA, and also 
this idea of seamless transition, the commitment that seems to 
be there to start alleviating some of these problems.
    I will just let you just randomly comment if you would, 
just your perspective.
    Mr. Robertson. First of all, you know, the VA is affiliated 
with over I think it is 108 medical schools right now. I have 
never understood why VA did not reach out to rural community 
hospitals and try to work out partnerships with the--I mean, 
where would be a better place to send them than in New Town, 
North Dakota, rather than building in a CBOC? Work out some 
kind of an agreement with the hospital that you would contract 
the services there where they wouldn't have to make the trip 
all the way to Fargo.
    Today Rick made a comment at an earlier hearing about the 
difference between remote areas versus rural areas, and that is 
a serious problem that I had never really thought of in that 
capacity where there are some places where you can't get to a 
VA hospital that are part of the continental United States. And 
I think that that is something that needs to be seriously 
addressed.
    But the question you had about the Mayo Clinic. Why doesn't 
VA have a partnership with Mayo Clinic to be able to take 
people that are in that catchment area under some kind of a 
contract? That would seem a wise use of resources.
    Mr. Weidman. It would, and it has certainly been a lot of 
concern in a lot of the leadership exercise, particularly by 
this Committee in regard to dealing with rural health care and 
the distinction that Steve is talking about is actually--our 
Alaska state president has written a paper that is almost ready 
for release to the Hill on remote versus rural health care and 
it will help in our thinking and planning.
    However, you all passed a number of laws having to do with 
rural health care and there is basically nobody at home at VA. 
They still have not staffed up that office, and it is--
everybody is talking about the new team at VA. This is a pretty 
lonely team, because you have General Shinseki and you have 
John R. Gingrich, who is his Chief of Staff, and that are it, 
and I think there is a couple of speech writers, but other than 
that, he hasn't been able to get anybody else on board.
    So in regard to rural health it would be helpful to us and 
the VSOs to--for you all to press hard about why the heck 
haven't you staffed up and done what we told you to back in 
110th Congress?
    Mr. Rieckhoff. And other than pile on to what these 
gentlemen have already said. I think when we deal with remote 
and rural areas we look to technology. I am going to sound like 
a broken record, but this is an opportunity for innovation, and 
I think the VA has made good process, for example, in the 
suicide prevention hot line and finding new ways to do 
outreach, but as some of you know we have launched a massive 
public service announcement campaign with the ad counsel. We 
are going where the veterans are, and I think that is a 
critical way to reaching the newest generation of veterans 
especially. We have to be online, we have to be innovating, and 
I think that is an area where they can really utilize new 
technology to bridge some of these gaps and create programs 
that work.
    And when it comes to DoD and VA, you know, Congressman 
Walz, I share your optimism, and I think we have an opportunity 
here with General Shinseki and Secretary Gates to really bridge 
that gap. The GI Bill will be a good test. I mean, they have to 
work out transferability, they have to be communicating 
effectively. We get a lot of calls from recruiters who want to 
know how does the new GI Bill compare to the old GI Bill, how 
do I communicate to this incoming recruits? So I think that 
will be a critical test there as well.
    Mr. Walz. Well thank you all.
    Thank you, Mr. Chairman.
    Mr. Sullivan. And Congressman to add on to what they said. 
The Vet Center's new mobile Vet Centers, those are fantastic. 
We encourage those, and in fact expanding Vet Centers when it 
comes to mental health otherwise we agree with that they have 
said.
    On seamless transition, the goal here is to bring VA to the 
veterans. And when a servicemember is about to get out of the 
military and become a veteran, they are at their military base, 
they are there already. By putting Benefits Delivery at 
Discharge at all VA facilities, making them permanent offices, 
and also at some of the National Guard permanent facilities, we 
can make a great step forward so that there is a good 
presentation, an initial contact with these servicemembers on 
their way out the door. And it is one stop shopping: GI Bill, 
disability compensation, home loan guarantee, their insurance, 
all of that can be done walking out the door with a permanent 
VA facility. That is when we truly have seamless transition is 
when that happens.
    Mr. Walz. Thanks so much.
    Mr. Chairman, may I just add one other comment about 
transition, and transition, there is nothing seamless about it, 
and I hate it, because it is new speak. I would settle for a 
decent transition, period.
    The combined physical that is happening at Walter Reed is 
not working well. It seems to be better at Bethesda, but Walter 
Reed it is not working well, and they are not doing it properly 
according to their other standard operating procedures. And the 
soldiers that I am in contact with regularly are really 
unhappy.
    We brought it to the attention of the previous Secretary 
last fall several times, to current Under Secretary several 
times, to the Deputy Under Secretary a number of times, and it 
is still not really fixed, and it is to the point where many of 
the young people are turning to JAG, and JAG is getting 
involved in it because what happens is if they say that Form 
3947 is wrong, then they say too bad. If you don't sign this it 
goes to hearing, and if it is hearing it is de novo and you may 
get nothing, and that is it.
    So many of the less sophisticated ones cave in, and so they 
get a disability rating from the military that is much less 
than it should have been in the first place, and that is all 
because they are not doing what they are supposed to be doing, 
is the army person sitting down with the military medical file 
and going over it with the soldier and then a separate process, 
the VA person sitting down with that same medical file and 
going over it with the soldier and filling out the Form 3947 
again to make sure it is correct, and it ain't happening.
    And we don't know what to say except I know that the Armed 
Services Committee, perhaps the Joint Oversight on this. 
Because they are about to expand this thing to 17 major 
military installation separation points and it is not even 
working for the people who are housed in Malone House right 
now.
    The Chairman. We thank you all.
    Mr. Robertson. Mr. Chairman, before you hit the gavel, our 
commander testified last September on our ``Joint Views and 
Estimates for Fiscal Year 2010 Budget.'' Do you mind if I 
submit this to the record?
    The Chairman. No, that will be added to the record. Thank 
you.
    Mr. Robertson. Thank you, sir.
    [The American Legion's ``Joint Views and Estimates for 
Fiscal Year 2010 Budget'' is attached to Mr. Robertson's 
prepared statement, and appears on p. 105.]
    The Chairman. As a concluding note, I notice that several 
things are still on the plate from previous Administrations.
    You might want to give us a summary of those issues or a 
list and we will give it to the new Administration. Not that 
you would get instant return, but let us restart it all, reset 
the button as Mrs. Clinton said.
    Thank you all, this hearing is adjourned.
    [Whereupon, at 5:27 p.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement of Hon. Bob Filner, Chairman,
                     Committee on Veterans' Affairs

    Welcome to the hearing on the Department of Veterans Affairs Budget 
Request for Fiscal Year 2010. Today's hearing is on the preliminary 
budget submission of the Department of Veterans Affairs for Fiscal Year 
2010.
    On February 26, 2009, the Administration submitted a preliminary 
budget to Congress. This 134-page document provides only top-line 
budget numbers and brief discussions regarding Administration 
priorities.
    For FY 2010, the Administration proposes a VA discretionary budget 
number of $52.5 billion, an increase of $4.9 billion, or 10.3 percent, 
above FY 2009 levels.
    In total discretionary resources (including collections), the 
Administration requests $55.9 billion, which exceeds The Independent 
Budget request by $1.3 billion.
    This budget marks the first time any President has submitted a 
budget that exceeds the recommendations of The Independent Budget. I 
have often referred to The Independent Budget as the funding ``bible'' 
for the VA, and I am pleased that its recommendations are being 
accorded the weight they deserve.
    This year's budget also marks a sharp departure from the previous 
Administration in that the budget includes increased funding over a 5-
year period, in this instance an increase of $25 billion above 
baseline, as compared to last year's budget that included a net cut of 
$20 billion. Although we understand these numbers are not binding on 
future years, and the levels are lower than the amounts that will be 
needed, we applaud this move toward presenting an honest and accurate 
look at our financial picture.
    I applaud the Administration's commitment to high priority areas of 
interest, which are shared by this Committee, including caring for our 
returning servicemembers, improving the VA's ability to provide mental 
heath care and services, addressing homelessness among veterans, and 
not forgetting the veterans of previous generations. We are committed 
to assisting the VA in their goal of turning the VA into a model 
organization of the 21st Century that puts the needs of veterans first.
    We understand that VA cannot provide specific account-level funding 
details at this time, and we await more detailed information in April. 
We note that this Committee will fight diligently to ensure that 
veterans receive the funding they need and that this funding is 
provided in a timely fashion.
    We applaud this Administration for this proposed robust funding 
increase for veterans, and look forward to hearing from our witnesses.

                                 
              Prepared Statement of Hon. Eric K. Shinseki,
             Secretary, U.S. Department of Veterans Affairs

    Mr. Chairman, Congressman Buyer, distinguished Members of the 
Committee:
    Thank you for this opportunity to present an overview of the 2010 
budget for the Department of Veterans Affairs (VA). President Obama has 
charged me with transforming VA into a 21st century organization--a 
transformation demanded by new times, new technologies, new demographic 
realities, and new commitments to today's Veterans.
    The VA's proposed 2010 budget demonstrates the President's 
commitment to our Nation's Veterans and a transformed VA that is 
people-centric, results-driven, and forward-looking. The proposal would 
increase VA's budget to $113 billion--up $15 billion, or 16 percent, 
from the 2009 enacted budget. This is the largest one-year dollar and 
percentage increase for VA ever requested by a President.
    Nearly two thirds of the increase ($9.7 billion) would go to 
mandatory programs (up 20 percent); the remaining third ($5.6 billion) 
would be discretionary funding (up 11 percent). The total budget would 
almost evenly split between mandatory funding ($56.9 billion) and 
discretionary funding ($55.9 billion).
    The President's 2010 budget is the first step toward increasing VA 
funding by $25 billion over the baseline over the next 5 years. This 
strong financial commitment will ensure Veterans receive timely access 
to the highest quality benefits and services we can provide and which 
they earned through their sacrifice and service to our Nation.
    These resources will be critical to our mission of addressing 
Veterans' changing needs over time. This funding pledge ensures we can 
deliver state-of-the-art health care and benefits; grow and maintain a 
skilled, motivated, and client-oriented workforce; and implement a 
comprehensive training and leader development program for long-term 
professional excellence at VA.
    The Administration is still developing the details of the 
President's 2010 budget request, to be released in late April. As a 
result, I cannot address today the funding for any specific program or 
activity. However, I want to summarize this budget's major focus areas 
that are critical to realizing the President's vision and fulfilling my 
commitment to Veterans.

            Dramatically Increasing Funding for Health Care

    VA's request for 2010 provides the funds required to treat more 
than 5.5 million Veteran patients. This is 9.0 percent above the 
Veteran patient total in 2008 and is 2.1 percent higher than the 
projected number in 2009. The number of patients who served in 
Operations Enduring Freedom and Iraqi Freedom will rise to over 419,000 
in 2010. This is 61 percent higher than in 2008 and 15 percent above 
the projected total this year.
    The 2010 budget request enables VA to achieve the President's 
pledge of strengthening the quality of health care for Veterans. We 
will increase our emphasis on treating those with vision and spinal 
cord injury and meet the rising demand for prosthetics and sensory 
aids. We will respond to the needs of an aging population and a growing 
number of women Veterans coming to VA for health care. The delivery of 
enhanced primary care for women Veterans is one of VA's top priorities. 
The number of women Veterans is growing rapidly. In addition, women are 
becoming increasingly dependent on VA for their health care. More than 
450,000 women Veterans have enrolled for care and this number is 
expected to grow by 30 percent in the next 5 years. We will soon have 
144 full-time Women Veterans Program Managers serving at VA medical 
facilities. They will serve as advisors to and advocates for women 
Veterans to help ensure their care is provided with the appropriate 
level of privacy and sensitivity.
    The Department will continue to actively collaborate with the 
Department of Defense (DoD) to establish a DoD/VA vision center of 
excellence in the prevention, diagnosis, mitigation, treatment, and 
rehabilitation of eye injuries. The FY 2010 budget request provides 
resources to continue development of a network of eye and vision care 
specialists to assist with the coordination and standardization of 
vision screening, diagnosis, rehabilitative management, and vision 
research associated with traumatic brain injury (TBI). This network 
will ensure a continuum of care from DoD military treatment facilities 
to VA medical facilities.

                   Expanding Health Care Eligibility

    For the first time since 2003, the President's budget expands 
eligibility for VA health care to non-disabled Veterans earning modest 
incomes. This commitment recognizes that economic conditions have 
changed and there are many lower income Priority 8 Veterans who are now 
facing serious financial difficulties due to the rising cost of health 
care. This year VA will open enrollment to Priority 8 Veterans whose 
incomes exceed last year's geographic and VA means test thresholds by 
no more than 10 percent. We estimate that 266,000 more Veterans will 
enroll for care in 2010 due to this policy change. Furthermore, the 
budget includes a gradual expansion of health care eligibility that is 
expected to result in nearly 550,000 new enrollees by 2013. The 
Department's 2010 budget contains sufficient resources to ensure we 
will maintain our quality of care, which sets the national standard of 
excellence. Further, there will be no adverse impact on wait times for 
those already enrolled in our system.

   Enhancing Outreach and Services Related to Mental Health Care and
  Cognitive Injuries, including Post-Traumatic Stress Disorder (PTSD)
        and Traumatic Brain Injury (TBI), with a Focus on Access
                      for Veterans in Rural Areas

    The Department's 2010 budget provides the resources VA needs to 
expand inpatient, residential, and outpatient mental health programs. A 
key element of VA's program expansion is integrating mental health 
services with primary and specialty care. Veterans receive better 
health care when their mental and physical needs are addressed in a 
coordinated and holistic manner.
    This budget allows us to continue our effort to improve access to 
mental health services across the country. We will continue to place 
particular emphasis on providing care to those suffering from PTSD as a 
result of their service in Operations Enduring Freedom and Iraqi 
Freedom. The Department will increase outreach to these Veterans as 
well as provide enhanced readjustment and PTSD services. Our strategy 
for improving access includes expanding our telemental health program, 
which allows us to reach thousands of additional mental health patients 
annually, particularly those living in rural areas.
    To better meet the health care needs of recently discharged 
Veterans, the 2010 budget enables VA to expand its screening program 
for depression, PTSD, TBI, and substance use disorders. The Department 
will also enhance its suicide prevention advertising campaign to raise 
awareness among Veterans and their families of the services available 
to them.
    In 2010, VA will expand the number of Vet Centers providing 
readjustment counseling services to Veterans, including those suffering 
from PTSD. The Department will also improve access to mental health 
services through expanded use of community-based mental health centers. 
We will continue to place VA mental health professionals in community-
based programs to provide clinical mental health services to Veterans. 
Where appropriate, we will provide fee-basis access to mental health 
providers when VA services are not reasonably close to Veterans' homes. 
We will also expand use of Internet-based mental health services 
through ``MyHealtheVet,'' which provides an extensive degree of health 
information to Veterans electronically. These steps are critical to 
providing care to Veterans living in rural areas.
    The 2010 budget provides resources for vital research projects 
aimed at improving care and clinical outcomes for Veterans of 
Afghanistan and Iraq. Some of this key research will focus on TBI and 
polytrauma, specifically studies on blast-force--related brain 
injuries, enhancing diagnostic techniques, and improving prosthetics. 
We will strengthen our burn injury research to improve the 
rehabilitation and daily lives of Veterans who have suffered burns. VA 
will also enhance research on chronic pain, which afflicts one of every 
four recently discharged Veterans. And the Department will also advance 
research on access to care, particularly for Veterans in rural areas, 
by studying new telemedicine efforts focused on mental health and PTSD.

    Investing in Better Technology to Deliver Services and Benefits
        to Veterans with the Quality and Efficiency They Deserve

    Leveraging information technology (IT) is crucial to achieving the 
President's vision for transforming VA into a 21st Century organization 
that meets Veterans' needs. This is critical not only for today's 
demands, but also for laying a foundation for high-quality, timely, and 
accessible service to Veterans, whose use of VA services is expected to 
grow year to year.
    IT is an integral component of VA's health care and benefits 
delivery systems. They enable VA's ability to deliver high-quality 
health care, ranging from emergency treatment to routine exams in 
medical centers, outpatient clinics, and in-home care and telehealth 
settings. These technologies are also the foundation of our benefits 
delivery systems, to include, for example, compensation, pensions, 
education assistance, and burial benefits. VA depends on a reliable and 
accessible IT infrastructure, a high-performing IT workforce, and 
modernized information systems that are flexible enough to meet both 
existing and emerging service delivery requirements. Only in this way 
can we ensure system-wide information security and the privacy of our 
clients. The President's 2010 budget for VA provides the resources 
necessary to meet these vital IT requirements.
    This budget strongly supports the most critical IT development 
program for medical care--advancement of VA's ``HealtheVet'' program, 
which is the future foundation of our electronic health record system. 
This system includes a health data repository, a patient scheduling 
system, and a reengineered pharmacy application. ``HealtheVet'' will 
equip our health care providers with the modern technology and tools 
they need to improve the safety and quality of care for Veterans.
    The Secretary of Defense and I are collaborating to simplify the 
transition of military personnel into civilian status through a uniform 
approach to both registering into VA and accessing electronic records 
data. Through a cooperative effort, we seek to improve the delivery of 
benefits and assure the availability of medical data to support the 
care of patients shared by VA and DoD. This will enhance our ability to 
provide world-class care to Veterans, active-duty servicemembers 
receiving care from both health care systems, and our wounded warriors 
returning from Iraq and Afghanistan.
    The 2010 budget provides the funds necessary to continue moving 
toward the President's goal of reforming the benefits claims process to 
ensure VA's claims decisions are timely, accurate, fair, and consistent 
through the use of automated systems. VA's paperless processing 
initiative expands on current paperless claims processing already in 
place for some of our benefits programs and will improve both the 
timeliness and accuracy of claims processing. It will strengthen 
service to Veterans by providing them the capability to apply for and 
manage their benefits online. It will also reduce the movement of paper 
files and further secure Veterans' personal information. The initial 
features of the paperless processing initiative will be tested in 2010, 
and by 2012 we expect to complete the implementation of a fully 
electronic benefits delivery system.

             Providing Greater Benefits to Veterans Who Are
                     Medically Retired from Service

    The President's 2010 budget provides for the first time concurrent 
receipt of disability benefits from VA in addition to DoD retirement 
benefits for disabled Veterans who are medically retired from service. 
Presently, only Veterans with at least 20 years of service who have 
service-connected disabilities rated 50 percent or higher by VA are 
eligible for concurrent receipt. Receipt of both VA and DoD benefits 
for all who were medically retired from service will be phased in 
starting in 2010.

       Combating Homelessness by Safeguarding Vulnerable Veterans

    The President has committed to expanding proven programs and 
launching innovative services to prevent Veterans from falling into 
homelessness. The 2010 budget includes funds for VA to work with the 
Departments of Housing and Urban Development, Labor, Education, Health 
and Human Services, and the Small Business Administration, in 
partnership with non-profit organizations, to improve the well-being of 
Veterans. This effort focuses on reducing homelessness and increasing 
employment opportunity among Veterans, and includes a pilot program 
aimed at maintaining stable housing for Veterans at risk of 
homelessness while also providing them with ongoing medical care and 
supportive services.

   Facilitating Timely Implementation of the Comprehensive Education 
    Benefits Veterans Earn through their Dedicated Military Service

    The Department is on target to implement the Post-9/11 Veterans 
Educational Assistance Act starting August 1, 2009. VA is pursuing two 
parallel strategies to successfully implement this new education 
program, both of which are fully supported by the resources presented 
in the 2010 budget.
    The short-term strategy relies upon a combination of manual claims 
processing and modifications to existing IT systems. Until a modern 
eligibility and payment system can be developed, VA will adjudicate 
claims manually and use the existing benefits delivery network to 
generate recurring benefit payments to schools and program 
participants. This budget includes funds to hire and maintain the 
additional staff required.
    The long-term strategy is the development and implementation of an 
automated system for claims processing. The Department has teamed with 
the Space and Naval Warfare Systems Command to address the necessary IT 
components of this strategy. They are the premier systems engineering 
command for the Department of the Navy, and they have extensive 
experience in building state-of-the-art IT systems. The automated 
solution will be available by the end of calendar year 2010, by which 
time full operational control of the automated system will be in VA's 
hands.
                                Closing

    Veterans are VA's sole reason for existence and my number one 
priority--bar none. I am inspired by this Committee's unwavering 
commitment to Veterans, and I look forward to working with you to 
transform VA into an organization that reflects the change and 
commitment our country expects and our Veterans deserve.

                                 
                   Prepared Statement of Carl Blake,
      National Legislative Director, Paralyzed Veterans of America

    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee, as one of the four co-authors of The Independent Budget 
(IB), 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) health care system for FY 2010.
    PVA, along with AMVETS, Disabled American Veterans, and the 
Veterans of Foreign Wars, is proud to come before you this year to 
present the 23rd 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, health care costs and health 
care demand to reach its recommended levels. This year, the document is 
endorsed by over 60 veterans' service organizations, and medical and 
health care advocacy groups.
    The process leading up to FY 2009 was extremely challenging. For 
the second year in a row, VA received historic funding levels that 
matched, and in some cases exceeded, the recommendations of the IB. 
Moreover, for only the third time in the past 22 years, VA received its 
budget prior to the start of the new fiscal year on October 1. However, 
this funding was provided through a combination continuing resolution/
omnibus appropriations act. The underlying Military Construction and 
Veterans Affairs appropriations bill for FY 2009 was not actually 
completed by Congress in the regular order. While the House passed the 
bill in the summer, the Senate never brought its bill up for a floor 
vote. This fact serves as a continuing reminder that, despite excellent 
funding levels provided over the last two years, the larger 
appropriations process is completely broken.
    PVA is pleased to see that the initial information provided by the 
Administration suggests a very good budget for the VA in FY 2010. The 
discretionary funding levels provide for a truly significant increase. 
However, we will withhold final judgment on the budget submission until 
we have much more details about the FY 2010 budget. Moreover, we would 
like to highlight our concern that the out year projections for VA 
funding do not seem to reflect sufficient budgets to serve the needs of 
veterans. In fact, the projected increases in all cases are less than 3 
percent. We would be very interested in an explanation and 
justification for the small out year spending increases.
    For FY 2010, The Independent Budget recommends approximately $46.6 
billion for total medical care, an increase of $3.6 billion over the FY 
2009 operating budget level established by P.L. 110-329, the 
``Consolidated Security, Disaster Assistance, and Continuing 
Appropriations Act of 2009.'' Our recommendation reinforces the long-
held policy that medical care collections should be a supplement to, 
not a substitute for, real dollars. Until Congress and the 
Administration fairly address the inaccurate estimates for Medical Care 
Collections, the VA operating budget should not include these estimates 
as a component.
    The medical care appropriation includes three separate accounts--
Medical Services, Medical Support and Compliance, and Medical 
Facilities--that comprise the total VA health care funding level. For 
FY 2010, The Independent Budget recommends approximately $36.6 billion 
for Medical Services. Our Medical Services recommendation includes the 
following recommendations:

Current Services Estimate                                $34,608,814,000
Increase in Patient Workload                              $1,173,607,000
Policy Initiatives                                          $790,000,000
                                                       -----------------
Total FY 2010 Medical Services                           $36,572,421,000


    Our increase in patient workload is based on a projected increase 
of 93,000 new unique patients--Priority Group 1-8 veterans and covered 
non-veterans. We estimate the cost of these new unique patients to be 
approximately $639 million. The increase in patient workload also 
includes a projected increase of 90,000 new Operation Iraqi Freedom and 
Operation Enduring Freedom (OIF/OEF) veterans at a cost of 
approximately $279 million. Finally, our increase in workload includes 
the projected increase of new Priority Group 8 veterans who will use 
the VA health care system as a result of the recent decision to expand 
Priority Group 8 enrollment by 10 percent. The VA estimated that this 
policy change would allow enrollment of approximately 265,000 new 
enrollees. Based on a historic Priority Group 8 utilization rate of 25 
percent, we estimate that approximately 66,250 of these new enrollees 
will become users of the system. This translates to a cost of 
approximately $255 million.
    Our policy initiatives include a continued investment in mental 
health and related services, returning the VA to its mandated long-term 
care capacity, and meeting prosthetics needs for current and future 
generations of veterans. For mental health and related services, the IB 
recommends approximately $250 million. In order to restore the VA's 
long-term care average daily census (ADC) to the level mandated by P.L. 
106-117, the ``Millennium Health Care Act,'' we recommend $440 million. 
Finally, to meet the increase in demand for prosthetics, the IB 
recommends an additional $100 million.
    For Medical Support and Compliance, The Independent Budget 
recommends approximately $4.6 billion. This new account was established 
by the FY 2009 appropriations bill, replacing the Medical 
Administration account. Finally, for Medical Facilities, The 
Independent Budget recommends approximately $5.4 billion. This amount 
includes an additional $150 million for non-recurring maintenance for 
the VA to begin addressing the massive backlog of infrastructure needs 
beyond those addressed through the recently enacted Stimulus bill.
    The IBVSOs contend that despite the recent increases in VA health 
care funding VA does not have the resources necessary to completely 
remove the prohibition on enrollment of Priority Group 8 veterans, who 
have been blocked from enrolling in VA since January 17, 2003. In 
response to this continuing policy, the Congress included additional 
funding to begin opening the VA health care system to some Priority 
Group 8 veterans. In fact, the final approved FY 2009 appropriations 
bill included approximately $375 million to increase enrollment of 
Priority Group 8 veterans by 10 percent. This will allow the lowest 
income and uninsured Priority Group 8 veterans to begin accessing VA 
health care.
    The Independent Budget believes that providing a cost estimate for 
the total cost to reopen VA's health care system to all Priority Group 
8 veterans is a monumental task. That being said, we have developed an 
estimate based on projected new users and based on second hand 
information we have received regarding numbers of Priority Group 8 
veterans who have actually been denied enrollment into the health care 
system. We have received information that suggests that the VA has 
actually denied enrollment to approximately 565,000 veterans. We 
estimate that such a policy change would cost approximately $545 
million in the first year, assuming that about 25 percent (141,250) of 
these veterans would actually use the system. If, assuming a worst-case 
scenario, all of these veterans who have actually been denied 
enrollment were to become users of the VA health care system, the total 
cost would be approximately $2.2 billion. These cost estimates reflect 
a total cost that does not include the impact of medical care 
collections. We believe that it is time for VA and Congress to develop 
a workable solution to allow all eligible Priority Group 8 veterans to 
begin enrolling in the system.
    For Medical and Prosthetic Research, The Independent Budget 
recommends $575 million. This represents a $65 million increase over 
the FY 2009 appropriated level. We are particularly pleased that 
Congress has recognized the critical need for funding in the Medical 
and Prosthetic Research account in the last couple of years. Research 
is a vital part of veterans' health care, and an essential mission for 
our National health care 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 2010, we 
recommend that the VA IT account be funded at approximately $2.713 
billion. This amount includes approximately $130 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.
    Paralyzed Veterans of America is pleased that the ``American 
Recovery and Reinvestment Act of 2009'' (also the Stimulus bill) 
included a substantial amount of funding for veterans programs. The 
legislation identified areas of significant need within the VA system, 
particularly as it relates to infrastructure needs. While we were 
disappointed that additional funding was not provided for major and 
minor construction in the Stimulus bill, we recognize that the funding 
that was provided will be critically important to the VA going forward.
    As explained in The Independent Budget, there is a significant 
backlog of major and minor construction projects awaiting action by the 
VA and funding from Congress. We have been disappointed that there has 
been inadequate follow through on issues identified by the Capital 
Asset Realignment for Enhanced Services (CARES) process. In fact, we 
believe it may be time to revisit the CARES process all together. For 
FY 2010, The Independent Budget recommends approximately $1.123 billion 
for Major Construction and $827 million for Minor Construction. The 
Minor Construction recommendation includes $142 million for research 
facility construction needs.
    Mr. Chairman, we would like to express our sincere thanks for your 
introduction of H.R. 1016, the ``Veterans Health Care Budget Reform and 
Transparency Act.'' For more than a decade, the Partnership for 
Veterans Health Care Budget Reform (Partnership), made up of nine 
veterans service organizations including PVA, and our IB co-authors, 
has advocated for reform in the VA health care budget process. The 
Partnership worked with the House and Senate Committees on Veterans' 
Affairs last year to develop this alternative proposal that would 
change the VA's medical care appropriation to an ``advance 
appropriation,'' guaranteeing funding for the health care system up to 
1 year in advance of the operating year. This alternative proposal 
would ensure that the VA received its funding in a timely and 
predictable manner. Furthermore, it would provide an option the IBVSOs 
believe is politically more viable than mandatory funding, and is 
unquestionably better than the current process.
    Moreover, to ensure sufficiency, our advance appropriations 
proposal would require that VA's internal budget actuarial model be 
shared publicly with Congress to reflect the accuracy of its estimates 
for VA health care funding, as determined by a government 
Accountability Office (GAO) audit, before political considerations take 
over the process. This feature would add transparency and integrity to 
the VA health care budget process. We ask this Committee in your views 
and estimates for FY 2010 to recommend to the Budget Committee an 
advance appropriations approach to take the uncertainties out of health 
care 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.
    Finally, Mr. Chairman, I would like to express PVA's serious 
concern that we have regarding a policy proposal that we have been told 
may be included in the budget submission later this year, and that may 
be one of the factors that allowed for the increased budget request for 
FY 2010, released on February 26. We have been told that the 
Administration may be considering a proposal that would allow the VA 
health care system to bill a veteran's insurance for the care and 
treatment of a disability or injury that was determined to have been 
incurred in or the result of the veteran's honorable military service 
to our country. Such a consideration is wholly unacceptable. This 
proposal ignores the solemn obligation that this country has to care 
for those men and women who have served this country with distinction 
and were left with the wounds and scars of that service. The blood 
spilled in service for this Nation is the premium that service-
connected veterans have paid for their earned care.
    While we understand the fiscal difficulties this country faces 
right now, placing the burden of those fiscal problems on the men and 
women who have already sacrificed a great deal for this country is 
unconscionable. We strongly urge Congress to investigate whether such a 
proposal is being considered and to forcefully reject it if it is 
brought before you.
    This concludes my testimony. I will be happy to answer any 
questions you may have.

                                 
                   Prepared Statement of Kerry Baker,
  Assistant 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 IB--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 23rd IB, 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 and its Claims Process
    To improve administration of VA's benefits programs, the IB 
veterans' service organizations (IBVSOs) recommend that Congress adopt 
both short- and long-term strategies for improvements within the 
Veterans Benefits Administration (VBA). These strategies focus on the 
VBA's information technology (IT) infrastructure as well as the claims 
and appeals process, to include the resulting backlog. Consequently, we 
are also seeking improvements in VBA's training programs and 
enhancements in accountability and quality assurance with respect to 
disability ratings. If Congress accepts our recommendations, VBA will 
be better positioned to serve all disabled veterans and their families.

VBA Information Technology
    To maintain and improve efficiency and accuracy of claims 
processing, the VBA must continue to upgrade its information technology 
(IT) infrastructure. Also, VBA must be given more flexibility to 
install, manage and plan upgraded technology to support claims 
management improvement.
    To meet ever-increasing demands while maintaining efficiency, the 
VBA must continually modernize the tools it uses to process and resolve 
claims. Given the current challenging environment in claims processing 
and benefits administration, and the ever-growing backlog, the VBA must 
continue to upgrade its IT infrastructure and revise its training to 
stay abreast of program changes and modern business practices. In spite 
of undeniable needs, Congress has steadily reduced funding for VBA 
initiatives over the past several years. In fiscal year 2001, Congress 
provided $82 million for VBA-identified IT 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.
    Funding for FY 2006 was only 28 percent of FY 2001 funding, without 
regard to inflation. Moreover, some VBA employees who provided direct 
support and development for VBA's IT initiatives have been transferred 
to the VA Chief Information Officer (CIO) when VA centralized all IT 
operations, governance, planning and budgeting. Continued IT 
realignment through FY 2007 and 2008 shifted more funding to VA's 
agency IT account, further reducing funding for these VBA initiatives 
in the General Operating Expenses account to $11.8 million. It should 
be noted that in the FY 2007 appropriation, Public Law 110-28, Congress 
provided $20 million to VBA for IT to support claims processing, and in 
2009 Congress designated $5 million in additional funding specifically 
to support the IT needs of new VBA Compensation and Pension Service 
personnel--also authorized by that appropriations act.
    All IT initiatives are now being funded in the VA's IT 
appropriation and tightly controlled by the CIO. However, needed and 
ongoing VBA initiatives include expansion of web-based technology and 
deliverables, such as web portal and Training and Performance Support 
Systems (TPSS); ``Virtual VA'' paperless processing; enhanced veteran 
self-service and access to benefit application, status, and delivery; 
data integration across business lines; use of the corporate database; 
information exchange; quality assurance programs and controls; and, 
employee skills certification and training.
    We believe VBA should continue to develop and enhance data-centric 
benefits integration with ``Virtual VA'' and modification of The 
Imaging Management System (TIMS). All these systems serve to replace 
paper-based records with electronic files for acquiring, storing, and 
processing claims data.
    Virtual VA supports pension maintenance activities at three VBA 
pension-maintenance centers. Further enhancement would allow for the 
entire claims and award process to be accomplished electronically. TIMS 
is the Education Service's system for electronic education claims 
files, storage of imaged documents, and work flow management. The 
current VBA initiative is to modify and enhance TIMS to make it fully 
interactive and allow for fully automated claims and award processing 
by Education Service and VR&E nationwide.
    The VBA should accelerate implementation of Virtual Information 
Centers (VICs). By providing veterans regionalized telephone contact 
access from multiple offices within specified geographic locations, VA 
could achieve greater efficiency and improved customer service. 
Accelerated deployment of VICs will more timely accomplish this 
beneficial effect.
    With the effects of inflation, the growth in veterans' programs, 
and the imperative to invest more in advanced IT, the IB veterans 
service organizations (IBVSOs) believe a conservative increase of at 
least 5 percent annually in VBA IT initiatives is warranted. Had 
Congress increased the FY 2001 funding of $82 million by 5 percent each 
year since then, the amount available for FY 2010 would be nearly $130 
million. Unfortunately, these programs have been chronically 
underfunded, and now with IT centralization, IT funding in VBA is even 
more restricted and bureaucratic.
    Congress has taken notice of the chronic disconnect between VBA IT 
and lagging improvements in claims processing. Section 227 of Public 
Law 110-389 places new requirements on VA to closely examine all uses 
of current IT and comparable outside IT systems with respect to VBA 
claims processing for both compensation and pension. Following that 
examination, VA is required to develop a new plan to use these and 
other relevant technologies to reduce subjectivity, avoid remands and 
reduce variances in VA Regional Office ratings for similar specific 
disabilities in veteran claimants.
    The act requires the VA Secretary to report the results of that 
examination to Congress in great detail, and includes a requirement 
that the Secretary ensure that the plan will result, within 3 years of 
implementation, in reduction in processing time for compensation and 
pension claims processed by VBA. The requirements of this section will 
cause heavy scrutiny on IT systems that VBA has been attempting to 
implement, improve and expand for years. We believe the examination 
will reveal that progress has been significantly stymied due to lack of 
directed funding to underwrite IT development and completion, and lack 
of accountability to ensure these programs work as intended.

Recommendations:
      Congress should provide the Veterans Benefits 
Administration adequate funding for its IT initiatives to improve 
multiple information and information-processing systems and to advance 
ongoing, approved and planned initiatives such as those enumerated in 
this section. We believe these IT programs should be increased annually 
by a minimum of 5 percent or more.
      VA should ensure that recent funding specifically 
designated by Congress to support the IT needs of VBA, and of new VBA 
staff authorized in fiscal year 2009, are provided to VBA as intended, 
and on an expedited basis.
      The Chief Information Officer and Under Secretary for 
Benefits should give high priority to the review and report required by 
Public Law 110-389, and redouble their efforts to ensure these ongoing 
VBA initiatives are fully funded and accomplish their stated 
intentions.
      The Secretary should examine the impact of the current 
level of IT centralization under the Chief Information Officer on these 
key VBA programs, and, if warranted, shift appropriate responsibility 
for their management, planning and budgeting from the CIO to the Under 
Secretary for Benefits.

The Claims Process
    In order to make the best use of newly hired personnel resources, 
Congress must focus on the claims process from beginning to end. The 
goal must be to reduce delays caused by superfluous procedures, poor 
training, and lack of accountability.
    During the past couple of years, the VA hired a record number of 
new claims adjudicators. Unfortunately, as a result of retirements by 
senior employees, an increase in disability claims, the complexity of 
such claims, and the time required for new employees to become 
proficient in processing claims, VA has achieved few noticeable 
improvements.
    The claims process is burdensome, extremely complex, and often 
misunderstood by veterans and many VA employees. Numerous studies have 
been completed on claims-processing delays and the backlog created by 
such delays, yet the delays continue. The following suggestions would 
simplify the claims process by reducing delays caused by superfluous 
procedures, inadequate training, and little accountability. Other 
suggestions will provide sound structure with enforceable rights where 
current law promotes subjectivity and abuses rights.
    The subjectivity of the claims process results in large variances 
in decision making, unnecessary appeals, and claims overdevelopment. In 
turn, these problems contribute to the duplicative, procedural chaos of 
the claims process. Congress and the Administration should seek to 
simplify, strengthen, and provide structure to the VA claims process.
    In order to understand the complex procedural characteristics of 
the claims process, and how these characteristics delay timely 
adjudication of claims, one must focus on the procedural 
characteristics and how they affect the claims process as a whole. 
Whether through expansive judicial orders, repeated mistakes, or 
variances in VA decisionmaking, some aspects of the claims process have 
become complex, loosely structured, and open to the personal discretion 
of individual adjudicators. By strengthening and properly structuring 
these processes, Congress can build on what otherwise works.
    These changes should begin by providing solid, nondiscretionary 
structure to VA's ``duty to notify.'' Congress meant well when it 
enacted VA's current statutory ``notice'' language. It has nonetheless 
led to unintended consequences that have proven detrimental to the 
claims process. Many Court of Appeals for Veterans Claims (Court) 
decisions have expanded upon VA's statutory duty to notify, both in 
terms of content and timing. However, with the recent passage of P.L. 
110-389, the ``Veterans Benefits Improvement Act of 2008,'' Congress, 
with the Administration's support, took an important step to correct 
this problem. However, the IBVSOs believe VA can do more.
    The VA's administrative appeals process has inefficiencies. The 
delays caused by these inefficiencies force many claimants into drawn-
out battles for justice that may last for years. Delays in the initial 
claims development and adjudication process are insignificant when 
compared to delays that exist in VA's administrative appeals process. 
The IBVSOs believe VA can eliminate some of the delays in this process 
administratively, and we urge VA to do so. For example, VA can amend 
its official forms so that the notice VA sends to a claimant when it 
makes a decision on a claim includes an explanation about how to obtain 
review of a VA decision by the Board of Veterans' Appeals (Board) and 
provides the claimant with a description of the types of reviews that 
are available.
    Another problem that seems to plague the VA's claims process is its 
apparent propensity to overdevelop claims. One possible cause of this 
problem is that many claims require medical opinion evidence to help 
substantiate their validity. There are volumes of Veterans Appeals 
Reporters filled with case law on the subject of medical opinions, 
i.e., who is competent to provide them, when are they credible, when 
are they adequate, when are they legally sufficient, and which ones are 
more probative, etc.
    There is ample room to improve the law concerning medical opinions 
in a manner that would bring noticeable efficiency to VA's claims 
process, such as when VA issues a Veterans Claims Assistance Act (VCAA) 
notice letter. Under current notice requirements and in applicable 
cases, VA's letter to a claimant normally informs the claimant that he 
or she may submit a private medical opinion. The letter also states 
that VA may obtain a medical opinion. However, these notice letters do 
not inform the claimant of what elements render private medical 
opinions adequate for VA rating purposes. To correct this deficiency, 
we recommend to VA that when it issues proposed regulations to 
implement the recent amendment of title 38, United States Code, section 
5103 that its proposed regulations contain a provision that will 
require it to inform a claimant, in a VCAA notice letter, of the basic 
elements that make medical opinions adequate for rating purposes.
    We believe that if a claimant's physician is made aware of the 
elements that make a medical opinion adequate for VA rating purposes, 
and provides VA with such an opinion, VA no longer needs to delay 
making a decision on a claim by obtaining its own medical opinion. This 
would reduce the number of appeals that result from conflicting medical 
opinions--appeals that are ultimately decided in an appellant's favor--
more often than not. If the Administration refuses to promulgate 
regulations that incorporate the foregoing suggestion, Congress should 
amend VA's notice requirements in section 5103 to require that VA 
provide such notice regarding the adequacy of medical opinions.
    Congress should consider amending section 5103A(d)(1) to provide 
that when a claimant submits private medical evidence, including a 
private medical opinion, that is competent, credible, probative, and 
otherwise adequate for rating purposes, the Secretary shall not request 
such evidence from a department health care facility. Some may view 
this suggestion as an attempt to tie VA's hands with respect to its 
consideration of private medical opinions. However, it does not. The 
language we suggest adding to section 5103A(d)(1) would not require VA 
to accept private medical evidence if, for example, VA finds that the 
evidence is not credible and therefore not adequate for VA rating 
purposes.
    The IBVSOs also believe that other procedures add unnecessary 
delays to the claims process. For example, we believe VA routinely 
continues to develop claims rather than issue decisions even though 
evidence development appears complete. These actions result in numerous 
appeals and unnecessary remands from the Board and the Court. Remands 
in fully developed cases do nothing but perpetuate the hamster-wheel 
reputation of veterans law. In fact, the Board remands an extremely 
large number of appeals solely for unnecessary medical opinions. In FY 
2007, the Board remanded 12,269 appeals to obtain medical opinions. Far 
too many were remanded for no other reason but to obtain a VA medical 
opinion merely because the appellant had submitted a private medical 
opinion. Such actions are, we respectfully submit, a serious waste of 
VA's resources.
    The suggested rulemaking actions and recommended changes to 
sections 5103 and 5103A(d)(1) may have a significant effect on 
ameliorating some problems. But to further improve these procedures, 
Congress should amend title 38, United States Code, section 5125. 
Congress enacted section 5125, for the express purpose of eliminating 
the former title 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 before VA could award 
benefits. However, Congress enacted section 5125 with discretionary 
language. This discretionary language permits, but does not require, VA 
to accept medical opinions from private physicians. Therefore, Congress 
should amend section 5125 by adding new language that requires VA to 
accept a private examination report if the VA determines that the 
report is (1) provided by a competent health care professional; (2) 
probative to the issue being decided; (3) credible; and (4) otherwise 
adequate for adjudicating the claim.

Recommendations:
      VA should amend its notification forms to inform 
claimants of the procedures that are available for obtaining review of 
a VA decision by the Board of Veterans' Appeals along with providing an 
explanation of the types of reviews that are available to claimants.VA 
should issue proposed regulations to implement the recent amendment of 
title 38, United States Code, section 5103 as quickly as possible. The 
VA's proposed regulations should include provisions that will require 
VA to notify a claimant, in appropriate circumstances, of the elements 
that render medical opinions adequate for rating purposes.
      Congress should amend section 5103A(d)(1) to provide that 
when a claimant submits a private medical opinion that is competent, 
credible, probative, and otherwise adequate for rating purposes, the 
Secretary shall not request another medical opinion from a department 
health care facility.
      Congress should amend title 38, United States Code, 
section 5125, insofar as it states that a claimant's private 
examination report ``may'' be accepted. The new language should direct 
that the VA ``must'' accept such report if it is (1) provided by a 
competent health care professional, (2) probative to the issue being 
decided, (3) credible, and (4) otherwise adequate for adjudicating such 
claim.

Training:
    The IBVSOs have consistently maintained that VA must invest more in 
training adjudicators and decisionmakers, and should hold them 
accountable for higher standards of accuracy. VA has made improvements 
to its training programs in the past few years; nonetheless, much more 
improvement is required in order to meet quality standards that 
disabled veterans and their families deserve.
    Training has not been a high enough priority in VA. We have 
consistently asserted that proper training leads to better quality 
decisions, and that quality is the key to timeliness of VA 
decisionmaking. VA will only achieve such quality when it devotes 
adequate resources to perform comprehensive and ongoing training and 
imposes and enforces quality standards through effective quality 
assurance methods and accountability mechanisms.
    The VBA's problems caused by a lack of accountability do not begin 
in the claims development and rating process--they begin in the 
training program. There is little measurable accountability in the 
VBA's training program.
    The VBA's unsupervised and unaccountable training system results in 
no distinction existing between unsatisfactory performance and 
outstanding performance. This lack of accountability during training 
further reduces, or even eliminates, employee motivation to excel. This 
institutional mindset is further epitomized in VBA's day-to-day 
performance, where employees throughout VBA are reminded that optimum 
work output is far more important than quality performance and accurate 
work.
    The effect of VBA's lack of accountability in its training program 
was demonstrated when it began offering skills certification tests to 
support certain promotions. Beginning in late 2002, VSR job 
announcements began identifying VSRs at the GS-11 level, contingent 
upon successful completion of a certification test. The open book test 
consisted of 100 multiple-choice questions. VA allowed participants to 
use online references and any other reference material, including 
individually prepared notes in order to pass the test.
    The first validation test was performed in August 2003. There were 
298 participants in the first test. Of these, 75 passed for a pass rate 
of 25 percent. The VBA conducted a second test in April 2004. Out of 
650 participants, 188 passed for a pass rate of 29 percent. Because of 
the low pass rates on the first two tests, a 20-hour VSR ``readiness'' 
training curriculum was developed to prepare VSRs for the test. A third 
test was administered on May 3, 2006, to 934 VSRs nationwide. Still, 
the pass rate was only 42 percent. Keep in mind that these tests were 
not for training; they were to determine promotions from GS-10 to GS-
11.
    These results reveal a certain irony, in that the VBA will offer a 
skills certification test for promotion purposes, but does not require 
comprehensive testing throughout its training curriculum. Mandatory and 
comprehensive testing designed cumulatively from one subject area to 
the next, for which the VBA then holds trainees accountable, should be 
the number one priority of any plan to improve VBA's training program. 
Further, VBA should not allow trainees to advance to subsequent stages 
of training until they have successfully completed such testing.
    The Veterans' Benefits Improvement Act of 2008 mandated some 
testing for claims processors and VBA managers, which is an 
improvement; however, it does not mandate the type of testing during 
the training process as explain herein. Measurable improvement in the 
quality of and accountability for training will not occur until such 
mandates exist. It is quite evident that a culture of quality neither 
exists, nor is much desired, in the VBA.

Recommendation:
    VA should undertake an extensive training program to educate its 
adjudicators on how to weigh and evaluate medical evidence. In 
addition, to complement recent improvements in its training programs, 
VA should require mandatory and comprehensive testing of the claims 
process and appellate staff. To the extent that VA fails to provide 
adequate training and testing, Congress should require mandatory and 
comprehensive testing, under which VA will hold trainees accountable.

Stronger Accountability
    In addition to training, accountability is the key to quality, and 
therefore to timeliness as well. As it currently stands, almost 
everything in the VBA is production driven. Performance awards cannot 
be based on production alone; they must also be based on demonstrated 
quality. However, in order for this to occur, the VBA must implement 
stronger accountability measures for quality assurance.
    The quality assurance tool used by the VA for compensation and 
pension claims is the Systematic Technical Accuracy Review (STAR) 
program. Under the STAR program, VA reviews a sampling of decisions 
from regional offices and bases its national accuracy measures on the 
percentage with errors that affect entitlement, benefit amount, and 
effective date.
    However, there is a gap in quality assurance for purposes of 
individual accountability in quality decisionmaking. In the STAR 
program, a sample is drawn each month from a regional office workload 
divided between rating, authorization, and fiduciary end-products. 
However, VA recognizes that these samples are only large enough to 
determine national and regional office quality. Samples as small as 10 
cases per month per office are woefully inadequate to determine 
individual quality.
    While VA attempts to analyze quality trends identified by the STAR 
review process, claims are so complex, with so many potential 
variables, that meaningful trend analysis is difficult. As a 
consequence, the VBA rarely obtains data of sufficient quality to allow 
it to reform processes, procedures, or policies.
    As mentioned above, STAR samples are far too small to allow any 
conclusions concerning individual quality. That is left to rating team 
coaches who are charged with reviewing a sample of ratings for each 
rating veteran service representative (RVSR) each month. This review 
should, if conducted properly, identify those employees with the 
greatest problems. In practice, however, most rating team coaches have 
insufficient time to review what could be 100 or more cases each month. 
As a consequence, individual quality is often under-evaluated and 
employees with quality problems fail to receive the extra training and 
individualized mentoring that might allow them to be competent raters.
    In the past 15 years the VBA has moved from a quality-control 
system for ratings that required three signatures on each rating before 
it could be promulgated to the requirement of but a single signature. 
Nearly all VA rating specialists, including those with just a few 
months' training, have been granted some measure of ``single 
signature'' authority. Considering the amount of time it takes to train 
an RVSR, the complexity of veterans disability law, the frequency of 
change mandated by judicial decisions, and new legislation or 
regulatory amendments, a case could and should be made that the routine 
review of a second well-trained RVSR would avoid many of the problems 
that today clog the appeals system.
    The Veterans' Benefits Improvement Act of 2008 (section 226) 
required VA to conduct a study on the effectiveness of the current 
employee work-credit system and work-management system. In carrying out 
the study, VA is required to consider, among other things: (1) measures 
to improve the accountability, quality, and accuracy for processing 
claims for compensation and pension benefits; (2) accountability for 
claims adjudication outcomes; and (3) the quality of claims 
adjudicated. The legislation requires VA to submit the report to 
Congress, which must include the components required to implement the 
updated system for evaluating VBA employees, no later than October 31, 
2009.
    This is a historic opportunity for VA to implement a new 
methodology--a new philosophy--by developing a new system with a 
primary focus of quality through accountability. Properly undertaken, 
the outcome would result in a new institutional mindset across the 
VBA--one that focuses on the achievement of excellence--and change a 
mindset focused mostly on quantity-for-quantity's sake to a focus of 
quality and excellence. Those who produce quality work are rewarded and 
those who do not are finally held accountable.

Recommendation:
      The VA Secretary's upcoming report must focus on how the 
Department will establish a quality assurance and accountability 
program that will detect, track, and hold responsible those VA 
employees who commit errors while simultaneously providing employee 
motivation for the achievement of excellence. VA should generate the 
report in consultation with veterans service organizations most 
experienced in the claims process.
    We invite your attention to the IB itself for the details of the 
remaining recommendations, but the following summarizes a number of 
suggestions to improve benefit programs administered by VBA:

      allow veterans eligible for benefits under title 38, 
United States Code, sections 31 and 33 to choose the most favorable 
housing allowance from the two programs
      support legislation to clarify the intent of Congress 
concerning who is considered to have engaged in combat
      repeal in whole the offset between disability 
compensation and military retired pay
      provide 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
      propose a rule change to the Federal Register that would 
update the mental health rating criteria
      provide 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
      increase the maximum coverage and adjustment of the 
premium rates for Service-Disabled Veterans' Life Insurance
      increase the maximum coverage available in policies of 
Veterans' Mortgage Life Insurance
      enforce VA's benefit of the doubt rule in judicial 
proceedings
      appoint judges to the Court of Appeals for Veterans 
claims who are advocates experienced VA law
      support legislation to increase Dependency and Indemnity 
Compensation (DIC) for certain survivors of veterans, and to no longer 
offset DIC with Survivor Benefit Plan payments. And
      authorize rates of DIC for surviving spouses of 
servicemembers who die while on active duty to the same rate as those 
who die while rated totally disabled.

    We hope the Committee will review these recommendations and give 
them consideration for inclusion in your legislative plans for FY 2009. 
Mr. Chairman, thank you for inviting the DAV and other member 
organizations of the IB 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 the Committee:
    On behalf of the 2.4 million men and women of the Veterans of 
Foreign Wars of the U.S. (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.
    On May 5, 2008, VA released the final results of its Capital Asset 
Realignment for Enhanced Services (CARES) business plan study for 
Boston, Massachusetts. The decision to keep the four Boston-area 
medical campuses open was the culmination of many years of work and 
1910s of millions of dollars as it marked the final step of the CARES 
planning process.
    CARES--VA's data-drive assessment of VA's current and future 
construction needs--gave VA a long-term roadmap and has helped guide 
its capital planning process over the past few fiscal years. CARES 
showed a large number of significant construction priorities that would 
be necessary for VA to fulfill its obligation to this Nation's veterans 
and over the last several fiscal years, the Administration and Congress 
have made significant inroads in funding these priorities. Since FY 
2004, $4.9 billion has been allocated for these projects. Of these 
CARES-identified projects, VA has completely five and another 27 are 
currently under construction. It has been a huge, but necessary 
undertaking and VA has made slow, but steady progress on these critical 
projects.
    The challenge for VA in the post-CARES era is that there are still 
numerous projects that need to be carried out, and the current backlog 
of partially funded projects that CARES has identified is large, too. 
This means that VA is going to continue to require significant 
appropriations for the major and minor construction accounts to live up 
to the promise of CARES.
    VA's most recent Asset Management Plan provides an update of the 
state of CARES projects--including those only in the planning of 
acquisition process. Appendix E (pages 93-95) shows a need of future 
appropriations to complete these projects of $2.195 billion.


------------------------------------------------------------------------
                                                   Future Funding Needed
                     Project                          ($ In Thousands)
------------------------------------------------------------------------
Pittsburgh                                                       62,400
Orlando                                                         462,700
San Juan                                                         91,620
Denver                                                          580,900
Bay Pines                                                       156,800
Los Angeles                                                     103,864
Palo Alto                                                       412,010
St. Louis                                                       122,500
Tampa                                                           202,600
                                                  ----------------------
    TOTAL                                                     2,195,394
------------------------------------------------------------------------


    This amount represents just the backlog of current construction 
projects. It also does not reflect the additional $401 million Congress 
gave VA as part of the FY 2009 appropriation, which did not earmark 
specific construction projects.
    Meanwhile, VA continues to identify and reprioritize potential 
major construction projects. These priorities, which are assessed using 
the rigorous methodology that guided the CARES decisions are released 
in the Department's annual Five Year Capital Asset Plan, which is 
included in the Department's budget submission. The most recent one was 
included in Volume IV and is available on VA's Web site: http://
www.va.gov/budget/summary/2009/index.htm
    Pages 7-12 of that document shows the priority scoring of projects. 
Last year's budget request sought funding for only three of the top 
scored projects. No funding was requested for any other new project, 
including those in Seattle, Dallas, Louisville or Roseburg, Oregon. In 
addition to the already-identified needs from that table, page 7-86 
shows a long list of potential major construction projects the 
department plans to evaluate from now through FY 13. These 122 
potential projects demonstrate the continued need for VA to upgrade and 
repair its aging infrastructure, and that continuous funding is 
necessary for not just the backlog of projects, but to keep VA viable 
for today's and future veterans.
    In a November 17, 2008 letter to the Senate Veterans Affairs 
Committee, Secretary Peake said that ``the Department estimates that 
the total funding requirement for major medical facility projects over 
the next 5 years would be in excess of $6.5 billion.''
    It is clear that VA needs a significant infusion of cash for its 
construction priorities. VA's own words and studies show this.


               Major Construction Account Recommendations
------------------------------------------------------------------------
                                                    Recommendation ($ in
                     Category                            Thousands)
------------------------------------------------------------------------
VHA Facility Construction                                      $900,000
NCA Construction                                                $80,000
Advance Planning                                                $45,000
Master Planning                                                 $20,000
Historic Preservation                                           $20,000
Miscellaneous Accounts                                          $58,000
                                                  ----------------------
    TOTAL                                                    $1,123,000
------------------------------------------------------------------------


      VHA Facility Construction--this amount would allow VA to 
continue digging into the $2 billion backlog of partially funded 
construction projects. Depending on the stages and ability to complete 
portions of the projects, any additional money could be used to fund 
new projects identified by VA as part of its prioritization methodology 
in the Five-Year Capital Plan.
      NCA Construction--page 7-143 of VA's Five-Year Capital 
Plan details numerous potential major construction projects for the 
National Cemetery Association throughout the country. This level of 
funding would allow VA to begin construction on at least three of its 
scored priority projects.
      Advance Planning--helps develop the scope of the major 
construction projects as well as identifying proper requirements for 
their construction. It allows VA to conduct necessary studies and 
research similar to planning processes in the private sector.
      Master Planning--a description of our request follows 
later in the text.
      Historic Preservation--a description of our request 
follows later in the text.
      Miscellaneous Accounts--these include the individual line 
items for accounts such as asbestos abatement, the judgment fund and 
hazardous waste disposal. Our recommendation is based upon the historic 
level for each of these accounts.


               Minor Construction Account Recommendations
------------------------------------------------------------------------
                                                       Funding ($ in
                     Category                            Thousands)
------------------------------------------------------------------------
Veterans Health Administration                                 $550,000
Medical Research Infrastructure                                $142,000
National Cemetery Administration                               $100,000
Veterans Benefits Administration                                $20,000
Staff Offices                                                   $15,000
                                                  ----------------------
    TOTAL                                                      $827,000
------------------------------------------------------------------------


      Veterans Health Administration--Page 7-95 of VA's Capital 
Plan reveals hundreds of already identified minor construction 
projects. These projects update and modernize VA's aging physical plant 
ensuring the health and safety of veterans and VA employees. 
Additionally, a great number of minor construction projects address 
FCA-identified maintenance deficiencies, the backlog of which was 
nearly $5 billion at the start of FY 08 (page 7-64).
      Medical Research Infrastructure--a description of our 
request follows later in the text.
      National Cemetery Administration--Page 7-145 of the 
Capital Plan identifies numerous minor construction projects throughout 
the country including the construction of several columbaria, 
installation of crypts and landscaping and maintenance improvements. 
Some of these projects could be combined with VA's new NCA nonrecurring 
maintenance efforts.
      Veterans Benefits Administration--Page 7-126 of the 
Capital Plan lists several minor construction projects in addition to 
the leasing requirements VBA needs. This funding also includes $2 
million it transfers yearly for the security requirements of its Manila 
office.
      Staff Offices--Page 7-166 lists numerous potential minor 
construction projects related to staff offices, including increased 
space and numerous renovations for VA's Inspector General's office.

             Increase Spending on Nonrecurring Maintenance

The deterioration of many VA properties requires increased spending on 
                        nonrecurring maintenance

    For years, The Independent Budget Veteran Service Organizations 
(IBVSOs) have highlighted the need for increased funding for the 
nonrecurring maintenance (NRM) account. NRM consists of small projects 
that are essential to the proper maintenance of and preservation of the 
lifespan of VA's facilities. NRM projects are one-time repairs such as 
maintenance to roofs, repair and replacement of windows and flooring or 
minor upgrades to the mechanical or electrical systems. They are a 
necessary component of the care and stewardship of a facility.
    These projects are so essential because if left unrepaired, they 
can really take their toll on a facility, leading to more costly 
repairs in the future, and the potential of a need for a minor 
construction project. Beyond the fiscal aspects, facilities that fall 
into disrepair can create access difficulties and impair patient and 
staff health and safety, and if things do develop into a larger 
construction projection because early repairs were not done, it creates 
an even larger inconvenience for veterans and staff.
    The industry standard for medical facilities is for managers to 
spend from 2 percent-4 percent of plant replacement value (PRV) on 
upkeep and maintenance. The 1998 PriceWaterhouseCoopers study of VA's 
facilities management practices argued for this level of funding and 
previous versions of VA's own Asset Management Plan have agreed that 
this level of funding would be adequate.
    The most recent estimate of VA's PRV is from the FY 08 Asset 
Management Plan. Using the standards of the Federal Government's 
Federal Real Property Council (FRPC), VA's PRV is just over $85 billion 
(page 26).
    Accordingly, to fully maintain its facilities, VA needs a NRM 
budget of at least $1.7 billion. This number would represent a doubling 
of VA's budget request from FY 2009, but is in line with the total NRM 
budget when factoring in the increases Congress gave in the 
appropriations bill and the targeted funding included in the 
supplemental appropriations bills.
    Increased funding is required not to just to fill current 
maintenance needs and levels, but also to dip into the extensive 
backlog of maintenance requirements VA has. VA monitors the condition 
of its structures and systems through the Facility Condition Assessment 
(FCA) reports. VA surveys each medical center periodically, giving each 
building a thorough assessment of all essential systems. Systems are 
assigned a letter grade based upon the age and condition of various 
systems, and VA gives each component a cost for repair or replacement.
    The bulk of these repairs and replacements are conducted through 
the NRM program, although the large increases in minor construction 
over the last few years have helped VA to address some of these 
deficiencies.
    VA's 2009 5-Year Capital Plan discusses FCAs and acknowledges the 
significant backlog, noting that in FY 2007, the number of high 
priority deficiencies--those with ratings of D or F--had replacement 
and repair costs of over $5 billion. Even with the increased funding of 
the last few years, VA estimates that the cost for repairing or 
replacing the high priority deficiencies is over $4 billion.
    VA uses the FCA reports as part of its Federal Real Property 
Council (FRPC) metrics. The department calculates a Facility Condition 
Index, which is the ratio of the cost of FCA repairs to the cost of 
replacement. According to the FY 08 Asset Management Plan, this metric 
has gone backward from 82 percent in 2006 to just 68 percent in 2008. 
VA's strategic goal is 87 percent, and for it to meet that, it would 
require a sizeable investment in NRM and minor construction.
    Given the low level of funding the NRM account has historically 
received, the IBVSOs are not surprised at the metrics or the dollar 
cost of the FCA deficiencies. The 2007 ``National Roll Up of 
Environment of Care Report,'' which was conducted in light of the 
shameful maintenance deficiencies at Walter Reed further prove the need 
for increased spending on this account. Maintenance has been neglected 
for far too long, and for VA to provide safe, high-quality health care 
in its aging facilities, it is essential that more money be allocated 
for this account.
    We also have concerns with how NRM funding is actually apportioned. 
Since it falls under the Medical Care account, NRM funding has 
traditionally been apportioned using the Veterans Equitable Resource 
Allocation (VERA) formula. This model works when divvying up health 
care dollars, targeting money to those areas with the greatest demand 
for health care. When dealing with maintenance needs, though, this same 
formula may actually intensify the problem, moving money away from 
older hospitals, such as in the northeast, to newer facilities where 
patient demand is greater, even if the maintenance needs are not as 
high. We were happy to see that the conference reports to the VA 
appropriations bills required NRM funding to be apportioned outside the 
VERA formula, and we would hope that this continues into the future.
    Another issue related to apportionment of funding came to light in 
a May 2007 Government Accountability Office (GAO) report. They found 
that the bulk of NRM funding is not actually apportioned until 
September, the final month of the fiscal year. In September 2006, GAO 
found that VA allocated 60 percent of that year's NRM funding. This is 
a shortsighted policy that impairs VA's ability to properly address its 
maintenance needs, and since NRM funding is year-to-year, it means that 
it could lead to wasteful or unnecessary spending as hospital managers 
rushed in a flurry to spend their apportionment before forfeiting it 
back. We cannot expect VA to perform a year's worth of maintenance in a 
month. It is clearly poor policy and not in the best interest of 
veterans. The IBVSOs believe that Congress should consider allowing 
some NRM money to be carried over from one fiscal year to another. 
While we would hope that this would not resort to hospital managers 
hoarding money, it could result in more efficient spending and better 
planning, rather than the current situation where hospital managers 
sometimes have to spend through a large portion of maintenance funding 
before losing it at the end of the fiscal year.
Recommendations:
    VA must dramatically increase funding for nonrecurring maintenance 
in line with the 2 percent-4 percent total that is the industry 
standard so as to maintain clean, safe and efficient facilities. VA 
also requires additional maintenance funding to allow the department to 
begin addressing the substantial maintenance backlog of FCA-identified 
projects.
    Portions of the NRM account should be continued to be funded 
outside of the VERA formula so that funding is allocated to the 
facilities that actually have the greatest maintenance needs.
    Congress should consider the strengths of allowing VA to carryover 
some maintenance funding from one fiscal year to another so as to 
reduce the temptation some VA hospital managers have of inefficiently 
spending their NRM money at the end of a fiscal year for fear of losing 
it.

          Inadequate Funding and Declining Capital Asset Value
   VA must protect against deterioration of its infrastructure and a 
                     declining capital asset value

    The last decade of underfunded construction budgets has meant that 
VA has not adequately recapitalized its facilities. Recapitalization is 
necessary to protect the value of VA's capital assets through the 
renewal of the physical infrastructure. This ensures safe and fully 
functional facilities long into the future. VA's facilities have an 
average age of over 55 years, and it is essential that funding be 
increased to renovate, repair and replace these aging structures and 
physical systems.
    As in past years, the IBVSOs cite the Final Report of the 
President's Task Force to Improve Health Care Delivery for Our Nation's 
Veterans (PTF). It found that from 1996-2001, VA's recapitalization 
rate was just 0.64 percent. At this rate, VA's structures would have an 
assumed life of 155 years.
    The PTF cited a PriceWaterhouseCoopers study of VA's facilities 
management programs that found that to keep up with industry standards 
in the private sector and to maintain patient and employee safety and 
optimal health care delivery, VA should spend a minimum of 5 to 8 
percent of plant replacement value (PRV) on its total capital budget.
    The FY 08 VA Asset Management Plan provides the most recent 
estimate of VA's PRV. Using the guidance of the Federal Government's 
Federal Real Property Council (FRPC), VA's PRV is just over $85 billion 
(page 26).
    Accordingly, using that 5 to 8 percent-standard, VA's capital 
budget should be between $4.25 and $6.8 billion per year in order to 
maintain its infrastructure.
    VA's capital budget request for FY 2009--which includes major and 
minor construction, maintenance, leases and equipment--was just $3.6 
billion. We greatly appreciate that Congress increased funding above 
that level with an increase over the Administration request of $750 
million in major and minor construction alone. That increased amount 
brought the total capital budget in line with industry standards, and 
we strongly urge that these targets continue to be met and we would 
hope that future VA requests use these guidelines as a starting point 
without requiring Congress to push them past the target.

Recommendation:
    Congress and the Administration must ensure that there are adequate 
funds for VA's capital budget so that VA can properly invest in its 
physical assets to protect their value and to ensure that the 
Department can continue to provide health care in safe and functional 
facilities long into the future.

                 Maintain VA's Critical Infrastructure

    The IBVSOs are concerned with VA's recent attempts to back away 
from the capital infrastructure blueprint laid out by CARES and we are 
worried that its plan to begin widespread leasing and contracting for 
inpatient services might not meet the needs of veterans.
    VA acknowledges three main challenges with its capital 
infrastructure projects. First, they are costly. According to a March 
2008 briefing given to the VSO community, over the next 5 years, VA 
would need $2 billion per year for its capital budget. Second, there is 
a large backlog of partially funded construction projects. That same 
briefing claimed that the difference in major construction requests 
given to OMB was $8.6 billion from FY 03 through FY 09, and that they 
have received slightly less than half that total. Additionally, there 
is a $2 billion funding backlog for projects that are partially but not 
completely funded. Third, VA is concerned about the timeliness of 
construction projects, noting that it can take the better part of a 
decade from the time VA initially proposes a project until the doors 
actually open for veterans.
    Given these challenges, VA has floated the idea of a new model for 
health care delivery, the Health Care Center Facility (HCCF) leasing 
program. Under the HCCF, VA would begin leasing large outpatient 
clinics in lieu of major construction. These large clinics would 
provide a broad range of outpatient services including primary and 
specialty care as well as outpatient mental health services and 
ambulatory surgery.
    On the face of it, this sounds like a good initiative. Leasing has 
the advantage of being able to be completed quickly, as well as being 
adaptable, especially when compared to the major construction process. 
Leasing has been particularly valuable for VA as evidenced by the 
success of the Community Based Outpatient Clinics (CBOCs) and Vet 
Centers.
    Our concern rests, however, with VA's plan for inpatient services. 
VA aims to contract for these essential services with affiliates or 
community hospitals. This program would privatize many services that 
the IBVSOs believe VA should continue to provide. We lay out our 
objections to privatization and widespread contracting for care 
elsewhere in The Independent Budget.
    Beyond those objections, though, is the example of Grand Island, 
Nebraska. In 1997, the Grand Island VA Medical Center closed its 
inpatient facilities, contracting out with a local hospital for those 
services. Recently, the contract between the local facility and VA was 
canceled, meaning veterans in that area can no longer receive inpatient 
services locally. They must travel great distances to other VA 
facilities such as the Omaha VA Medical Center. In some cases, when 
Omaha is unable to provide specialized care, VA is flying patients at 
its expense to faraway VA medical centers, including those in St. Louis 
and Minneapolis.
    Further, with the canceling of that contract, St. Francis no longer 
provides the same level of emergency services that a full VA Medical 
Center would provide. With VA's restrictions on paying for emergency 
services in non-VA facilities, especially for those who may have some 
form of private insurance, this amounts to a cut in essential services 
to veterans. Given the expenses of air travel and medevac services, the 
current arrangement in Grand Island has likely not resulted in any cost 
savings for VA. Ferrying sick and disabled veterans great distances for 
inpatient care also raises patient safety and quality concerns.
    The HCCF program raises many concerns for the IBVSOs that VA must 
address before we can support the program. Among these questions, we 
wonder how VA would handle governance, especially with respect to the 
large numbers of non-VA employees who would be treating veterans? How 
would the non-VA facility deal with VA directives and rule changes that 
govern health care delivery and that ensure safety and uniformity of 
the quality of care? Will VA apply its space planning criteria and 
design guides to non-VA facilities? How will VA's critical research 
activities, most of which improve the lives of all Americans and not 
only veterans, be affected if they are being conducted in shared 
facilities, and not a traditional part of VA's first-class research 
programs? What would this change mean for VA's electronic health 
record, which many have rightly lauded as the standard that other 
health care systems should aim to achieve? Without the electronic 
health record, how would VA maintain continuity of care for a veteran 
who moves to another area?
    But most importantly, CARES required years to complete and consumed 
thousands of hours of effort and millions of dollars of study. We 
believe it to be a comprehensive and fully justified roadmap for VA's 
infrastructure as well as a model that VA can apply periodically to 
assess and adjust those priorities. Given the strengths of the CARES 
process and the lessons VA learned and has applied from it, why is the 
HCCF model, which to our knowledge has not been based on any sort of 
model or study of the long-term needs of veterans, the superior one? We 
have yet to see evidence that it is and until we see more convincing 
evidence that it will truly serve the best needs of veterans, the 
IBVSOs will have a difficult time supporting it.

Recommendation:
    VA must resist implementing the HCCF model without fully addressing 
the many questions the IBVSOs have and VA must explain how the program 
would meet the needs of veterans, particularly as compared to the 
roadmap CARES has laid out.

                    Research Infrastructure Funding

The Department of Veterans Affairs must have increased funding for its 
  research infrastructure to provide a state-of-the-art research and 
 laboratory environment for its excellent programs, but also to ensure 
     that VA hires and retains the top scientists and researchers.

VA Research Is a National Asset
    Research conducted in the Department of Veterans Affairs has led to 
such innovations and advances as the cardiac pacemaker, nuclear 
scanning technologies, radioisotope diagnostic techniques, liver and 
other organ transplantation, the nicotine patch, and vast improvements 
in a variety of prosthetic and sensory aids. A state-of-the-art 
physical environment for conducting VA research promotes excellence in 
health professions education and VA patient care as well as the 
advancement of biomedical science. Adequate and up-to-date research 
facilities also help VA recruit and retain the best and brightest 
clinician scientists to care for enrolled veterans.

VA Research Infrastructure Funding Shortfalls
    In recent years, funding for the VA Medical and Prosthetics 
Research Program has failed to provide the resources needed to 
maintain, upgrade, and replace VA's aging research facilities. Many VA 
facilities have exhausted their available research space. Along with 
space reconfiguration, ventilation, electrical supply, and plumbing 
appear frequently on lists of needed upgrades in VA's academic health 
centers. In the 2003 Draft National Capital Asset Realignment for 
Enhanced Services (CARES) plan, VA included $142 million designated for 
renovation of existing research space and build-out costs for leased 
researched facilities. However, these capital improvement costs were 
omitted from the Secretary's final report. Over the past decade, only 
$50 million has been spent on VA research construction or renovation 
nationwide, and only 24 of the 97 major VA research sites across the 
Nation have benefited.
    In House Report 109-95 accompanying the FY 2006 VA appropriations, 
the House Appropriations Committee directed VA to conduct ``a 
comprehensive review of its research facilities and report to the 
Congress on the deficiencies found and suggestions for correction of 
the identified deficiencies.'' In FY 2008, the VA Office of Research 
and Development initiated a multiyear examination of all VA research 
infrastructure for physical condition and capacity for current 
research, as well as program growth and sustainability of the space 
needed to conduct research.

Lack of a Mechanism to Ensure VA's Research Facilities Remain 
        Competitive
    In House Report 109-95 accompanying the FY 2006 VA appropriations, 
the House Appropriations Committee expressed concern that ``equipment 
and facilities to support the research program may be lacking and that 
some mechanism is necessary to ensure the Department's research 
facilities remain competitive.'' A significant cause of research 
infrastructure's neglect is that there is no direct funding line for 
research facilities.
    The VA Medical and Prosthetic Research appropriation does not 
include funding for construction, renovation, or maintenance of 
research facilities. VA researchers must rely on their local facility 
managements to repair, upgrade, and replace research facilities and 
capital equipment associated with VA's research laboratories. As a 
result, VA research competes with other medical facilities' direct 
patient care needs--such as medical services infrastructure, capital 
equipment upgrades and replacements, and other maintenance needs--for 
funds provided under either the VA Medical Facilities appropriation 
account or the VA Major or Minor Medical Construction appropriations 
accounts.

Recommendations:
    The Independent Budget veterans service organizations anticipate 
VA's analysis will find a need for funding significantly greater than 
VA had identified in the 2004 Capital Asset Realignment for Enhanced 
Services report. As VA moves forward with its research facilities 
assessment, the IBVSOs urge Congress to require the VA to submit the 
resulting report to the House and Senate Committees on Veterans' 
Affairs no later than October 1, 2009. This report will ensure that the 
Administration and Congress are well informed of VA's funding needs for 
research infrastructure so they may be fully considered at each stage 
of the FY 2011 budget process.
    To address the current shortfalls, the IBVSOs recommend an 
appropriation in FY 2010 of $142 million, dedicated to renovating 
existing VA research facilities in line with the 2004 CARES findings.
    To address the VA research infrastructure's defective funding 
mechanism, the IBVSOs encourage the Administration and Congress to 
support a new appropriations account in FY 2010 and thereafter to 
independently define and separate VA research infrastructure funding 
needs from those related to direct VA medical care. This division of 
appropriations accounts will empower VA to address research facility 
needs without interfering with the renovation and construction of VA 
direct health-care infrastructure.

                Program for Architectural Master Plans:

    Each VA medical facility must develop a detailed master plan.
    The delivery models for quality health care are in a constant state 
of change. This is due to many factors including advances in research, 
changing patient demographics, and new technology.
    The VA must design their facilities with a high level of 
flexibility in order to accommodate these new methods of patient care. 
The department must be able to plan for change to accommodate new 
patient care strategies in a logical manner with as little effect as 
possible on other existing patient care programs. VA must also provide 
for growth in already existing programs.
    A facility master plan is a comprehensive tool to look at potential 
new patient care programs and how they might affect the existing health 
care facility. It also provides insight with respect to possible 
growth, current space deficiencies, and other facility needs for 
existing programs and how VA might accommodate these in the future.
    In some cases in the past, VA has planned construction in a 
reactive manner. After funding, VA would place projects in the facility 
in the most expedient manner--often not considering other projects and 
facility needs. This would result in shortsighted construction that 
restricts, rather than expands options for the future.
    The IBVSOs believe that each VA medical Center should develop a 
comprehensive facility master plan to serve as a blueprint for 
development, construction, and future growth of the facility. Short and 
long-term CARES objectives should be the basis of the master plan.
    Four critical programs were not included in the CARES initiative. 
They are long-term care, severe mental illness, domiciliary care, and 
Polytrauma. VA must develop a comprehensive plan addressing these needs 
and its facility master plans must account for these services.
    VA has undertaken master planning for several VA facilities; most 
recently Tampa, Florida. This is a good start, but VA must ensure that 
all facilities develop a master plan strategy to validate strategic 
planning decisions, prepare accurate budgets, and implement efficient 
construction that minimizes wasted expenses and disruption to patient 
care.

Recommendation:
    Congress must appropriate $20 million to provide funding for each 
medical facility to develop a master plan.
    Each facility master plan should include the areas left out of 
CARES; long-term care, severe mental illness, domiciliary care, and 
Polytrauma programs as it relates to the particular facility.
    VACO must develop a standard format for these master plans to 
ensure consistency throughout the VA health care system.

                      Empty or Underutilized Space

    VA must not use empty space inappropriately and must continue 
disposing of unnecessary property where appropriate Studies have 
suggested that the VA medical system has extensive amounts of empty 
space that the Department can reuse for medical services. Others have 
suggested that unused space at one medical center may help address a 
deficiency that exists at another location. Although the space 
inventories are accurate, the assumption regarding the feasibility of 
using this space is not.
    Medical facility planning is complex. It requires intricate design 
relationships for function, but also because of the demanding 
requirements of certain types of medical equipment. Because of this, 
medical facility space is rarely interchangeable, and if it is, it is 
usually at a prohibitive cost. For example, VA cannot use unoccupied 
rooms on the eighth floor to offset a deficiency of space in the second 
floor surgery ward. Medical space has a very critical need for inter- 
and intra-departmental adjacencies that must be maintained for 
efficient and hygienic patient care.
    When a department expands or moves, these demands create a domino 
effect of everything around it. These secondary impacts greatly 
increase construction expense, and they can disrupt patient care.
    Some features of a medical facility are permanent. Floor-to-floor 
heights, column spacing, light, and structural floor loading cannot be 
altered. Different aspects of medical care have different requirements 
based upon these permanent characteristics. Laboratory or clinical 
spacing cannot be interchanged with ward space because of the needs of 
different column spacing and perimeter configuration. Patient wards 
require access to natural light and column grids that are compatible 
with room-style layouts. Labs should have long structural bays and 
function best without windows. When renovating empty space, if the area 
is not suited to its planned purpose, it will create unnecessary 
expenses and be much less efficient.
    Renovating old space rather than constructing new space creates 
only a marginal cost savings. Renovations of a specific space typically 
cost 85 percent of what a similar, new space would. When you factor in 
the aforementioned domino or secondary costs, the renovation can end up 
costing more and produce a less satisfactory result. Renovations are 
sometimes appropriate to achieve those critical functional adjacencies, 
but it is rarely economical.
    Many older VA Medical Centers that were rapidly built in the 1940s 
and 1950s to treat a growing veteran population are simply unable to be 
renovated for modern needs. Most of these Bradley-style buildings were 
designed before the widespread use of air conditioning and the floor-
to-floor heights are very low. Accordingly, it is impossible to 
retrofit them for modern mechanical systems. They also have long, 
narrow wings radiating from a small central core, which is an 
inefficient way of laying out rooms for modern use. This central core, 
too, has only a few small elevator shafts, complicating the vertical 
distribution of modern services.
    Another important problem with this unused space is its location. 
Much of it is not located in a prime location; otherwise, VA would have 
previously renovated or demolished this space for new construction. 
This space is typically located in outlying buildings or on upper floor 
levels, and is unsuitable for modern use.

               VA Space Planning Criteria/Design Guides:

    VA must continue to maintain and update the Space Planning Criteria 
and Design Guides to reflect state-of-the-art methods of health care 
delivery.
    VA has developed space-planning criteria it uses to allocate space 
for all VA health care projects. These criteria are organized into 
sixty chapters; one for each health care service provided by VA as well 
as their associated support services. VA updates these criteria to 
reflect current methods of health care delivery.
    In addition to updating these criteria, VA has utilized a computer 
program called VA SEPS (Space and Equipment Planning System) it uses as 
a tool to develop space and equipment allocation for all VA health care 
projects. This tool is operational and VA currently uses it on all VA 
health care projects.
    The third component used in the design of VA health care projects 
is the design guides. Each of the sixty space planning criteria 
chapters has an associated design guide. These design guides go beyond 
the allocation of physical space and outline how this space is 
organized within each individual department, as well as how the 
department relates to the entire medical facility.
    VA has updated several of the design guides to reflect current 
patient delivery models. These include those guides that cover Spinal 
Cord Injury/Disorders Center, Imaging, Polytrauma Centers, as well as 
several other services.
Recommendation:
    The VA must continue to maintain and update the Space Planning 
Criteria and the VA SEPS space-planning tool. It also must continue the 
process of updating the Design Guides to reflect current delivery 
models for patient care. VA must regularly review and update all of 
these space-planning tools as needed, to reflect the highest level of 
patient care delivery.

               Design-build Construction Delivery System

    The VA must evaluate use of the Design-build construction delivery 
system.
    For the past 10 years, VA has embraced the design-build 
construction delivery system as a method of project delivery for many 
health care projects. Design-build attempts to combine the design and 
construction schedules in order to streamline the traditional design-
bid-build method of project delivery. The goal is to minimize the risk 
to the owner and reduce the project delivery schedule. Design-build, as 
used by VA, places the contractor as the design builder.
    Under the contractor-led design build process, VA gives the 
contractor a great deal of control over how he or she designs and 
completes the project. In this method, the contractor hires the 
architect and design professionals. With the architect as a 
subordinate, a contractor may sacrifice the quality of material and 
systems in order to add to his own profits at the expense of the owner.
    Use of design-build has several inherent problems. A short-cut 
design process reduces the time available to provide a complete design. 
This provides those responsible for project oversight inadequate time 
to review completed plans and specifications. In addition, the 
construction documents may not provide adequate scope for the project, 
leaving out important details regarding the workmanship and/or other 
desired attributes of the project. This makes it difficult to hold the 
builder accountable for the desired level of quality. As a result, a 
project is often designed as it is being built, which often compromises 
VA's design standards.
    Design-build forces the owner to rely on the contractor to properly 
design a facility that meets the owner's needs. In the event that the 
finished project is not satisfactory to the owner, the owner may have 
no means to insist on correction of work done improperly unless the 
contractor agrees with the owner's assessment. This may force the owner 
to go to some form of formal dispute resolution such as litigation or 
arbitration.

Recommendation:
    VA must evaluate the use of Design-build as a method of 
construction delivery to determine if design-build is an appropriate 
method of project delivery for VA health care projects.
    The VA must institute a program of ``lessons learned''. This would 
involve revisiting past projects and determining what worked, what 
could be improved, and what did not work. VA should compile and use 
this information as a guide to future projects. VA must regularly 
update this document to include projects as they are completed.

               Preservation of VA's Historic Structures:

    The VA must further develop a comprehensive program to preserve and 
protect its inventory of historic properties.
    The VA has an extensive inventory of historic structures that 
highlight America's long tradition of providing care to veterans. These 
buildings and facilities enhance our understanding of the lives of 
those who have worn the uniform, and who helped to develop this great 
Nation. Of the approximately 2,000 historic structures, many are 
neglected and deteriorate year after year because of a lack of funding. 
These structures should be stabilized, protected and preserved because 
they are an integral part our Nation's history.
    Most of these historic facilities are not suitable for modern 
patient care. As a result, a preservation strategy was not included in 
the CARES process. For the past 6 years, the IBVSOs have recommended 
that VA conduct an inventory of these properties; classifying their 
physical condition and their potential for adaptive reuse. VA has been 
moving in that direction and historic properties are identified on 
their Web site. VA has placed many of these buildings in an ``Oldest 
and Most Historic'' list and these buildings require immediate 
attention.
    At least one project has received funding. The VA has invested over 
$100,000 in the last year to address structural issues at a unique 
round structure in Hampton, VA. Built in 1860, it was originally a 
latrine and the funding is allowing VA to convert it into office space.
    The cost for saving some of these buildings is not very high 
considering that they represent a part of history that enriches the 
texture of our landscape that once gone cannot be recaptured. For 
example, VA can restore the Greek Revival Mansion in Perry Point, MD, 
which was built in the 17fifties, to use as a training space for about 
$1.2 million. VA could restore the 1881 Milwaukee Ward Memorial Theater 
for use as a multi-purpose facility at a cost of $6 million. This is 
much less than the cost of a new facility.
    As part of its adaptive reuse program, VA must ensure that the 
facilities that it leases or sells are maintained properly. VA's legal 
responsibilities could, for example, be addressed through easements on 
property elements, such as building exteriors or grounds.
    We encourage the use of P.L. 108-422, the Veterans Health Programs 
Improvement Act, which authorized historic preservation as one of the 
uses of a new capital assets fund that receives funding from the sale 
or lease of VA property.

Recommendation:
    VA must further develop a comprehensive program to preserve and 
protect its inventory of historic properties.
    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 2010. 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 23rd 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 health care services, 
including long-term care. And, veterans must be assured accessible 
burial in a state or national cemetery in every state.
    The VA health care 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.
    Mr. Chairman, I want to thank you for introducing H.R. 1016, the 
Veterans Health Care Budget Reform and Transparency Act of 2009. 
Providing sufficient, predictable and timely funding for VA health care 
will go a long way in ensuring our veterans receive the care they need 
from fully staffed, state of the art VA medical centers. I also want to 
thank each Member of the Committee who has co-sponsored this act, and 
for those how still have questions I look forward to further 
discussions so we can solve the problems of the current funding system.
    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 Department of Veterans Affairs National Cemetery Administration 
(NCA) currently maintains more than 2.9 million gravesites at 125 
national cemeteries in 39 states and Puerto Rico. Of these cemeteries, 
65 will be open to all interments; 20 will accept only cremated remains 
and family members of those already interred; and 40 will only perform 
interments of family members in the same gravesite as a previously 
deceased family member. NCA also maintains 33 soldiers' lots and 
monument sites. All told, NCA manages 17,000 acres, half of which are 
developed.
    VA estimates that about 27 million veterans are alive today. They 
include veterans from World War I, World War II, the Korean war, the 
Vietnam War, the Gulf War, the conflicts in Afghanistan and Iraq, and 
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 approximately 100,000 in 2007 to 111,000 
in 2009. Historically, 12 percent of veterans opt for burial in a state 
or national cemetery.
    The most important obligation of the NCA is to honor the memory of 
America's brave men and women who served in the armed forces. 
Therefore, the purpose of these cemeteries as national shrines is one 
of the NCA's top priorities. Many of the individual cemeteries within 
the system are steeped in history, and the monuments, markers, grounds, 
and related memorial tributes represent the very foundation of the 
United States. With this understanding, the grounds, including 
monuments and individual sites of interment, represent a national 
treasure that deserves to be protected and cherished.
    The Independent Budget veterans service organizations (IBVSOs) 
would like to acknowledge the dedication and commitment of the NCA 
staff who continue to provide the highest quality of service to 
veterans and their families. We call on the Administration and Congress 
to provide the resources needed to meet the changing and critical 
nature of NCA's mission and fulfill the Nation's commitment to all 
veterans who have served their country honorably and faithfully.
    In FY 2008, $195 was million appropriated for the operations and 
maintenance of NCA, $28.2 million over the Administration's request, 
with only $220,000 in carryover. NCA awarded 39 of the 42 minor 
construction projects that were in the operating plan. The State 
Cemetery Grants Service awarded $37.3 million of the $39.5 million that 
was appropriated. This carryover was caused by the cancellation of a 
contract that NCA had estimated to be $2 million but the contractor's 
estimation was considerable higher. Additionally, $25 million was 
invested in the National Shrine Commitment.
    NCA has done an exceptional job of providing burial options for 88 
percent of all veterans who fall within the 170,000 veterans within a 
75 mile radius threshold model. However, under this model, no new 
geographical area will become eligible for a national Cemetery until 
2015. St. Louis, Mo. will, at that time, meet the threshold due to the 
closing of Jefferson Barracks National Cemetery in 2017. Analysis shows 
that the five areas with the highest veteran population will not become 
eligible for a national Cemetery because they will not reach the 
170,000 threshold.
    NCA has spent years developing and maintaining a cemetery system 
based on a growing veteran population. In 2010 our veteran population 
will begin to decline. Because of this downward trend, a new threshold 
model must be developed to ensure more of our veterans will have 
reasonable access to their burial benefits. Reducing the mile radius to 
65 miles would reduce the veteran population that is served from 90 
percent to 82.4 percent, and reducing the radius to 55 miles would 
reduce the served population to 74.1 percent. Reducing the radius alone 
to 55 miles would only bring two geographical areas in to 170,000 
population threshold in 2010, and only a few areas into this revised 
model by 2030.
    Several geographical areas will remain unserved if the population 
threshold is not reduced. Lowering the population threshold to 100,000 
veterans would immediately make several areas eligible for a national 
Cemetery regardless of any change to the mile radius threshold. A new 
threshold model must be implemented so more of our veterans will have 
access to this earned benefit.

National Cemetery Administration (NCA) Accounts
    The Independent Budget recommends an operations budget of $241.5 
million for the NCA for fiscal year 2010 so it can meet the increasing 
demands of interments, gravesite maintenance, and related essential 
elements of cemetery operations.
    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.
    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.
    Therefore, in accordance with ``An Independent Study on 
Improvements to Veterans Cemeteries,'' which was submitted to Congress 
in 2002, The Independent Budget again recommends Congress establish a 
5-year, $250 million ``National Shrine Initiative'' to restore and 
improve the condition and character of NCA cemeteries as part of the FY 
2008 operations budget. Volume 2 of the Independent Study provides a 
systemwide, comprehensive review of the conditions at 119 national 
cemeteries. It identifies 928 projects across the country for gravesite 
renovation, repair, upgrade, and maintenance. These projects include 
cleaning, realigning, and setting headstones and markers; cleaning, 
caulking, and grouting the stone surfaces of columbaria; and 
maintaining the surrounding walkways. Grass, shrubbery, and trees in 
burial areas and other land must receive regular care as well. 
Additionally, cemetery infrastructure, i.e. buildings, grounds, walks, 
and drives must be repaired as needed. According to the Study, these 
project recommendations were made on the basis of the existing 
condition of each cemetery after taking into account the cemetery's 
age, its burial activity, burial options and maintenance programs.
    The IBVSOs is encouraged that $25 million was set aside for the 
National Shrine Commitment for FY 07 and 08. The NCA has done an 
outstanding job thus far in improving the appearance of our National 
cemeteries, but we have a long way to go to get us where we need to be. 
By enacting a 5-year program with dedicated funds and an ambitious 
schedule, the national cemetery system can fully serve all veterans and 
their families with the utmost dignity, respect, and compassion.
    In addition to the management of national cemeteries, the NCA is 
responsible for the Memorial Program Service. The Memorial Program 
Service provides lasting memorials for the graves of eligible veterans 
and honors their service through Presidential Memorial Certificates. 
Public Laws 107-103 and 107-330 allow for a headstone or marker for the 
graves of veterans buried in private cemeteries who died on or after 
September 11, 2001. Prior to this change, the NCA could provide this 
service only to those buried in national or state cemeteries or to 
unmarked graves in private cemeteries. Public Law 110-157 gives VA 
authority to provide a medallion to be attached to the headstone or 
marker of veterans who are buried in a private cemetery. This benefit 
is available to veterans in lieu of a government furnished headstone or 
marker.
    The IBVSOs call on the Administration and Congress to provide the 
resources required to meet the critical nature of the NCA mission and 
fulfill the Nation's commitment to all veterans who have served their 
country so honorably and faithfully. Congress should provide NCA with 
$241.5 million for fiscal year 2010 to offset the costs related to 
increased workload, additional staff needs, general inflation and wage 
increases and Congress should include as part of the NCA appropriation 
$50 million for the first stage of a $250 million 5-year program to 
restore and improve the condition and character of existing NCA 
cemeteries.

The State Cemetery Grants Program
    The State Cemeteries Grant Program faces the challenge of meeting a 
growing interest from states to provide burial services in areas that 
are not currently served. The intent of the SCGP is to develop a true 
complement to, not a replacement for, our Federal system of national 
cemeteries. With the enactment of the Veterans Benefits Improvements 
Act 1998, the NCA has been able to strengthen its partnership with 
states and increase burial service to veterans, especially those living 
in less densely populated areas not currently served by a national 
cemetery. Currently there are 55 state and tribal government cemetery 
construction grant pre-applications, 34 of which have the required 
state matching funds necessary totaling $120.7 million.
    The Independent Budget recommends that Congress appropriate $52 
million for SCGP for FY 2010. This funding level would allow SCGP to 
establish six new state cemeteries that will provide burial options for 
179,000 veterans who live in a region that currently has no reasonably 
accessible state or national cemetery.

Burial Benefits
    In 1973 NCA established a burial allowance that provided partial 
reimbursements for eligible funeral and burial costs. The current 
payment is $2,000 for burial expenses for service-connected (SC) death, 
$300 for non-service-connected (NSC) deaths, and $300 for plot 
allowance. At its inception, the payout covered 72 percent of the 
funeral cost for a service-connected death, 22 percent for a non-
service-connected death, and 54 percent of the burial plot cost. In 
2007 these benefits eroded to 23 percent, 4 percent, and 14 percent 
respectively. It is time to bring these benefits back to their original 
value.
    Burial allowance was first introduced in 1917 to prevent veterans 
from being buried in potters' fields. In 1923 the allowance was 
modified. The benefit was determined by a means test, and then in 1936 
the allowance was changed again, removing the means test. In its early 
history, the burial allowance was paid to all veterans, regardless of 
the service-connectivity of their death. In 1973 the allowance was 
modified to reflect the relationship of their death as service 
connected or not.
    The plot allowance was introduced in 1973 as an attempt to provide 
a plot benefit for veterans who did not have reasonable access to a 
national cemetery. Although neither the plot allowance nor the burial 
allowances were intended to cover the full cost of a civilian burial in 
a private cemetery, the increase in the benefit's value indicates the 
intent to provide a meaningful benefit by adjusting for inflation.
    The national average cost for a funeral and burial in a private 
cemetery has reached $8,555, and the cost for a burial plot is $2,133. 
At the inception of the benefit the average costs were $1,116 and $278 
respectively. While the cost of a funeral has increased by nearly seven 
times the burial benefit has only increased by 2.5 times. To bring both 
burial allowances and the plot allowance back to its 1973 value, the SC 
benefit payment will be $6,160, the NSC benefit value payment will be 
$1,918, and the plot allowance will increase to $1,150. Readjusting the 
value of these benefits, under the current system, will increase the 
obligations from $70.1 million to $335.1 million per year.
    Based on accessibility and the need to provide quality burial 
benefits, The Independent Budget recommends that VA separate burial 
benefits into two categories: veterans who live inside the VA 
accessibility threshold model and those who live outside the threshold. 
For those veterans who live outside the threshold, the SC burial 
benefit should be increased to $6,160, NSC veteran's burial benefit 
should be increased to $1,918, and plot allowance should increase to 
$1,150 to match the original value of the benefit. For veterans who 
live within reasonable accessibility to a state or national cemetery 
that is able to accommodate burial needs, but the veteran would rather 
be buried in a private cemetery the burial benefit should be adjusted. 
These veterans' burial benefits will be based on the average cost for 
VA to conduct a funeral. The benefit for a SC burial will be $2,793, 
the amount provided for a NSC burial will be $854, and the plot 
allowance will be $1,150. This will provide a burial benefit at equal 
percentages, but based on the average cost for a VA funeral and not on 
the private funeral cost that will be provided for those veterans who 
do not have access to a state or national cemetery.
    The recommendations of past legislation provided an increased 
benefit for all eligible veterans but it currently fails to reach the 
intent of the original benefit. The new model will provide a meaningful 
benefit to those veterans whose access to a state or national cemetery 
is restricted as well as provides an improved benefit for eligible 
veterans who opt for private burial. Congress should increase the plot 
allowance from $300 to $1,150 for all eligible veterans and expand the 
eligibility for the plot allowance for all veterans who would be 
eligible for burial in a national cemetery, not just those who served 
during wartime. Congress should divide the burial benefits into two 
categories: veterans within the accessibility model and veterans 
outside the accessibility model. Congress should increase the service-
connected burial benefit from $2,000 to $6,160 for veterans outside the 
radius threshold and $2,793 for veterans inside the radius threshold. 
Congress should increase the non-service-connected burial benefit from 
$300 to $1,918 for veterans outside the radius threshold and $854 for 
veterans inside the radius threshold. Congress should enact legislation 
to adjust these burial benefits for inflation annually.
    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 Paul Sullivan,
             Executive Director, Veterans for Common Sense

    Veterans for Common Sense (VCS) thanks Chairman Filner and Members 
of the Committee for inviting us to testify about the Department of 
Veterans Affairs' (VA) budget request for Fiscal Year 2010.
    VCS applauds VA's fiscal year 2010 budget submission. President 
Barack Obama and VA Secretary Eric Shinseki plan to increase VA's 
budget by $15 billion for 2010. This enormous increase is fantastic and 
far exceeds our highest expectations. This dramatic improvement in 
funding should provide a desperately needed shot in the arm for VA to 
increase capacity, streamline policies, and resolve years of chronic 
underfunding. VCS awaits further details about VA's 2010 budget request 
expected to be released in April.
    VCS thanks the Committee for your hearings and for your landmark 
legislation during the 110th Congress. We especially thank you for the 
``Joshua Omvig Veterans Suicide Prevention Act,'' the ``Dignity for 
Wounded Warriors Act,'' and Chairman John Hall's landmark legislation 
launching an overhaul of the Veterans Benefits Administration (VBA). 
Other key legislation passed in the past 2 years includes significant 
budget increases, major cost of living increases, and a lift on VA's 
ban on advertising.

Measuring Success in Five Key Areas
    As described in our recent report, ``Looking Forward: The Status 
and Future of VA,'' http://www.veteransforcommonsense.org/files/vfcs/ 
VCS_Looking_Forward_Report_02-09-2009.pdf, VCS urges Congress to focus on a narrow set of five key measures to monitor VA. We ask you to work with VA to 
consistently, accurately, and transparently define these terms and then 
monitor their quality and timely assistance:

    1.  Health care--excluding mental health
    2.  Health care--mental health
    3.  Suicide prevention
    4.  Reducing homelessness
    5.  Benefits (compensation, pension, education, vocational 
rehabilitation, home loan guaranty, and insurance), especially the 
disability compensation backlog
Key Budgeting Questions
    VCS asks Congress to require that VA answer these key budgeting 
questions:

    1.  Does VA have enough funding, staffing, and legislative guidance 
to process all disability claims within 30 days?
    2.  Does VA have enough funding, staffing, and legislative guidance 
to provide all patients (physical health care and mental health care) 
with care within 30 days?
    3.  Does VA have enough information gathered at each point-of-
service to answer questions one and two?
VA's 2008 Significant Estimation Failure
    VCS begins our testimony by spotlighting an enormous red flag at VA 
in 2008. During the last Administration, VA repeatedly failed to 
accurately estimate the number of Iraq and Afghanistan war veteran 
patients. We hope we can look forward to a time when VA properly 
estimates demand so VA is not caught a day late and a dollar short. To 
the best of our knowledge, VA has never estimated the number of Iraq 
and Afghanistan war veteran disability compensation claims and the 
number of issues per claim. We look forward to learning about VA's 
estimates in the coming months.
    VA's pattern of planning failures has caused enormous harm to our 
veterans by creating massive delays obtaining health care and 
disability benefits. In 2005, VA testified before Congress that the 
agency had sufficient money to provide timely and high-quality health 
care and benefits. This turned out to be a vicious game of smoke and 
mirrors--a tragic game which our veterans always lose. A few months 
later, former VA Secretary Jim Nicholson returned to Congress, hat in 
hand, to request billions of dollars in emergency appropriations.
    VA's planning errors were caused by the prior Administration's 
failure to consider the long-term health care and disability benefit 
needs of returning Iraq and Afghanistan war veterans. VA's planning 
errors continued through 2008, a trend we hope ends with the new 
Administration. In February 2008 statement by former VA Secretary James 
Peake. He told this Committee, ``We expect to treat about 333,000 
veterans in 2009 who served in Operation Enduring Freedom and Operation 
Iraqi Freedom.'' Not only was he wrong, he was wildly off the mark. In 
reality, as of September 30, 2008, VA had already treated more than 
400,000 Iraq and Afghanistan war veterans. As of 6 months ago, VA had 
already underestimated the number of recent combat veteran patients by 
20 percent.
    The situation continues to worsen. Based on the current rate of 
more than 10,000 new Iraq and Afghanistan war veteran patients flooding 
into VA each month, VA may expect a total of 520,000 recent war 
patients by September 30, 2009. That would mean VA underestimated the 
number of new patients by nearly 187,000. VA's estimate may be off by 
as far as 56 percent. While VCS supports opening VA health care to 
Priority Group 8 veterans and those previously denied enrollment since 
2003, we are concerned that VA may not accurately forecast demand, 
leading to additional challenges for an already overburdened system.
    VA has not yet provided an estimate for Iraq and Afghanistan war 
veteran patients for FY 2010. We hope VA planners are monitoring the 
situation carefully so as to avoid repeating the same mistake over and 
over again. VCS asks Congress to require that VA produce accurate 
estimates for new patients and claims for the Iraq and Afghanistan wars 
so that VA leaders adequately prepare budget requests and so our 
veterans receive prompt and high-quality care and benefits. In 
addition, VA should provide more information about VA activities so the 
public can learn the total human and financial costs of the two wars--
and be prepared to support significant increases in VA's budgets for 
the next several decades.
Important Facts About VA
    Any discussion about VA and veterans must be based on the best 
available current information. VCS uses FOIA to obtain documents about 
VA policies and activities in order to better inform Congress, 
journalists, and the public about VA.
    The information VCS obtained under FOIA provides incontrovertible 
evidence that VA's capacity crisis requires more active monitoring and 
significantly increased funding. We believe the Iraq and Afghanistan 
wars, as well as the current severe and worsening economic recession, 
have created extraordinary challenges to VA's future responsibilities.

      VA expects to treat 5.8 million patients this year. VCS 
supports President Obama's plan to open up VA to all eligible veterans, 
including Category 8. With proper planning, this transition can be 
accomplished within a few years.
      VA's Office of the Inspector General reported 25 percent, 
or as many as 1.5 million veterans per year, wait more than 1 month to 
see a VA doctor. This is unacceptable, as no veteran should ever wait 
more than 1 month for care. We also insist that emergent mental health 
patients be treated as equal to physical injuries--there should be no 
delay, especially for suicidal patients or new patients with symptoms 
of PTSD.
      VA regional offices are still working on 672,000 claims 
of all types. As the Afghanistan War expands, as Iraq War veterans 
return home, as VA and DoD conduct more PTSD and TBI screenings, as 
stigma is reduced, and as the 5 years of free VA health care for new 
war veterans begins to expire, VA may see an increase in new claims 
that will further exacerbate the existing claims backlog.
      According to VA, 21 percent of the rating-related claims, 
or 86,000 of all veterans with a claim pending, have already waited 
more than 6 months for a decision. This is an improvement of 4 percent 
compared with last year.

    Here are salient facts regarding Iraq and Afghanistan war veterans:

      DoD reported 82,000 battlefield casualties: nearly 5,000 
deaths plus more than 77,000 non-fatal casualties.
      VA hospitals already treated more than 400,000 veteran 
patients, including 178,000 diagnosed with at least one mental health 
condition.
      VA regional offices received 329,000 veterans' disability 
claims
      54,000 veterans, or 16 percent, wait, on average 6 
months, for a VA decision.
      VA diagnosed more than 105,000 veterans with PTSD
      VA approved 43,000 veterans' claims for PTSD, or 41 
percent of those diagnosed.

    We are also awaiting a Congressionally mandated review of 
discrepancies in claim adjudication outcomes, particularly among 
National Guard and Reserve who are half as likely to file a claim, yet 
twice as likely to be denied. At the request of Congress, VA is also 
reviewing the reason why only 41 percent of Iraq and Afghanistan war 
veterans diagnosed with post traumatic stress disorder (PTSD) by VA 
receive disability compensation for PTSD from VA.
    Planning is critical during these difficult economic times. In a 
worst case scenario based on VA data reporting 10,000 new Iraq and 
Afghanistan war patients per month, VA may treat up to one million Iraq 
and Afghanistan war veterans as
soon as the end of 2013. For more information about VA's significant 
challenges related to the Iraq and Afghanistan wars, please read our 
report, ``Looking Forward:
The Status and Future of VA,'' that can be viewed at: http://
www.veteransforcommonsense.org/files/vfcs/
VCS_Looking_Forward_Report_02-09-2009.pdf
VCS Budget Priorities for Fiscal Year 2010 and Beyond
    VCS would like to share our top 15 priorities for VA's Fiscal Year 
2010 budget and beyond. Each of these priorities addresses key items 
described in our report, ``Looking Forward: The Status and Future of 
VA,'' published in February 2009. VCS supports implementing as many of 
these proposals as possible because of VA's current capacity crisis and 
because many of these initiatives overlap.

1. Streamline and Expedite Veterans' PTSD Claims
    According to a 2008 report by RAND, as many as 338,000 Iraq and 
Afghanistan war veterans are expected to return home and develop post 
traumatic stress disorder (PTSD). VCS urges Congress to pass the 
``COMBAT PTSD Act,'' H.R. 952. Chairman John Hall's superb new bill 
properly defines deployment to combat in order to streamline disability 
compensation claims for PTSD. Our VCS analysis of health care use and 
claims activity among Iraq and Afghanistan war veterans revealed a 
serious discrepancy that demands immediate action by Congress. 
According to VA statistics released to VCS under the Freedom of 
Information Act (FOIA), more than 105,000 Iraq and Afghanistan war 
veterans were diagnosed by VA with PTSD. However, only 42,000 of those 
veterans are receiving disability compensation from VA for PTSD. The 
scientific evidence is conclusive: In 2008, the Institute of Medicine 
concluded there is a link between deployment to a war zone and the 
development of PTSD.
    Now is the time to fix the problem of unreasonable PTSD claim 
delays so that our veterans can receive the PTSD disability benefits 
they earned. With a new law or regulation, VA should be able to quickly 
approve 1910s of thousands of PTSD claims filed by Iraq and Afghanistan 
war veterans. VA would be putting disability benefits in the hands of 
deserving veterans during an economic crisis when their need is most 
acute. Although this proposal may cost billions of dollars in the next 
year, these are entitlement payments VA will eventually pay. 
Furthermore, VA may realize a cost savings when VA employees working on 
PTSD claims are freed up to process other claims of equally deserving 
veterans.

2. Streamline and Expedite Veterans' TBI Claims
    According to the same 2008 RAND report, as many as 357,000 Iraq and 
Afghanistan war veterans are expected to return home diagnosed with 
traumatic brain injury (TBI). In a manner similar to PTSD, VCS urges 
Congress and the VA to implement new rules designed to create a 
presumption for a concussive blast in order to streamline and expedite 
veterans' claims for TBI. VCS thanks VA for issuing new TBI regulations 
that improved the rating schedule for veterans suffering from this 
disabling signature physical wound of the wars. However, VA and 
Congress can go further by streamlining the claims process by presuming 
that veterans diagnosed with TBI were exposed to blasts and other TBI-
causing injuries while deployed to the Iraq and Afghanistan wars 
(absent any other finding). We have a quickly closing window of 
opportunity to address this issue before it gets worse. If Congress and 
VA fail to streamline PTSD and TBI claims, VA faces the very real 
prospect of becoming overwhelmed by 600,000 to 700,000 of these 
difficult to process claims, thus further exacerbating VA's disability 
claim backlog. In a related matter, VCS became alarmed at VA plans to 
close the Central Texas Veterans Health Care System Brain Imaging and 
Recovery Laboratory (BIRL), located on the University of Texas campus 
in Austin, Texas. VCS strongly supports continued funding of scientific 
research to better understand TBI and to find treatments for TBI, 
including the BIRL.

3. Open Hundreds of New VBA Offices
    Now is the time to bring VA to our veterans and beneficiaries so 
they can meet face-to-face with VA claims processing staff and begin 
reversing the isolationist culture of VA. VCS urges Congress to 
significantly expand the Veterans Benefits Administration (VBA) and 
bring VA benefits to locations where our servicemembers leave the 
military and cities where our veterans live. VBA can do this by placing 
permanent claims processing staff at all active duty military 
facilities and in cities throughout the United States in a manner 
similar to the Social Security Administration. Congress should also 
allow VA to place VBA staff at VHA facilities and Vet Centers. VCS 
continues to support a massive expansion of VBA's successful Benefits 
Delivery at Discharge (BDD) program. We especially support VBA's 
efforts to transform BDD into a paperless process. During the 1990s, 
Under Secretary Ken Kizer restructured and reformed the Veterans Health 
Administration, a strong precedent that a new Under Secretary for 
Benefits can and must follow to reform VBA. Attached for the record is 
a one-page briefing paper VCS provided to the Presidential Transition 
Team.

4. Expand Scientific Research, Especially for Gulf War Veterans
    The Research Advisory Committee on Gulf War Veterans' Illnesses 
(RAC), report published in 2008 confirms that between 175,000 and 
210,000 Gulf War veterans remain ill. We are still waiting for 
treatment and benefits from VA. VCS urges Congress to expand research 
to better understand Gulf War Illness. VCS urges Congress to fully fund 
all $30 million for the Department of Defense for competitive research 
in the Congressionally Directed Medical Research Program to search for 
treatments, as recommended by the RAC. We also ask Congress to fund a 
new set of VA--Institute of Medicine contracts to review scientific 
research related to Gulf War toxic exposures that considers both human 
and animal studies. We especially ask that depleted uranium (DU) be re-
examined based on animal studies linking DU exposure in laboratory 
animals to birth defects and cancer. Veterans for Common Sense 
encourages Members of Congress to read the full RAC report, especially 
the recommendations.

5. Better Long-Term Planning
    Never again should VA be caught off guard to the point where VA is 
short billions of dollars in desperately needed funds to provide health 
care to our veterans. VCS urges Congress to continue consolidating VA's 
information technology so VA can collect and analyze more data more 
transparently at the local and national level. VA should be asked to 
provide Congress with a specific plan to collect, report, analyze, and 
share data so that VA, Congress, veterans groups, and academics can 
better monitor the situation for planning, staffing, and budgeting 
purposes over the long-term. Better planning also means better 
training. VCS urges VA to expand training for new employees who will be 
using the data at the local and national level to assist veterans and 
plan for the future, especially with the advent of advanced funding for 
VA.

6. Ending Homelessness
    According to VA, one-in-four homeless people are veterans, and this 
is a national disgrace. Iraq and Afghanistan war veterans are already 
showing up in homeless shelters, a sign of VA's challenges as well as 
the overall dismal state of our economy. VCS believes VA and Congress 
should learn a lesson from the Vietnam War, where our Nation lied to 
send our troops to war and then failed to provide for their return. In 
2003, the prior Administration misled us into another war, and again 
failed to plan for our veterans' homecoming. There should be zero 
tolerance for homeless veterans. We have an opportunity now to prevent 
a national tragedy from happening again by instituting aggressive 
homeless prevention initiatives for all veterans, especially Iraq and 
Afghanistan war veterans. A full compliment of supportive services 
includes employment assistance, drug and alcohol counseling, and mental 
health treatment, as well as VA health care and benefits assistance. 
Please read the entire statement prepared by Swords to Plowshares that 
we ask to be placed into the record.

7. Advanced Funding and Mandatory Full Funding
    VCS supports advanced funding for VA as well as mandatory full 
funding for VA's health care budget. VA needs advanced funding so VA is 
properly prepared to handle changes in patient demand at the local and 
national levels. VA needs mandatory full funding so veterans don't wait 
for medical care--for physical or psychological conditions. VCS 
supports transparent VA budgeting from the bottom up so veterans, 
legislators, and the public are aware of VA's financial needs at the 
local and national levels.

8. Ending Stigma and Discrimination
    One of our top priorities is ending the stigma that often blocks 
servicemembers and veterans from seeking mental health treatment early, 
when it is most effective and least expensive. VCS urges Congress to 
fund anti-stigma programs that
allow VA to collaborate with the Department of Defense (DoD) and the 
Depart-
ment of Labor (DOL). VCS salutes the new DOL Web site, http://
www.americasheroesatwork.gov, and recommends that VA and DoD launch 
similar public education efforts. VCS urges Congress to investigate why 
DoD has not fully implemented the 1997 Force Health Protection laws 
(Public Law 105-85, section 701), a law intended to prevent a repeat of 
the Gulf War illness debacle. VCS believes DoD must begin providing 
pre- and post-deployment medical exams to all servicemembers as a way 
to de-stigmatize mental health conditions. VA needs the pre- and post-
deployment exam records as part of the veteran's medical history for 
treatment and disability benefits.

9. Open a Polytrauma Center at Every VA
    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 on-going 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. This is 
especially important since RAND estimated up to 19.5 percent of our 
returning Iraq and Afghanistan war veterans may suffer from TBI. 
According to the Department of Defense, they have already identified 
more than 180,000 TBI cases from the two wars (Associated Press,

10. Ending Veteran Suicide Epidemic
    VCS thanks VA for implementing their toll-free suicide prevention 
hotline, a tremendously successful effort that received 100,000 calls 
and performed more than 2,600 ``rescues''--saving the lives of 
thousands of distraught veterans. VCS supports a full and prompt 
implementation of VA's Mental Health Strategic Plan. We also support 
VA's new Suicide Prevention Coordinators and Local Recovery 
Coordinators. VCS urges Congress to fund a state-of-the-art suicide 
data collection, reporting, and analysis office at VA that can 
collaborate with the Department of Defense, Department of Health and 
Human Services, and other government agencies. 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, use of 
VA medical centers, use of VA Vet Centers, and use of VA disability 
benefits. VCS remains alarmed at the anecdotal evidence from press 
reports of veterans, often in the National Guard or Reserve, who 
complete suicide shortly after notification of a second or subsequent 
deployment to the combat zone.

11. Expanding Vet Centers
    Congress should enact legislation to expand VA's highly successful 
Vet Centers. VCS urges Congress to allow Vet Centers to provide mental 
health services to active duty servicemembers, either at existing VA 
facilities or at new offices on military bases. This expanded service 
might first be targeted at military installations that have shortages 
of mental health care 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. Congress should 
also allow Vet Centers to house VBA staff to assist veterans with 
disability claims. This should be part of an overall long-term VA 
strategic plan to bring all of VA to our veterans so veterans are not 
required to visit several locations for assistance.

12. Supporting Vietnam War Veterans
    VCS continues to support research and treatments for Vietnam War 
veterans poisoned by dioxin contained in Agent Orange. VCS also 
supports VA advertising and outreach to veterans with diabetes, 
prostate cancer, and other war-related medical conditions so they are 
aware of new VA health care and disability benefits available for those 
conditions. VCS urges Congress to declare ``Blue Water'' veterans 
eligible for VA health care and benefits related to Agent Orange.

13. Due Process
    VCS believes all veterans should have the right to full due process 
and the right to retain an attorney to assist them with obtaining VA 
health care or disability benefits starting from the first day a 
veteran or beneficiary seeks any VA benefit. Sound legal advice is 
especially critical when a veteran has a serious injury, such as TBI or 
PTSD, or where the veteran may have diminished capacity to wage a 
complex and protracted legal battle against VA. Legal assistance means 
the ability to hire an experienced and trained advocate who will fight 
for you, an advocate who will explain VA's complicated and adversarial 
process, an advocate who will to obtain military and other documents 
for your claim, and an advocate who can quickly obtain your VA 
benefits. While Veteran Service Organization (VSO) assistance is often 
beneficial to veterans and beneficiaries filing claims against VA, VCS 
also strongly supports the right of veterans and beneficiaries to 
obtain competent and compensated legal counsel for those who defended 
our Constitution. Due process also means that VCS supports efforts by 
VA to cooperate with local law enforcement and legal systems to offer 
treatment programs to veterans arrested for minor offenses. We believe 
that pro-active action to identify veterans in our legal system and 
offer VA treatment may mitigate the long-term social consequences of 
untreated PTSD and TBI.

14. Outreach
    VCS urges VA to begin more advertising to increase awareness about 
VA. The most important outreach effort should be to reduce stigma 
against veterans with mental health conditions and to publicize VA's 
suicide prevention hotline. VCS is pleased with Chairman Harry 
Mitchell's successful effort to allow VA to conduct advertising about 
health care and benefits. This change represents a progressive policy 
improvement. VCS believes VA should consider broadcasting public 
service announcements describing VA services especially for members of 
the National Guard and Reserve. An analysis by VCS found that they 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 obtain 
it.

15. Transparency
    VCS is pleased with VA's handling of recent challenges by providing 
greater information earlier. For example, in the past few weeks, VA 
informed the public about a problem with a contractor conducting 
transcriptions. Transparency in government should be applauded. This is 
why VCS urges Congress to review VA's handling of Freedom of 
Information Act (FOIA) requests so that more information about VA is 
more readily available to the public. Much of the information VCS 
presents to Congress came from our extensive FOIA research efforts. VCS 
provided Congress, veterans, and the public with critical information 
at a time when VA intentionally concealed bad news.

For the Committee
    VCS provides four documents related to our testimony for the 
Committee's files:

      Swords to Plowshares, Statement to Presidential 
Transition Team (PTT), Dec. 2008.
      VCS, ``Proposal to Restructure Veterans Benefits 
Administration Facilities,'' presented to the PTT on Dec. 6, 2008.
      Nora Eisenberg, ``Why the Dark Secrets of the Gulf War 
are Still Haunting Us,'' AlterNet, Feb. 27, 2009.
      VCS, ``Looking Forward: The Status and Future of VA,'' 
Feb. 2009.

    [The documents are being retained in the Committee files.]

                                 
                 Prepared Statement of Paul Rieckhoff,
      Executive Director, Iraq and Afghanistan Veterans of America

    On behalf of IAVA and our more than 125,000 members and supporters, 
thank you for inviting Iraq and Afghanistan Veterans of America to 
testify today regarding the VA's budget for Fiscal Year 2010. I would 
also like to thank you for your commitment to our Nation's veterans. 
From the passage of the new GI Bill to the dramatic increases in 
veterans' health care funding, the remarkable legislative victories for 
veterans we've seen in the last 3 years would not have been possible 
without your leadership.
    At IAVA, we are committed to making sure that no servicemember, and 
no veteran, is ever left behind. The mission of IAVA is to improve the 
lives of the more than 1.7 million Iraq and Afghanistan veterans and 
their families. As veterans come home from Iraq and Afghanistan to the 
worst economy in decades, we need to show real support for our troops 
and veterans.
    Overall, we are pleased with the limited information currently 
available about the FY 2010 Budget. The top line number for veterans' 
discretionary funding is about $1.2 billion higher than the amount 
recommended by leading veterans' organizations, including IAVA, in The 
Independent Budget. The budget plans increases in VA funding by $25 
billion over 5 years. This funding will be crucial if we are to provide 
proper care and support to the surge of veterans who will be coming 
home from combat in the coming years.
    We are also pleased to see the renewed focus on mental health care 
in the DoD budget, including the comprehensive TBI registry, and also 
the rollback of concurrent receipt limitations that unfairly cut the 
benefits available to disabled military retirees. We were also pleased 
to see the Administration's planned expansion of VA health care access 
to about 500,000 moderate-income veterans. This is a good first step, 
although we'd like to see it happen faster. About 1.8 million veterans 
lack health insurance, and about 565,000 veterans have been denied VA 
care because their income level was too high. IAVA believes every 
single veteran should be eligible for VA health care.
    From what we've seen so far, the budget looks strong. But the devil 
is in the details. Until we have had the opportunity to go through this 
budget line-by-line in April, we can not entirely endorse the plan. 
Above all, we must ensure that this budget does not rest on increased 
copays, premiums and fees for veterans.
    Our biggest disappointment about the current budget is that the 
President has not opted to include advance appropriations for the VA in 
his proposal. Advance appropriations doesn't cost any additional money, 
it just gives VA hospitals and clinics advance notice of the funding 
they will receive the following year. Right now, VA hospitals have no 
way of knowing what their budget will be next year, and when the budget 
is passed late (and it usually is), they often have to ration the care 
they give veterans.
    The bottom line is, VA budget delays hurt veterans. I want to tell 
you about one of the thousands of veterans of all generations who would 
benefit from advance appropriations. Rey Leal served as a Marine in 
Fallujah during some of the heaviest fighting, earning a Bronze Star 
with valor as a Private First Class, an almost unheard of 
accomplishment for a soldier of his rank. But when he returned to 
southern Texas, his closest VA hospital was over 5 hours away. Rey's a 
tough Marine, and a boxer, but he shouldn't have to fight to get care 
at a veterans' hospital. And at his nearest outpatient clinic, there 
was just one psychologist, taking appointments only 2 days a week.
    The psychologist only works 2 days because that Texas clinic, like 
many VA clinics and hospitals, has to stretch it's funding to make sure 
the money lasts the whole year. They don't know how much funding 
they'll have next year because the VA budget is routinely passed late. 
For the millions of veterans like Rey, we must fix this broken VA 
funding system. Advance appropriations is a common-sense solution that 
President Obama supported as a candidate, and it's something we would 
have liked to see in the budget.
    If the Obama Administration is not going to lead the fight for 
advance appropriations, we will need Congress to step in. A number of 
Members of this Committee, including, of course, Chairman Filner, have 
already proven themselves to be key allies in the fight for advance 
appropriations, and we thank you for your support. IAVA is a proud 
endorser of H.R. 1016/S. 423, and we will work with the Committees in 
any way we can to move this legislation forward. With your help, we can 
ensure that veterans are not kept waiting, as they have in 19 of the 
last 22 years, while Congress plays politics with the budget.
    Last month, President Obama traveled to Camp Lejeune to announce 
the eventual drawdown of combat troops in Iraq. No matter what you 
think of his plan, one thing is clear: the new strategy in Iraq will 
create a surge of new veterans coming home in 2009 and 2010. America 
needs to be ready, and the 2010 veterans' budget will be a crucial 
first step.
    Thank you for your time.

            Sincerely,
                                                     Paul Rieckhoff

                                 
               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 on 
the Committee, on behalf of Vietnam Veterans of America (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 2010 
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, VVA thanks you for sponsoring advanced Appropriations 
legislation in the Senate (H.R. 1016). As you know, VVA and other major 
veterans' service organizations have been long-time supporters of 
legislation to achieve assured funding. When the VA budget is late 19 
or of the last 22 times, it is clear that there is a need for a new 
mechanism to correct the problems in the current system of funding. 
While VVA remains committed to the assured funding concept, we 
currently strongly support the Advanced Appropriations legislation 
contained in H.R. 1016 as being so much better than what we currently 
have in place. As we have this discussion in regard to the FY 10 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, as it will move us toward our common goal of predictable, 
fully adequate, and timely funding for VA health care that is 
sufficient to truly meet the needs of all veterans in vital need of 
such care.

Overview
    Concerning the proposal at hand, the President's FY 10 budget for 
the VA, VVA is pleased with the overall amount of the request, which is 
for a $5.5 Billion overall increase over the FY 2010 budget. It is 
unclear how much of that is slated for the Veterans Health 
Administration (VHA), and how much for other purposes given the sketchy 
outline of the VA budget thus far available. However, it is clear that 
the bulk of those funds needs to VHA to meet the rising needs of 
medical inflation continue the process of adding needed organizational 
capacity as the population served expands, and for modernizing 
equipment and facilities.
    Using the Center for Medicare & Medicaid Services (CMS) figure of 
3.6 percent-inflation, that would mean that the Congress needs to add a 
minimum figure of about $1.4 Billion to VHA just to keep up with 
increases in fixed costs, even if no more veterans entered the system. 
Further, there is a need to ``front load'' staff to increase 
organizational capacity to be ready to handle additional numbers of 
veterans allowed to seek health care from the VHA as the system is re-
opened to those who were frozen out of the system by the actions of the 
previous Administrations beginning in January of 2003. There will be 
further increases of our youngest veterans from the current conflicts 
seeking services from VHA as well as more older veterans seeking 
services, particularly Vietnam veterans whose medical problems are now 
coming to the fore due to age and manifestation of long term effects of 
exposure to Agent Orange and other herbicides and toxins in Vietnam and 
elsewhere during their military service.
    While VVA is adamant that VA needs to allow these veterans to 
register and to receive health care, it needs to be done in a manner 
that avoids overwhelming the system all at once leading to long delays 
in receiving care. The system is in many cases too ``thin'' to be able 
to accommodate more people for more than a brief amount of time. VVA 
believes that these staff enhancements and increases in organizational 
capacity will require at least another $2 Billion for VHA to increase 
the size of permanent staff.

Vet Centers
    This would include significantly increasing the number of staff in 
the highly successful VA Vet Center (Readjustment Counseling) program 
to not just open and provide staff for new centers and to do rural 
outreach, as important as these two efforts are, but to enlarge the 
size of existing teams. Perhaps the most pressing need, beyond ensuring 
that staff members at Vet Centers are not so over-worked that they 
``burn out,'' is the need for more certified family counselors and more 
counselors professionally trained and certified to deal with military 
sexual trauma in veterans of both genders. The Vet Centers are our 
first line of defense against suicides, and we must make sure they have 
the organizational capacity to continue doing what they do so well on a 
long term sustainable basis.

Research
    VVA 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. VVVA 
believes that we must become more serious about research at the VA, 
given that the National Institutes of Health (NIH) continues to totally 
ignore veterans and the long term health effects of military service. 
Other than one head injury study, we know of no other NIH research 
project that even tangentially asks about military service and uses 
that as a variable (and possible confounder). VVA recommends that 
Research & Development be provided at least $ 750 million for FY 2010 
and commensurately large increases in the out years, so that over 5 
years this activity is funded at least at the $1 Billion level.
    For the first time in many years, VVA has NOT signed on to the 
Friends of VA Health Care & Medical Research (FOVA) although we 
strongly believe that there needs to be a significant increase in R&D 
funding. VVA did not sign on to FOVA because of a required pledge not 
to push for any earmarks in Research & Development funds. It would be 
irresponsible of VVA to sign this pledge and not seek ear marks given 
that we have been unable to discover ANY research programs into the 
long term health effects of Agent Orange and other toxins, despite 
repeated inquiries to the current Undersecretary for Health and the 
current occupant of the office of Director of Research & Development, 
as well as the previous two occupants of the office of Secretary of 
Veterans Affairs. Obviously we need ear marks for research into the 
environmental wounds of Vietnam, as well as into the deleterious health 
effects of service in other periods of time and theaters of operation, 
such as the first Gulf War. It would be a betrayal of our members and 
their families if we did not urgently seek ear marks for further 
research into the terrible health long term effects of exposure to the 
herbicides and other toxins (including pesticides, PCBs, etc.) used in 
Vietnam during the war.

NVVRS
    This lack of such research projects is compounded by VHA's adamant 
refusal to obey the law and complete the replication of the ``National 
Vietnam Veterans Readjustment Study'' (NVVRS) as a robust mortality and 
morbidity study from the only existing statistically valid random 
sample of Vietnam veterans in existence. Frankly, this study in needed 
not only to document the long term course of post traumatic stress 
disorder, but also to document physiological problems in this 
population (which we know to be many). Their refusal says a great deal 
about their bias and determinedly continued willful ignorance.
    Mr. Chairman, VVA thanks this Committee and the Appropriations 
Committee for using the power of the purse in the FY 2008 and FY 2009 
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.
    VVA is concerned that previous leadership at VA felt they were 
above the law and ignored this mandate, and were unapologetic about 
being scofflaws. We hope this provision will again be included in the 
Appropriations act and that General Shinseki will see to it that VA 
obeys the law and gets this done on his watch.
    Further, VVA strongly urges the Congress to mandate and fund 
longitudinal studies to begin virtually immediately, using the exact 
same methodology as the NVVRS, for the following cohorts: a) Gulf War 
1991; b) Operation Iraqi Freedom; and, c) Operation Enduring Freedom.
    Please take action now so that these young veterans are not placed 
into the same predicament Vietnam veterans find themselves today.

Military History Needed on CPRS
    Further, the continued refusal of VHA to take a complete military 
record as part of the electronic medical records, known as he 
Computerized Patient Records System or CPRS at VA, means that there is 
no way to do needed epidemiological research on veterans who use the VA 
system that looks into exposures they may have been subject to in 
military service, depending on the branch of service, when, where, and 
MOS. Further, this would enable mortality studies based on when and 
where one served for those who have already died. 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.
    VVA asks that $25 million be specifically designated for 
replication of the NVVRS, $20 million for research into the health care 
effects of Agent Orange and other toxins, $15 million to the Medical 
Follow Up Agency (MFUA) at the Institute of Medicine (IOM) at the 
National Academies of Sciences, to finish translating all of the data 
from the now closed Ranch Hand Study into modern computer language and 
properly catalogue it to make this data accessible to credentialed 
researchers. This potentially enormously valuable trove of research 
data should not be allowed to perish for want of these minimal funds.
    In 2009, VA and DoD is supposed to complete the pilot of a new 
disability evaluation system for wounded returnees at major medical 
facilities in the Washington, D.C. area, and expand it to most other 
large military medical centers. 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. However the process is currently not working as it is supposed to 
work. VVA repeatedly brought this to the attention on the former 
Secretary of Veterans Affairs and the current Undersecretary for 
Benefits and his staff since last November. There is a real need for 
joint oversight of this process by the Veterans Affairs Committee and 
the Armed Services Committee to ensure that wounded and ill soldiers 
are treated fairly in their waning days of military service.
    We are also concerned 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? Will those staff be properly trained to deal with the needs 
of veterans with heavy combat trauma and other problems?
    Much more attention needs to be devoted to continuing medical 
education, particularly for mental health providers and for primary 
care physicians and other clinicians. One of the best kept secrets at 
VA is the existence of the Veterans Health Initiative (VHI) curricula 
about the wounds, maladies, illnesses, and conditions endemic to 
military service depending on when and where one served. (www.va.gov/
vhi) VHA apparently makes no systematic effort to utilize this tool to 
better educate these clinicians who can and will do an even better job 
if properly trained and supported. As Secretary Shinseki has repeatedly 
stated, what is lacking is primarily a matter of leadership and 
accountability. We hope and trust that he can and will meet that lack, 
particularly if the rest of his team gets on board quickly.

Mental Health--Need to Restore Organizational Capacity for Substance 
        Abuse Treatment
    VVA urges that language be inserted in the Appropriations bill the 
Congress to express concern that substance use disorders among our 
Nation's veterans is not being adequately addressed by the Veterans 
Health Administration (VHA). The relatively high rate of drug and 
alcohol abuse among our Nation's veterans (much of which is self-
medication to deal with untreated PTSD), especially those returning 
from service in Operation Enduring Freedom and Operation Iraqi Freedom, 
is causing significant human suffering for veterans and their families.
    These folks can and will be stronger for their experience if we 
only will deliver the effective care they need when they need it in a 
way they will accept.
    Further delay in moving to restore effective mental health and 
substance abuse services will lead to poorer health and more acute 
health care utilization in the out years, not to mention economic 
opportunity cost to the Nation and needless suffering by these 
veterans, and their families.
    Last year, VVA urged the Congress to direct the Secretary to make 
concerted efforts to reduce the overall incidence of drug and alcohol 
abuse and dependence among enrollees in the Veterans Health 
Administration by meeting the performance measurements included in ``A 
Comprehensive VHA Strategic Plan for Mental Health Services,'' VA's 
current and adopted plan to reform its mental health programs, with the 
hallmark of recovery. To its credit, VA has developed a strategy to 
``restore VHA's ability to consistently deliver state of the art care 
for veterans with substance abuse disorders,'' as a milestone within 
that reform plan, but to date has yet to fulfill the promise of its 
commitment to recovery, and establishing the goal of every veteran 
being able to obtain and sustain meaningful employment at a living wage 
as the ultimate goal for all VA mental health programs, including its 
substance use disorder programs. It should now no longer be a case of 
lacking resources, so we need much better oversight and accountability 
in the coming year. In addition it is clear that we need new leadership 
in the Mental Health area, as the Chairman has noted on several 
occasions. We hope Secretary Shinseki will heed the Chairman and others 
in this regard.
    VVA urges the Congress to direct the Secretary to provide quarterly 
reports beginning with a baseline report by each Veterans Integrated 
Service Network (VISN) on the initiatives set forth in the VHA 
Strategic Plan for Mental Health Services, specifically to improve VA's 
treatment of substance use disorders. These reports will provide an 
ongoing indication of VHA's progress in the implementation of its 
adopted Strategic Plan as described in section 1.2.8 of ``A 
Comprehensive VHA Strategic Plan of Mental Health Services'', May 2, 
2005. In addition to baseline information, at minimum these reports 
should include: the current ranking of networks on their percentage of 
substance abuse treatment capacity along with plans developed by the 
lowest quartile of networks to bring their percentage up to the 
national average; and, the locations of VA facilities that provide 5 
days or more of inpatient/residential detoxification services, either 
on site, at a nearby VA facility, or at a facility under contract to 
provide such care; and, the locations of VA health care facilities 
without specialized substance use disorder providers on staff, with a 
statement of intentions by each such facility director of plans to 
employ such providers or take other actions to provide such specialized 
care.
    The decade long diminishment of VA mental health programs that we 
experienced in the 1990s did level out by 2001, and VA all too 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, and be held to much higher standards of 
accountability, as noted above. 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 health care. In addition to the funds VVA is 
recommending elsewhere, we specifically recommend an increase of an 
additional $500 million dollars over and above the $3.9 Billion that VA 
now says they will allocate to assist VA in meeting the mental health 
care 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 in 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 health care at VA, and 
who often have no other option.
Blind and Low Vision Veterans Need Much Greater Resources and Attention
    The President's request contains a significant reduction in the 
efforts to strengthen services for blind veterans. With the number of 
blind and very low vision veterans of the Nation's latest wars in need 
of services now, VVA strongly recommends the Congress explicitly direct 
an additional $35 million for FY 2010 to increase staffing and 
programming at the VA's Blind and Visually Impaired Service Centers, 
and to add at least one new center.
    Further, VVA recommends that the Congress directs the Secretary to 
implement an employment and independent living project modeled on the 
highly successful ``Project Amer-I-Can'' that so successfully placed 
blind and visually impaired veterans into work and other situations 
that resulted in them becoming much more autonomous and independent. 
That program was a cooperative venture of the New York State Department 
of Labor, the Veterans Employment & Training Service (VETS), and the 
Blind Veterans Association.
    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 percent 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. This would be in addition 
to the almost $ 1 Billion contained in the stimulus package.

Homeless Veterans
    As we all know, homelessness is a significant problem in the 
veterans' community and veterans are disproportionately represented 
among the homeless population. While many effective programs assist 
homeless veterans to become productive and self-sufficient members of 
their communities and Congress must ensure that the Department of 
Veterans Affairs has adequate funding to meet the needs of the over 
154,000 homeless veterans who served this country so proudly in past 
wars and veterans of our modern day war. VVA recommends the following 
in VA FY 2010 budget for homeless programs.

Homeless Provider Grant and Per Diem Program
    The Department of Veterans Affairs Homeless Grant & Per Diem 
Program has been in existence since 1994. These programs address the 
needs of homeless veterans and support the development of transitional, 
community-based housing and the delivery of supportive services. 
Because financial resources available to HGPD are limited, the number 
of grants awarded and the dollars granted are restrictive and hence 
many geographic areas in need suffer a loss that HGPD could address.
    The Consolidated Appropriations Act of 2008, Public Law 110-161 
provides $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, VVA believes that for FY 2010 a level of at least 
$200 million authorization is required. 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 VA provides grants to VA health care 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.
    VVA estimates 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.
    VVA also strongly urges you to actively help us seek an 
appropriation for the full $50 million authorized for the Homeless 
Veterans Reintegration Program (HVRP) for FY 2010.

Veterans Benefits Administration
    The Veterans Benefits Administration (VBA) continues to not only 
need additional resources and enhanced accountability measures, but a 
total paradigm shift and re-tooling of the business processes.

Compensation & Pension
    VVA recommends adding one hundred 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 $80 million dollars specifically 
earmarked to create ``express lines'' at all VARO and not just the ten 
pilot sites, 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
    Last year (and the year before that), VVA recommended adding an 
additional two hundred specially trained vocational rehabilitation 
placement 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. VA only added 
60 such counselors. 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 clear VA needs to add several hundred of these employment 
placement specialists for disabled veterans specifically called for in 
past years' funding measures, and there is clearly a need for 
additional training to ensure 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 greater 
accountability to the VA Vocational Rehabilitation process is 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.

Computerization of the Claims Process
    VVA agrees with Secretary Shinseki's statement that computerization 
in and of itself will not fix the mess in the Compensation & Pension 
program, but rather to re-think and straighten out the business 
processes first before we ``put garbage in to get garbage out.'' While 
the Secretary and his new team figure out what those new business 
processes will be, VVA also believes that Congress needs to set aside 
funds for putting all of the VBA records into digital form. This is 
essentially an investment in computer infrastructure every bit as 
important as buildings. We do not know what that figure is, but we have 
to believe there are existing platforms that can be adapted for this 
use that are already successfully being used in other branches of the 
Federal Government.

Accountability at the 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 on board. 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.
    The almost quarter of a million VA personnel consist of fine hard 
working people who are by and large committed to doing a good job for 
the veterans whom they serve. What is needed is leadership that is 
worthy of those fine workers, and a better system of accountability 
(especially for managers) and the system will work much better.
    Thank you again, Mr. Chairman, for allowing VVA to be heard at this 
forum. 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 
H.R. 1016 at the earliest possible time. I will be happy to answer any 
questions you or your distinguished colleagues may have.

                                 
                 Prepared Statement of Steve Robertson,
       Director, National Legislative Commission, American Legion

    Mr. Chairman and Members of the Committee:
    The American Legion welcomes this opportunity to comment on 
President Obama's ``top line'' budget request for Fiscal Year 2010. The 
American Legion is pleased by the $113 billion total appropriations for 
the Department of Veterans Affairs (VA) in FY 2010 and the projected 
$57 billion in mandatory appropriations and $56 billion in 
discretionary appropriations.
    As a nation at war, America has a moral, ethical and legal 
commitment to the men and women of the Armed Forces of the United 
States and their survivors. These current defenders of democracy will 
eventually join the ranks of their 23.5 million comrades, we refer to 
as veterans. The active-duty, Reserve components and veterans continue 
to make up the Nation's best recruiters for the armed forces. Young men 
and women across the country see servicemembers and veterans as role 
models. Chances are before enlisting in the armed forces, these young 
people will seek the advice of those they see in uniform or family 
members who served in the armed forces for their recommendations on 
military service.
    Therefore, it is absolutely critical that the entire veterans' 
community (active-duty, Reserve component, and veterans) continue to 
remain supportive of honorable military service. No servicemember 
should ever be in doubt about:

      the quality of health care he or she will receive if 
injured;
      the availability of earned benefits for honorable 
military service upon discharge; or
      the quality of survivors' benefits should he or she pay 
the ultimate sacrifice.

    The American Legion and many other veterans' and military service 
organizations are united in advocating enactment of timely, predictable 
and sufficient budgets for VA medical care. In FY 2009, Congress passed 
and the President signed this budget at the start of the fiscal year. 
Clearly, Secretary Shinseki is much more fortunate than many of his 
colleagues in the Cabinet because he has a timely, predictable and 
sufficient budget with which to administer. The American Legion urges 
Congress to once again pass the VA budget for FY 2010 prior to the 
start of the fiscal year--it does make a difference!
    Mr. Chairman, The American Legion sincerely appreciated your 
introduction of H.R. 1016, Veterans Health Care Budget Reform and 
Transparency Act of 2009. This legislation should help achieve the 
timeliness and predictability goals, while giving us the remainder of 
the budget cycle to assure the sufficiency goal. Working together, the 
veterans' community is actively seeking additional cosponsors to this 
legislation.
    Mr. Chairman and Members of the Committee, The American Legion 
greatly appreciates the provisions contained in the American Recovery 
and Reinvestment Act:

      A Tax Credit for Hiring Unemployed Veterans: Provides a 
tax credit to businesses for hiring unemployed veterans. Specifically, 
veterans would qualify if they were discharged or released from active 
duty from the Armed Forces during the previous 5 years and received 
unemployment benefits for more than 4 weeks before being hired.
      Disabled Veterans Payment of $250: Provides a payment of 
$250 to all disabled veterans receiving benefits from the Department of 
Veterans Affairs. VA Medical Facilities: Provides $1 billion for non-
recurring maintenance, including energy efficiency projects, to address 
deficiencies and avoid serious maintenance problems at the 153 VA 
hospitals across the country.
      Increase the Number of VA Claims Processors: Provides 
$150 million for an increase in VA claims processing staff, in order to 
address the large backlog in processing veterans' claims. This backlog 
has been a key complaint of veterans across the country.
      Improve Automation of VA Benefit Processing: Provides $50 
million to improve the automation of the processing of veterans' 
benefits, to get benefits out sooner and more accurately.
      Construction of Extended Care Facilities for Veterans: 
Provides $150 million for state grants for the construction of 
additional extended care facilities for veterans.

    After reviewing the Office of Management and Budget's Web site with 
regards to the President's ``top line'' Budget Request for the 
Department of Veterans Affairs, The American Legion renders its support 
as follows:

      Increases funding for the Department of Veterans Affairs 
by $25 billion above baseline over the next 5 years.--Supported by The 
American Legion*
      Dramatically increases funding for veterans health 
care.--Supported by The American Legion*
      Expands eligibility for veterans health care to over 
500,000 veterans by 2013.--Supported by The American Legion*
      Enhances outreach and services related to mental health 
care and cognitive injuries, including post-traumatic stress disorder 
and traumatic brain injury, with a focus on access for veterans in 
rural areas--Supported by The American Legion*
      Invests in better technology to deliver services and 
benefits to veterans with the quality and efficiency they deserve.--
Supported by The American Legion*
      Provides greater benefits to veterans who are medically 
retired from service.--Supported by The American Legion*
      Combats homelessness by safeguarding vulnerable 
veterans.--Supported by The American Legion*
      Facilitates timely implementation of the comprehensive 
education benefits that veterans earn through their dedicated military 
service.--Supported by The American Legion*

    * All support is contingent upon the release of the budget request 
in April.

    On September 11, 2008, The American Legion National Commander David 
Rehbein testified before a joint session of the congressional 
Committees on Veterans' Affairs. In that testimony, he clearly outlined 
the funding recommendations for FY 2010. I am here today to re-
emphasize that support for certain specific areas.
Medical Care Collections Fund
    The Balanced Budget Act 1997, Public Law (P.L.) 105-33, established 
the VA Medical Care Collections Fund (MCCF), requiring amounts 
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 copayments and other 
medical charges and user fees. Funds collected may only be used to 
provide VA medical care and services, as well as 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 copayments; 
however, The American Legion adamantly opposes the scoring of MCCF as 
an offset to the annual discretionary appropriations since the majority 
of these funds come from the treatment of non-service-connected medical 
conditions. Previously, these collection goals have far exceeded VA's 
ability to collect accounts receivable.
    Since FY 2004, VHA's total collections increased from $1.7 billion 
to $2.2 billion; a 29.4 percent-increase. The third-party component of 
VA's collections also increased from $960,000 to $1.26 million; a 31.3 
percent-increase.
    VA's ability to capture these funds is critical to its ability to 
provide quality and timely care to veterans. Miscalculations of VA 
required funding levels result in real budgetary shortfalls. Seeking an 
annual emergency supplemental is not the most cost-effective means of 
funding the Nation's model health care delivery system. Government 
Accountability Office (GAO) reports continue to raise the issue of 
VHA's ability to capture insurance data in a timely and correct manner. 
In addition, they continue to express concerns of VHA's ability to 
maximize its third-party collections.
    According to a 2008 GAO report, VA lacks policies and procedures 
and a full range of standardized reports for effective management 
oversight of VA-wide third-party billing and collection operations. 
Further, although VA management has undertaken several initiatives to 
enhance third-party revenue, many of these initiatives are open-ended 
or will not be implemented for several years. Until these shortcomings 
are addressed, VA will continue to fall short of its goal to maximize 
third-party revenue, thereby placing a higher financial burden on 
taxpayers. In addition, GAO recommended an improvement of third-party 
billings; follow-up on unpaid amounts, and management oversight of 
billing and collections.
    The American Legion opposes offsetting annual VA discretionary 
funding by the MCCF goal.

Third-Party Reimbursements for Treatment of Service-Connected Medical 
        Conditions
    Recently, there has been some talk about VA seeking third-party 
reimbursements from private health care insurers for the treatment of 
service-connected medical conditions. The American Legion believes that 
this would be inconsistent with the mandate ``. . . to care for him who 
shall have borne the battle. . . .'' The U.S. government sent these men 
and women into harm's way, not private insurance companies.
    Should private insurance companies be required to reimburse VA for 
the treatment of service-connected medical conditions, The American 
Legion has grave concerns over the adverse impact such a policy change 
would have on service-connected disabled veterans and their families. 
Depending on the severity of the medical conditions, those medical 
insurance policies with a calendar year benefit maximum or a life-time 
benefit maximum could result in the rest of the family not receiving 
any health care benefits. Many health insurance companies require 
deductibles to be paid before any benefits are covered.
    In addition, there is concern as to what premiums would be to cover 
service-connected disabled veterans and their families with private 
health insurance, especially those who are small businessowners or 
self-employed. The American Legion is also concerned with employers who 
would be reluctant to hire service-connected disabled veterans because 
of the impact their employment might have on company health care 
benefits.
    The American Legion adamantly opposes any legislative initiative 
that would require third-party reimbursements from private health 
insurance providers for the treatment of service-connected disabled 
veterans by VA.

                        Medicare Reimbursements

    As do most American workers, veterans pay into the Medicare system, 
without choice, throughout their working lives, including while on 
active duty or as active service Reservists in the Armed Forces. A 
portion of each earned dollar is allocated to the Medicare Trust Fund 
and, although veterans must pay into the Medicare system, VA is 
prohibited from collecting any Medicare reimbursements for the 
treatment of allowable, non-service-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.
    The American Legion would support a legislative initiative to allow 
VHA to bill, collect and reinvest third-party reimbursements from the 
Centers for Medicare and Medicaid Services for the treatment of 
allowable, non-service-connected medical conditions of enrolled 
Medicare-eligible veterans. This legislative change would generate 
approximately $3--5 billion in new third-party collections annually. 
The Congressional Budget Office predicts that enrolled veterans in 
Priority Groups 7 and 8 alone would generate $12 billion from 2010 to 
2014 and $26 billion from 2010 to 2019.

        State Extended Care Facility Construction Grants Program

    Since 1984, nearly all planning for VA inpatient nursing home care 
has revolved around State Veterans' Homes (SVHs) and contracts with 
public and private nursing homes. The reason for this is obvious: for 
FY 2004, VA paid a per diem of $59.48 for each veteran it placed in 
SVHs, compared to the $354 VA claims it cost in FY 2002 to maintain a 
veteran for 1 day in its own nursing home care units (NHCUs).
    Under the provisions of title 38, USC, VA is authorized to make 
payments to states to assist in the construction and maintenance of 
SVHs. Today, there are 133 SVHs in 47 states with over 27,000 beds 
providing nursing home, hospital, and domiciliary care. Grants for 
Construction of State Extended Care Facilities provide funding for 65 
percent of the total cost of building new veterans' homes. Recognizing 
the growing LTC needs of older veterans, it is essential the State 
Veterans' Homes Program be maintained as an important alternative 
health care provider to the VA system.
    The American Legion opposes attempts to place a moratorium on new 
SVH construction grants. State authorizing legislation has been enacted 
and state funds have been committed. Delaying projects will result in 
cost overruns and may result in states deciding to cancel these much 
needed facilities.
    The American Legion supports increasing the amount of authorized 
per diem payments to 50 percent for nursing home and domiciliary care 
provided to veterans in State Veterans' Homes; providing prescription 
drugs and over-the-counter medications to State Homes Aid and 
Attendance patients along with the payment of authorized per diem to 
State Veterans' Homes; and allowing full reimbursement of nursing home 
care to 70 percent or higher service-connected disabled veterans, if 
those veterans reside in a State Veterans' Home.
    The American Legion recommends $275 million for the State Extended 
Care Facility Construction Grants Program in FY 2010.

                    Medical and Prosthetics Research

    The American Legion believes VA's focus in research must remain on 
understanding and improving treatment for medical conditions that are 
unique to veterans. servicemembers are surviving catastrophically 
disabling blast injuries due to the superior armor they are wearing in 
the combat theater and the timely access to quality combat medical 
care. The unique injuries sustained by the new generation of veterans 
clearly demand particular attention. It has been reported that VA does 
not have state-of-the-art prostheses like DoD and that the fitting of 
prostheses for women has presented problems due to their smaller 
stature.
    The American Legion also supports adequate funding of other VA 
research activities, including basic biomedical research and bench-to-
bedside projects for FY 2010. Congress and the Administration should 
continue to encourage acceleration in the development and initiation of 
needed research on conditions that significantly affect veterans, such 
as prostate cancer, addictive disorders, trauma and wound healing, 
post-traumatic stress disorder, rehabilitation, and other research that 
is conducted jointly with DoD, the National Institutes of Health (NIH), 
other Federal agencies, and academic institutions.
    The American Legion recommends $532 million for Medical and 
Prosthetics Research in FY 2010.

                            Blinded Veterans

    There are currently over 35,000 blind veterans enrolled in the VA 
health care system. Additionally, demographic data suggests that in the 
United States, there are over 160,000 veterans with low-vision problems 
who are eligible for Blind Rehabilitative services. Due to staffing 
shortages, over 1,500 blind veterans will wait months to get into one 
of the 10 blind rehabilitative centers.
    VA currently employs approximately 164 Visual Impairment Service 
Team (VIST) Coordinators, to provide lifetime case management to all 
legally blind veterans and all Operation Enduring Freedom/Operation 
Iraqi Freedom (OEF/OIF) patients, and 38 Blind Rehabilitative 
Outpatient Specialists (BROS) to provide services to patients who are 
unable to travel to a blind rehabilitation center. The training 
provided by BROS is critical to the continuum of care for blind 
veterans. In addition, the DoD medical system is dependent on VA to 
provide blind rehabilitative services.
    Given the critical skills a BROS teaches to help blind veterans and 
their families adjust to such a devastating injury, The American Legion 
urges VA to recruit more specialists and continue with expansion of 
Blind Rehabilitation Outpatient Specialists and Visual Impairment 
Services Teams.

                         Major VHA Construction

    The CARES process identified approximately 100 major construction 
projects throughout the VA Medical Center System, the District of 
Columbia, and Puerto Rico. Construction projects are categorized as 
major if the estimated cost is over $10 million. Now that VA has 
disclosed the plan to deliver health care through 2022, Congress has 
the responsibility to provide adequate funds. The CARES plan calls for 
the construction of new hospitals in Orlando and Las Vegas and 
replacement facilities in Louisville and Denver for a total cost 
estimated over $1 billion for these four facilities.
    VA has not had this type of progressive construction agenda in 
decades. Major construction costs can be significant and proper 
utilization of funds must be well planned. However, if timely 
completion is truly a national priority, The American Legion continues 
to have concerns due to inadequate funding.
    In addition to the cost of the proposed new facilities, there are 
many construction issues that have been ``placed on hold'' for the past 
several years due to 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 health care in 
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 VA has effectively shepherded the 
CARES process to its current state by developing the blueprint for the 
future delivery of VA health care--we urge Congress to adequately fund 
the implementation of this comprehensive and crucial undertaking.
    The American Legion recommends $1.8 billion for Major Construction 
in FY 2010.

                         Minor VHA 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, due to the age of these buildings, 
continuous renovations, relocations and expansions. When combined with 
the added cost of the CARES program recommendations, it is easy to see 
that a major increase over the previous funding level is crucial and 
overdue.
    The American Legion recommends $1.5 billion for Minor Construction 
in FY 2010.

                     Information Technology Funding

    Since the data theft occurrence in May 2006, the VA has implemented 
a complete overhaul of its Information Technology (IT) division 
nationwide. The American Legion is hopeful VA takes the appropriate 
steps to strengthen its IT security to regain the confidence and trust 
of veterans who depend on VA for the benefits they have earned.
    Within VA Medical Center Nursing Home Care Units, it was discovered 
there was conflict with IT and each respective VAMC regarding provision 
of Internet access to veteran residents. VA has acknowledged the 
Internet would represent a positive tool in veteran rehabilitation. The 
American Legion believes Internet access should be provided to these 
veterans without delay for time is of the essence in the journey to 
recovery. In addition, veterans should not have to suffer due to VA's 
gross negligence in the matter.
    The American Legion hopes Congress will not attempt to fund the 
solution to this problem with scarce fiscal resources allocated to the 
VA for health care delivery. With this in mind, The American Legion is 
encouraged by the fact that IT is its own line item in the budget 
recommendation.
    The American Legion believes there should be a complete review of 
IT security government wide. VA isn't the only agency within the 
government requiring an overhaul of its IT security protocol. The 
American Legion urges Congress to exercise its oversight authority and 
review each Federal agency to ensure that the personal information of 
all Americans is secure.
    The American Legion supports the centralization of VA's IT. The 
amount of work required to secure information managed by VA is immense. 
The American Legion urges Congress to maintain close oversight of VA's 
IT restructuring efforts and fund VA's IT to ensure the most rapid 
implementation of all proposed security measures.
    The American Legion recommends $2.7 billion for Information 
Technology.

                        State Approving Agencies

    The American Legion is deeply concerned that veterans, especially 
returning wartime veterans, receive their education benefits in a 
timely manner. Annually, approximately 300,000 servicemembers (90,000 
of which belong to the National Guard and Reserve) return to the 
civilian sector and use their earned educational benefits from the 
Department of Veterans Affairs (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. There are time restrictions on most veterans' education 
benefits; significantly, the National Guard and Reserve must remain in 
the Selected Reserve to use their earned benefits.
    The American Legion believes that every effort should be made to 
ensure the New GI Bill education benefits are delivered without 
problems or delays. Veterans are unique in that they volunteer for 
military service; therefore, these educational benefits are earned as 
the thanks of a grateful Nation. The American Legion believes it is a 
national obligation to provide timely oversight of all veterans' 
education programs to assure they are administered in a timely, 
efficient, and accurate manner.
    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 VA 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. GAO recommends VA 
establish outcome-oriented performance measures to assess the 
effectiveness of SAA efforts. The American Legion fully agrees. 
Finally, GAO recommends VA 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 Gordon Mansfield responded at the 
time to GAO that VA would initiate contact with appropriate officials 
at the Departments of Education and Labor to help identify any 
duplicate efforts.
    The American Legion strongly recommends SAA funding at $19 million 
in FY 2010.

                      Make TAP and DTAP Mandatory

    The American Legion is deeply concerned with the timely manner in 
which veterans, especially returning wartime veterans, transition into 
the civilian sector.
    The Department of Defense (DoD) estimates that 68 percent of 
separating active-duty servicemembers attend the full Transitional 
Assistance Program (TAP) seminars, but only 35 percent of Reserve 
components' servicemembers attend. The American Legion believes these 
low attendance numbers are a disservice to all transitioning 
servicemembers, especially Reserve component servicemembers. In 
addition, many National Guard and Reserve troops have returned from the 
wars in Iraq and Afghanistan only to encounter difficulties with their 
Federal and civilian employers at home, and the number of destroyed and 
bankrupt businesses due to military deployment is still being realized.
    In numerous cases brought to the attention of The American Legion 
by veterans and other sources, many returning servicemembers have lost 
jobs, promotions, businesses, homes, and cars and, in a few cases, 
become homeless. The American Legion strongly believes all 
servicemembers would benefit greatly by having access to the resources 
and knowledge that TAP/Disabled Transitional Assistance Program (DTAP) 
provide. TAP/DTAP also needs to update their programs to recognize the 
large number of National Guard and Reserve business owners who now 
require training, information and assistance while they attempt to 
salvage or recover a business which they abandoned to serve their 
country.
    The American Legion strongly recommends DoD require all separating 
servicemembers, including those from Reserve component units, 
participate in TAP and DTAP training not more than 180 days prior to 
their separation or retirement from the Armed Forces.
    TAP Employment Workshops provided to transitioning servicemembers 
at most military installations in the United States as well as in eight 
overseas locations consist of two and one-half day employment 
workshops. The training helps servicemembers prepare a plan for 
obtaining meaningful civilian employment when they leave the military. 
The workshop focuses on skills assessment, resume writing, job 
counseling and assistance, interviewing and networking skills, labor 
market information, and familiarization with America's workforce 
investment system.
    Studies show servicemembers who participate in TAP employment 
workshops find their first civilian job 3 weeks earlier than veterans 
who do not participate in TAP. The Department of Labor's Veterans 
Employment Training Services (DOL-VETS) ensures every TAP participant 
leaves the program with a draft resume, a practice interview session, 
and a visit to their state job board.
    VETS only received a modest 4 percent-increase since 2002. 
Transition assistance, education, and employment are each a pillar of 
financial stability. They will prevent homelessness; assist the veteran 
to compete in the private sector, and allow our Nation's veterans to 
contribute their military skills and education to the civilian sector. 
By placing veterans in suitable employment quickly, the country 
benefits from increased income tax revenue and reduced unemployment 
compensation payments, thus greatly offsetting the cost of TAP 
training.
    The American Legion recommends $404.2 million to DOL-VETS for FY 
2010.

       Military Occupational Specialty Transition (MOST) Program

    The American Legion supports legislation to reauthorize and fund 
$60 million for the next 10 years for the servicemembers' Occupational 
Conversion and Training Act (SMOCTA). SMOCTA is a training program 
developed in the early 1990's for those leaving military service with 
few or no job skills transferable to the civilian marketplace. SMOCTA 
was renamed the Military Occupational Specialty Transition (MOST) 
program in legislation proposed last year, but the language and intent 
of the program still apply.
    If enacted, MOST would be the only Federal job training program 
designed strictly for veterans and the only Federal job training 
program available for use by state veterans' employment personnel to 
assist veterans with barriers to employment.
    Veterans eligible for MOST assistance are those with a primary or 
secondary military occupational specialty that DoD has determined is 
not readily transferable to the civilian workforce, or those veterans 
with a service-connected disability compensation rating of 30 percent 
or higher. MOST is a unique job training program because there is a job 
waiting for the veteran upon completion of training.
    The American Legion recommends reauthorization of MOST and $60 
million in funding for the program.

                              Homelessness

    The American Legion notes there are approximately 154,000 homeless 
veterans on the street each night. This number, compounded with 300,000 
servicemembers entering the civilian sector each year since 2001 with 
at least a third of them potentially suffering from mental illness, 
indicates that programs to prevent and assist homeless veterans are 
needed.
    The Homeless Veterans Reintegration Program (HVRP) is a competitive 
grant program. Grants are awarded to states or other public entities 
and non-profit organizations, including faith-based organizations, to 
operate employment programs that reach out to homeless veterans and 
help them become gainfully employed. HVRP provides services to assist 
in reintegrating homeless veterans into meaningful employment in the 
labor force and stimulates 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 American Legion recommends $50 million for this highly 
successful grant program in FY 2010.

                                  NVTI

    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 DVOPs and LVERs to be trained within three years of hiring. We 
recommend these personnel be trained within one year.

    The American Legion recommends $4.2 million for NVTI in FY 2010.
                 Veterans Workforce Investment Program

    VWIP grants support efforts to ensure veterans' lifelong learning 
and skills development in programs designed to serve 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 jobs.

    The American Legion recommends $20 million for VWIP in FY 2010.
               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 
servicemembers. USERRA prohibits employer discrimination due to 
military obligations and provides reemployment rights to returning 
servicemembers. VETS administers this law; it 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 
servicemembers have been activated for military duty. During this same 
period, DOL-VETS 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 (VEOA) 1998 extended 
certain rights and remedies to recently separated veterans. VETS has 
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.
    Veterans Preference is being unlawfully ignored by numerous 
agencies. Whereas figures indicate a decline in claims by veterans of 
the current conflicts compared to Gulf War I, the reality is that 
employment opportunities are not being properly publicized. Federal 
agencies, as well as Federal Government contractors and subcontractors, 
are required by law to notify the Office of Personnel Management (OPM) 
of job opportunities, but more often than not these job opportunities 
are never made available to the public. The VETS program investigates 
these claims and corrects unlawful practices.
    The American Legion recommends $40 million for Program Management 
that encompasses USERRA and VEOA in FY 2010.

              Veteran-Owned and Service-Connected Disabled
                     Veteran-Owned Small 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 economic growth 
factor as we move into the 21st Century. Currently, more than nine out 
of every ten businesses are small firms. They 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 
Reserve servicemembers is tragic, with a reported 40 percent of all 
businesses owned by veterans suffering financial losses and, in some 
cases, bankruptcy. Many other small businesses have discovered they are 
unable to operate and suffer some form of financial loss when key 
employees who are members of the Reserve Components are activated. The 
Congressional Budget Office 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.'' The American Legion supports legislation that would 
require the Federal Government close the pay gap between Reserve and 
National Guard servicemembers civilian and military pay and would also 
provide tax credits up to $30,000 for small businesses with 
servicemembers who are activated.
    The Office of Veterans' Business Development within the Small 
Business Administration (SBA) is 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 veterans who are entrepreneurs. The American Legion feels 
this pittance is an insult to American veterans who are small 
businessowners. This token funding also undermines the spirit and 
intent of P.L. 106-50 that provides small business opportunities to 
veteran-owned businesses.
    The American Legion strongly recommends increased funding of the 
SBA's Office of Veterans' Business Development to provide enhanced 
outreach and specific community-based assistance to veterans and self 
employed members of the Reserves and National Guard. The American 
Legion also supports legislation that would permit the Office of 
Veterans Business Development to enter into contracts, grants, and 
cooperative agreements to further its outreach goals and develop a 
nationwide community-based service delivery system specifically for 
veterans and members of the Reserve Components.
    The American Legion recommends $15 million in FY 2010 to implement 
a nationwide community-based assistance program to veterans and self 
employed members of the Reserves and National Guard.
     Homeless Providers Grant and Per Diem Program Reauthorization
    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. The Grant and Per Diem 
Program is 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 recommends $200 million for the Grant and Per 
Diem Program for FY 2010.

                               CONCLUSION

    Mr. Chairman and Members of the Committee, The American Legion is 
impressed by President Obama's initial ``top line'' budget request. 
Like the rest of America, The American Legion waits to see the details, 
legislative initiatives and other specifics in the budget request he 
has promised to provide in April. The American Legion and VA Secretary 
Shinseki cannot over emphasize the importance of enactment of the 
Military Construction, Veterans' Affairs and Related Agencies 
Appropriations for FY 2010 before the start of the new fiscal year.
    The American Legion would greatly appreciate support of this 
Committee for advance appropriations for VA medical care in FY 2010 and 
FY 2011 in the FY 2010 Budget Resolution and the Military Construction, 
Veterans' Affairs and Related Agencies Appropriations for FY 2010.
    Once again, The American Legion can support President Obama's top 
line budget request; however, that support is contingent upon review of 
his budget request released in April:

      Increases funding for the Department of Veterans Affairs 
by $25 billion above baseline over the next 5 years.
      Dramatically increases funding for veterans health care.
      Expands eligibility for veterans health care to over 
500,000 veterans by 2013.
      Enhances outreach and services related to mental health 
care and cognitive injuries, including post-traumatic stress disorder 
and traumatic brain injury, with a focus on access for veterans in 
rural areas.
      Invests in better technology to deliver services and 
benefits to veterans with the quality and efficiency they deserve.
      Provides greater benefits to veterans who are medically 
retired from service.
      Combats homelessness by safeguarding vulnerable veterans.
      Facilitates timely implementation of the comprehensive 
education benefits that veterans earn through their dedicated military 
service.

    The American Legion welcomes the opportunity to work with this 
Committee and the Administration on the enactment of a timely, 
predictable and sufficient budget for the Department of Veterans 
Affairs.
    Mr. Chairman, that concludes my testimony and The American Legion 
would welcome any questions you or your colleagues may have.

                                 ______
                                 
          The American Legion, National Commander's Testimony,
           Statement of David K. Rehbein, National Commander,
             The American Legion, Before a Joint Session of
            The Veterans' Affairs Committees, U.S. Congress
          On The Legislative Priorities of The American Legion

                           SEPTEMBER 11, 2008

                              INTRODUCTION

The American Legion's National Commander, David K. Rehbein to the House 
        and Senate Committees on Veterans' Affairs
    Messrs. Chairmen and Members of the Committees:
    As The American Legion's newly elected National Commander, I thank 
you for this opportunity to present the views of its 2.7 million 
members on issues under the jurisdiction of your Committees. At the 
conclusion of The American Legion's 90th National Convention in 
Phoenix, Arizona, delegates adopted 242 organizational resolutions, 
with 212 having legislative intent. These mandates create the 
legislative portfolio of The American Legion for the remainder of the 
110th Congress as well as the upcoming 111th Congress.
    As the summer of 2008 turns to fall, America is poised at a 
critical point in history. In just over 2 months, voters will usher in 
a new Administration and a new Congress. There is no incumbent, not 
even an incumbent vice president, running for the Nation's highest 
office.
    America's leadership will change after the general election of 
2008. But what cannot change is The American Legion's obligation to 
ensure that the brave men and women who have worn the uniform of this 
Nation are not forgotten. The war on terrorism--Operations Iraqi 
Freedom (OIF) and Enduring Freedom (OEF)--has already generated nearly 
one million discharged veterans, all of whom are guaranteed access to 
health care through the Department of Veterans Affairs (VA) for the 
first 5 years after their return home. Hundreds of thousands of OIF and 
OEF veterans are now using their VA health care benefits, increasing 
the workload of a health care system that was overburdened before the 
war began. It is a sacred and time honored obligation of The American 
Legion to make sure these veterans have the services they need and 
timely access to the care they have earned and deserve.
    By working together, The American Legion and the Members of both 
the House and Senate Veterans Affairs Committees have made considerable 
progress in recent years to meet that obligation. We have fought for 
better funding for the VA health care system, and received it. We have 
argued for greater attention to mental health services, including Post 
Traumatic Stress Disorder (PTSD) and Traumatic Brain Injury care, which 
have become known as the ``signature wounds'' of the wars we are 
fighting today. We have offered up American Legion services across the 
Nation, to care for those who come home severely wounded, through our 
Heroes to Hometowns program, and through our corps of expert service 
officers. We have worked with Congress, the White House, states and 
local communities--at every level--to ensure that our government, 
particularly VA, has what it needs to provide quality health care, 
disability compensation, rehabilitation and transitional programs to 
all eligible veterans. We have made progress. But we are not there yet.
    The backlog of VA benefits claims remains a source of continuous 
frustration nationwide. And while new attention has been given to 
mental health care for returning veterans, VA providers themselves say 
they cannot keep up with it all. In some communities, it's a crisis. 
Funds have been budgeted for new VA medical facilities that have been 
in blueprints far too long. VA must undertake a new future, with a new 
generation of war veterans with unique needs entering the system, while 
at the same time honoring the service of--and caring for--those of past 
wars and conflicts.
    The American Legion applauds the 110th Congress for recommending FY 
2008 funding allocations for many VA accounts that meet or exceed 
funding targets proposed by The American Legion in testimony presented 
earlier this year. We are also thankful for the hard work of both 
chambers in passing a comprehensive and effective GI Bill that more 
accurately reflects the sacrifices of America's servicemembers--Active 
Duty, Guard and Reserve.
    The process of providing adequate and compassionate services to our 
veterans is, as we all know, continuous. We must stay on top of the 
changes in health care, in technology, and foremost, among the veterans 
we serve. With that in mind and on behalf of The American Legion, I 
offer the following budget recommendations for the Department of 
Veterans Affairs for FY 2010:

BUDGET PROPOSALS FOR SELECTED DISCRETIONARY PROGRAMS FOR DEPARTMENT OF 
        VETERANS AFFAIRS FOR FISCAL YEAR 2009

----------------------------------------------------------------------------------------------------------------
                                                                             Appropriations      The American
                  Program                       FY 2008        H.R. 6599      Committee S.     Legion's FY 2010
                                                                                  3301          Recommendations
----------------------------------------------------------------------------------------------------------------
Medical Services +                          $29.1 billion   $30.9 billion     $35.6 billion
                                                                              (see + note.)
----------------------------------------------------------------------------
Medical Administration +                     $3.5 billion    $4.4 billion     (see + note.)       $42.8 billion
----------------------------------------------------------------------------------------------
Medical Facilities                           $4.1 billion      $5 billion        $5 billion   (includes medical
                                                                                                and prosthetics
                                                                                                      research)
----------------------------------------------------------------------------------------------
Medical Care Total                          $36.7 billion   $40.3 billion     $40.6 billion
----------------------------------------------------------------------------------------------------------------
Medical Care Recovery Fund                  ($2.4 billion)  ($2.5 billion)   ($2.5 billion)                   *
----------------------------------------------------------------------------------------------------------------
Medical and Prosthetic Research              $480 million    $500 million      $527 million        $532 million
----------------------------------------------------------------------------------------------------------------
Major Construction                           $1.1 billion    $923 million      $1.2 billion        $1.8 billion
----------------------------------------------------------------------------------------------------------------
Minor Construction                           $630 million    $991 million      $729 million        $1.5 billion
----------------------------------------------------------------------------------------------------------------
State Veterans Homes Grants                  $165 million    $165 million      $250 million        $275 million
----------------------------------------------------------------------------------------------------------------
State Veterans Cemetery Grants                $40 million     $45 million       $42 million         $49 million
----------------------------------------------------------------------------------------------------------------
National Cemetery Administration             $195 million    $240 million      $230 million        $249 million
----------------------------------------------------------------------------------------------------------------
Information Technology                         $2 billion    $2.5 billion      $2.5 billion        $2.7 billion
----------------------------------------------------------------------------------------------------------------
General Operating Expenses                   $1.6 billion    $1.8 billion      $1.8 billion        $2.8 billion
----------------------------------------------------------------------------------------------------------------
* The American Legion continues to support using Medical Care Recovery Funds as supplements, not offsets to
  discretionary VA funding.
+ Medical Services and Medical Administration accounts--VA's FY 2009 budget request proposed merging the Medical
  Services account and the Medical Administration account. The Senate concurred with this recommendation for
  consolidation. The House renamed the Medical Administration account the ``Medical Support and Compliance'',
  but maintained it as a separate account.

                         VETERAN'S HEALTH CARE

A System Worth Saving
    In 2002, The American Legion initiated the ``I Am Not A Number'' 
campaign to ascertain the quality and timeliness of health care 
delivery within VA. This program surveyed veterans on their personal 
experiences with the VA health care system and provided The American 
Legion with a clear snapshot of the needs of VA systemwide. These 
actual accounts of veterans' experiences highlighted a trend within VA; 
veterans reported the quality of care was exceptional, but criticized 
the difficulty of access to treatment.
    During that time, then National Commander Ronald Conley conducted 
site visits to 60 VA Medical Centers nationwide and compiled a report 
highlighting the issues affecting VA, which was a result of years of 
inadequate funding. This report, titled, ``A System Worth Saving,'' 
covered issues from Medical Care Collection Fund (MCCF) targets; wait 
times; budgetary shortfalls; and staffing levels.
    By 2004, The American Legion had conducted a full cycle of site 
visits to VA Medical Centers (VAMC) throughout VA's 21 Veterans 
Integrated Service Networks (VISN). In 2005, The American Legion 
conducted site visits to selected VAMC's, with attention on the 
progression of the Capital Asset Realignment for Enhanced Services 
(CARES). Due to the initial lack of headway from the CARES initiative, 
The American Legion was prompted to conduct site visits with additional 
focus on various medical areas within the VA Medical Center system to 
ascertain the level of progression. The focus included Polytrauma 
Centers and Vet Centers, and Nursing Home Care Units/Community Living 
Centers (NHCU/CLC) in 2006 and 2007. Although emphasis was placed on 
the aforementioned areas, The American Legion continued to focus on the 
overall progress of VA Medical Centers.
    Since 2002, these comprehensive reports, created from the 
compilation of site visit reports, have been presented to Congress and 
shared with VA in an attempt to bring attention to the budgetary needs 
of the VA health care system. This year marks the printing of the sixth 
``A System Worth Saving'' report. The American Legion's 2008 ``A System 
Worth Saving'' report, a compilation of information gathered from site 
visits conducted by field service representatives and the System Worth 
Saving Task Force members, focuses on Nursing Home Care Units/Community 
Living Centers (NHCUs/CLCs) located within the VA Medical Center 
System. Of the total 134 Nursing Home Care Units/Community Living 
Centers, approximately 49 were selected. The reports highlighted key 
issues in determining quality care, staffing levels, funding, physical 
plant, as well as obstacles and challenges to providing quality care.
    Although it has been 6 years since the initial visits, The American 
Legion continues to have concerns of the effects of current budgets on 
VA's ability to deliver quality care in a timely manner. America's 
veterans are turning to VA for their health care needs and, as we 
welcome home injured veterans, it is forever our responsibility as 
advocates to work together to ensure VA is indeed capable of treating 
all eligible veterans.

Budget Reform for Veterans' HealthCare
    The annual discretionary appropriations in Fiscal Year (FY) 2007 
and FY 2008 represented a dramatic improvement over years of consistent 
budgetary shortfalls, but these funding levels were achieved only 
through dynamic leadership in both chambers. However, even these two 
outstanding appropriations did not follow the normal appropriations 
process--one was achieved through a year-long continuing resolution 
with significant markups for VA medical care and the second required 
the President to declare a need for emergency appropriations for VA 
medical care.
    As the current generation of young Americans sequentially answer 
the Nation's call to arms, and deploying and returning from around the 
world, their more complex issues warrant the demand for additional 
support and accommodations, to include assured funding, clinical 
providers, nurses, and space. Many have survived combat wounds that 
were fatal to servicemembers in past conflicts; this is due to modern 
technology in the combat zones and hot spots around the world.
    Like so many brave men and women who honorably served before them, 
these new veterans are fighting for the freedom and security of us all. 
Therefore, today's veterans deserve the respect of a grateful Nation 
upon their return home. Generations of wartime veterans of the past 
were unconditionally welcomed at VA medical facilities until the 1980s.
    The American Legion believes the absence of appropriate urgent 
changes in Federal health care funding will continue to add to the 
strife that has plagued the VA, as well as the veterans it serves. New 
veterans may soon discover their battles are not over; that is, if the 
aforementioned doesn't come to past. Instead, the Nation's newest 
heroes will inevitably fight for the life of the VA health care system, 
as veterans in the 20th century fought for care they were eligible to 
receive.
    With the influx of those returning from Iraq and Afghanistan, the 
demand for various clinical providers, nurses, space, and structural 
peripherals are mounting. As each fiscal year comes, assured funding is 
essential to proactively meet various challenges faced at VA medical 
facilities. The American Legion believes the time for serious reform of 
the Federal appropriations for veterans' health care that would provide 
timely, predictable, and sufficient appropriations for VA medical care. 
We hereby urge Congress to act now to ensure that we, as a nation, will 
always provide the funding necessary to ensure the complete care for 
those who seek timely access to quality health care through the VA 
health care delivery system.
    The American Legion believes the solution to the Veterans Health 
Administration's (VHA's) recurring fiscal difficulties will only be 
achieved through meaningful reform of the Federal appropriations 
process as recommended by the President's Task Force to Improve Health 
Care Delivery for our Nation's Veterans (in 2003). This Task Force 
clearly identified the consistent mismatch between VA health care 
funding and the growing demand for health care services.
    The American Legion and eight other major veterans' and military 
service organizations have joined forces to urge Congress to provide 
annual Federal appropriations that are timely, predictable, and 
sufficient. These three components are critical for effective long- and 
short-range decisionmaking by VA management. The Partnership for 
Veterans Health Care Budget Reform has supported legislation that would 
make VA health care funding mandatory rather than discretionary. Under 
this concept, VA health care funding would be formula-based, much like 
other mandatory benefits like Medicare, Social Security, and VA 
compensation and pension.
    This concept has met a great deal of resistance by many lawmakers 
on Capitol Hill; so The American Legion and its colleagues now 
recommends an alternative to mandatory funding--advanced 
appropriations. The American Legion believes this change would assure 
timeliness and predictability. Under advanced appropriations, VA 
medical care discretionary appropriations would be approved prior to 
the start of the next fiscal year. Should The American Legion have 
concern about the sufficiency of the advanced appropriations, it would 
have an opportunity to address any shortfalls while testifying for the 
remainder of the VA appropriations for that fiscal year.
    The American Legion recommends reform of the Federal appropriation 
process with regard to VA health care that would guarantee timely, 
predictable, and sufficient annual appropriations.

MEDICAL CARE COLLECTIONS
    The Balanced Budget Act 1997, Public Law (PL) 105-33, established 
the VA Medical Care Collections Fund (MCCF), requiring amounts 
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 copayments and other 
medical charges and user fees. Funds collected may only be used to 
provide VA medical care and services, as well as 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 copayments; 
however, The American Legion adamantly opposes the scoring of MCCF as 
an offset to the annual discretionary appropriations since the majority 
of these funds come from the treatment of non-service-connected medical 
conditions. Previously, these collection goals have far exceeded VA's 
ability to collect accounts receivable.
    Since FY 2004, VHA's total collections increased from $1.7 billion 
to $2.2 billion; a 29.4 percent-increase. The third-party component of 
VA's collections also increased from $960,000 to $1.26 million; a 31.3 
percent-increase.
    VA's ability to capture these funds is critical to its ability to 
provide quality and timely care to veterans. Miscalculations of VA 
required funding levels result in real budgetary shortfalls. Seeking an 
annual emergency supplemental is not the most cost-effective means of 
funding the Nation's model health care delivery system. Government 
Accountability Office (GAO) reports continue to raise the issue of 
VHA's ability to capture insurance data in a timely and correct manner. 
In addition, they continue to express concerns of VHA's ability to 
maximize its third-party collections.
    According to a 2008 GAO report, VA lacks policies and procedures 
and a full range of standardized reports for effective management 
oversight of VA-wide third-party billing and collection operations. 
Further, although VA management has undertaken several initiatives to 
enhance third-party revenue, many of these initiatives are open-ended 
or will not be implemented for several years. Until these shortcomings 
are addressed, VA will continue to fall short of its goal to maximize 
third-party revenue, thereby placing a higher burden on taxpayers. In 
addition, GAO recommended an improvement of third-party billings; 
follow-up on unpaid amounts, and management oversight of billing and 
collections.
    The American Legion opposes offsetting annual VA discretionary 
funding by the MCCF goal, especially since VA is prohibited from 
collecting any third-party reimbursements from the Nation's largest 
federally-mandated health insurer, Medicare.

MEDICARE
    As do most American workers, veterans pay into the Medicare system, 
without choice, throughout their working lives, including while on 
active duty or as Reservists in the Armed Forces. A portion of each 
earned dollar is allocated to the Medicare Trust Fund and, although 
veterans must pay into the Medicare system, VA is prohibited from 
collecting any Medicare reimbursements for the treatment of allowable, 
non-service-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.
    The American Legion is opposed to the current policy on Medicare 
reimbursement and supports Medicare reimbursement for VHA for the 
treatment of allowable, non-service-connected medical conditions of 
enrolled Medicare-eligible veterans.

VET CENTERS
    The American Legion is proud to have been involved with the Vet 
Center program since its inception in 1979. During the developmental 
phase, some Vet Centers operated from local American Legion posts 
during their search for permanent locations. They were designed to 
provide services exclusively for veterans who served in theaters of 
conflict, or those who experienced military sexual trauma.
    Vet Centers are community-based and veterans are assessed the day 
they seek services. In addition, they also provide mental health 
counseling to those within the veteran's support system, such as 
spouses and children. Recently, VA announced the addition of 39 Vet 
Centers, increasing the total to 278. These facilities are mandated for 
completion by the fall of 2009.
    During The American Legion's 2007 site visits to Vet Centers, it 
was acknowledged their overall challenge included limited staffing, 
which was a result of occurring and anticipated influx of returning 
Operations Enduring Freedom/Iraqi Freedom (OEF/OIF) veterans. Services 
have also expanded to provide bereavement counseling to family members 
of those who have died while fighting in support of OEF and OIF.
    The American Legion continues to acknowledge the success of Vet 
Centers and the quality services they provide to the Nation's veterans 
and their families. The Vet Centers' distinctive locations, personnel, 
and overall growing missions continue to stand beyond other programs 
offered by VA.
    Vet Centers also provide services in a non-clinical environment, 
which may appeal to those who would be reluctant to seek mental health 
care in a medical facility. A high percentage of the staff, more than 
80 percent, are combat veterans and can relate to the readjustment 
issues experienced by the those seeking services.
    The most important aspect of Vet Centers is the provision of timely 
accessibility. Since Vet Centers are community-based and veterans are 
assessed within minutes of their arrival, eligible veterans are not 
subjected to long wait times for disability claims decisions to 
determine eligibility for enrollment, or long wait times for available 
appointments.
    Although Vet Centers have an extensive outreach plan, more outreach 
is required to reach other groups of veterans who are unaware they are 
eligible to use Vet Centers or those who may not be familiar with the 
program in general. According to VA, many veterans learn of Vet Centers 
by word-of-mouth; reaching veterans residing in rural areas continues 
to be a challenge.
    VA has recently recognized the importance of Vet Centers and the 
current and potential services they are capable of rendering veterans 
within their respective communities. The plan to open 39 additional Vet 
Centers validates their acknowledgement and commitment to ensure 
veterans receive access to all VA related services. The completion date 
for the project is the fall of 2009. This plan will also call for more 
funding to operate and lease space for the new Vet Centers.
    As more servicemembers return from theater, the demand for more 
services will be required. Upon completion of Vet Centers in 2009, The 
American Legion urges VA to assess the surrounding areas to ensure the 
amount of Centers is adequate to accommodate these new veterans.
    The American Legion believes all Vet Centers should be fully 
staffed with qualified providers to ensure combat veterans seeking care 
for readjustment are afforded the same standard of quality care, no 
matter which Vet Center they use.

TRAUMATIC BRAIN INJURY (TBI)
    A recent GAO report acknowledged VA's challenge of facing a number 
of clinical challenges in its efforts to screen OEF/OIF veterans for 
mild TBI and evaluate those who screen positive on the TBI screening 
tool, to include the absence of no objective diagnostic tests, such as 
laboratory tests or neuroimaging tests like MRI and computed tomography 
(CT) scans that can definitively and reliably identify mild TBI. Other 
challenges include the similarity of many symptoms of mild TBI to 
symptoms associated with other conditions, which makes a definitive 
diagnosis of mild TBI more difficult to reach; OEF/OIF veterans with 
mild TBI might not realize that they have an injury and should seek 
health care.
    According to the New England Journal of Medicine, the U.S. Army 
surveyed approximately 2525 soldiers three to 4 months after their 
return from a year-long deployment in Iraq. Of the 2525 soldiers, 124 
reported injuries with loss of consciousness, 260 reported injuries 
with altered mental status, and 435 reported other injuries during 
deployment. In addition, those who reported loss of consciousness, 43.9 
percent met criteria for post-traumatic stress disorder (PTSD), in 
comparison to 27.3 percent who reported an altered mental status.
    Soldiers with mild traumatic brain injury were more likely to 
report poor health, missed workdays, medical visits, and a high number 
of somatic and post concussive symptoms than were soldiers with other 
injuries. On the other hand, after adjustment for PTSD and depression, 
mild traumatic brain injury was no longer significantly associated with 
these physical health outcomes or symptoms, except for headache.
    The report's conclusion stated mild traumatic brain injury 
occurring among soldiers deployed in Iraq is strongly associated with 
PTSD and physical health problems three to 4 months after the soldiers' 
return home while PTSD and depression are important mediators of the 
relationship between mild TBI and physical health problems.
    In a July 2006, VA's Office of Inspector General (OIG) issued a 
report entitled ``Health Status of and Services for Operation Enduring 
Freedom and Operation Iraqi Freedom Veterans after Traumatic Brain 
Injury Rehabilitation.'' The VA's OIG examined VHA's ability to meet 
the needs of OEF/OIF veterans who suffered from TBI. It reports that 52 
patients from around the country--including Montana, Colorado, North 
Dakota, and Washington--were interviewed at least 1 year after 
completing inpatient rehabilitation from a Lead Center (Minneapolis, 
MN; Palo Alto, CA; Richmond, VA; and Tampa, FL) that included those who 
lived in rural states.
    Many of the obstacles for TBI veterans and their family members 
were similar. Some 48 percent of the patients indicated that there were 
few resources in the community for brain injury-related problems. 
Approximately 38 percent indicated that transportation was a major 
obstacle. Another 17 percent indicated that they did not have money to 
pay for medical, rehabilitation, and injury-related services.
    Some of the challenges noted by family members who care for these 
veterans in rural settings include the necessity for complicated 
special arrangements and the absence of VA rehabilitative care in their 
communities. Case managers working at Lead Centers and several 
secondary centers noted limited ability to follow patients after 
discharge to rural areas and lack of adequate transportation.
    These limitations place undue hardship on the veterans' families as 
well. Those contributing to the report, as well as veterans who have 
contacted The American Legion, have shared many examples of the manner 
in which family have been devastated by caring for TBI injured 
veterans. They have sacrificed financially, have lost jobs that 
provided the sole income for the family, and have endured extended 
separations from children.

POLYTRAUMA CENTERS
    To date, VHA has designated five VA Medical Centers as Polytrauma 
Rehabilitation Centers (PRC). These Centers provide specialized care 
for returning servicemembers and veterans who suffer from multiple and 
severe injuries. They also provide specialized rehabilitation to help 
injured servicemembers or veterans optimize the level of independence 
and functionality they are capable of achieving.
    The Polytrauma Centers are located in Minneapolis, MN; Palo Alto, 
CA; Richmond, VA; San Antonio, TX; and Tampa, FL. Another unique aspect 
of the Polytrauma Center includes the administration of care for TBI, 
amputations, blindness and psychosocial/mental health issues in one 
location.
    In addition to the five designated sites, VA has established 17 
Polytrauma Network Sites (PNS)--one in each Veterans Integrated 
Services Network (VISNs); and approximately 75 Polytrauma Support 
Clinic Teams to augment the care for those with multiple injuries.
    During the ``System Worth Saving'' site visits to the PRC Centers, 
many of them had vacancies for highly specialized rehabilitative fields 
and nursing. The major challenge to filling vacancies included the 
inability to offer competitive salaries. It is the declaration of The 
American Legion that VA must be adequately staffed to maintain or 
enhance services provided to veterans and servicemembers recovering 
from multiple injuries.

ACCESS TO CARE FOR RURAL VETERANS
    Research conducted by VA indicated veterans residing in rural areas 
are in poorer health than their urban counterparts. It was further 
reported that nationwide, one in five veterans who enrolled to receive 
VA health care lives in rural areas. Providing quality health care in a 
rural setting has proven to be very challenging, given factors such as 
limited availability of skilled care providers and inadequate access to 
care. Even more challenging will be VA's ability to provide treatment 
and rehabilitation to rural veterans who suffer from the signature 
ailments of the on-going Global War on Terror--traumatic blast injuries 
and combat-related mental health conditions. VA's efforts need to be 
especially focused on these issues.
    A vital element of VA's transformation in the 1990s was the 
creation of Community Based Outpatient Clinics (CBOCs) that proximate 
access to VA primary care within veterans' communities. Recently, VA 
scheduled the opening of 44 additional CBOCs in 21 states. The new 
clinics will be fully activated by 2009, increasing VA's network of 
independent and community-based clinics to 782. The American Legion 
believes the clinics are warranted due to the growing population of 
veterans within rural areas of the Nation. More veterans are also 
migrating to less populated areas with an abundance of automobiles, 
which are the primary catalysts that transport Improvised Explosive 
Devises (IED's) in Iraq.
    While VA has taken the right step with the addition of more CBOCs, 
The American Legion believes more are warranted. There continues to be 
great difficulty serving veterans in rural areas, such as Nebraska, 
Nevada, Utah, South Dakota, Wyoming, and Montana where veterans face 
extremely long drives, a shortage of health care providers, and bad 
weather. VISNs rely heavily upon CBOCs to close the gap.
    Many veterans continue to express concerns to The American Legion 
about their limited financial resources prohibiting travel, citing the 
rising cost of gas, the limitations of the mileage reimbursement rate, 
and the need to pay for overnight accommodations as obstacles. 
Providing contracted care in highly rural communities--when VA health 
care services are not possible--would alleviate the unwarranted 
hardships these veterans encounter when seeking access to VA health 
care.

SEAMLESS TRANSITION
    VA has an Office of Seamless Transition that is available to 
participate in Department of Defense (DoD), National Guard and Reserves 
Transition Assistance Programs (TAP) and Disabled Transition Assistance 
Programs (DTAP). However, The American Legion remains concerned that 
many servicemembers returning home from OEF/OIF duty are not being 
properly advised of the benefits and services available to them from VA 
and other Federal and state agencies. This is especially true of 
Reserve and National Guard units that are demobilized at hometown 
Reserve Centers and National Guard armories, rather than at active duty 
demobilization centers.
    Legionnaires at the state level have briefed Guard and Reserve 
units on VA's benefits and services. Many transitioning servicemembers 
were unaware of the existence of the Office of Seamless Transition and 
did not know the office has staff available to provide briefings to 
their respective units that had recently returned from or planned to 
deploy in support of GWOT.
    The American Legion asserts the importance of improved 
communication between VA and Reserve and National Guard units to ensure 
eligible Reservists are aware of all entitled VA benefits. In addition, 
there must be a concerted, proactive effort on behalf of DoD and VA to 
ensure every veteran is thoroughly screened and properly handed off 
from the former to the latter. In a recent GAO site visit to DoD 
medical facilities, it was discovered that health care providers were 
unaware a medical record review was required and that medical records 
were not consistently reviewed by providers conducting the pre-
deployment health assessment.
    Health assessment mistakes or inconsistencies occurring when 
veterans are active servicemembers will follow them to civilian life 
and eventually be overlooked. When those mistakes and inconsistencies 
become routine, the numbers increase, which will continually give birth 
to veterans with issues that could have been previously alleviated 
before entering the civilian community.
    The American Legion believes a stern system of checks and balances 
underlined with current and future plans and policies will ensure 
ongoing communication and successful transition of the Nation's heroes 
from DoD to VA.

THE AGING OF AMERICA'S VETERANS
VA's Long-Term Care Mission
    Public Law (PL) 106-117, the Millennium Health Care and Benefits 
Act, enacted in November 1999, required VA to continue to ensure 1998 
levels of extended care services (defined as VA nursing home care, VA 
domiciliary, VA home-based primary care, and VA adult day health care) 
in its facilities. Yet, VA has not consistently maintained the 1998 bed 
levels mandated by law.
    VA's inability to adequately address the long-term care problem 
facing the agency was most notable during the Capital Assets 
Realignment for Enhanced Services (CARES) process and continues. The 
planning for the long-term care mission, one of the major services VA 
provides to veterans, was not addressed in the initial CARES 
initiative, which is touted as the most comprehensive analysis of VA's 
health care infrastructure ever conducted.
    The American Legion met with the Office of Geriatrics and Extended 
Care (GEC) in November 2007 to discuss this rapidly changing and 
demanding source of unique health care and the newly implemented 
Cultural Transformation of its 134 Nursing Home Care Units (NHCU). 
Initially implemented in 2004, the conversion to the Cultural 
Transformation plan seeks to overcome barriers to change; create a peer 
support network; and link providers with long-term care leaders to 
establish evidence for best practices and models of care.
    In addition, VA has reiterated the Joint Commission on 
Accreditation of Health care Organizations' (JACHO) Standard Ethics, 
Rights and Responsibility, which states, ``Residents have a right to an 
environment that preserves dignity and contributes to a positive self 
image.'' This includes appropriate accommodations for sufficient space 
with access to personal living space and a home-like atmosphere.
    During The American Legion's 2008 site visits, which focused on VA 
Nursing Home Care Units, Task Force members and Field Service 
representatives discussed VA long-term care, as well as its support 
systems and all it supports. In this round table and physical tour 
engagement, The American Legion sought to ascertain that all was being 
carried out as discussed during the 2004 implementation of the cultural 
transformation. Challenges which continue to impede full operation 
include: the three budgets split along with the separation of 
Information Technologies (IT), Cultural Transformation, and being 
understaffed.
    The American Legion continues to state its support for the 
publishing and implementation of a Long-Term Care (LTC) strategic plan 
that addresses the rising long-term care needs of America's veterans. 
We remain disappointed it has now been over 4 years since the CARES 
decision and no plan has been published. We assert VA should take 
proactive steps to provide the care mandated by Congress. Congress 
should in turn do its part and provide adequate mandatory funding to VA 
to implement its mandates.
    The American Legion will continue to support current legislation 
that will ensure appropriate payments for the cost of LTC provided to 
veterans in State Veterans' Homes, stronger oversight of payments to 
State Veterans' Homes, full reimbursement for the treatment of veterans 
70 percent service-connected or higher, and the more efficient delivery 
of pharmaceuticals.
    It is vital that VA meet the LTC requirements of the Millennium 
Health Care and Benefits Act; we urge your Committees to support 
adequate funding for VA to meet the LTC needs of America's veterans.
State Extended Care Facility Construction Grants Program
    Since 1984, nearly all planning for VA inpatient nursing home care 
has revolved around State Veterans' Homes (SVHs) and contracts with 
public and private nursing homes. The reason for this is obvious: for 
FY 2004, VA paid a per diem of $59.48 for each veteran it placed in 
SVHs, compared to the $354 VA claims it cost in FY 2002 to maintain a 
veteran for 1 day in its own nursing home care units (NHCUs).
    Under the provisions of title 38, United States Code (USC), VA is 
authorized to make payments to states to assist in the construction and 
maintenance of SVHs. Today, there are 133 SVHs in 47 states with over 
27,000 beds providing nursing home, hospital, and domiciliary care. 
Grants for Construction of State Extended Care Facilities provide 
funding for 65 percent of the total cost of building new veterans' 
homes. Recognizing the growing LTC needs of older veterans, it is 
essential the State Veterans' Home Program be maintained as an 
important alternative health care provider to the VA system.
    The American Legion opposes attempts to place a moratorium on new 
SVH construction grants. State authorizing legislation has been enacted 
and state funds have been committed. Delaying projects will result in 
cost overruns from increasing building materials costs and may result 
in states deciding to cancel these much needed facilities.

    The American Legion supports:

      Increasing the amount of authorized per diem payments to 
50 percent for nursing home and domiciliary care provided to veterans 
in State Veterans' Homes;
      Providing prescription drugs and over-the-counter 
medications to State Homes Aid and Attendance patients along with the 
payment of authorized per diem to State Veterans' Homes; and
      Allowing for full reimbursement of nursing home care to 
70 percent service-connected veterans or higher, if veterans reside in 
a State Veterans' Home.

    The American Legion recommends $275 million for the State Extended 
Care Facility Construction Grants Program in FY 2010.
Medical and Nursing School Affiliations
    VHA and its medical school affiliates continue to enjoy a 
longstanding and exemplary relationship that has endured for virtually 
60 years. This relationship continues to thrive and evolve to present 
day. Currently, there are 129 accredited medical schools in the United 
States. Of these, 107 have formal affiliation agreements with VA 
Medical Centers (VAMCs). More than 30,000 medical residents and 22,000 
medical students receive a portion of their medical training in VA 
facilities annually. VA estimates that 70 percent of its physician 
workforce has university appointments.
    VHA conducts the largest coordinated education and training program 
for health care professions in the Nation. The medical school 
affiliations allow VA to train new health professionals to meet the 
health care needs of veterans and the Nation. Medical school 
affiliations have been a major factor in VA's ability to recruit and 
retain high quality physicians. It also affords veterans access to the 
some of the most advanced medical technology and cutting edge research. 
VHA research continues to make meaningful contributions to improve the 
quality of life for veterans and the general population.
    VHA's recent and numerous recognitions as a leader in providing 
safe, high-quality health care to the Nation's veterans can be directly 
attributed to the relationship that has been fostered through the 
affiliates. The American Legion remains committed to this mutually 
beneficial affiliation between VHA and the medical schools of this 
Nation. We also believe that medical school affiliates should be 
appropriately represented as a stakeholder on any national task force, 
commission, or Committee established to deliberate on veterans' health 
care.
    VA recently established a Nursing Academy to address the nationwide 
nursing shortage issue. The Nursing Academy has embarked on a 5-year 
pilot program that will establish partnerships with a total of 12 
nursing schools. The initial set of partnerships implemented this year 
included nursing schools in Florida, California, Utah and Connecticut. 
This pilot program will train nurses to understand the health care 
needs of veterans and make more nurses available to allow VA to 
continue to provide veterans with the quality care they deserve.
    Academic Year (AY) 2007-08 was the first of a multi-year expansion 
in order to address the recommendations of the federally Chartered 
External Advisory Committee on VHA Resident Education. The Advisory 
Committee was charged with an examination of the philosophy and 
deployment of VA's residency training positions.
    The Committee acknowledged the critical role VA plays in provision 
of high-quality graduate medical education (GME) and recommended VA 
increase its proportional support of the national GME enterprise. With 
2008 being the second year of expansion, the VA Office of Academic 
Affiliations has developed three Requests for Proposals (RFPs) which 
will create about 400 new, permanent resident positions nationwide in 
AY 2009-2010. In addition to the GME Enhancement initiative, 698 
physician resident positions were awarded to 72 facilities in 61 
specialty training programs.
    The American Legion affirms its strong commitment and support for 
the mutually beneficial affiliations between VHA and the medical and 
nursing schools of this Nation.

MEDICAL AND PROSTHETICS RESEARCH
    The American Legion believes VA's focus in research should remain 
on understanding and improving treatment for conditions that are unique 
to veterans. servicemembers are surviving catastrophically disabling 
blast injuries due to the superior armor they are wearing in the combat 
theater and the timely access to quality triage. The unique injuries 
sustained by the new generation of veterans clearly demand particular 
attention. It has been reported that VA does not have state-of-the-art 
prostheses like DoD, and that the fitting of the prostheses for women 
has presented problems due to their smaller stature.
    The American Legion supports adequate funding of other VA research 
activities, including basic biomedical research and bench-to-bedside 
projects for FY 2010. Congress and the Administration should continue 
to encourage acceleration in the development and initiation of needed 
research on conditions that significantly affect veterans--such as 
prostate cancer, addictive disorders, trauma and wound healing, post-
traumatic stress disorder, rehabilitation, and others jointly with DoD, 
the National Institutes of Health (NIH), other Federal agencies, and 
academic institutions.
    The American Legion recommends $532 million for Medical and 
Prosthetics Research in FY 2010

ENVIRONMENTAL EXPOSURES
Agent Orange
    One of the top priorities of The American Legion has been to ensure 
that long overdue major epidemiological studies of Vietnam veterans who 
were exposed to the herbicide Agent Orange are carried out. In the 
early 1980s, Congress held hearings on the need for such 
epidemiological studies. The Veterans' Health Programs Extension and 
Improvement Act 1979, Public Law 96-151, directed VA to conduct a study 
of long-term adverse health effects in veterans who served in Vietnam 
as a result of exposure to herbicides. When VA was unable to do the 
job, the responsibility was passed to the Centers for Disease Control 
(CDC). In 1986, CDC also abandoned the project, asserting that a study 
could not be conducted based on available records.
    The American Legion did not give up. Three separate panels of the 
National Academy of Sciences have agreed with The American Legion and 
concluded that CDC was wrong and that epidemiological studies based on 
DoD records are possible.
    The Institute of Medicine (IOM) report, Characterizing Exposure of 
Veterans to Agent Orange and Other Herbicides Used in Vietnam, is based 
on the research conducted by a Columbia University team. Headed by 
principal investigator Dr. Jeanne Mager Stellman, the team has 
developed a powerful method for characterizing exposure to herbicides 
in Vietnam. The American Legion is proud to have collaborated in this 
research effort. In its final report on the study, the IOM urgently 
recommends that epidemiological studies be undertaken now that an 
accepted exposure methodology is available. The American Legion 
strongly endorses this IOM report.
    The IOM's most recent report on veterans' herbicide exposure in 
Vietnam, Veterans and Agent Orange: Update 2006, released July 27, 
2007,added two new illnesses to the category of ``limited or suggestive 
evidence of association,'' AL amyloidosis and hypertension. This is a 
profound finding since many Vietnam War veterans suffer from 
hypertension.
    The ``limited or suggestive'' evidence finding meets the threshold 
of a positive association between the exposure of humans to a herbicide 
agent and the occurrence of a disease in humans, as set forth in title 
38, United States Code Sec. 1116, and has been used by VA to add other 
conditions, including type 2 diabetes, to the list of herbicide 
presumptive disabilities. Although the Secretary of Veterans Affairs, 
in violation of specific reporting requirements set forth in Sec. 1116, 
has yet to publish his official determination regarding this latest IOM 
report in the Federal Register, The American Legion received a letter 
from the Secretary on June 26, 2008, informing our organization that AL 
amyloidosis is the only condition, based on the July 2007 IOM report, 
that would be added to the list of disabilities presumed to be service-
connected due to herbicide exposure. The Secretary specifically stated 
that he has ``determined that the evidence available at this time does 
not warrant the establishment of a new presumption of service 
connection based on service in Vietnam for any additional diseases 
reviewed in the NAS report.''
    Since, at of the time of this writing, the Secretary has not 
published a notice of his determination in the Federal Register, which 
will include an explanation of the scientific basis for that 
determination; The American Legion is unable to comment on the 
reasoning behind VA's decision not to recognize hypertension as 
presumptively service-connected to herbicide exposure among Vietnam 
veterans. Rest assured, we will carefully review the Secretary's 
determination once it is published in the Federal Register and will 
take appropriate action, including, but not limited to, seeking a 
legislative remedy to correct this injustice.
    The American Legion is extremely concerned about the timely 
disclosure and release of all information by DoD on the use and testing 
of herbicides in locations other than Vietnam during the war. Over the 
years, The American Legion has represented veterans who claim to have 
been exposed to herbicides in places other than Vietnam. Without 
official acknowledgement by the Federal Government of the use of 
herbicides, proving such exposure is virtually impossible. Information 
has come to light in the last few years leaving no doubt that Agent 
Orange, and other herbicides contaminated with dioxin, were released in 
locations other than Vietnam. This information is slowly being 
disclosed by DoD and provided to VA.
    In April 2001, officials from DoD briefed VA on the use of Agent 
Orange along the Korean demilitarized zone (DMZ) from April 1968 
through July 1969. It was applied through hand spraying and by hand 
distribution of pelletized herbicides to defoliate the fields of fire 
between the frontline defensive positions and the south barrier fence. 
The size of the treated area was a strip 151 miles long and up to 350 
yards from the fence to north of the civilian control line. According 
to available records, the effects of the spraying were sometimes 
observed as far as 200 meters downwind. DoD identified the units that 
were stationed along the DMZ during the period in which the spraying 
took place. This information was given to VA's Compensation and Pension 
Service, which provided it to all of the regional offices. VA Central 
Office has instructed its Regional Offices to concede exposure for 
veterans who served in the identified units during the period the 
spraying took place.
    In January 2003, DoD provided VA with an inventory of documents 
containing brief descriptions of records of herbicides used at specific 
times and locations outside of Vietnam. The information, unlike the 
information on the Korean DMZ, does not contain units involved or 
individual identifying information. Also, according to VA, this 
information is incomplete, reflecting only 70 to 85 percent of 
herbicide use, testing and disposal locations outside of Vietnam. VA 
requested that DoD provide it with information regarding the units 
involved with herbicide operations or other information that may be 
useful to place veterans at sites where herbicide operations or testing 
was conducted. Unfortunately, as of this date, additional information 
has not been provided by DoD.
    Obtaining the most accurate information available concerning 
possible exposure is extremely important for the adjudication of 
herbicide-related disability claims of veterans claiming exposure 
outside of Vietnam. For herbicide-related disability claims, veterans 
who served in Vietnam during the period of January 9, 1962 to May 7, 
1975 are presumed by law to have been exposed to Agent Orange. Veterans 
claiming exposure to herbicides outside of Vietnam are required to 
submit proof of exposure. This is why it is crucial that all 
information pertaining to herbicide use, testing, and disposal in 
locations other than Vietnam be released to VA in a timely manner. 
Congressional oversight is needed to ensure that additional information 
identifying involved personnel or units for the locations already known 
by VA is released by DoD, as well as all relevant information 
pertaining to other locations that have yet to be identified. Locating 
this information and providing it to VA must be a national priority.
    The American Legion endorses this IOM report and strongly urges VA 
to make a timely decision on its recommendations and provide 
notification of the decision to add or not add to the presumptive list.

Gulf War Illness
    In the Research Advisory Committee on Gulf War Veterans' Illness 
(RACGWI) initial report released in November 2004, it was found that, 
for a large majority of ill Gulf War veterans, their illnesses could 
not be explained by stress or psychiatric illness and concluded that 
current scientific evidence supports a probable link between neurotoxin 
exposure and subsequent development of Gulf War veterans' illnesses. 
Earlier government panels concluded that deployment-related stress, not 
the numerous environmental and other exposures troops were exposed to 
during the war, was likely responsible for the numerous unexplained 
symptoms reported by thousands of Gulf War veterans.
    Gulf War research is moving away from the previous stress theories 
and is beginning to narrow down possible causes. However, research 
regarding viable treatment options is still lacking. The American 
Legion applauds Congress for having the foresight to provide funding to 
the Southwestern Medical Center's Gulf War Illness research program. 
The Center, headed by Dr. Robert Haley at the University of Texas 
Southwestern, was awarded $15 million, renewable for 5 years, to 
further the scientific knowledge on Gulf War Veterans Illnesses 
research. This research will not only impact veterans of the 1991 Gulf 
War, but may prove beneficial for those currently serving in the 
Southwest Asia Theater and the Middle East. The purpose of the research 
is to fill in the gaps of knowledge where there is little, yet 
suggestive information. Dr. Haley's research will further this 
knowledge about Gulf War veterans' illnesses and hopefully help improve 
the lives of ill Gulf War veterans and their families who suffer beside 
them. We owe ill Gulf War veterans our exhaustive efforts in finding 
treatments for their ailments.
    VA must continue to fund research projects consistent with the 
recommendations of the Research Advisory Committee on Gulf War 
Veterans' Illness (RACGWI). It is important that VA continues to focus 
its research on finding medical treatments that will alleviate 
veterans' suffering as well as on figuring out the causes of that 
suffering. The American Legion also recommends that your Committees 
thoroughly review the RACGWI's second report, which will be released 
this fall.
    Public Law 103-210, which authorized the Secretary of Veterans 
Affairs to provide priority health care to the veterans of the Persian 
Gulf War who have been exposed to toxic substances and environmental 
hazards, allowed Gulf War Veterans--and veterans of the Vietnam War--to 
enroll into Priority Group 6. The last sunset date for this authority 
was December 31, 2002. Since this date, information provided to 
veterans and VA hospitals has been conflicting. Some hospitals continue 
to honor Priority Group 6 enrollment for ill Gulf War veterans seeking 
care for their ailments. Other hospitals, well aware of the sunset 
date, deny Priority Group 6 enrollment for these veterans and notify 
them that they qualify for Priority Group 8. To these veterans' dismay, 
they are completely denied enrollment because of VA's restricted 
enrollment for Priority Group 8 since January 2003. Even more 
confounding is the fact that eligibility information disseminated via 
Internet and printed materials does not consistently reflect this 
change in enrollment eligibility for Priority Group 6. VA has assured 
The American Legion that this issue will be rectified.
    Although these veterans can file claims for these ailments and 
possibly gain access to the health care system once a disability 
percentage rate is granted, those whose claims are denied cannot 
enroll. According to the May 2007 version of VA's Gulf War Veterans 
Information System (GWVIS), there were 14,874 claims processed for 
undiagnosed illnesses. Of those undiagnosed illness claims processed, 
11,136 claims were denied. Due to their nature, these illnesses are 
difficult to understand and information about individual exposures may 
not be available, many ill veterans are not able to present strong 
claims. They are then forced to seek care from private physicians who 
may not have enough information about Gulf War Veterans' illnesses to 
provide appropriate care.
    NOTE: VA also published another negative presumption determination 
in the Federal Register on July 21, 2008--Joe, you might want to add 
something about this report.
    VA published its comments on the IOM's Gulf War and Health, Volume 
2: Insecticides and Solvents report, released in February 2003 in the 
Federal Register. The Department decided not to establish a presumption 
of service connection for any diseases, illnesses or health effects 
considered in the report, based on exposure to insecticides or solvents 
during service in the Persian Gulf during the Persian Gulf War. Many of 
VA's justifications for not establishing presumption mirror the reasons 
why ill Gulf War veterans have problems justifying their claims. The 
IOM report notes that little information is known about the use of 
solvents in the theater.
    VA notes that veterans may still be granted service connection, if 
evidence indicates an association between their diseases and their 
exposures. This places the burden of proof on Gulf War veterans to 
prove their exposures and that the level of exposure is sufficient 
enough to warrant service connection. IOM and VA have acknowledged that 
there is insufficient information on the use of the identified solvents 
and pesticides during the Gulf War.
    VA states that PL105-277 does not explain the meaning of the 
phrase, ``known or presumed to be associated with service in the Armed 
forces in the Southwest Asia theater of operations during the Persian 
Gulf War'' and that there is no legislative history explaining the 
meaning of the phrase. VA has had adequate time to get Congress to 
clarify the statute's intent and should have clarified the intent prior 
to delivering a charge to the IOM for the report. VA's interpretation 
is that Congress did not intend VA to establish presumptions for known 
health effects of all substances common to military and civilian life, 
but that it should focus on the unique exposure environment in the 
Persian Gulf during the war. The IOM was commissioned to ascertain 
long-term health effects of service in the Persian Gulf during the war, 
based on exposures associated with service in theater during the war as 
identified by Congress, not exposures unique to the Southwest Asia 
Theater. The determination to not grant presumption for the ailments 
identified should be based solely on the research findings, not on the 
legitimacy of the exposures identified by Congress.
    The IOM has a similar charge to address veterans who served in 
Vietnam during the war. Herbicides were not unique to the operations in 
the Southeast Asia theater of conflict and there had not been, until 
recently, a definitive notion of the amounts of herbicides to which 
servicemembers had been exposed. Peer-reviewed, occupational studies 
are evaluated to make recommendations on which illnesses are associated 
with exposure the herbicides--and their components known to be used in 
theater. For ailments that demonstrate sufficient evidence of a causal 
relationship, sufficient evidence of an association, and limited 
evidence of an association, the Secretary may consider presumption. 
Gulf War and Health Volume 2 identifies several illnesses in these 
categories. However the Secretary determined that presumption is not 
warranted
    VA needs to clearly define what type of information is required to 
determine possible health effects, for instance clarification of any 
guidance or mandate for the research. VA also needs to ensure that its 
charge to the IOM is specific enough to help it make determinations 
about presumptive illnesses. VA noted that neither the report, nor the 
studies considered for the report identified increased risk of disease 
based on episodic exposures to insecticides or solvents and that the 
report states no conclusion whether any of the diseases are associated 
with ``less than chronic exposure,'' possibly indicating a lack of data 
to make a determination. If this was necessary, it should have been 
clearly identified.
    Finally, section 1118, title 38, USC, mandates how the Secretary 
should respond to the recommendations made in the IOM reports. The 
Secretary is required to make a determination of whether or not a 
presumption for service connection is warranted for each illness 
covered in the report no later than 60 days after the date the report 
is received. If the Secretary determines that presumption is not 
warranted for any of the illnesses or conditions considered in the 
report, a notice explaining scientific basis for the determination has 
to be published in the Federal Register within 60 days after the 
determination has been made. Gulf War and Health, Volume 2 was released 
in 2003, 4 years ago. Since then, IOM has released several other 
reports and VA has yet to publish its determination on those reports as 
well.
    The American Legion urges VA to provide clarity in the charge for 
the IOM reports concerning what type of information is needed to make 
determinations of presumption of service connection for illnesses that 
may be associated with service in the Gulf during the war.
    The American Legion urges VA to get clarification from Congress on 
the intent of the phrase ``known or presumed to be associated with 
service in the Armed forces in the Southwest Asia theater of operations 
during the Persian Gulf War,'' get clarification from the IOM Committee 
to fill in as many gaps of information as possible, and re-evaluate the 
findings of the IOM report with the clarification provided.
    The American Legion also urges Congress to provide oversight to 
ensure VA provides timely responses to the recommendations made in the 
IOM reports.

Atomic Veterans
    Since the 1980s, claims by Atomic Veterans exposed to ionizing 
radiation for a radiogenic disease, for conditions not among those 
listed in section 1112(c)(2), title 38, USC, have required an 
assessment to be made by the Defense Threat Reduction Agency (DTRA) as 
to nature and amount of the veteran's radiation dosing. Under this 
guideline, when dose estimates provided are reported as a range of 
doses to which a veteran may have been exposed, exposure at the highest 
level of the dose range is presumed. From a practical standpoint, VA 
routinely denied the claims by many atomic veterans on the basis of 
dose estimates indicating minimal or very low-level radiation exposure.
    As a result of the court decision in National Association of 
Radiation Survivors v. VA and studies by GAO and others of the U.S.'s 
nuclear weapons test program, the accuracy and reliability of the 
assumptions underlying DTRA's dose estimate procedures have come into 
question. On May 8, 2003, the National Research Council's Committee to 
Review the DTRA Dose Reconstruction Program released its report. It 
confirmed the complaints of thousands of Atomic Veterans that DTRA's 
dose estimates have often been based on arbitrary assumptions resulting 
in underestimation of the actual radiation exposures. Based on a 
sampling of DTRA cases, it was found that existing documentation of the 
individual's dose reconstruction, in a large number of cases, was 
unsatisfactory and evidence of any quality control was absent. The 
Committee concluded their report with a number of recommendations that 
would improve the dose reconstruction process of DTRA and VA's 
adjudication of radiation claims.
    The American Legion was encouraged by the mandate for a study of 
the dose reconstruction program; nonetheless, we are concerned that the 
dose reconstruction program may still not be able to provide the type 
of information that is needed for Atomic Veterans to receive fair and 
proper decisions from VA. Congress should not ignore the National 
Research Council's findings and other reports that dose estimates 
furnished VA by DTRA over the past 50 years have been flawed and have 
prejudiced the adjudication of the claims of 1910s of thousands of 
Atomic Veterans. It remains practically impossible for Atomic Veterans 
or their survivors to effectively challenge a DTRA dose estimate.
    It is not possible to accurately reconstruct the radiation dosages 
to which these veterans were exposed. The process prolongs claims 
decisions on ionizing radiation cases, ultimately delaying treatment 
and compensation for veterans with fatal diseases.
    The American Legion believes the dose reconstruction program should 
not continue. We urge the enactment of legislation to eliminate this 
provision in the claim of veterans with a recognized radiogenic disease 
who was exposed to ionizing radiation during military service.

Mustard Gas Exposure
    In March 2005, VA initiated a national outreach effort to locate 
veterans exposed to mustard gas and Lewisite as participants in 
chemical warfare testing programs while in the military. The purpose of 
the testing programs was to evaluate the effectiveness of various types 
of protective clothing, ointments and equipment that could be used to 
protect American soldiers on the battlefield. Some participants were 
exposed during full-body exposure wearing various degrees of protective 
gear and some were tested by having a droplet of the agent applied to 
their forearms. For this recent initiative, VA is targeting veterans 
who have been newly identified by DoD for their participation in the 
testing, most of which had participated in programs conducted during 
WWII. DoD estimated 4,500 servicemembers had been exposed.
    Since the most recent VA outreach effort was announced, The 
American Legion has been contacted by veterans who contend that the 
number of participants identified was understated by 1910s of 
thousands, and that participation in these clandestine chemical 
programs extended decades beyond the World War II era. Investigators 
have not always maintained thorough records of the events; adverse 
health effects were not always annotated in the servicemember's medical 
records; and participants were warned not to speak of the program. 
Without adequate documentation of their participation, participants may 
not be able to prove their current ailments are related to the testing.
    It is important DoD commits to investigating these claims as they 
arise to determine if they have merit. It is also important VA commit 
to locating those identified by DoD in a timely manner, as many of them 
are WWII era veterans. Congressional oversight may be necessary to 
ensure these veterans are granted the consideration they deserve.

BLINDED VETERANS
    There are currently approximately 38,000 blind veterans enrolled in 
the VA health care system. Additionally, demographic data suggests that 
in the United States, there are over 160,000 veterans with low-vision 
problems and eligible for Blind Rehabilitative services. Due to 
staffing shortages, over 1,500 blind veterans will wait months to get 
into one of the 10 blind rehabilitative centers.
    VA currently employs approximately 164 Visual Impairment Service 
Team (VIST) Coordinators to provide lifetime case management to all 
legally blind veterans, and all Operation Enduring Freedom/Operation 
Iraqi Freedom (OEF/OIF) patients and 38 Blind Rehabilitative Outpatient 
Specialists (BROS) to provide services to patients who are unable to 
travel to a blind center. The training provided by BROS is critical to 
the continuum of care for blind veterans. DoD medical system is 
dependent on VA to provide blind rehabilitative services.
    Given the critical skills a BROS teaches to help blind veterans and 
their families adjust to such a devastating injury, The American Legion 
urges VA to recruit more specialists.

MEDICAL CONSTRUCTION AND INFRASTRUCTURE SUPPORT
Major Construction
    The CARES process identified approximately 100 major construction 
projects in throughout the VA Medical Center System, the District of 
Columbia, and Puerto Rico. Construction projects are categorized as 
major if the estimated cost is over $10 million. Now that VA has 
disclosed the plan to deliver health care through 2022, Congress has 
the sequential responsibility to provide adequate funds. The CARES plan 
continually calls for the construction of new hospitals in Orlando and 
Las Vegas, and replacement facilities in Louisville and Denver for a 
total 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. However, if timely 
completion is truly a national priority, The American Legion continues 
to have concerns due to inadequate funding.
    In addition to the cost of the proposed new facilities are many 
construction issues that have been ``placed on hold'' for the past 
several years due to 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 health care in 
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 VA has effectively shepherded the 
CARES process to its current state by developing the blueprint for the 
future delivery of VA health care--we hereby continue to urge Congress 
act equally and adequately fund the implementation of this 
comprehensive and crucial undertaking.
    The American Legion recommends $1.8 billion for Major Construction 
in FY 2010.

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. Due to the age of these building, 
continuous renovations, relocations and expansions are quite common. A 
slight hesitation in provision of funding leaves a profound impact, as 
it has in recent years. When combined with the added cost of the CARES 
program recommendations, it is easy to see that a major increase over 
the previous funding level is crucial and overdue.
    The American Legion recommends $1.5 billion for Minor Construction 
in FY 2010.

INFORMATION TECHNOLOGY FUNDING
    Since the data theft occurrence in May 2006, the VA has implemented 
a complete overhaul of its Information Technology (IT) division 
nationwide. Although not quite from its beginning stages, The American 
Legion is hopeful VA takes the appropriate steps to strengthen its IT 
security to renew the confidence and trust of veterans who depend on VA 
for the benefits they have earned.
    Within VA Medical Center Nursing Home Care Units, it was discovered 
there was conflict with IT and each respective VAMC regarding provision 
of Internet access to veteran residents. VA has acknowledged the 
Internet would represent a positive tool in the veteran's 
rehabilitation. The American Legion believes Internet access should be 
provided to these veterans without delay, for time is of the essence in 
the journey to recovery. In addition, veterans should not have to 
suffer due to VA's gross negligence in the matter.
    The American Legion hopes Congress will not attempt to fund the 
solution to this problem with scarce fiscal resources allocated to the 
VA for health care delivery. With this in mind, The American Legion is 
encouraged by the fact that IT is its own line item in the budget 
recommendation.
    The American Legion believes there should be a complete review of 
IT security government wide. VA isn't the only agency within the 
government requiring an overhaul of its IT security protocol. The 
American Legion urges Congress to exercise its oversight authority and 
review each Federal agency to ensure that the personal information of 
all Americans is secure.
    The American Legion supports the centralization of VA's IT. The 
quantity of work required to secure information managed by VA is 
immense. The American Legion urges Congress to maintain close oversight 
of VA's IT restructuring efforts and fund VA's IT to ensure the most 
rapid implementation of all proposed security measures.
    The American Legion recommends $2.7 billion for Information 
Technology.

                        COMPENSATION AND PENSION

VETERANS BENEFITS ADMINISTRATION
    VA has a statutory responsibility to ensure the welfare of the 
Nation's veterans, their families, and survivors. Providing quality 
decisions in a timely manner has been, and will continue to be one of 
VA's most difficult challenges.

CLAIMS BACKLOG & STAFFING
    In FY 2007, more than 2.8 million veterans received disability 
compensation benefits. Providing quality decisions in a timely manner 
has been, and will continue to be, one of the VA's most difficult 
challenges. A majority of the claims processed by the Veterans Benefits 
Administration's (VBA) 57 regional offices involve multiple issues that 
are legally and medically complex and time consuming to adjudicate.
    As of August 9, 2008, there were 618,314 claims pending in VBA, 
394,201 of which are rating cases. There has been a steady increase in 
VA's pending claim backlog since the end of FY 2004 when there were 
321,458 rating cases pending. At the end of FY 2007, there were more 
than 391,000 rating cases pending in the VBA system, up approximately 
14,000 from FY 2006. Of these, more than 100,000 (25.7 percent) were 
pending for more than 180 days. Including non-rating claims pending, 
the total compensation and pension claims backlog was more than 
627,000, with 26.5 percent of these claims pending more that 180 days.
    There were also more than 164,000 appeals pending at VA regional 
offices, with more than 142,000 requiring some type of further 
adjudicative action. At the end of FY 2007, the average number of days 
to complete a claim from date of receipt (182.5 days) was up 5.4 days 
from FY 2006.
    Inadequate staffing levels, inadequate continuing education, and 
pressure to make quick decisions, resulting in an overall decrease in 
quality of work, has been a consistent complaint among regional office 
employees interviewed by The American Legion staff during regional 
office quality checks. It is an extreme disservice to veterans, not to 
mention unrealistic, to expect VA to continue to process an ever 
increasing workload, while maintaining quality and timeliness, with the 
current staff levels. The current wartime situation provides an 
excellent opportunity for VA to actively seek out returning veterans 
from OEF and OIF, especially those with service-connected disabilities, 
for employment opportunities within VBA. Despite the recent hiring 
initiatives, regional offices will clearly need more personnel given 
current and projected future workload demands.
    However, VBA must be required to provide better justification for 
the resources it says are needed to carry out its mission and, in 
particular, how it intends to improve the level of adjudicator 
training, job competency, and quality assurance.

PRODUCTION VS. QUALITY
    Since 1996, The American Legion, in conjunction with the National 
Veterans Legal Services Program (NVLSP), has conducted quality review 
site visits at more than 40 regional offices for the purpose of 
assessing overall operation. This Quality Review Team visits a regional 
office for a week and conducts informal interviews with both VA and 
veterans service organization (VSO) staff. The Quality Review Team then 
reviews a random sample of approximately 30-40 recently adjudicated 
American Legion-represented claims. The Team finds errors in 
approximately 20-30 percent of cases reviewed.
    The most common errors include the following:

      Inadequate claim development leading to premature 
adjudication of claim;
      Failure to consider reasonably inferred claims based on 
evidence of record;
      Rating based on inadequate VA examination; and/or
      Under evaluation of disability (especially mental 
conditions).

    These errors are a direct reflection of VA's emphasis of quantity 
over quality of work. This seems to validate The American Legion's 
concerns that emphasis on production continues to be a driving force in 
most VA regional offices, often taking priority over such things as 
training and quality assurance. Clearly, this frequently results in 
premature adjudications, improper denials of benefits and inconsistent 
decisions

VETERANS' DISABILITY BENEFITS COMMISSION
    In October 2007, after almost 2\1/2\ years of study, the Veterans' 
Disability Benefits Commission (VDBC or Commission), released its 
extensive report, Honoring the Call to Duty: Veterans' Disability 
Benefits in the 21st century, to the President and Congress. Due to the 
history surrounding the establishment of the Commission, The American 
Legion and others in the VSO community feared that it would be used as 
a tool to restrict veterans' benefits. In fact, key Members of Congress 
and other Federal Government officials publicly expressed their desire 
to use the VDBC as a vehicle to institute radical changes in the VA 
disability system that would negatively impact and restrict entitlement 
to benefits for a large number of veterans.
    Concerned about the questionable history surrounding the creation 
of the VDBC and the impact its recommendations would undoubtedly have 
on VA's disability compensation program, American Legion staff closely 
monitored the Commission's activities and provided written and oral 
testimony, as well as other input, on several occasions. From the very 
beginning, Commission Chairman Terry Scott assured the VSOs and others 
that the Commission did not have a hidden agenda and its purpose was 
not to cut or otherwise restrict veterans' benefits. During the course 
of the Commission's 2\1/2\-year study The American Legion's concerns 
diminished and our skepticism turned to optimism as the release of its 
final report approached. Our approach, however, is still ``trust, but 
verify.''
    The American Legion appreciates the Commission's hard work and 
commitment and we are generally pleased with its recommendations. As 
the final report contains 113 recommendations, this statement will 
focus, for the most part, on recommendations that will directly impact 
the disability compensation system as well as those addressed as high 
priority in the Executive Summary.

EXECUTIVE SUMMARY PRIORITY RECOMMENDATIONS
Recommendation 4-23 (Chapter 4, Section I.5)
    VA should immediately begin to update the current Rating Schedule, 
beginning with those body systems addressing the evaluation and rating 
of post-traumatic stress disorder and other mental disorders and of 
traumatic brain injury. Then proceed through the other body systems 
until the Rating Schedule has been comprehensively revised. There 
vision process should be completed within 5 years. VA should create a 
system for keeping the Rating Schedule up to date, including a 
published schedule for revising each system.
    American Legion Position: Most major body systems in the rating 
schedule have been updated over the last few years. The American Legion 
supports the updating of conditions such as traumatic brain injury that 
have not been recently updated. We wish to also note that the rating 
schedule is not the major cause of problems with the VA disability 
compensation process. VA problems such as inadequate staffing, 
inadequate funding, ineffective quality assurance, premature 
adjudications, and inadequate training still plague the VA regional 
offices. The American Legion wants to emphasize that, in most cases, it 
would be inappropriate to reduce the value of a disability as long as 
our troops are in harm's way.

Recommendation 5-28 (Chapter 5, Section III.3)
    VA should develop and implement new criteria specific to post-
traumatic stress disorder in the VA Schedule for Rating Disabilities. 
VA should base those criteria on the Diagnostic and Statistical Manual 
of Mental Disorders and should consider a multidimensional framework 
for characterizing disability due to post-traumatic stress disorder.
    American Legion Position: The rating schedule currently uses one 
set of rating criteria for all mental disorders. There are unique 
aspects of PTSD that are not properly evaluated by the current rating 
criteria and it makes sense to develop rating criteria that address the 
specific symptoms involved with PTSD.

Recommendation 5-30 (Chapter 5, Section III.3)
    VA should establish a holistic approach that couples posttraumatic 
stress disorder treatment, compensation and vocational assessment. 
Reevaluation should occur every 2-3 years to gauge treatment 
effectiveness and encourage wellness.
    American Legion Position: While The American Legion supports a 
holistic approach to the treatment and compensation of post-traumatic 
stress disorder (PTSD) that encourages wellness, we are concerned that 
a mandatory reevaluation every 2-3 years could result in undue stress 
among PTSD service-connected veterans. They may be fearful that the 
sole purpose of such reevaluation would be to reduce compensation 
benefits. This perception could undermine the treatment process. We 
would, therefore, encourage study and review of possible unintended 
consequences regarding this portion of the Commission's recommendation.

Recommendation 6-14 (Chapter 6, Section IV.2)
    Congress should eliminate the ban on concurrent receipt for all 
military retirees and for all servicemembers who separated from the 
military due to service-connected disabilities. In the future, priority 
should be given to veterans who separated or retired from the military 
under Chapter 61 with:

      fewer than 20 years service and a service-connected 
disability rating greater than 50 percent, or
      disability as the result of combat.

    American Legion Position: The American Legion strongly supports 
full concurrent receipt and we are pleased with that portion of the 
recommendation.

Recommendation 7-4 (Chapter 7, Section II.3)
    Eligibility for Individual Unemployability should be consistently 
based on the impact of an individual's service-connected disabilities, 
in combination with education, employment history, and medical effects 
of an individual's age or potential employability. VA should implement 
a periodic and comprehensive evaluation of Individual Unemployability-
eligible veterans. Authorize a gradual reduction in compensation for 
Individual Unemployability recipients who are eligible to return to 
substantially gainful employment rather than abruptly terminating 
disability payments at an arbitrary level of earning.
    American Legion Position: Although The American Legion supports the 
provision of this recommendation calling for the gradual reduction in 
compensation benefits for Individual Unemployability (IU) recipients 
who are able to return to substantially gainful employment, we strongly 
oppose the portion of the recommendation that could be interpreted as 
requiring the consideration of age in determining eligibility to IU. It 
is inherently unfair to punish an older veteran who would not be able 
to work at any age because of a service-connected condition while 
awarding the benefit to a similarly disabled younger veteran. The 
current rule states (in essence) that the impact of a service-connected 
condition on a veteran cannot be evaluated to a higher degree because 
the veteran is old; 38 C.F.R. Sec. 3.341(a). The schedule is based on 
the average impairment in earning capacity. If the veteran cannot work 
because of service-connected disability(s) then IU should be awarded. 
Moreover, we have found that younger veterans have to overcome VA bias 
when they apply for IU because VA raters think that younger people have 
a better chance of going back to work. Thus, allowing age to be used as 
a factor in determining eligibility for IU purposes may end up 
adversely impacting both older and younger veterans.

Recommendation 7-5 (Chapter 7, Section II.3)
    Recognizing that Individual Unemployability is an attempt to 
accommodate individuals with multiple lesser ratings but who remain 
unable to work, the Commission recommends that as the VA Schedule for 
Rating Disabilities is revised, every effort should be made to 
accommodate such individuals fairly within the basic rating system 
without the need for an Individual Unemployability rating.
    American Legion Position: The American Legion is extremely leery of 
any recommendation that would encourage the elimination of a specific 
benefit program on the anticipation of a revised rating schedule which 
would supposedly eliminate the need for that benefit. The current 
policy as enunciated by 38 CFR Sec. 3.340 states, ``[T]otal disability 
will be considered to exist when there is present any impairment of 
mind or body which is sufficient to render it impossible for the 
average person to follow a substantially gainful occupation.'' This 
policy is fair and consistent with the non-adversarial nature of the VA 
claims process. Therefore, this policy should not be altered.
    38 CFR Sec. 4.16b states:

        (b) It is the established policy of the Department of Veterans 
        Affairs that all veterans who are unable to secure and follow a 
        substantially gainful occupation by reason of service-connected 
        disabilities shall be rated totally disabled.

    The bottom line is that veterans who are unable to work due to 
service-connected disability should be compensated at the 100 percent-
level, whether it be based on a scheduler evaluation (either single 
service-connected disability or a combined scheduler evaluation) or 
based on Individual Unemployability. This has been a longstanding VA 
policy and we see no need to change it. See 38 CFR Sec. 3.340.

Recommendation 7-6 (Chapter 7, Section III.2)
    Congress should increase the compensation rates up to 25 percent as 
an interim and baseline future benefit for loss of quality of life, 
pending development and implementation of quality of life measure in 
the Rating Schedule. In particular, the measure should take into 
account the quality of life and other non-work related effects of 
severe disabilities on veterans and family members.
    American Legion Position: The American Legion supports an increase 
in compensation benefits to adequately account for a service-connected 
disability's impact on a veteran's quality of life. Before any change 
is made, however, we would like to carefully analyze how this would 
impact special monthly compensation, which is based in part on loss of 
quality of life.

Recommendation 7-8 (Chapter 7, Section III.2)
    Congress should consider increasing special monthly compensation 
(SMC), where appropriate, to address the more profound impact on 
quality of life by disabilities subject to special monthly compensation 
and review ancillary benefits to determine where additional benefits 
could improve a disabled veteran's quality of life.
    American Legion Position: The American Legion fully supports 
increasing special monthly compensation to address profound impacts on 
quality of life for disabilities subject to SMC as well as reviewing 
ancillary benefits for the purpose of determining where additional 
benefits could improve a disabled veteran's quality of life.

Recommendation 7-12 (Chapter 7, Section V.3)
    VA and DoD should realign the disability evaluation process so that 
the Services determine fitness for duty, and servicemembers who are 
found unfit are referred to VA for disability rating. All conditions 
that are identified as part of a single, comprehensive medical 
examination should be rated and compensated.
    American Legion Position: The American Legion has long been 
concerned with low disability ratings issued by the military's 
disability evaluation system and we fully support limiting the 
military's role to determination of fitness while leaving the rating 
process to VA. However, we do have concerns as to how this extra work 
for the VA would be funded.

Recommendation 7-13 (Chapter 7, Section VI)
    Congress should enact legislation that would bring the ancillary 
and special purpose benefits to levels originally intended considering 
cost of living and provide for annual adjustments to keep pace with the 
cost of living.
    American Legion Position: This recommendation is appropriate as 
ancillary and special purpose benefits, as reflected in the VDBC's 
report, have not been adjusted to keep pace with cost of living changes 
resulting in the failure of the benefits to fulfill their intended 
purposes.

Recommendation 8-2 (Chapter 8, Section III.1B)
    Congress should eliminate the Survivor Benefit/Dependency and 
Indemnity Compensation offset for survivors of retirees and in-service 
deaths.
    American Legion Position: The American Legion fully supports this 
recommendation.

Recommendation 9-1 (Chapter 9, Section II.6.A.b)
    Improve claims cycle time by:
    Establishing a simplified and expedited process for well documented 
claims, using best business practices and maximum feasible use of 
information technology; and Implementing an expedited process by which 
the claimant can state the claim information is complete and waive the 
time period (60 days) allowed for further development.
    Congress should mandate and provide appropriate resources to reduce 
the VA claims backlog by 50 percent within 2 years.
    American Legion Position: While we are fully supportive of 
initiatives to expedite the claims process and reduce the claims 
backlog, The American Legion, however, is not supportive of imposing 
arbitrary deadlines to reduce the claims backlog because experience has 
shown that such production driven efforts have a tendency to sacrifice 
quality for quantity, resulting in more errors and, ultimately, an 
increase in appeals. Additionally, while we support an expedited 
process to grant benefits, compliance with statutory duties to assist 
and notify must be fully complied with in claims in which benefits 
would be denied. An immediate reduction in the backlog could be 
accomplished by VA management encouraging VA raters to grant benefits 
when there is sufficient evidence in the record rather than developing 
the record to support a denial.

Recommendation 10-11 (Chapter 10, Section VII)
    VA and DoD should expedite development and implementation of 
compatible information systems including a detailed project management 
plan that includes specific milestones and lead agency assignment.
    American Legion Position: The American Legion supports this 
recommendation.

Recommendation 11-1 (Chapter 11)
    Congress should establish an oversight group to ensure timely and 
effective implementation of the Commission's recommendations. This 
group should be co chaired by VA and DoD and consist of senior 
representatives from appropriate departments and agencies. It is 
further recommended that the Veterans' Affairs Committees hold hearings 
and require annual reports to measure and assess progress.
    American Legion Position: The American Legion has no objections to 
this recommendation. We do, however, urge that this recommendation be 
amended to specifically address VSO participation in this oversight 
process.

Other Recommendations
Recommendation 5-1 (Chapter 5, Section I.1)
    Congress should change the character-of--discharge standard to 
require that when an individual is discharged from his or her last 
period of active service with a bad conduct or dishonorable discharge, 
it bars all benefits.
    American Legion Position: The American Legion strongly opposes this 
recommendation. The Commission voted twice not to recommend a change to 
the current 30-year old policy that allows eligibility for VA benefits 
based on separate honorable periods of service. The VDBC finally 
decided on this position after a third vote of 8-4. We are disappointed 
in not only the recommendation, but also the nature in which the 
Commission arrived at its decision.
    As noted in the VDBC's report, it is clear from a review of the 
legislative history that Congress intended to liberalize the overly 
strict requirement of discharge under honorable conditions when it 
enacted the current ``under conditions other than dishonorable'' 
standard in 1944. The current standard correctly and fairly 
acknowledges that those who were discharged for relatively minor 
offenses should not be barred from receiving veterans' benefits. 
Congress' intent was also clear when it amended the law in 1977 to 
allow an individual who was discharged under dishonorable conditions, 
or conditions otherwise precluding basic eligibility, to receive VA 
benefits based upon a separate period of service if VA determined that 
the individual was discharged from the other period of service under 
conditions other than dishonorable or would have been discharged under 
conditions other than dishonorable if not for reenlistment.
    Endorsing a change in the character of discharge standard where one 
period of service under other than honorable conditions would negate 
other periods of service that were under conditions other than 
dishonorable is both unfair and in direct conflict with the intent of 
Congress when it enacted the current Character of Discharge standards.

Recommendation 5-2 (Chapter 5, Section I.2.B)
    Maintain the present definition of line of duty: that 
servicemembers are on duty 24 hours a day, 7 days a week.
    American Legion Position: The American Legion fully supports this 
position and we are hopeful that the Commission's recommendation 
regarding this issue will end further debate calling for a line of duty 
(LOD) definition that only covers injuries, diseases, or deaths 
incurred while performing military duties.
    The intent of Congress regarding the LOD definition and the equal 
treatment of all veterans, no matter how, when or where a service 
related condition was incurred, is clearly expressed in the legislative 
history and current statutory provisions. Previous recommendations to 
limit the line of duty definition to only those disabilities that are a 
direct result of performance of military duties have not been acted on 
by Congress, despite large potential savings touted by the recommending 
agencies. The American Legion believes that there are very good reasons 
previous recommendations to limit or restrict the current LOD 
definition have not been implemented. First, there is the basic 
question of fairness. Limiting the line of duty definition to only 
those disabilities, deaths and illnesses incurred while actually 
performing one's military duties, despite the fact that an active duty 
servicemember is considered, under the Uniform Code of Military Justice 
(UCMJ), to be on duty 24/7 is inherently unfair and fundamentally 
wrong. Additionally, the message such a change would send to current 
servicemembers and prospective members would undoubtedly have a 
negative impact on both recruitment and retention. Finally, the 
additional administrative costs and other burdens resulting from a 
change in the line of duty definition would offset any projected 
savings.

Recommendation 5-3 (Chapter 4, Section I.2.B)
    Benefits should be awarded at the same level according to the 
severity of the disability, regardless of whether the injury was 
incurred or disease was contracted during combat or training, wartime 
or peacetime.
    American Legion Position: The American Legion fully supports this 
recommendation. An injury, disease or death is just as debilitating and 
traumatic to an individual and his or her family no matter how the 
condition was incurred or where the veteran was at the time it was 
incurred. Making a distinction between combat and non-combat 
disabilities is fundamentally wrong and demeaning to the honorable 
service of all veterans. Moreover, implementing such a provision would 
add another level of complexity to an already overburdened and complex 
adjudication system.

Recommendation 5-4 (Chapter 5, Section I.3.B)
    Maintain the current reasonable doubt standard.
    American Legion Position: The reasonable doubt standard is the 
hallmark of VA's non-adversarial disability compensation program and we 
fully support this recommendation.

Recommendation 5-5 (Chapter 5, Section I.4B)
    Age should not be a factor for rating service connection or 
severity of disability, but may be a factor in setting compensation 
rates.
    American Legion Position: The American Legion does not support the 
use of age for establishing entitlement to service connection or for 
determining severity of disability, nor do we support using age as a 
factor in setting compensation rates. Although we understand the 
reasoning behind the Commission's recommendation calling for age to be 
used as a factor in setting service-connected disability compensation 
rates, The American Legion maintains that compensation rates should be 
based on the severity of disability and should not be applied 
differently based on the age of the veteran.

Recommendation 5-6 (Chapter 5, Section I.5B)
    Maintain the current standard of an unlimited time limit for filing 
an original claim for service connection.
    American Legion Position: The American Legion fully supports this 
recommendation. Although we recognize that it is prudent for veterans 
to file service connection disability claims as soon as possible after 
separating from service, and we strongly encourage such action whenever 
possible, that option, for various reasons, is not always feasible. 
Therefore, if sufficient evidence to establish entitlement to service 
connection is submitted, the benefit sought should be awarded, 
regardless of how long after service the claim was filed.

Recommendation 5-7 (Chapter 5, Section I.5B)
    DoD should require a mandatory benefits briefing to all separating 
military personnel, including Reserve and National Guard components, 
prior to discharge from service.
    American Legion Position: The American Legion fully supports this 
recommendation. It is extremely important that separating members 
receive sufficient information regarding all VA benefits to which they 
may be entitled after separation from service.

Recommendations 5-11, 5-12 & 5-14 (Chapter 5, Section II.1)
Recommendation 5-11
    The goal of the presumptive disability decisionmaking process 
should be to ensure compensation for veterans whose diseases are caused 
by military service and this goal must serve as the foundation for the 
work of the Science Review Board. The Committee recommends that the 
Science Review Board implement its proposed two-step process. 
[IOMRec.4]
Recommendation 5-12
    The Science Review Board should use the proposed four-level 
classification scheme, as follows, in the first step of its evaluation. 
A standard should be adopted for ``causal effect'' such that if there 
is at least as much evidence in favor of the exposure having a causal 
effect on the severity or frequency of a disease as there is evidence 
against, then a service-connected presumption will be considered. 
[IOMRec.5]

      Sufficient: The evidence is sufficient to conclude that a 
causal relationship exists.
      Equipoise and Above: The evidence is sufficient to 
conclude that a causal relationship is at least as likely as not, but 
not sufficient to conclude that a causal relationship exits.
      Below Equipoise: The evidence is not sufficient to 
conclude that a causal relationship is at least as likely as not, or is 
not sufficient to make a scientifically informed judgment.
      Against: The evidence suggests the lack of a causal 
relationship.

Recommendation 5-14
    When the causal evidence is at Equipoise and Above, an estimate 
also should be made of the size of the causal effect among those 
exposed. [IOMRec.7]
    American Legion Position: The American Legion does not support 
these recommendations because the ``association'' standard currently 
used in the presumption determination process is consistent with the 
non-adversarial and liberal nature of the VA disability claims process. 
Moreover, as is the case of the 1991 Gulf War, there is often a lack of 
specific or reliable exposure data. Due to improper recordkeeping, 
resulting in a lack of reliable exposure data, during Operations Desert 
Shield/Storm, there is insufficient information to properly determine 
servicemember exposure to the numerous environmental and other hazards 
U.S. troops were exposed to in the Southwest Asia theater of operations 
during the war. A lack of such data would clearly diminish the value 
and reliability of a ``causation'' standard as recommended by the IOM. 
It should also be noted that despite its recommendation, the Commission 
stated that it was concerned that ``causation rather than association 
may be too stringent'' and encouraged further study of the matter.

Recommendation 7-15 (Chapter 7, section VIII.2)
    Lump sum payments should not be considered to compensate veterans 
for their disabilities.
    American Legion Position: The Commission thoroughly studied this 
issue and we are hopeful that this recommendation will put an end to 
future proposals in favor of lump sum payments.

FILIPINO VETERANS' BENEFITS
    The American Legion fully supports the Filipino Veterans Equity Act 
and has testified in support of this legislation on a number of 
occasions for several years. The American Legion's objection rests with 
how Congress plans to pay for larger bill that contains the Filipino 
Equity Act provision. In order to meet its PAY GO obligations, Congress 
plans to repeal the Hartness v. Nicholson decision. In fact, some 
Filipino veterans may very well benefit from the Hartness v. Nicholson 
decision; especially should the Filipino Veterans Equity Act become 
law.
    By repealing this decision, Congress would be denying one group of 
veterans (elderly, disabled homebound) an earned benefit to give 
another group of veterans (the Filipino veterans and others) benefits. 
The American Legion believes it is wrong and sets an unacceptable 
precedence.
    There is nothing that would prevent Congress from next year, 
repealing the Filipino Equity Act to use that money to pay for some 
other group of veterans. Such a ``rob Peter to pay Paul'' scheme 
clearly dishonors and disrespects all veterans involved. Even worse, it 
pits veterans against veterans.
    In Hartness v. Nicholson, a veteran appealed a May 5, 2004, 
decision of the Board of Veterans' Appeals that denied housebound (HB) 
benefits because VA determined that the veteran did not meet either of 
the two alternative criteria for HB benefits:

      he did not have a single disability rated 100 percent 
disabling combined with substantial confinement to the home; and
      he did not have entitlement under the alternative basis a 
100 percent-disability rating with an additional independently ratable 
60 percent-disability.

    The Court of Appeals for Veterans Claims agreed held that a wartime 
veteran may be awarded housebound benefits if, in addition to being 65 
years old, he or she has been rated at least 60 percent disabling or is 
considered permanently housebound. Section 1513, Title 38, USC, 
currently benefits many wartime veterans from the ``Greatest 
Generation'' and other veterans from subsequent conflicts.
    The American Legion strongly supports the Filipino Veterans Equity 
Act, but cannot support this proposed PAYGO funding stream. The 
American Legion believes the sacrifice of these heroes warrants relief. 
Balancing the books on the backs of the very patriots that protected 
and defended this Nation is unconscionable. Congress must not make a 
grave mistake in the name of fairness, equality, or even fiscal 
responsibility.
    We urge Congress to do what is right. It has other funding 
options--not just the repeal of Hartness v. Nicholson:

      waive the budget rules, which Congress has already done 
to fund other bills; or
      pass the Filipino Veterans Equity Act as part of an 
emergency supplemental appropriations.

                           VETERANS MEMORIALS

National Cemetery Administration
    The mission of The National Cemetery Administration (NCA) is to 
honor veterans with final resting places in national shrines and with 
lasting tributes that commemorate their service to this Nation. The 
National Cemetery Administration's mission is to serve all veterans and 
their families with the utmost dignity, respect, and compassion. Every 
national cemetery should be a place that inspires visitors to 
understand and appreciate the service and sacrifice of our Nation's 
veterans.
    The American Legion recognizes NCA's excellent record in providing 
timely and dignified burials to all veterans who opt to be buried in a 
national Cemetery. Equally noteworthy is NCA's fine record in providing 
memorial headstones, markers and Presidential Memorial Certificates 
(PMC) to all who request such benefits. We also recognize the hard work 
that is required to restore and maintain National Cemeteries as 
national shrines and applaud NCA for its commitment and success toward 
that endeavor.
    The American Legion looks forward to evaluation results and 
recommendations that VA is currently conducting, and which is expected 
to be available by the end of the 2008 calendar year. The evaluation 
will cover program outcomes and policies including the ``75-mile 
service area/170,000 veteran population'' threshold that currently 
serves as the benchmark for establishing a new national cemetery. The 
American Legion is pleased that driving (commuting) times will also be 
considered in this evaluation. Inner-city traffic can significantly 
increase travel times to distant cemeteries. Driving time needs to be 
factored in when trying to determine if the veteran population is being 
served effectively.

National Cemetery Expansion
    The requested overall budget for 2009 is $425 million, of which 
$181 million and 1,603 full time equivalents (FTE) were requested for 
Operations and Maintenance, and $83.4 million for cemetery expansion 
and improvement. According to NCA's own estimates in the President's 
budget request for FY 2009, which is also warranted by the opening of 
new national cemeteries, annual interments will increase to 111,000, a 
10 percent rise from FY 2007. Interments in FY 2013 are expected to be 
about 109,000, a 9 percent-increase from FY 2007. The total number of 
graves maintained is also expected to increase during the planning 
timeframe from almost 2.8 million in FY 2007 to over 3.3 million in FY 
2013.
    NCA has only requested 6 additional FTEs to maintain its current 
125 cemeteries and 30 FTEs to prepare for the activation of interment 
operations of six new national cemeteries as directed by the National 
Cemetery Expansion Act of 2003, Public Law 108-109. NCA has to complete 
fast track parcels as part of Phase I construction of the new 
cemeteries in the following areas: Bakersfield, CA; Birmingham, AL; 
Columbia-Greenville, SC; Jacksonville, FL; Southeastern PA; and 
Sarasota County, FL. Full Phase I operations are underway in each 
cemetery now.
    Since it takes approximately 20 to 30 FTEs to run a national 
cemetery (depending on the size and workload); and whereas it takes 8 
to 10 FTEs to run a newly opened cemetery (cemeteries are opened to 
interments long before completion of the full site) it seems reasonable 
to believe that at least 50 new employees would be needed to operate 
the 6 new cemeteries that NCA plans to bring online in FY 2008. It is 
likely that they will need the full 20 to 30 by FY 2009. The average 
employee salary with benefits is $67,000.
    The American Legion recommends that moneys for additional employees 
also be included in the FY 2010 budget.

National Shrine Commitment
    Maintaining cemeteries as national shrines is one of NCA's top 
priorities. This commitment involves raising, realigning and cleaning 
headstones and markers to renovate gravesites. Adequate funding is the 
key to maintaining this very important commitment. The American Legion 
supported NCA's goal of completing the National Shrine Commitment 
within 5 years. VA assessed burial sections, roadways, buildings, and 
historic structures and identified 928 potential improvement projects 
at an estimated cost of $280 million. With the addition of six new 
national cemeteries, of which five are included to be fast tracked 
between late 2008 and early 2009, and the opening of the sixth in mid-
2009, resources will be strained. The American Legion recommends that 
$60 million be put toward the National Shrine Commitment in order to 
fulfill this commitment.
    The American Legion recommends $249 million for the National 
Cemetery Administration in FY 2010.

State Cemetery Construction Grants Program
    VA's State Cemetery Grants Program complements VA's 126 national 
cemeteries across the country. The program helps states establish, 
expand or improve state veterans' cemeteries. To date, the VA program 
has helped establish 66 veterans' cemeteries in 35 states, Saipan and 
Guam, which provided more than 22,000 burials in FY 2006. Since the 
program began in 1980, VA has awarded 156 grants totaling nearly $286 
million.
    NCA received $32 million for the current fiscal year to be used to 
establish six new cemeteries (Abilene, TX; Des Moines, IA; Glennville, 
GA; Fort Stanton, NM; Missoula, MT; and Williamstown, KY) and to expand 
four others (Cheltenham, MD; Crownsville, MD; Jacksonville, NC; and 
Kona Coast, HI). 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 fill the needs of veteran populations that 
are still not well served by the ``75-mile service area/170,000 veteran 
population'' threshold that currently serves as the benchmark for 
establishing a new national cemetery. New state cemeteries, and 
expansions and improvements of existing cemeteries are therefore likely 
to increase. With increasing costs, especially the high costs of land 
in urban areas, and increased demand, The American Legion suggests that 
the amount of money for the State Cemetery Grants Program be 
substantially increased.
    The American Legion recommends $49 million for the State Cemetery 
Grants Program in FY 2010.

                      NATIONAL ECONOMIC COMMISSION

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.
    S. 22, the Post-9/11 Veterans Education Assistance Act of 2008 is a 
new benefit providing educational assistance to individuals who served 
on active duty on or after September 11, 2001. This New GI Bill will be 
fully implemented by August 2009. The American Legion strongly 
supported the enhancements to the Montgomery GI Bill and is grateful 
that the House and Senate passed this bill. The President in turn 
signed this vital piece of legislation on June 30, 2008. This New GI 
Bill is well deserved for the men and women who have protected, 
sacrificed, and served our country honorably.
    The American Legion will continue to believe and support every 
effort to ensure that the GI Bill and related veterans' education 
benefits are delivered without problems or delays. Furthermore, 
veterans are unique, in that they volunteer for military service; 
therefore, these educational benefits are earned as the thanks of a 
grateful Nation. The American Legion believes it is a national 
obligation to provide timely oversight of veterans' education programs 
to assure they are administered in a timely, efficient, and accurate 
manner.
    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 SAAs efforts. The American Legion fully 
agrees. In response, VA Deputy Secretary Mansfield plans to establish a 
working group with SAAs to create a reporting system for approval 
activities and develop outcome-oriented measures with a goal of 
implementation in the FY 2008 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.
    Section 301 of PL 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 SAAs 
funding.
    The American Legion strongly recommends SAAs funding at $19 million 
to assure current staffing and activities in FY 2010.

VOCATIONAL REHABILITATION AND EMPLOYMENT SERVICE (VR&E)
    The mission of the VR&E program is to help qualified, service-
disabled veterans achieve independence in daily living and, to the 
maximum extent feasible, obtain and maintain suitable employment. The 
American Legion fully supports these goals. As a nation at war, there 
continues to be an increasing need for VR&E services to assist 
Operations Iraqi Freedom and Enduring Freedom veterans in reintegrating 
into independent living, achieving the highest possible quality of 
life, and securing meaningful employment. To meet America's obligation 
to these specific veterans, VA leadership must focus on marked 
improvements in case management, vocational counseling, and--most 
importantly--job placement.
    The success of the rehabilitation of our severely disabled veterans 
is determined by the coordinated efforts of every Federal agency 
involved in the seamless transition from the battlefield to the 
civilian workplace. Timely access to quality health care services, 
favorable physical rehabilitation, vocational training, and job 
placement play a critical role in the ``seamless transition'' of each 
veteran, as well as his or her family.
    Administration of VR&E and its programs is a responsibility of the 
VBA. Providing effective employment programs through VR&E must become a 
priority. Until recently, VR&E's primary focus has been providing 
veterans with skills training, rather than providing assistance in 
obtaining meaningful employment. Clearly, any employability plan that 
doesn't achieve the ultimate objective--a job--is falling short of 
actually helping those veterans seeking assistance in transitioning 
into the civilian workforce.
    Vocational counseling also plays a vital role in identifying 
barriers to employment and matching veterans' transferable job skills 
with those career opportunities available for fully qualified 
candidates. Becoming fully qualified becomes the next logical objective 
toward successful transition. It is our observations from talking to 
veterans, counselors, Disabled Veteran Outreach Program Specialists 
(DVOPs) and Local Veteran Employment Representatives (LVERs) that it 
would be beneficial if VR&E counselors take on an additional duty of 
finding or assisting in employment of veterans. Because these 
counselors deal directly with veterans on a full time basis, as opposed 
to DVOPs and LVERs on a part time basis, they are more devoted and 
specialized in their approach to an individual veteran. These 
counselors may have input into the employability of a service-connected 
veteran, but The American Legion asserts that the VA must rely on an 
expert medical opinion from a qualified, competent physician to 
determine unemployability.
    We appreciate the significance of a vocational assessment in 
establishing entitlement to total disability ratings for compensation 
based on unemployability of the individual (TDIU) and we welcome the 
participation of a vocational or rehabilitation specialist in this 
process. However, a medical opinion is still extremely important in 
determining unemployability and must be given proper consideration and 
weight.

INTERAGENCY COOPERATION BETWEEN DOL-VETS AND VA
    It is our experience that the interagency collaboration and 
communication between the VR&E program, and the Department of Labor 
(DOL) Veterans Employment and Training Service (VETS) is lacking.
    In recent years, many states did not refer veterans from the VR&E 
program to VETS for assistance in obtaining employment. Veterans with 
high-tech skills and advanced education were referred to expensive 
commercial placement agencies that do not specialize in employment 
assistance for veterans, and difficult to place veterans were sent to 
VETS. Therefore, to assist in the correction of these deficiencies a 
memorandum of understanding between VA and DOL was developed and signed 
in October 2005 stating that each agency would work for the smooth 
transition of veterans to the civilian workforce. This agreement is 
authorized in accordance with section 4102A (b) (3), title 38, U.S.C.
    In discussions with numerous VETS representatives across the 
country, The American Legion is hearing a variety of opinions on the 
current implementation process and progress of the MOU. Some states 
report a total lack of communication and information sharing while 
other states already enjoy a strong relationship between the local VETS 
and VR&E Offices.
    A majority of VETS representatives contacted spoke of a markedly 
improved level of communication between the two agencies, along with 
other positive developments such as improvement in local data sharing 
and combined training on the local and national levels. In addition, 
national representatives from the two agencies are currently reporting 
a close and cooperative relationship, and the expectation is that this 
relationship will continue to improve over time.
    In some states, however, it has been reported that the signing of 
the MOU has not led to an improvement in cooperation between the two 
agencies. Some problems cited were a difference in the perceptions of 
the primary mission, differing education levels of VA case managers and 
the DVOPs and LVERs, and the unenforceable mandate for the two agencies 
to communicate and cooperate on a local level. The DVOPs and LVERs are 
controlled by each individual state and have their own requirements, 
making a state and Federal program difficult to synchronize.
    Concerns such as education levels of VA's case managers and DOL 
DVOPs and LVERs (case managers from the VA generally have BA or MA 
degrees while the DVOPs and LVERs require only a high school 
education), job philosophies, and performance standards are cited as 
problems that affect the delivery of employment and rehab services to 
veterans.
    While poor coordination between VR&E counselors and their VETS 
counterparts has contributed to the shortfalls of the VR&E program, a 
number of states have begun to improve communications. The outlook is 
not completely negative. A majority of VETS representatives have 
commended their VR&E counterparts for their willingness to ensure the 
successful implementation of the joint MOU that is designed to improve 
rehabilitation, training and employment outcomes for disabled veterans.
    The American Legion recommends exploring possible training programs 
geared specifically for VR&E Counselors through the National Veterans 
Training Institute (NVTI). Contracting for standardized or specialized 
training for VR&E employees could very well strengthen and improve 
overall program performance. NVTI serves as a valuable resource for 
VETS employment specialists and has contributed to a marked improvement 
in VETS performance.

Veterans' preference should play a large role in job placement
    The Federal Government has scores of employment opportunities that 
educated, well-trained, and motivated veterans can fill given a fair 
and equitable chance to compete. Working together, all Federal agencies 
should identify those vocational fields, especially those with high 
turnover rates, suitable for VR&E applicants. Career fields like 
information technology, claims adjudications, and debt collection offer 
employment opportunities and challenges for career-oriented applicants 
that also create career opportunities outside the Federal Government.
    There are three ways veterans can be appointed to jobs in the 
competitive civil service: by competitive appointment through an OPM 
list of eligibles (or agency equivalent); by noncompetitive appointment 
under special authorities that provide for conversion to the 
competitive service; or, by Merit Promotion selection under the 
Veterans Employment Opportunities Act (VEOA).

Provide military occupational skills and experience translation for 
        civilian employment counseling
    The American Legion notes that due to the current demands of the 
military, greater emphasis on the Reserve component of the Armed Forces 
created employment hardships for many Reservists. The American Legion 
supports amending Section 4101(5), title 38, USC, to add Subsection (D) 
to the list of ``Eligible Persons'' for Job Counseling, Training, and 
Placement Service for Veterans, to include members in good standing of 
Active Reserve and Guard Units of the Armed Forces of the United States 
who have completed basic and advanced Duty for Training (ACDUTRA) and 
have been awarded a Military Occupation Specialty.
    DoD provides some of the best vocational training in the Nation for 
its military personnel and establishes measures and evaluates 
performance standards for every occupation with the armed forces. There 
are many occupational career fields in the armed forces that can easily 
translate to a civilian counterpart. Many occupations in the civilian 
workforce require a license or certification. In the Armed Forces, 
these unique occupations are performed to approved military standards 
that may meet or exceed the civilian license or certification criteria.
    Upon separation, many former military personnel, certified as 
proficient in their military occupational career, are not licensed or 
certified to perform the comparable job in the civilian workforce, thus 
hindering chances for immediate civilian employment and delaying career 
advancement. This situation creates an artificial barrier to employment 
upon separation from military service.
    A study by the Presidential Commission on servicemembers' and 
Veterans' Transition Assistance identified a total of 105 military 
professions where civilian credentialing is required. The most easily 
identifiable job is that of a Commercial Truck Driver in which there is 
a drastic shortage of qualified drivers. Thousands of veterans must 
venture through each state's laws instead of a single national test or 
transfer of credentials from the military. We have testified alongside 
members of the trucking industry to the U.S. House of Veterans' Affairs 
Subcommittee on Economic Opportunity for the need for accelerated MGIB 
payments for these courses and other matters.
    The American Legion supports efforts to eliminate employment 
barriers that impede the transfer of military job skills to the 
civilian labor market, and supports efforts to DoD take appropriate 
steps to ensure that servicemembers be trained, tested, evaluated and 
issued any licensure or certification that may be required in the 
civilian workforce. The American Legion supports efforts to increase 
the civilian labor market's acceptance of the occupational training 
provided by the military.

DEPARTMENT OF LABOR VETERANS EMPLOYMENT AND TRAINING SERVICE (DOL-VETS)
    The American Legion's position regarding VETS programs is that this 
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 stated 
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 300,000 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 DVOPs 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. Such 
services will continue to be crucial as today's active duty 
servicemembers, especially those returning from combat in Iraq and 
Afghanistan, transition into the civilian world. Education, vocational 
and entrepreneurial training and employment opportunities will enable 
these veterans to succeed in their future endeavors. Adequate funding 
will allow the programs to increase staffing to provide comprehensive 
case management job assistance to disabled and other eligible veterans.
    Section 4103A, title 38 USC requires that all DVOP specialists 
shall be qualified veterans and preference be given to qualified 
disabled veterans in appointment to DVOP specialist positions. section 
4104(a)(4), title 38 USC states:
        ``[I]n the appointment of local veterans' employment 
        representatives on or after July 1, 1988, preference shall be 
        given to qualified eligible veterans or eligible persons. 
        Preference shall be accorded first to qualified service-
        connected disabled veterans; then, if no such disabled veteran 
        is available, to qualified eligible veterans; and, if no such 
        eligible veteran is available, then to qualified eligible 
        persons.''
    The American Legion believes that the military experience is 
essential to understanding the unique needs of the veteran and that all 
LVERs, as well as all DVOPs, should be veterans and should be 
additionally educated to be able to address the needs of veterans who 
desire entrepreneurial support.
    The American Legion also supports legislation that will restore 
language to Chapter 41, title 38, USC, that require that half time 
DVOP/LVER positions be assigned only after approval of the DVET, and 
that the Secretary of Labor would be required to monitor all career 
centers that have veterans on staff assigned. PL 107-288 has eliminated 
the requirement that DOL/VETS review all workforce centers annually and 
this has minimized Federal oversight of the programs since the ASVET 
has drastically cut funds allocated for this activity and established a 
policy that only 10 percent of the centers operated under title 38, 
USC, will be reviewed, and PL 107-288 has removed the job descriptions 
of the DVOPs and LVERs from Title 38, USC, and given the states the 
ability to establish the duties and responsibilities, thus weakening 
the VETS program across the country by eliminating the language that 
required these staff positions provide services only to veterans.
    Veterans returning from Afghanistan, Iraq and other tours of duty 
are not always coming back to a hero's welcome--at least from 
employers. The jobless rate for veterans between ages 18 to 24 was 12 
percent in 2007, almost three times the national unemployment rate of 
4.6 percent. Numerous national publications have reported veterans are 
having a more difficult time finding jobs than non-veterans. According 
to a recent national survey, one in five veterans said finding a job 
took 6 months or longer; one in 10 said it took more than a year. The 
employment market is tougher for young veterans. This is a major key 
reason why the funding for the VETS program is so critical.
    Veterans need proper training and tools to begin new careers after 
they leave military service. The VWIP account has only received $7.3 
million in annual funding, which has allowed the program to operate in 
only 11 states. This is absolutely unacceptable. There are thousands of 
veterans available for work, but they lack marketable, technological 
skills, especially for those jobs that exist in the Information Age 
economy. The problem is clearly a lack of adequate funding for veterans 
who are the only participants in this program. The budget baseline 
needs to increase to allow VETS to train eligible veterans in all 50 
states in FY 2010.

Make Transitional Assistance Program (TAP)/Disabled Transitional 
        Assistance Program (DTAP) a Mandatory Program
    The American Legion is deeply concerned with the timely manner that 
veterans, especially returning wartime veterans, transition into the 
civilian sector. Annually, for the past 6 years, approximately 300,000 
servicemembers, 90,000 of them belonging to the National Guard and 
Reserve, enter the civilian sector each year.
    DoD estimates that 68 percent of separating servicemembers attend 
the full TAP seminars and only 35 percent of the Reserve components 
attend. The American Legion believes this low attendance number is a 
disservice to all transitioning servicemembers, especially the Reserve 
component. Currently, numerous National Guard and Reserve troops have 
returned from the war in Iraq and Afghanistan only to encounter 
difficulties with their Federal and civilian employers at home, and the 
number of destroyed and bankrupt businesses due to military deployment 
is still being realized.
    In numerous cases brought to the attention of The American Legion 
by veterans and other sources, many of these returning servicemembers 
have lost jobs, promotions, businesses, homes, and cars and, in a few 
cases, become homeless. The American Legion strongly endorses the 
belief that servicemembers would greatly benefit by having access to 
the resources and knowledge that the Transitional Assistance Program 
(TAP) and Disabled Transitional Assistance Program (DTAP) can provide 
and the TAP/DTAP program needs to update their program to recognize the 
large number of Guard and Reserve businessowners who now require 
training, information and assistance while they attempt to salvage or 
recover from a business which they abandoned to serve their country.
    Any delay in reintegration into the civilian workforce can 
adversely affect a veteran's life. Every effort should be made to 
ensure that veterans are afforded all the opportunities that this great 
country can offer without delay.
    The American Legion strongly supports the Transition Assistance 
Program and Disabled Transition Assistance Program. Additionally, The 
American Legion supports that DoD require all separating, active-duty 
servicemembers, including those from Reserve and National Guard units, 
be given an opportunity to participate in Transition Assistance Program 
and Disabled Transition Assistance Program training not more than 180 
days prior to their separation or retirement from the Armed Forces.
    The DoD Transition Assistance Program (TAP) was designed to help 
smooth the transition of military personnel (and family members) 
leaving active duty. TAP is a partnership among DoD, DOL, and VA. The 
program consists of four components:

    1.  DoD Preseparation Counseling;
    2.  DOL Employment Workshops;
    3.  VA Benefits Briefing; and
    4.  Disabled Transition Assistance Program (DTAP).

    Once a servicemember has completed the four workshops above, they 
are eligible for one-on-one counseling and employment assistance 
training through their service. For demobilizing Guard and Reserve: DoD 
Preseparation Counseling, DOL Uniformed Services Employment and 
Reemployment Rights Act (USERRA) Briefing, VA Benefits Briefing, and VA 
DTAP Briefing are provided on major military installations by the 
Transition Assistance Offices.
    A new Web site designed to help all veterans was recently launched 
on June 11, 2007. The ``TurboTap'' is intended to be a one-stop 
transition center but not to replace the face-to-face interaction and 
the assistance that the full programs can provide.
    Transition Assistance Program (TAP) Employment Workshops are 
provided to transitioning servicemembers at most military installations 
in the United States as well as in eight overseas locations. The two 
and one-half day employment workshops help servicemembers prepare a 
plan for obtaining meaningful civilian employment when they leave the 
military. The workshop focuses on skills assessment, resume writing, 
job counseling and assistance, interviewing and networking skills, 
labor market information, and familiarization with America's workforce 
investment system.
    Studies have shown that servicemembers who participate in TAP 
employment workshops find their first civilian jobs 3 weeks earlier 
than veterans who do not participate in TAP. According to DOL--VETS, it 
is estimated that about 65 percent of servicemembers leaving active 
duty do attend a TAP workshop. VETS is vital in ensuring that every TAP 
participant leaves the session with a draft resume, a practice 
interview session, and having visited their state job board.
    DOL--VETS program is critical in supporting veterans as they 
transition from the military and into the private sector, assisting 
veterans to be awarded federal employment using their earned veterans 
preference, and assisting veterans to achieve substantially gainful 
employment.
    At the end of the Cold war, DoD dramatically downsized its 
personnel strength. In an attempt to assist separating servicemembers 
in making a successful transition back into the civilian workforce, 
Congress enacted PL 101-510 that authorized the creation of the TAP 
that provides separating servicemembers with 3 days of comprehensive 
training with emphasis on such topics as networking, how to conduct a 
job search, resume writing, career decisionmaking, interview 
techniques, as well as current occupational and labor market 
conditions.
    VETS provide professional veterans' employment personnel, DVOPs and 
LVERs, to participate in the TAP program. Higher demands placed on 
LVERs to deliver TAP modules, in addition to their normal employment 
assistance programs, has the potential for weakening their overall 
capability.
    To ensure that all veterans, both transitioning and those looking 
for employment assistance well past their discharge, receive the best 
care; the DOL-VETS program must be adequately funded. However, we feel 
that the current funding levels are inadequate.
    On the contrary to the demands placed upon VETS, funding increases 
for VETS since 9/11 do not reflect the large increase in servicemembers 
requiring these services due to the Global War on Terror. In support of 
this fact, the inflation rate from January 2002 to January 2007 is 
14.29 percent and yet for State Grants alone, funding has only 
increased a meek 1.19 percent ($158 million to $161 million).
    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, afford the veteran to 
compete in the private sector, and allow our Nation's veterans to 
contribute their military skills and education to the civilian sector.
    By placing veterans in suitable employment sooner, the country 
benefits from increased income tax revenue and reduced unemployment 
compensation payments, thus greatly offsetting the cost of TAP 
training. The necessity and severity of the situation is now.
    The American Legion recommends $352 million to DOL-VETS for FY 
2010.

MILITARY OCCUPATIONAL SPECIALTY TRANSITION (MOST) PROGRAM
    The American Legion supports the new legislation, H.R. 6221 that 
will authorize $60 million for the next 10 years to fund the 
servicemembers' Occupational Conversion and Training Act (SMOCTA). 
SMOCTA is a training program developed in the early 1990's for those 
leaving military service with few or no job skills transferable to the 
civilian marketplace. SMOCTA has been changed to the Military 
Occupational Specialty Transition (MOST) program, but the language and 
intent of the program still applies.
    If enacted, MOST would be the only Federal job training program 
available strictly for veterans and the only Federal job training 
program specifically designed and available for use by state veterans' 
employment personnel to assist veterans with barriers to employment.
    Veterans eligible for assistance under MOST are those with a 
primary or secondary military occupational specialty that DoD has 
determined is not readily transferable to the civilian workforce or 
those veterans with a service-connected disability rating of 30 per 
cent or higher. MOST is a unique job training program because there is 
a job waiting for the newly trained veteran upon completion of training 
so that they can continue to contribute to the economic well-being of 
the Nation.
    In March 1993, DoD, VA, and DOL signed a Memorandum of 
Understanding (MOU), which defined their roles and responsibilities in 
the implementation of SMOCTA and DoD provided funding for SMOCTA. The 
VA and DOL were responsible for administering the program. Many LVERs 
and DVOPs publicly praised the effectiveness of this program because it 
successfully returned veterans to the civilian workforce.
    The American Legion recommends reauthorization of SMOCTA (now MOST) 
and adequate funding for the program.
Employment
    DVOPs provide outreach services and intensive employment services 
to meet the employment needs of eligible veterans, with priority to 
disabled veterans and special emphasis placed on those veterans most in 
need. LVERs conduct outreach to local employers to develop employment 
opportunities for veterans, and facilitate employment, training and 
placement services to veterans. In particular, many LVERs are the 
facilitators for the Transition Assistance Program employment 
workshops.
    There are inadequate appropriations to several states because of 
policies and practices that cause these states to receive fewer 
positions and/or less funding. This procedure caused a deterioration of 
the available services provided to veterans in those states, and 
adversely impacts the level of services provided.

HOMELESSNESS (DOL--VETS)
    The American Legion notes that there are approximately 154,000 
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 that intensive and numerous programs to prevent and 
assist homeless veterans are available.
    Homeless Veterans Reintegration Program (HVRP) is a competitive 
grant program. Grants are awarded to states or other public entities 
and non-profits, 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 American Legion recommends $40 million for this highly 
successful grant program in FY 2010.

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 DVOPs and LVERs to be trained within 3 years of hiring. We 
believe that these personnel should be trained within 1 year.
    The American Legion recommends $6 million of funding for NVTI in FY 
2010.
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 wages and career potential jobs.
    The American Legion recommends funding of $20 million for VWIP in 
FY 2010.

EMPLOYMENT RIGHTS AND VETERANS' PREFERENCE
    The Uniformed Services Employment and Reemployment Rights Act 
(USERRA) protects the 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, as well as 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 have 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 (VEOA) 1998 extended 
certain rights and remedies to recently separated veterans. VETS were 
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.
    Veterans' Preference is being unlawfully ignored by numerous 
agencies. Whereas figures show a decline in claims by veterans of this 
conflict compared to Gulf War I, the reality is that employment 
opportunities are not being broadcast. Federal agencies as well as 
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. The VETS program investigates these claims and corrects 
unlawful practices.
    The American Legion recommends funding of $61 million for Program 
Management that encompasses USERRA and VEOA in FY 2010.
    The American Legion also supports the strongest Veterans' 
Preference laws possible at all levels of government. We believe that 
the evidence compiled in this report will show the current state of 
enforcing the Uniformed Services Employment and Reemployment Rights Act 
(USERRA) and Veterans' Preference laws to the Nation's veterans.
    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 claims after the non-compliance 
employment event occurred 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 following paragraphs are the perceived steps taken by the 
Federal Government to protect veterans' employment and it demonstrates 
reactionary measures to assist veterans that may take months to 
resolve. Many veterans give up or do not file complaints because they 
must seek employment elsewhere or face serious financial difficulties.
    The Office of Personnel Management (OPM) administers entitlement to 
Veterans' Preference in employment. DOL, through VETS, provides 
assistance to all persons having claims under USERRA. DOL is the 
enforcement authority for USERRA, and it processes all formal 
complaints of violations of the law. The veteran may then request that 
the Department of Justice (DoJ) litigate on their behalf but only after 
a certain period has passed.

    The following excerpt is from the DoJ Web site (www.usdoj.gov):

        ``If VETS is unsuccessful in resolving the complaint, the 
        claimant may request that VETS refer the complaint to Office of 
        Special Counsel (OSC). If the Special Counsel believes there is 
        merit to the complaint, OSC will initiate an action before the 
        Merit Systems Protection Board (MSPB) and appear on behalf of 
        the claimant.

        ``The DoJ is responsible for enforcing the provisions of the 
        USERRA against state and local government employers and private 
        employers. If the Department of Justice takes your case, it 
        will serve as your attorney if you work for a private employer 
        or a local government. If you work for a state government, the 
        Department of Justice may bring a lawsuit in the name of the 
        United States.''

    The DoJ Web site continues to state:

        ``USERRA authorizes the Department of Justice Office of Special 
        Counsel (OSC) to investigate alleged violations of the act by 
        Federal Executive Agencies, and to prosecute meritorious claims 
        before the Merit Systems Protection Board on behalf of the 
        aggrieved person. Under the Veterans Employment Opportunities 
        Act 1998 (VEOA), in order to seek corrective action, a 
        preference eligible [veteran] is to file a written complaint 
        with the U.S. Department of Labor, Veterans Employment and 
        Training Service (VETS), within 60 days of the alleged 
        violation. If the Secretary is unable to resolve a complaint 
        within 60 days, the Secretary is to provide notification of an 
        unsuccessful effort to resolve the complaint to the 
        complainant.''

    The American Legion reiterates its position that protection of 
veterans' employment rights should be concurrent and continuous 
oversight must be emplaced to protect veterans from unfair hiring 
practices, not just reactionary investigations and lawsuits. We further 
state that the veteran must be protected at the onset of the hiring 
process, especially because corrective actions to remedy the veteran's 
plight are not guaranteed.
    Finally, we recommend to this Committee that the DoJ provide a 
detailed description of their veterans' employment activities.


------------------------------------------------------------------------
         Veterans' Preference Cases              FY 2006       FY 2007
------------------------------------------------------------------------
Cases Carried over from previous FY                    67            29
------------------------------------------------------------------------
Cases Opened                                          479           427
------------------------------------------------------------------------
Total cases                                           546           456
------------------------------------------------------------------------
Cases Closed                                          517           406
------------------------------------------------------------------------
Cases carried to next FY                               29            50
------------------------------------------------------------------------


FY 2006
    In 2006, VETS staff closed 1,377 USERRA complaints, recovering 
$2,346,142.04 in lost wages and benefits.
FY 2007
    In 2007, VETS staff closed 1,200 USERRA complaints, recovering 
$1,886,572.95 in lost wages and benefits.

VETERAN AND SERVICE 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 as we move 
further into the 21st century. Currently, more than nine out of every 
ten 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 Reservists is tragic with 
a reported 40 percent of all businesses owned by veterans suffering 
financial losses and in some cases bankruptcies. Many small businesses 
have discovered they are unable to operate and suffer some form of 
financial loss when key employees (who are members of the Reserve 
component) are activated. The Congressional Budget Office in a 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.'' The American Legion is a strong 
supporter of the ``Hope at Home Act of 2007,'' which is a bipartisan 
bill that would not only require the Federal Government to close the 
pay gap between their Reserves and National Guard servicemember's 
civilian and military pay but it would also provide tax credits up to 
$30,000 for small businesses with servicemembers who are 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 veterans who are entrepreneurs. The 
American Legion feels that this pittance is an insult to American 
military veterans who are small businessowners; consequently, this 
undermines the spirit and intent of PL 106-50 and continues to be a 
source of embarrassment for this country.
    The American Legion strongly supports increased funding of the 
efforts of the SBA's Office of Veterans' Business Development in its 
initiatives to provide enhanced outreach and specific community based 
assistance to veterans and self employed members of the Reserves and 
National Guard. The American Legion also supports legislation that 
would permit the Office of Veterans Business Development to enter into 
contracts, grants, and cooperative agreements to further its outreach 
goals and develop a nationwide community-based service delivery system 
specifically for veterans and members of Reserve components of the 
United States military.
    The American Legion recommends $15 million in FY 2010 to enable to 
implement a nationwide community-based assistance program to veterans 
and self employed members of the Reserves and National Guard.

THE NATIONAL VETERANS BUSINESS DEVELOPMENT CORPORATION
    Congress enacted the Veterans Entrepreneurship (TVC) and Small 
Business Development Act 1999 (PL 106-50) to assist veterans and 
service-connected disabled veterans who own small businesses by 
creating the National Veterans Business Development Corporation. 
Presently, the objectives of PL 106-50 (as originally envisioned) are 
not being met at the present time due to the scope of the mission, 
staffing and funding requirements.
    The American Legion believes that with limited funding and 
staffing, TVC should not try to duplicate or replicate preexisting 
services such as those provided by the Small Business Development 
Centers (SBDC). The American Legion recommends that the resource-
training centers that TVC is currently providing funding for be given 
to the jurisdiction of the SBA's Veterans' Development Office.
    The SBA's Veterans' Development Office is presently funding five 
such centers around the country and should be given the additional 
three. In addition, the SBA office should take on the responsibility of 
partnering with military and VA hospitals, TAPs, State Department of 
Veterans Affairs, Procurement technical Assistance Centers, Military 
Family Support Centers, and VSOs to provide employment and 
entrepreneurship programs along with the addition of funding and 
necessary senior staff to oversee the implementation and development of 
such a program.
    TVC would operate more effectively acting as a liaison with 
existing associations of small businessowners and, by working with SBA 
programs, ensure the involvement of private and successful military 
alumni from the business community to help support SBA's successful 
reintegration of veterans and Reserve component entrepreneurs into the 
private and public American marketplace.
    The American Legion also supports restructuring of the organization 
by replacing the current Chief Executive Officer position with a 
congressionally appointed Director from the Senior Executive Service. 
That move would allow Congress greater oversight of expenditures and an 
enhanced ability to monitor performance. Restricting the role of the 
Board of Directors to fundraising, marketing and branding which will 
serve to increase small business opportunities to veterans along with 
relieving board members with the challenges of operating such a 
national outreach initiative, with only the guidance of the Chief 
Executive Officer.
    The American Legion reiterates the SBA's Office of Veterans' 
Business Development should be the lead agency to ensure that veterans 
returning from Iraq and Afghanistan are provided with Entrepreneurial 
Development Assistance. Comprehensive training should be handled by the 
SBA and augmented by TVC's online training. Resource Training Centers 
should include DoD and VA faculties. Currently, many military families 
are suffering financial hardship while their loved ones are 
recuperating in military hospitals around the country. Many spouses 
leave their jobs to be with that disabled servicemember only to watch 
their finances deteriorate. Seamless transition in many cases is just a 
wishful thought; however, if business development training was offered 
to military members, a small home based business that is feasible could 
be the answer in guaranteeing a constant source of revenue for the 
family, in turn making them less dependent on the Federal Government.
    The American Legion has encouraged Congress to require reasonable 
``set-asides'' of Federal procurements and contract for businesses 
owned and operated by veterans. The American Legion supported 
legislation in the past that sought to add service-connected disabled 
veterans to the list of specified small business categories receiving 3 
percent set-asides. PL 106-50, ``The Veteran Entrepreneurship and Small 
Business Development Act of 1999,'' included veteran small businesses 
within Federal contracting and subcontracting goals for small 
businessowners and within goals for the participation of small 
businesses in Federal procurement contracts. It requires the head of 
each Federal agency to establish agency goals for the participation by 
small businesses owned and controlled by service-connected disabled 
veteran, within that agency's procurement contracts.
    Agency compliance with PL 106-50 has been minimal with only two 
agencies self-reporting that they have met their goals (the Department 
of Veterans Affairs and the Small Business Administration). In 2004, 
President Bush issued Executive Order 13360 to strengthen opportunities 
in Federal contracting for service-disabled veteran-owned businesses.
Recommendations

    1. Incorporate Executive Order 13360 into SBA Regulations and 
Standard Operating Procedures

    The American Legion endorses these recommendations given from the 
``SBA Advisory Committee on Veterans Business Affairs'' FY 2006 SBA 
report:

      ``The SBA needs to reemphasize implementation of 
Executive Order 13360 and establish it as a Federal procurement 
priority across the entire Federal sector. Federal agencies need to be 
held accountable, by the SBA, for their implementing Executive Order 
13360 and their progress toward the 3 percent-goal. The SBA needs to 
establish a means to monitor agencies progress and where appropriate, 
establish a vehicle to report or otherwise identify those that are not 
in compliance, and pursue ongoing follow-up.''
      ``To achieve the SDVOSB procurement goal contained in 
Executive Order 13360, the SBA must identify all agencies affected by 
the Executive Order under the directive of Congress. Then the SBA 
should assist these agencies to develop a demonstrable, measured 
strategic plan and establish realistic reporting criteria. Once the 
information is received, disseminate this data to all agencies, 
Veterans Organizations and post on SBA Web site as a bellwether of 
program progress.''

    2. Change to Sole Source Contracting Methods

    ``To provide parity among special emphasis procurement programs the 
SBA should take immediate, appropriate steps to promulgate regulations 
to revise 13 CFR 125.20. The proposed revision would eliminate existing 
restrictions on the award of sole source contracts to SDVOSB such as 
the ``Rule of Two''. The change should mirror 13 CFR 124.508(c) which 
applies to 8 (a) Program participants and states--.In order to be 
eligible to receive a sole source 8 (a) contract, a firm must be 
current participant on the date of the award--Accordingly, adopting 
this language would eliminate all restrictions on sole source awards to 
SDVOSBs.''

    3. Develop a User Friendly Veteran Procurement Database

    The American Legion also urges that the Federal Government and DoD 
utilize its available technology to create, fund and support a veteran 
procurement-spending database within the DoD that would finally bring 
veteran owned and service-disabled veteran owned businesses on equal 
footing with all other small business special interest groups when it 
comes to Federal procurement opportunities.

HOME LOAN GUARANTY PROGRAM
    VA's Home Loan Guaranty program has been in effect since 1944 and 
has afforded approximately 18 million veterans the opportunity to 
purchase homes. The Home Loan programs offer veterans a centralized, 
affordable and accessible method of purchasing homes in return for 
their service to this Nation. The program has been so successful over 
past years that not only has the program paid for itself, but has also 
shown a profit in recent years. Administrative costs constitute a 
relatively small portion--less than 10 percent--of the total capital 
and operating costs. The predominant costs are claims costs and other 
costs associated with foreclosure and alternatives taken to avoid 
foreclosure. Each claim costs the Federal Government about $20,000. 
However, revenues that VA collects from different sources, including 
the funding fee that borrowers pay, property sales, and proceeds from 
acquired loans and vendee loans, offset this cost.
    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' in to the program, it 
no longer serves the intent of helping veterans afford a home.
    The fee, currently 2.15 percent on no-downpayment loans for a 
first-time use, is intended to enable the veteran who obtains a VA home 
loan to contribute toward the cost of this benefit, and thereby reduce 
the cost to taxpayers. The funding fee for second time users who do not 
make a downpayment is 3.3 percent. The idea of a higher fee for second 
time use is based on the fact that these veterans have already had a 
chance to use the benefit once, and also that prior users have had time 
to accumulate equity or save money toward a down payment.
    The following persons are exempt from paying the funding fee:

      Veterans receiving VA compensation for service-connected 
disabilities.
      Veterans who would be entitled to receive compensation 
for service-connected disabilities if they did not receive retirement 
pay.
      Surviving spouses of veterans who died in service or from 
service-connected disabilities (whether or no tsuch surviving spouses 
are veterans with their own entitlement and whether or not they are 
using their own entitlement on the loan).

    The funding fee makes the VA Home Loan program less beneficial than 
compared to a standard, private loan, in some aspects. The current rate 
for mortgages (July 2008) is 6.5 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 in to the program; however 
that goes directly against the intention of the law, to provide 
veterans a resource for obtaining a home.
    The American Legion believes that it is unfair for veterans to pay 
high funding fees of 2 to 3 percent, which can add approximately $3,000 
to $11,000 for a first time buyer. The VA funding fee was initially 
enacted to defray the costs of the VA guaranteed home loan program. 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.
    Therefore, The American Legion strongly recommends that the VA 
funding fee on home loans be reduced or eliminated for all veterans 
whether active duty, Reservist, or National Guard.
Specially Adaptive Housing
    The American Legion is pleased to support the VA Secretary's 
efforts to improve the housing arrangements to better suit disabled 
veterans' needs, with specific emphasis on severe burn injuries. The 
American Legion additionally applauds efforts to assist disabled 
veterans to receive adaptive equipment for automobiles.
    The American Legion conveys that specially adaptive housing should 
also include those veterans suffering from Traumatic Brain Injury 
(TBI), and other debilitating injuries. We are also concerned with the 
ambiguity of the term ``severe'' in that there are many different 
levels of injury where a severe injury to one individual may not be as 
severe to another.

HOMELESS VETERANS
    The American Legion supports the efforts of public and private 
sector agencies and organizations with the resources necessary to aid 
homeless veterans and their families. The American Legion supports 
proposals that will provide medical, rehabilitative and employment 
assistance to homeless veterans and their families.
    Homeless veteran programs should be granted full appropriations to 
provide supportive services such as, but not limited to outreach, 
health care, habilitation and rehabilitation, case management, daily 
living, personal financial planning, transportation, vocational 
counseling, employment and training, and education.
    The American Legion applauds the VA, HUD, and the Senate 
Appropriations Committee for ensuring PL 110-161, the FY 2008 
Consolidated Appropriations Act, included $75 million for the 
Department of Housing and Urban Development (HUD)--Veterans Affairs 
Supported Housing (VASH) program. This funding allowed HUD and VA to 
make up to 10,000 supportive incremental housing vouchers available to 
homeless veterans. Looking ahead to FY 2009 funding for veterans 
permanent housing, HUD has requested another $75 million for up to 
10,000 additional vouchers for the HUD-VASH program. The American 
Legion urges the Appropriations Members to support this amount in new 
legislation, and to double that amount in FY 2010.
    Veterans need a sustained coordinated effort that provides secure 
housing, nutritious meals, essential physical health care, substance 
abuse aftercare and mental health counseling, as well as personal 
development and empowerment. Veterans also need job assessment, 
training and placement assistance. The American Legion believes all 
programs to assist homeless veterans must focus on helping veterans 
reach their highest level of self-management.
Homeless Providers Grant and Per Diem Program Reauthorization
    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, PL 102-590. The Grant and Per Diem 
Program is 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 increasing the funding level 
to $200 million annually for the Grant and Per Diem Program.
    VBA has 20 full-time and 37 part-time homeless veteran outreach 
coordinators to enhance prompt claims for homeless and at-risk 
veterans. VBA identified and expedited more than 21,000 claims from 
homeless veterans since 2003. Approximately 44 percent of compensation 
claims and 77 percent of pension claims are approved annually.
    Health Care for Homeless Veterans (HCHV) sites provide outreach, 
physical and psychiatric treatment, referrals, and case management to 
homeless veterans. HCHV staffs assist over 60,000 homeless veterans 
each year and place homeless veterans into community-based facilities 
under contract to local VA medical facilities.
    Domiciliary Care for Homeless Veterans Program (DCHV) operates 34 
sites, with 1,833 dedicated domiciliary beds, providing time limited 
residential treatment with long-term physical, psychological, and 
rehabilitative counseling and services including aftercare. This 
program annually provides residential treatment to nearly 5,200 
homeless veterans.
    Veterans Industries/Compensated Work Therapy Program (VI/CWT) 
offers vocational and rehabilitative services, ranging from evaluation 
and counseling to participation in compensated work and vocational 
training. Since 1994 over 32,000 veterans have been successfully 
reintegrated into society as responsible members of the community 
through this program.
    Compensated Work Therapy/Transitional Residence (CWT/TR) program 
operates in 64 community-based locations (with a total of 469 
operational beds), provides residences to disadvantaged, at risk, and 
homeless veterans, while they participate in the VI/CWT. Nearly 6000 
veterans have been housed under this program.
    Homelessness impacts every community in the Nation. Approximately 
200 community-based veterans' service organizations across the country 
have successfully reached homeless veterans through specialized 
programs. Veterans who participate in these programs have a higher 
chance of becoming productive citizens again.
    A full continuum of care--housing, employment training and 
placement, health care, substance abuse treatment, legal aid, and 
follow-up case management--depends on many organizations working 
together to provide services and adequate funding. The availability of 
homeless veteran services, and continued community and government 
support for them, depends on vigilant advocacy and public education 
efforts on the local, state and Federal levels.
    The FY 2007 Department of Veterans Affairs Community Homelessness 
Assessment, Local Education and Networking Groups (CHALENG) report 
estimates that approximately 154,000 veterans are homeless at any point 
in time. Prior reports state that one out of every three homeless men 
sleeping in doorways, alleys or boxes in our cities and rural 
communities has put on a uniform and served this country. According to 
the February 2007 Homeless Assessment Report to Congress (U.S. 
Department of Housing and Urban Development 2007), veterans represent 
19 percent of all homeless people in America.
    For FY 2007, The VA Health Care for Homeless Veterans (HCHV) 
reports that 68,000 homeless veterans are enrolled in their programs. 
Community-based organizations are attempting to assist the overwhelming 
remainder of veterans who are homeless.
    In addition to the complex set of factors affecting all 
homelessness (the extreme shortage of affordable housing, livable 
income, and access to health care), a large number of displaced and at-
risk veterans live with lingering effects of Post Traumatic Stress 
Disorder (PTSD), substance abuse, and a lack of family and social 
support networks. Many times these veterans have mental health 
disorders related to their honorable service to their country, are 
unable to compensate for their condition. They unfortunately 
deteriorate to unrecognizable individuals compared to their pre-
military experience.

Potential homeless veterans of Operation Iraq Freedom and Operation 
        Enduring Freedom (OIF/OEF)
    Some OIF/OEF veterans are at high risk of becoming homeless. Combat 
veterans of OIF/OEF and the Global War on Terror who need help--from 
mental health programs to housing, employment training and job 
placement assistance--are beginning to trickle into the Nation's 
community-based homeless veterans' service organizations. Already 
stressed by an increasing need for assistance by post-Vietnam Era 
veterans and strained budgets, homeless services providers are deeply 
concerned about the inevitable rising tide of combat veterans who will 
soon be requesting their support.
    Since 9/11, nearly 800,000 American men and women have served or 
are serving in a war zone. Rotations of troops returning home from Iraq 
are now a common occurrence. Military analysts and government sources 
say the deployments and repatriation of combat veterans is unlike 
anything the Nation has experienced since the end of the Vietnam War.
    The signs of an impending crisis are clearly seen in VA's own 
numbers. Under considerable pressure to stretch dollars, VA estimates 
it can provide assistance to about 100,000 homeless veterans each year, 
only 20 percent of the more than 500,000 who will need supportive 
services. Hundreds of community-based organizations nationwide struggle 
to provide assistance to as many of the other 80 percent as possible, 
but the need far exceeds available resources.
    VA's HCHV reports 1,049 OIF/OEF era homeless veterans with an 
average age of 33 years young. HCHV further reports that nearly 65 
percent of these homeless veterans experienced combat. Now receiving 
combat veterans from Iraq and Afghanistan daily, the VA is reporting 
that a high percentage of those casualties need treatment for mental 
health problems. That is consistent with studies conducted by VA and 
other agencies that conclude anywhere from 15 to more than 35 percent 
of combat veterans will experience some clinical degree of PTSD, 
depression or other psychosocial problems.

Homeless Women Veterans and Children
    Homeless veterans' service providers' clients have historically 
been almost exclusively male. That is changing as more women veterans 
and women veterans with young children have sought help. Additionally, 
the approximately 200,000 female Iraq veterans are isolated during and 
after deployment making it difficult to find gender-specific peer-based 
support. Access to gender-appropriate care for these veterans is 
essential.
    More women are engaging in combat roles in Iraq where there are no 
traditional frontlines. In the past 10 years, the number of homeless 
women veteran has tripled. In 2002, the VA began a study of women and 
PTSD. The study includes subjects whose PTSD resulted from stressors 
that were both military and non-military in nature. Preliminary 
research shows that women currently serving have much higher exposure 
to traumatic experiences, rape and assault prior to joining the 
military. Other reports show extremely high rates of sexual trauma 
while women are in the service (20-40 percent). Repeated exposure to 
traumatic stressors increases the likelihood of PTSD. Researchers also 
suspect that many women join the military, at least in part, to get 
away from abusive environments. Like the young veterans, these women 
may have no safe supportive environment to return to, adding yet more 
risk of homeless outcomes.
    CHALENG sites continue to report increases in the number of 
homeless veterans with families (i.e., dependent children) being served 
at their programs. It reports that 98 sites (71 percent of all sites) 
reported a total of 1,038 homeless veteran families seen. This was a 5 
percent-increase over the previous year's 989 homeless veteran 
families. (FY 2007 VA CHALENG report)
    Homeless veteran service providers recognize that they will have to 
accommodate the needs of the changing homeless veteran population, 
including increasing numbers of women and veterans with dependents. 
Access to family housing through the distribution of the thousands of 
new section 8 vouchers that will be made available through the HUD-VASH 
program will offer an important new resource allowing VA staff to 
assist the veteran and her family.
    The American Legion supports adequate funding for all domiciliary 
programs for all qualified veterans. More women veterans and women 
veterans with young children have sought help. Additionally, the 
approximately 200,000 female Iraq veterans are isolated during and 
after deployment making it difficult to find gender-specific, peer-
based support. Access to gender-appropriate care for these veterans is 
essential.

                                SUMMARY

    The American Legion appreciates the strong relationship we have 
developed with both Committees. With increasing military commitments 
worldwide, it is important that we work together to ensure that the 
services and programs offered through VA are available to the new 
generation of American servicemembers who are returning home.
    The American Legion is fully committed to working with each of you 
to ensure that America's veterans receive the entitlements they have 
earned. Whether it is improved accessibility to health care, timely 
adjudication of disability claims, improved educational benefits or 
employment services, each and every aspect of these programs touches 
veterans from every generation. Together we can ensure that these 
programs remain productive, viable options for the men and women who 
have chosen to answer the Nation's call to arms.

                                 
                  Statement of Hon. Harry E. Mitchell,
         a Representative in Congress from the State of Arizona

    Chairman Filner, thank you for calling this hearing, and thank you 
Secretary Shinseki for your willingness to appear before the Committee 
again today. Thank you also to the Veterans Service Organizations for 
agreeing to testify.
    The task of examining the Administration's Budget and crafting the 
Congressional Budget should be a little easier this year. For the first 
time in the history of The Independent Budget--which is drafted by 
veterans for veterans--the Administration's proposal has exceeded the 
requests made by the veteran community.
    According to the Administration, the 11 percent-increase in 
discretionary funding is aimed at bringing 500,000 Priority 8 veterans 
into the VA health care system, ensuring that the new GI Bill is ready 
and active for the 2009 school year, and reaching out to veterans in 
need. Many of my constituents and colleagues have raised concerns about 
a proposal that would collect medical fees from veterans with service-
connected disabilities, but with this exception, I believe the 
Administration's budget outline is headed in the right direction.
    As the Administration finalizes the details of its budget proposal, 
I wish to highlight two issues that I hope will be addressed.
    We are all troubled by a startling spike in traumatic brain injury 
and post-traumatic stress disorder. About one-fifth of all combat 
casualties include TBI, and roughly the same proportion of troops will 
develop PTSD after returning from combat. Recently, I met with a young 
veteran from Arizona who suffers from PTSD, and he has been through the 
ringer at the VA, trying to get the mental health care he needs. He is 
working as hard as he can to recover, but he's been through four or 
five jobs, a couple attempts at college, and he's fighting to keep his 
second marriage together. His long-term success is by no means assured, 
so we must assure him that the service and benefits he needs will be 
there when he needs them.
    I also expect increased transparency as the VA drafts its Priority 
List of Pending State Home Construction Grant Applications for FY 2010. 
This year, two facilities in one state received approximately $140 
million of the $175 million available nationwide. While some states may 
have more pressing needs than others, I hope that the rationale for 
budgeting these funds will be made clear in FY 2010.
    Thank you again to all of our witnesses. I look forward to hearing 
your perspective on the budget outlook for the VA in the coming fiscal 
year.

                                 

                   MATERIAL SUBMITTED FOR THE RECORD

                                U.S. Department of Veterans Affairs
                                  The Secretary of Veterans Affairs
                                                     Washington, DC
                                                     April 20, 2009

The Honorable Phil Roe
U.S. House of Representatives
Washington, DC 20515

Dear Congressman Roe:

    At the March 10, 2009, House Veterans' Affairs Committee hearing, 
you asked for the percentage of the budget going to care for World War 
II, Vietnam Veterans, and Veterans of other eras.
    The Fiscal Year (FY) 2008 table below provides a breakdown of 
obligation-based cost by combat, excluding state home patients and 
Readjustment Counseling. Please note these figures only include costs 
for Veteran care; costs for other beneficiaries (such as CHAMPVA) are 
not included, but amount to approximately 1 percent of VA's health 
obligation-based cost. Also note Veterans may have served in multiple 
combat eras. However, 98 percent of Veterans have one period of service 
listed in their FY 2008 encounter records. The remaining Veterans have 
a period of service assigned consistent with their age.

------------------------------------------------------------------------
                         Percent of                          Percent of
   Period of Service        Cost        Period of Service       Cost
------------------------------------------------------------------------
Vietnam                         46%   Desert Storm                   6%
------------------------------------------------------------------------
World War II                    14%   OEF/OIF                        3%
------------------------------------------------------------------------
Korea                           12%   Pre-Korea                      1%
------------------------------------------------------------------------
Post-Vietnam                    12%   Other*                         1%
------------------------------------------------------------------------
Post-Korea                       7%   TOTAL                        100%
------------------------------------------------------------------------
* Includes categories that do not fit within remaining definitive
  categories. For example, a few records from World War I Veterans are
  included among others.

    Thank you for your and the Committee's support of our mission.

            Sincerely,
                                                   Eric K. Shinseki

                                 

                                U.S. Department of Veterans Affairs
                                  The Secretary of Veterans Affairs
                                                     Washington, DC
                                                     April 20, 2009

The Honorable Bob Filner
Chairman
Committee on Veterans' Affairs
U.S. House of Representatives
Washington, DC 20515

Dear Mr. Chairman Filner:

    At the March 10, 2009, House Veterans' Affairs Committee hearing 
when you made comments about a transformative approach to the claims 
backlog,
    I responded that advocacy training can make a difference.
    Since that time the Veterans Benefits Administration (VBA) is 
obtaining contractor support to assist in developing a Veteran-focused 
strategy for improving client satisfaction and service delivery. VBA's 
comprehensive approach includes collection and analysis of customer 
satisfaction and other data and information; internal assessments of 
VBA's client-services culture, processes, and issues; and development 
of training programs and other process improvements to increase client 
satisfaction.
    I look forward to working with you and the Committee in our common 
effort to meet the needs of Veterans who deserve the best care we can 
provide.

            Sincerely,
                                                   Eric K. Shinseki

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 18, 2009

The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Secretary Shinseki

    In reference to our Committee hearing of March 10, 2009, I would 
appreciate your response to the enclosed additional questions for the 
record by close of business Wednesday, April 15, 2009.
    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 Veterans' Affairs Committee
                             March 10, 2009

U.S. Department of Veterans Affairs Budget Request for Fiscal Year 2010
    Question 1: I am concerned that the Administration's out-year 
funding projections could result in serious budget shortfalls for 
veterans' health care. Considering among other things health care 
inflation and increased workloads due to the restoration of health care 
eligibility for many priority 8 veterans, the drawdown in Iraq, and 
increased demand for VA health care from the economic downturn, please 
provide an explanation of how the funding levels were calculated for 
the VA in the out-years of FY 2011 through FY 2014.

    Response: The 2010 Budget is the first step in meeting the 
Presidential initiative to increase VA's budget by $25 billion over the 
baseline over the next 5 years. The 2010 Budget includes a large 
increase for the Department of Veterans Affairs (VA) to invest in 
improved quality care and services. While the currently projected out-
year estimates show more modest growth, the Department will continue to 
evaluate its resource requirements annually to ensure full 
consideration of its funding needs in the budget planning process.

    Question 2: According to the budget information provided to the 
Committee for FY 2010, VA is expecting an unprecedented increase in 
collections. How does the Department anticipate reaching the goal? What 
efficiencies do you intend to establish to reach these new collection 
goals?

    Response: The specific details of VA's projected collections 
estimate for 2010 are still being finalized and will not be available 
until the detailed 2010 budget documents are published. However, we are 
constantly improving businesses associated with collections. For 
example, the 2010 budget request makes investments in an accelerated 
implementation of the consolidated patient accounting centers, in 
critical training efforts for VA employees responsible for collections, 
and internal reviews to identify opportunities for improved collections 
efforts. Achieving the best results from our collections efforts is a 
priority, but VA understands that Congress shares that priority. The 
Department would welcome further discussions on how to continue 
improving VA's ability to increase collections.

    Question 3: The stimulus provided over a billion dollars for non-
recurring maintenance and energy projects at VHA. How much of the total 
funding will be allocated toward energy projects? Have the projects 
been identified? How many of these projects will include photovoltaic 
solar roofs?

    Response: About $400 million of the $1 billion (40 percent) that 
Veterans Health Administration (VHA) received is allocated toward 
energy improvement and renewable energy projects. VA has identified 
these projects. The Department is conducting feasibility studies at 
multiple sites and will then select the most beneficial projects based 
on the study results. Regarding solar photovoltaic (PV) systems, VA is 
assessing 31 sites and will select up to 8 sites to implement a solar 
PV project. VA anticipates that most, if not all of these projects, 
will be rooftop solar PV systems.

    Question 4: For many years VA and DoD have told the Committee that 
significant progress is being made to provide a seamless transition for 
our servicemembers. While progress has been made, many servicemember 
transitions are still not seamless. How does your budget reflect this 
priority and what help do you need from Congress and DoD to make this a 
reality?

    Response: The seamless transition of servicemembers to civilian 
life is a priority for VA and the 2010 budget will ensure this remains 
a top priority. When the 2010 budget is released it will present 
specifics on how the Department will advance its efforts both 
internally and with the Department of Defense (DoD), to help ensure 
that active duty services members' transition to civilian life is 
smooth as possible. Some examples of key activities in support of the 
seamless transition goal are presented below:
    Compensation & Pension: Based on the success of the Joint DoD/VA 
Disability Evaluation System (DES) pilot in the National Capital 
Region, VA and DoD agreed to expand the pilot to 20 additional sites 
across the Nation in 2009 to thoroughly test the new processes. Further 
expansion in 2010 is planned.
    VA will continue the following activities which help provide a 
seamless transition for our servicemembers:

      Benefits delivery at discharge and quick start programs 
for those servicemembers who wish to file a claim while still on active 
duty.
      Expedited processing of initial and reopened claims from 
seriously and very seriously injured Veterans, as well as initial 
claims from all in-theater war Veterans and subsequent claims from 
Veterans claiming post traumatic stress disorder.
      Expanded outreach to newly discharged Veterans and Guard 
and Reserve personnel.

    The Department will pursue information technology modernization 
efforts that support transition initiatives, including enhancements to 
VA and DoD data exchange as well as integration of technologies to 
enable Veterans and other claimants to interact with VA in the same 
manner as the best private-sector service businesses.
    Updating VA schedule for rating disabilities (VASRD) to reflect the 
best medical information, and the signature conditions associated with 
new conflicts, is a priority. New rating criteria for the assessment of 
traumatic brain injury (TBI) became effective on October 23, 2008. The 
Veterans Benefits Administration (VBA) is processing claims from very 
seriously injured and seriously injured Operation Enduring Freedom and 
Operation Iraqi Freedom (OEF/OIF) Veterans on a first priority basis. 
VBA also conducts priority claims processing for all returning theater 
Veterans and when post traumatic stress disorder (PTSD) is first 
claimed by OEF/OIF Veterans.
    Education: VA is conducting outreach activities to inform 
servicemembers and Veterans of the Post-9/11 GI Bill education benefit. 
As part of this outreach effort, VA identified approximately 2 million 
individuals who have been discharged, including recently discharged 
Veterans, with 30 days or more of service after September 10, 2001. 
These individuals will receive a letter that explains the Post-9/11 GI 
Bill and provides them with information on electing and applying for 
the education benefit. While these initial letters will be sent in 
April 2009, subsequent direct mailings containing education benefit 
information will be sent to individuals on active duty throughout 
fiscal 2010.
    Insurance: The servicemembers' Group Life Insurance Traumatic 
Injury Protection (TSGLI) provides critical transition support for 
severely injured servicemembers and their families. TSGLI provides for 
payment to servicemembers who suffer a traumatic injury that results in 
a qualifying loss in the program. It helps servicemembers and their 
families with financial burdens associated with recovering from a 
traumatic injury as they transition into civilian life. A premium of $1 
per month is charged to each servicemember insured under SGLI. This 
premium covers the civilian incidence of such injuries. Any excess 
program costs above the premiums collected are paid by DoD. The 
administrative cost of processing TSGLI is covered under the 
administrative expenses of the Office of servicemembers' Group Life 
Insurance (OSGLI). For these reasons, TSGLI has no impact on 
Insurance's budget.
    All discharged Veterans who had servicemembers' Group Life 
Insurance (SGLI) in the military receive a series of mailings advising 
them of their right to convert the SGLI coverage to Veterans' Group 
Life Insurance (VGLI). Since virtually all current servicemembers are 
enrolled in SGLI, virtually all new veterans are covered by these 
mailings. In addition, the Insurance Service staff conducts special 
outreach to recently separated servicemembers who have a military or VA 
disability rating of 50 percent or more. The purpose of this outreach 
(which is conducted by phone calls) is to ensure that separated 
servicemembers are aware of their eligibility for post-separation life 
insurance benefits, including the SGLI Disability Extension, VGLI, 
TSGLI, and Service-Disabled Veterans Insurance. The administrative 
costs of the mailing are paid by OSGLI, and there are minimal costs 
associated with the special outreach effort, so there is little impact 
on Insurance's budget.
    Loan Guaranty: The Specially Adapted Housing (SAH) Program helps 
transitioning servicemembers and Veterans with certain permanent 
service connected disabilities adapt a home they already own, or buy or 
build a house and modify it to meet their disability-related needs. The 
Department will continue the SAH program which provides valuable 
assistance to severely disabled Veterans.
    Vocational Rehabilitation & Employment: Vocational Rehabilitation & 
Employment helps transitioning servicemembers through two programs: 
Chapter 36, Educational and Vocational (Ed/Voc) counseling and Coming 
Home to Work (CHTW). Ed/Voc counseling is available to servicemembers 
during the 6-month period prior to discharge and to Veterans during the 
1-year period following discharge. Ed/Voc counseling services include 
academic and career counseling. VA will continue to provide appropriate 
Education and Vocational Rehabilitation counseling services to Veterans 
to help ease their transition from active military service to civilian 
life.
    The CHTW program is a cooperative effort with DoD that provides 
opportunities for servicemembers and OEF/OIF Veterans to obtain work 
experience, develop skills needed to transition to civilian employment, 
determine potential career opportunities, and return to suitable, 
gainful employment. There is a CHTW coordinator in each of the 57 VA 
regional offices, with 13 of these positions being designated as 
unique, full-time positions to support this effort. The remaining 44 
regional office positions are filled by vocational rehabilitation 
counselors who provide assistance as a collateral duty.
    Benefits Executive Council: VA gets support from DoD through the 
Benefits Executive Council (BEC), the official forum for senior level 
interaction between the VBA and DoD. VBA's program offices regularly 
report transition-related activities to the BEC. The transition-related 
activities are included in the budget of the appropriate program 
office.
    Outreach: The Wounded Warrior Act (the FY 2008 National Defense 
Authorization Act, Public Law 110-181) called for joint outreach 
efforts to recovering servicemembers, Veterans, and their families. As 
a result, web-based applications, assistance centers, and direct 
outreach activities were developed.
    The web-based National Resource Directory provides information on 
services and resources available through: national, state and local 
government agencies; Veterans' benefit, service, or advocacy 
organizations; professional provider associations; community and faith-
based or non-profit organizations; academic institutions; and employers 
and philanthropic activities of business and industry. The Directory 
was developed jointly and is currently co-managed by DoD, VA, and the 
Department of Labor.
    The Yellow Ribbon Reintegration Program provides National Guard and 
Reserve members and their families with information about services 
throughout the entire deployment cycle. VA participates with 
representation on the advisory board and assignment of a VA liaison 
within the program office.
    A compensation and benefits handbook was co-developed by DoD and VA 
to help servicemembers and their families navigate the DoD and VA 
systems. The handbook is available electronically or in book format.
    Information Technology as an Enabler: DoD and VA have taken the 
first crucial steps in creating a Joint Virtual Lifetime Electronic 
Record (VLER), as announced by President Obama on April 9, 2009. Both 
Secretaries are dedicated to ensuring strong executive oversight with 
specific attention to the Interagency Program Office, mandated by NDAA 
2008, on behalf of VA and DoD, to provide oversight for VA-DoD data 
sharing initiatives. The emerging vision for the VLER initiative is for 
all current and future servicemembers, Veterans, and eligible family 
members to have a VLER that will encapsulate all data necessary to 
uniquely identify them and ensure the delivery of care and benefits for 
which they are eligible. This proactive delivery begins upon oath of 
military service and continues beyond death to survivor benefits.
    DoD and VA will develop workgroups to define the common services 
used by information processes in both Departments as well as the common 
functional processes within services unique to each Department. Joint 
DoD/VA efforts have already begun to define the data and business 
processes for this effort. The result will be an unprecedented unified 
data sharing between the two Departments.
    A MyeBenefits portal, currently under development, will provide 
individualized information upon login for all servicemembers and 
Veterans.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Secretary:

    In reference to our full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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 Committee on Veterans' Affairs
                             March 10, 2009
U.S. Department of Veterans Affairs Budget Request for Fiscal Year 2010
    Question 1: The proposed 5-year discretionary budget increases for 
VA are relatively modest in the out-years, providing for an increase of 
about $1.5 billion, or 3 percent, in each of the out-years. This 
compares to the 10 percent-increase proposed in the FY 2010 budget. 
This year marks a sharp departure from prior budgets such as last 
year's budget submission which proposed cutting VA by $20 billion over 
5 years. In light of criticism from some quarters that these modest 
increases do not accurately reflect the funding needs of the VA in out-
years, can you explain how these estimates were developed?

    Response: The 2010 Budget is the first step in meeting the 
Presidential initiative to increase the Department of Veterans Affairs' 
(VA) budget by $25 billion over the baseline over the next 5 years. The 
2010 Budget includes a large increase for the Department to invest in 
improved quality care and services. While the currently projected out-
year estimates show more modest growth, the Department will continue to 
evaluate its resource requirements annually to ensure full 
consideration of its funding needs in the budget planning process.

    Question 2(a): VA has seen record funding increases for medical 
care over the last few years and your budget request would seem to 
accommodate another record increase. While VA has enjoyed these record 
increases, the Committee has heard concerns raised by some local 
medical facilities that suggest these facilities are not seeing these 
increased resources in their budgets. Does this suggest a flaw in the 
current resource allocation system, or how VISN budgets are handled?

    Response: The concerns expressed early in the fiscal year (FY) by 
the Veterans Integrated Service Networks (VISN) and medical centers 
were a matter of timing. The funds allocated by the Veterans Equitable 
Resource Allocation (VERA) process were released to the field within 2 
weeks of enactment of the FY 2009 appropriation. However, a significant 
amount of centrally managed funding was not included in that initial 
allocation, including funding for prosthetics, clinical trainees, and 
State Veterans homes. In addition, funding for two new congressional 
initiatives, $250 million for rural health and $543 million for 
expanded enrollment of Priority Group 8 Veterans, required planning, 
analysis and preparation prior to allocation. The vast majority of 
these funds were allocated by January 2009. VA is committed to ensuring 
that sufficient funds reach critical points of care in a timely manner.

    Question 2(b): What plans does VA have to better control and 
account for health care spending while maintaining some level of 
flexibility to respond to local needs?

    Response: VA conducts monthly performance reviews of all its 
activities, including actual execution of budgets as compared to plans. 
In addition, the Veterans Health Administration (VHA) National 
Leadership Board, through its subordinate finance committee, reviews 
funding requirements and budget execution data in detail at least twice 
each month. A portion of the annual VHA appropriations are held in 
unallocated reserve each year, and are used at the discretion of the 
Under Secretary of Health to address emerging funding requirements from 
the field, as well as to provide funding for innovative proposals to 
improve health care services for our Nation's Veterans.

    Question 3: The budget seems to include a proposal to shift the 
mandatory funding for contract examinations for disability compensation 
eligibility to the discretionary side of the budget, specifically the 
General Operating Expenses account. Can you explain to the Committee 
the details of this proposal and the reasons for it and assure the 
Committee that this will not place an undue strain on the account that 
funds the claims processing system?

    Response: The proposed transfer of funding from the compensation 
and pension mandatory funding account to the General Operating Expense 
(GOE) account is based on an analysis of the spending. Specifically, 
the spending for medical examinations supports providing benefits, but 
is not itself a payment of benefits to Veterans. As a result, funding 
for these examinations more appropriately belongs in the discretionary 
operational account, GOE.
    Managing contract examination presents unique challenges whether 
funded from the mandatory or discretionary accounts. Sufficient funding 
for the examinations clearly must be provided to the Department. 
Moreover, Veterans Benefit Administration (VBA) already manages some 
contracted examinations through discretionary funding because an 
existing contract with MES Solutions is paid from that account. The 
current legislative authority for the MES Solutions contract, without 
further Congressional action to extend it, will expire at the end of 
2010.
    VA is committed to the sound budgeting and management practices 
required to provide for the needs of our Veterans with regard to 
contract examinations. VA analyzed three key factors before 
recommending this migration of funding source. The first and most 
critical factor is that use of contractors typically means a loss or 
lessening of capacity for examinations through internal sources as our 
medical centers refocus resources to provide for more acute and chronic 
patient care. Second, if the need for examinations or the mix of 
examinations is underestimated or the requested funding is not 
provided, VA's ability to provide needed examinations in a timely 
manner may be adversely affected. New legislation, new presumptive 
conditions, new outreach efforts, or new case law may result in an 
unanticipated increased caseload. Finally, the growth in the cost of 
examinations, as with health care generally, could exceed the budgeted 
discretionary funding increase. However, these factors are inherent 
across the core services that VA provides for Veterans. We are 
monitoring for precisely these kinds of events so that we will not be 
caught off guard, and will be able to adjust funding strategies as 
necessary.

    Question 4(a): The budget highlights investments in better 
technology to deliver services and benefits to Veterans. There have 
been concerns over the adequacy of previous VA budget requests for IT 
spending and the speed with which the VA was reforming its efforts. Can 
you provide an update to the Committee as to the Department's efforts 
in this area and whether you feel confident that when the IT account 
level is established it will be sufficient to meet the requirements 
mandated by Congress?

    Response: VA's goal is to build modern information technology (IT) 
systems that will move us into the 21st century, enabling the delivery 
of the highest quality health care and services to our Veterans. This 
can only be done with a modern IT infrastructure, a high performing IT 
workforce, and a state-of-the-art information system in health care and 
benefits that will be flexible enough to meet both existing and 
emerging service delivery requirements. With the FY 2010 IT funding 
request, VA will develop an interagency interoperability plan with the 
Department of Defense (DoD), with the goal of improving patient safety 
and care; expedite benefit claims processing; automate the educational 
benefits assistance system to handle the expanded benefits passed in 
the Post 9/11 Veterans Educational Assistance Act of 2008; continue to 
develop financial and logistics integrated technology as the next 
generation core financial management system; and strengthen our IT 
workforce as well as our aging and fragile IT infrastructure.
    The budget increase we are requesting for FY 2010 recognizes that 
IT touches all aspects of VA operations. IT provides standard equipment 
of desktop computers, laptops, printers, phone systems, network 
connections through regional servers, which hold the vital information 
of our Veterans. The Office of Information and Technology supports a 
workforce of 286,000 employees VA-wide who directly or indirectly serve 
23 million Veterans and their families. Our nationwide health care 
system is comprised of 153 medical facilities, 755 community-based 
outpatient clinics, and 232 vet centers. Our benefits delivery system 
for compensation, pension, housing loan guaranty, education and 
insurance benefits support 55 regional offices nationwide. Our burial 
system automates all necessary processes for interments efficiently and 
effectively throughout 128 national cemeteries, and provides headstones 
and markers worldwide. Our backbone corporate financial management 
system provides steady and reliable data and performs financial 
processing needed to monitor funds, and financially report our 
operations throughout VA.

    Question 4(b): Should the Committee expect the need for continued 
large investments in this area, and if so, how can the Committee be 
assured that such increases will truly accomplish the mission at hand?

    Response: Transformational change of this scope and breadth is 
always a challenge; however, we believe the FY 2010 funding request 
supports a full budget requirement to right-size the IT budget request 
and avoids transferring funds, as was the case over the last 2 years. 
Congress approved the reprogramming of funds for FY 2008 and 2009 from 
the Medical Care and General Operating Expenses accounts. These 
transfers to our budget were needed to meet the demands of an aging IT 
infrastructure, the investment in 21st century legacy systems, and to 
ensure staffing a full workforce to support those current and future 
systems.

                     The Honorable Michael Michaud

    Question 1: During your testimony on March 10, you testified that, 
``the number of patients who served in OEF/OIF will rise to over 
419,000 in 2010.'' According to some VSO estimates, this number 
significantly undercounts the amount of Iraq and Afghanistan war 
Veterans who will seek VA treatment and services. How did VA come by 
this estimate?

    Response: Starting with the 2007 enrollee health care projection 
model (EHCPM), VHA has used a future force deployment scenario 
developed by the Congressional Budget Office (CBO) to estimate future 
Operation Enduring Freedom and Operation Iraqi Freedom (OEF/OIF) 
Veterans. Based on this scenario, VHA created a separate model that 
projects OEF/OIF total Veteran population, enrollment, patients, 
utilization and expenditures.

    The model recognizes the 5-year period of enrollment eligibility 
for combat Veterans. In the beginning of the eligibility period, the 
enrollment rates for OEF/OIF Veterans are assumed to be higher relative 
to other Veteran populations. As time passes, enrollment becomes more 
similar to that of other Veteran cohorts.
    In addition, the model reflects the fact that OEF/OIF enrollees 
have significantly different VA health care utilization patterns than 
non-OEF/OIF enrollees. In particular:

      OEF/OIF enrollees are expected to need more than eight 
times the number of post-traumatic stress disorder (PTSD) residential 
rehab services than non-OEF/OIF enrollees;
      OEF/OIF enrollees have an increased need for dental 
services, physical medicine, prosthetics, and outpatient psychiatric 
and substance abuse treatment; but
      On the other hand, experience indicates that OEF/OIF 
enrollees seek about half as much inpatient acute surgery care from VA 
as non-OEF/OIF enrollees.

    VA recognizes projecting demand for health care services for OEF/
OIF Veterans has been challenging because many unknowns will influence 
the number and type of services that VA will need to provide OEF/OIF 
enrollees. For example, VA cannot project the duration of the conflict, 
when OEF/OIF Veterans will be demobilized, or the ultimate total OEF/
OIF force strength at this time.

                       The Honorable Joe Donnelly

    Question 1(a): Mr. Secretary, ensuring our Nation's Veterans have 
access to the health care they earned is clearly a top priority, and 
the VA budget requested by the President reflects that. However, many 
Veterans across the country, including in my district, are forced to 
drive hours each way to get specialty, diagnostic or re-current care. 
While the budget does not get into specifics, do you anticipate a 
considerable amount of funding to go toward enhancing and expanding the 
health care services provided at some of the smaller VA health clinics?

    Response: VHA engages in continuous strategic evaluation of its 
health care delivery system and expands services based upon analysis of 
the enrolled Veteran population and the projected demand for health 
care services. VHA uses access guidelines to achieve one of its primary 
goals of providing high quality health care to Veterans in their 
communities.
    The primary strategic goal of VISN 11 is to improve access to VA 
health care for Veterans, and adequate funding is available to 
accomplish that goal. The VISN strategy is following a dual course of 
action to improve access by expanding the network of community-based 
outpatient clinics (CBOC) available for Veterans, and identifying and 
locating in existing VA medical center (VAMC) and CBOC sites, services 
used by Veterans.
    In Indiana, VISN 11 has reviewed the health care needs of Veterans 
in the Fort Wayne and South Bend areas and determined that an expanded 
array of services can be justified in both those cities. As recently 
announced, VISN 11 will be developing a construction project to expand 
the ambulatory services at the Fort Wayne VAMC and increase the 
specialized services on site. At the same time, services will be 
expanded at the South Bend CBOC site to include specialty care for 
which Veterans now have to travel to Fort Wayne.

    Question 1(b): Also, how will VA determine which clinics and areas 
should receive expanded or enhanced VA health care services?

    Response: Expansion of services is based on local Veteran 
populations and demand for services. VA has established access 
guidelines for primary care, acute care, and tertiary care, and VA uses 
those standards to determine service delivery methods and ensure that 
access to care is available close to home.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

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 entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

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

Dear Kerry:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Dennis Cullinan
National Legislative Director
Veterans of Foreign Wars of the United States
200 Maryland Avenue, NE
Washington, DC 20002-5724

Dear Dennis:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Raymond C. Kelley
Legislative Specialist
AMVETS
4647 Forbes Boulevard
Lanham, MD 20706

Dear Ray:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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 30, 2009

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 2010 budget for the 
Department of Veterans' Affairs (VA). We appreciate the Committee 
recommending a substantial budget for the VA in its recently submitted 
Views and Estimates. We also look forward to working with the Committee 
to move your advance appropriations legislation. Only through 
cooperation between the veterans' service organizations and the Members 
of the Committee can we hope to attain a sufficient, timely, and 
predictable budget for the VA.
    We have included with our letter a response to each of the 
questions that you presented following the hearing on March 10, 2009. 
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

                                 ______
                                 

    Question 1: The FY 2010 Independent Budget was released prior to 
the enactment of the American Recovery and Reinvestment Act of 2009 on 
February 17, 2008. The law provides $1.4 billion in resources for the 
VA, including funding for Medical Facilities; Grants for State Extended 
Care Facilities; National Cemetery Administration; claims processing 
for VBA; and the Office of Inspector General. In light of the resources 
newly made available to the VA, do the VSOs recommend any modifications 
to the FY 2010 Independent Budget request?

    Response: The Independent Budget is pleased that the ``American 
Recovery and Reinvestment Act of 2009'' (also the Stimulus bill) 
included a substantial amount of funding for veterans programs. The 
legislation identified areas of significant need within the VA system, 
particularly as it relates to infrastructure needs. While we were 
disappointed that additional funding was not provided for major and 
minor construction in the Stimulus bill, we recognize that the funding 
that was provided will be critically important to the VA going forward. 
It is also important to note that we do not believe the funding 
provided in the Stimulus bill should impact our recommendations for the 
VA. We have been told that the VA intends to spend that funding in the 
current fiscal year; therefore, the funding needs for FY 2010 will 
still remain.

    Question 2: The Independent Budget argues that amounts estimated 
for medical collections should be fully appropriated and is silent as 
to how medical collections should be used by the VA. Does you 
organization support or oppose the current collections program? If 
opposed, should Congress scrap the current Priority Group system and 
not differentiate between service-connected and non-service-connected 
veterans? If you support the current program but believe that these 
funds should be appropriated, how does your organization specifically 
propose to spend this nearly $3 billion amount, or 5 percent of current 
VA medical care budget?

    Response: Principally, the co-authors of The Independent Budget do 
not support the current collections program. 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 health care 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 health care budget.
    While the purpose and utilization of collections has evolved we 
continue to hold the belief that collections supplement the cost of 
providing health care. Veterans' health care should not be dependent 
upon an uncertain funding mechanism like medical care collections. 
However, we realize that political considerations will not allow for 
the policy by which The Independent Budget for FY 2010 believes funding 
for VA health care 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 health care system.
    Moreover, we are not suggesting 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) health 
care programs should be provided in full with Federally appropriated 
dollars. Our budget recommendations this year 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.
    As to the question about the Priority Group enrollment structure, 
we do not support any suggestion to abolish this system. The Priority 
Group system is not simply a tool to distinguish between who pays for 
their care and who does not. The system also establishes priority for 
care should there be a funding shortfall that may result in 
restrictions to care, much like what happened to new Priority Group 8 
veterans in 2003. Additionally, the existing Priority Group system 
establishes varying degrees of care available to veterans, most notably 
access to nursing home care and other long-term care services.
    As for spending the additional funding, 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 five 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. The VA could also use these additional 
resources to address gaps that currently exist. For instance, VA 
currently offers no assisted living services to any Priority Group of 
veterans. And yet, this is certainly a model of non-institutional care 
that can benefit many veterans as well as their spouses. This type of 
service is also something that the newest generation of disabled 
veterans is clamoring for. There is also a broad range of community 
services including expanded home-based care such as homemaker services 
and attendant care (services not currently authorized) that could be 
provided with these additional dollars. These services would maximize 
independence and preclude institutional care for both disabled and 
aging veterans.
    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 devoted only $1 million and 
one new full-time employee (FTE) to this office in FY 2009. This 
brought the Office of Rural Health up to three FTE. This is wholly 
unacceptable, particularly given the fact that rural health care access 
might be the single biggest health care 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 hiring certain health care 
professionals. This is particularly true of nurses, rehabilitation 
specialists, and specialized care doctors.

    Question 3: The Administration has vowed to pore over the budgets 
of every Federal Department and Agency line-by-line to make sure that 
taxpayer dollars are spent wisely. The Administration has also signaled 
that veterans' funding will be a high priority. In light of this need 
for fiscal restraint, which programs and operations of the VA provide 
the most cost-effective service to veterans and which programs and 
services do you believe we should look closely at to see if it can be 
reformed to provide better service at a lower cost?

    Response: The Independent Budget would like to emphasize our 
ongoing concern that the biggest factor in creating inefficient 
spending of resources by the Department of Veterans Affairs (VA) is the 
late approval of appropriations and insufficient budgets in previous 
years. As we have pointed out many times, late passage of the VA's 
appropriations bill has become the rule, not the exception. In fact, in 
19 of the previous 22 years, the VA's appropriations bill was not 
approved prior to the start of the fiscal year on October 1. Moreover, 
while in the past couple of years Congress has provided very 
significant increases in resources for the VA, we believe that previous 
fiscal years were marked by marginal increases and even flat-line 
budgets. This uncertainty about when and how much funding will be 
provided hinders the ability of VA officials to efficiently plan and 
responsibly manage VA health care.

    The Independent Budget would also like to point to the management 
of Medical Care Collections. Once again, while the VA has gotten much 
better at meeting collections estimates in recent years, in the past 
collection rates were terrible. Moreover, considering the fact that the 
operating budget of the VA is based on collections estimates, it is 
completely unacceptable that even one dollar of a given fiscal year's 
estimate not be collected, since this has a direct impact on the 
ability of the VA to provide care. As long as part of the operations of 
the VA health care system are reliant on uncertain collections 
outcomes, the system itself will be placed at a disadvantage.
    We also believe that the Fee-for-Service program needs to be 
reevaluated as well. Non-VA purchased care may be provided to eligible 
veterans from non-VA health care providers when VA medical facilities 
are incapable of providing necessary care; when VA medical facilities 
are geographically inaccessible to a veteran for necessary care; when a 
medical emergency prevents a veteran from receiving care in a VA 
facility; to complete an episode of care; and for certain specialty 
examinations to assist VA in adjudicating disability claims.
    As you know, many of the veterans' service organizations (VSO) have 
complained about the application of fee basis care in order to meet the 
needs of veterans in rural settings. However, this concern can be taken 
a step further. Veterans eligible for fee basis care are sometimes 
unable to secure treatment from a community provider because of VA's 
lower payment, less than full payment, and delayed payment for medical 
services. In fact, as stated in The Independent Budget for FY 2010, we 
are ``especially concerned that service-connected disabled veterans who 
are authorized to use non-VA care are at times required by the only 
provider in their community to pay for their care up front.'' We would 
encourage the Committee to seriously examine the Fee-for-Service 
program so as to affect real improvements to this service. With a 
properly run fee basis care program, the VA can better meet the health 
care needs of many veterans, particularly those veterans living in 
rural communities.
    As an example of a cost-effective program within the VA, we would 
point to the operations of the Prosthetics and Sensory Aids program. 
Because the prosthetics activities of the entire VA are managed through 
a centralized funding structure, the program's leadership is better 
able to monitor and adjust the budgetary needs of the service. Over 
years of budget shortfalls, many of the VA hospitals had been forced to 
hold down costs by cutting spending. This delayed provision of 
wheelchairs, artificial limbs, and other prosthetic devices, which was 
unacceptable. As a result, the VA established a policy that all funds 
for prosthetics would be controlled from the VA Prosthetic Service in 
the Central Office and that no prescription for prosthetics would fail 
to be filled or delayed because of a lack of funds.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Paul Sullivan
Executive Director
Veterans for Common Sense
P.O. Box 15514
Washington, DC 20003

Dear Paul:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 ______
                                 
                     Committee on Veterans' Affairs
                     U.S. House of Representatives
          Post-Hearing Questions from the Honorable Bob Filner
                             March 10, 2009
           Hearing on the U.S. Department of Veterans Affairs
                  Budget Request for Fiscal Year 2010

    Question: The Administration has vowed to pore over the budgets of 
every Federal Department and Agency line-by-line to make sure that 
taxpayer dollars are spent wisely. The Administration has also signaled 
that veterans' funding will be a high priority. In light of this need 
for fiscal restraint, which programs and operations of the VA provide 
the most cost-effective service to veterans and which programs and 
services do you believe we should look closely at to see if t can be 
reformed to provide better service at a lower cost?

    Response: We are very pleased the Administration has signaled that 
funding for the Department of Veterans Affairs (VA) is a ``high 
priority.''

    VCS respectfully disagrees with the implied premise of the question 
that Congress should limit oversight of VA programs based only on VA's 
limited ability to measure cost effectiveness.
    Here is a description of a meeting 11 years ago that describes how 
using only the financial cost of a bill or a program to discuss and 
decide the legitimacy of medical care and benefits for veterans is 
wrong because it is incomplete:

        During an advocacy meeting to discuss the ``Persian Gulf 
        Veterans Act 1998,'' a legislative aide told me that the 
        financial cost of providing medical care and benefits to the 
        hundreds of thousands of our ill Gulf War veterans would be 
        prohibitive. Therefore, he said, the legislator opposed the 
        bill due to the high cost--he did not want to spend billions of 
        dollars on health care and disability benefits for our ill Gulf 
        War veterans sickened by multiple toxic exposures during 
        deployment to Southwest Asia during Desert Shield and Desert 
        Storm.

        I asked the aide if the legislator supported unlimited funding 
        for the military to fight and win wars. The aide quickly 
        responded that the legislator absolutely supported unlimited 
        appropriations for our military, especially during war. During 
        our conversation, we both agreed our number one national 
        security asset is our servicemembers who support and defend our 
        Constitution.

        I asked the aide this question: If our Nation has an unlimited 
        budget for bullets, bombs, and bayonets for our military, and 
        since care for our veterans is part of the cost of fighting 
        wars, why then do we not have an unlimited budget for hospital 
        beds and disability benefits for our most important national 
        security asset--our disabled veterans who fought in and 
        survived combat? The legislative aide became speechless and 
        then abruptly left the room without answering.

    In addition to our social contract that guides VA to take care of 
our veterans who gave up the best years of our lives defending our 
Constitution, Congress should follow the example of the burn unit at 
the San Antonio Military Medical Center (SAMMC) in Texas.
    The highly dedicated and exceptionally motivated medical staff at 
Brooke Army Medical Center, part of SAMMC, spare no expense treating 
Iraq and Afghanistan war casualties. Expensive skin grafts are provided 
immediately without question and without regard to financial cost. 
Nurses provide 24/7 medical care to each wounded warrior. Medical 
professionals with expertise evaluating and treating burns are 
frequently flown to Texas to provide the best available current 
technology and treatments. In our view, this is the correct policy, as 
everything possible is done to save lives.
    VCS believes VA must have an equal standard--mandatory full funding 
for VA health care. If we only count the lives lost and funds spent on 
the battlefield for arms in order to determine the human and financial 
costs of war, then we are counting only those things that are easily 
counted, and we are ignoring those items that truly count--the quality 
of life for disabled veterans (and their families) sent to war in our 
name who return home, often in great need of assistance.
    While VA often suffered from inefficiency, poor leadership, poor 
training, chronic underfunding, chronic understaffing, complex rules, 
and adversarial bureaucratic red tape, especially during the last 
Administration, VA still usually provides high-quality assistance, 
albeit sometimes with significant delays. VCS believes mandatory full 
funding, strong leadership, and streamlined policies will assist VA 
with evolving and improving the delivery of health care and benefits to 
our veterans. VCS thanks VA for continuing to move forward under the 
current Administration's new leaders and additional funding.

                                 ______
                                 
    VCS is not familiar with every program administered by VA, so our 
answer about specific VA programs is limited to the areas with which we 
are most familiar. Here is a list of a seven areas VCS finds critical. 
Many of these need significant and immediate improvement to meet a 
sustained increased in demand caused by the current economic crisis and 
the continuation of two simultaneous wars in Iraq and Afghanistan:

    1.  Medical Research. At a time of unprecedented demand for health 
care related to highly toxic dioxin (agent orange) exposures associated 
with the Vietnam War, VA has a moral and legal obligation to fund 
scientific research immediately in order to better understand the 
adverse health outcomes of toxic exposures and to develop desperately 
needed treatments for veterans and our families. Our Vietnam War and 
Gulf War veterans fought valiantly for answers and health care after 
their return, yet VA took decades to respond adequately. While research 
for toxic exposures during those wars remains important, VA must 
immediately begin pro-actively collecting data, monitoring veterans, 
and researching the impact of Iraq War and Afghanistan War toxic 
exposures, starting with toxic exposures surrounding the enormous burn 
pit near Balad, Iraq. By starting medical research now, we have a rare 
window of opportunity to avoid prior VA mistakes that caused delays in 
medical care and benefits for our Atomic veterans, Vietnam War 
veterans, and Gulf War veterans.

    2.  Benefits Delivery at Discharge (BDD). This new and expanding 
program is highly successful and efficient because it places Veterans 
Benefits Administration (VBA) employees at military installations who 
can expeditiously collect and review service and medical records before 
discharge, thus saving VA staff months, and of10 years, of searching 
for misplaced military records, especially for post traumatic stress 
disorder claims. The government Accountability Office (GAO) and several 
Congressional hearings have validated the success of this essential 
program. Therefore, VCS recommends significantly expanding this 
essential program so that as many servicemembers as possible have the 
opportunity to participate in BDD, especially National Guard and 
Reserve servicemembers who are usually excluded. During the March 10, 
2009, hearing, VCS provided Congress with our modest proposal to expand 
VA's BDD and bring VA to our veterans with one-stop shopping during and 
after military service.

    3.  Readjustment Counseling Service's ``Vet Centers.'' This 
seasoned and expanding program is also highly successful and efficient 
because it places Veterans Health Administration (VHA) mental health 
professionals in store front locations easily accessed by deployed 
veterans seeking readjustment counseling. Several GAO reports about Vet 
Centers have repeatedly shown this program to be among the most 
successful entry points for veterans seeking mental health care 
services. The low overhead of small store front offices makes these 
points of care highly cost-effective. Therefore, VCS recommends 
significantly expanding this program so that more veterans can utilize 
equally valuable Vet Center counseling in addition to VHA out-patient 
and in-patient care provided at VHA medical centers. VCS advocates 
placing Vet Centers on or near military installations to meet the 
mental health care crisis among our returning servicemembers as soon as 
possible, when treatment is least expensive and most effective. Vet 
Centers should also be expanded to provide counseling for 
servicemembers' and veterans' families.

    4.  Mental Health. This includes VA's Suicide Prevention programs, 
anti-stigma programs, and the National Center for Post Traumatic Stress 
Disorder (NCPTSD). Specifically, VA has not provided consistent and 
timely oversight of VA's Mental Health Strategic Plan. Although there 
are some pilot programs, VA has yet to fully implement outreach and 
anti-stigma campaigns. On a positive note, VA is now working closely 
with DoD on the issue of suicide prevention. Unfortunately, while prior 
VA leaders have often attempted to under-fund the NCPTSD during a time 
of record demand for VA mental health care, we are pleased that 
Congress consistently provided more funds for NCPTSD than requested by 
the Administration. Based on VA's internal reports documenting 
increased health care use, VCS estimates as many as 400,000 total new 
mental health patients from the Iraq and Afghanistan wars by the end of 
2013, out of one million estimated new VA patients from the two wars. 
Therefore, VCS recommends increasing all facets of VA's mental health 
care programs to develop processes designed at early identification, 
intervention, and treatment of war-related mental health conditions. We 
believe ramping up programs now for existing and returning 
servicemembers, when treatment is least expensive and most effective, 
is crucial. Increases should be made for Suicide Prevention 
Coordinators and Local Recovery Coordinators to make sure there is a 
coordinated effort between VA's many different mental health programs.

    5.  Office of the Actuary. This office could and should provide VA 
leaders with far greater amounts of accurate, consistent, transparent, 
and timely information for use in VA planning, policy development, and 
long-term budgeting. A critical role of VA's Office of the Actuary is 
to collaborate with other federal agencies, especially the Department 
of Defense (DoD) and the Census Bureau, on the collection of data on 
veterans for planning purposes. However, due to a lack of robust and 
timely data for several years, VA leaders made several critical 
decisions without complete information, resulting in dramatic multi-
billion dollar budget shortfalls. Poor data played a key role in the 
large numbers of veteran patients and claimants waiting unreasonable 
amounts of time for VA assistance. Therefore, VCS recommends that VA's 
Office of the Actuary be significantly expanded to include more DoD, 
Census Bureau, VHA, and VBA subject matter experts. VHA requires better 
data to monitor and prepare for health care use demand. Similarly, VBA 
requires better data to monitor and prepare for disability claim 
activity. VHA and VBA must work more closely together to identify 
veterans using VHA yet not VBA, and vice-versa, in order to understand 
what drives health care and claim demand. At a time when Congress is 
ready to provide VHA with advanced funding (and possibly mandatory full 
funding), Congress should take a thorough and deliberate look at VA's 
limited ability to prepare for and use the money Congress appropriates. 
This becomes even more vital with the extension of free medical care, 
from 2 years to five years, for deployed Iraq and Afghanistan war 
veterans.

    6.  Office of Seamless Transition (STO) and related offices. These 
offices perform vital roles within VA assisting veterans, collecting 
data, and developing policies to assist servicemembers with seamlessly 
transitioning from the military into civilian life as veterans. The 
lack of single office with a single leader and streamlined processes 
have significantly hampered VA's ability to provide prompt and high-
quality services to the tidal wave of returning Iraq and Afghanistan 
war veterans. The lack of consistent data about individual 
servicemembers (such as service and medical records) as well as data 
about the entire cohort of all servicemembers (that would include 
demographic and deployment data for planning purposes) has created 
significant challenges in meeting the needs of our returning veterans 
in an efficient manner. The office would realize a much higher 
effectiveness if it was fully staffed, fully funded, and led by an 
executive who interacted with DoD and the Department of Labor. VA is 
currently unable to meet the needs of the existing one million current 
war veterans, and the situation may deteriorate significantly as the 
remaining one million servicemembers who have deployed or are deployed 
prepare for discharge. Therefore, VCS recommends that VA develop a more 
robust and efficient STO to meet the current and growing need of our 
returning Iraq and Afghanistan war veterans.

    7.  Information Technology (IT). This VA office provides vital 
hardware, software, and communications within VA and to the outside 
world essential to the success of nearly every VA program--from 
applications, claims processing, medical records, e-mail, and the 
Internet, to name a few. VCS recommends modernizing VA's computer 
equipment and computer programs as well as using new technologies to 
assist veterans and beneficiaries with learning about and applying for 
VA benefits and so that VA is more transparent and interactive for 
veterans, family members, VA staff, journalists, elected officials, and 
the public. VCS lists VA's IT efforts based on recent challenges 
veterans faced applying for the new Post-9/11 GI Bill education 
benefits, an outstanding VA program we strongly support.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Paul Rieckhoff
Executive Director and Founder
Iraq and Afghanistan Veterans of America
770 Broadway, 2nd Floor
New York, NY 10003

Dear Paul:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 ______
                                 
         Response from Iraq and Afghanistan Veterans of America
                     Committee on Veterans' Affairs
                     U.S. House of Representatives
          Post-Hearing Questions from the Honorable Bob Filner
                             March 10, 2009
           Hearing on the U.S. Department of Veterans Affairs
                  Budget Request for Fiscal Year 2010

    Question: The Administration has vowed to pore over the budget of 
every Federal Department and Agency line-by-line to make sure that 
taxpayer dollars are spent wisely. The Administration has also signaled 
that veterans' funding will be a high priority. In light of this need 
for fiscal restraint, which programs and operations of the VA provide 
the most cost-effective service to veterans and which programs and 
services do you believe we should look closely at to see if it can be 
reformed to provide better service at a lower cost?

    Response: Thank you for the opportunity to address this issue. IAVA 
believes that the introduction of OIF/OEF outreach coordinators is a 
highly successful and cost-efficient program. These coordinators, 
themselves veterans of Iraq and Afghanistan, are for many returning 
servicemembers the first point of contact with the VA. They provide an 
invaluable personal connection that helps overcome the many 
bureaucratic hurdles facing those seeking out support from the VA. 
These outreach coordinators make up a crucial element of the excellent 
Vet Centers, which have been proven for decades to be a low-cost, high-
impact answer to the mental health needs of combat veterans. We 
wholeheartedly support the continuation and expansion of this and other 
VA outreach programs.

    In our legislative agenda, IAVA has called for a reformed and 
streamlined VA budget. If the VA were to know their health care budget 
a year in advance, we would see an end to the waste and inefficiency 
brought about by poor planning. For instance, VA hospitals frequently 
delay needed repairs while they are shifting funding to other accounts 
to cover shortfalls. In the meantime, many of those infrastructure 
problems are worsening and growing more expensive to repair. When 
hospitals are operating under a continuing budget resolution, they are 
forced to ration care, delaying appointments while patients get sicker 
and their care becomes more expensive. No one at the VA wants these 
problems to persist, but without action by Congress and the President 
to appropriate VA funding in advance, these inefficiencies will 
continue to unabated.

                                 

                                     Committee on Veterans' Affairs
                                                     Washington, DC
                                                     March 23, 2009

Richard F. Weidman
Executive Director for Policy and Government Affairs
Vietnam Veterans of American
8605 Cameron Street, Suite 400
Silver Spring, MD 20910

Dear Rick:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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

                                 ______
                                 
                                        Vietnam Veterans of America
                                                  Silver Spring, MD
                                                       May 18, 2009

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

Dear Chairman Filner:

    In response to your questions following the hearing on the Budget 
Request for FY 2010 for the Department of Veterans Affairs, Vietnam 
Veterans of America (VVA) offers the following:

    Which programs and operations of the VA provide the most cost-
effective service?

      The Vet Centers, since their inception, are the most 
well-run--and cost-effective--entities within the VA. They are the only 
VA service that can treat families as well as the veteran.
      Preventive health programs run at different VA Medical 
Centers certainly are cost-effective: they prevent far more costlier 
treatments for health conditions that develop later on. We want to cite 
the programs run by Dr. Lawrence Deyton and his staff at the VA Central 
Office, and the programs run by Dr. Victor Wahby, both of which help 
reduce illness.

    Which programs and operations need to be reformed to provide 
better, less costly service?

      One out of ten VA health care dollars are expended for 
so-called ``fee-basis'' care for services that either a VAMC or CBOC 
are unable to provide in a timely manner or can be performed locally 
and save a veteran, usually living in a rural or remote area, hours of 
travel. In an attempt to get a handle on this, the VA is engaged in a 
pilot program in four VISNs called ``Project HERO.'' This endeavor is 
worth an oversight hearing. We believe it is resulting in less health 
care for more money.
      Pharmacy Service--the formulary is much too restrictive 
(and much more restrictive than either DoD or Medicare) on the theory 
that they are going to save a lot of money on medications. However, 
they often save pennies and spend big dollars because they scrimp on 
medications that could have prevented very costly acute care in-patient 
stays. The method of evaluating pharmacists needs to be dramatically 
changed from how much in ``savings'' they produce in comparison with 
the national average (which becomes a ``race to the bottom'') to how 
much did what they do in cooperation with the medical staff at a given 
VA Medical Center to promote healing and wellness, and reduce in-
patient acute care stays in the hospital, and/or to prevent secondary 
conditions from developing. VVA will be coming out with a paper on this 
issue in the next 2 months.
      The VA needs to develop a comprehensive ``wellness 
program'' that brings together nutrition, the ``get Fit for Life'' 
program, the ``MOVE' program, the ``My Health-e-Vet'' program, and 
other initiatives into an integrated model that is directly linked into 
primary care at each VAMC, OC, or CBOC. Only by putting a major and 
imaginative comprehensive effort together can VA reduce incidence and 
severity of chronic diseases and create a sustainable model for VA 
health care.

    Mr. Chairman, VVA hopes these answers prove to be useful to you in 
your deliberations. Again I wish to thank you for allowing VVA to 
present our views to you on these vital veterans' issues.

            Sincerely,

                                                 Richard F. Weidman
               Executive Director for Policy and Government Affairs

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                     March 23, 2009

Steve Robertson
The American Legion
Director, National Legislative Commission
1608 K Street, NW
Washington, DC 20006

Dear Steve:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2010'' on 
March 10, 2009, I would appreciate it if you could answer the enclosed 
hearing questions by the close of business on May 5, 2009.
    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 American Legion
                                                    Washington, DC.
                                                     March 26, 2009

Honorable Bob Filner, Chairman
Committee on Veterans' Affairs
U.S. House of Representatives
335 Cannon Office Building
Washington, DC 20515-6335

Dear Chairman Filner:

    Thank you again for allowing The American Legion to testify at the 
March 10 hearing entitled ``The Department of Veterans Affairs Budget 
Request for Fiscal Year 2010.'' This letter is in response to your 
Post-Hearing Question:

        The Administration has vowed to pore over the budgets of every 
        Federal Department and Agency line-by-line to make sure that 
        taxpayer dollars are spent wisely. The Administration has also 
        signaled that veterans' funding will be a high priority. In 
        light of this need for fiscal restraint, which programs and 
        operations of the VA provide the most cost-effective service to 
        veterans and which programs and services do you believe we 
        should look closely at to see if it can be reformed to provide 
        better service at a lower cost?

    Mr. Chairman, with all due respect, The American Legion has worked 
closely with both the Department of Veterans Affairs and Congress for 
many, many years. Clearly, The American Legion has never hesitated to 
praise programs and operations that provide the most cost-effective 
service to veterans nor identified programs and operations that needed 
immediate attention and reform.
    Each and every program and operation is an earned benefit due to 
honorable military service. Fortunately, this grateful Nation continues 
to strive toward meeting the needs of America's veterans and their 
family members. Without question, the Veterans Health Administration 
(VHA) continues to serve as the role model for the rest of the health 
care industry. Its achievements in that industry truly illustrate a 
solid return on investment dollars. From the electronic medical records 
to the medical research to the patient safety to the customer 
satisfaction, VHA is peerless within and outside the Federal 
Government.
    The American Legion still believes there is much room for 
improvement in two significant areas within VHA, that of mental health 
and long-term care. The American Legion believes that due to the high 
cost of these specialized services, they have been neglected by VHA 
leadership. During the Capital Assets Realignment for Enhanced Services 
(CARES) process, VA did not address these two critical areas of 
concentration. Therefore, a situation now exists where there exists a 
growing demand for both mental health care services and long-term care 
that VHA is not properly prepared to meet and the veterans' community 
is underserved.
    With the newest generation of wartime veterans and the aging 
veterans' community turning to VHA for timely access to quality health 
care, both of these areas of specialized service need to be closely 
monitored and addressed via congressional oversight. ``Take a number 
and we'll get back to you'' is absolutely unacceptable.
    The challenges facing the Veterans Benefits Administration remain 
although The American Legion remains optimistic. Newly hired claims 
adjudicators must be properly trained and, more importantly, retained. 
VBA leadership must develop an aggressive short- and long-term strategy 
to recruit, train, and retain proficient claims processors and 
adjudicators. The American Legion continues to support the recruitment, 
training, and retention of service-connected disabled veterans in this 
career field, especially those going through VA's Vocational 
Rehabilitation Program.
    With regards to construction projects, both major and minor, The 
American Legion supported many of the CARES recommendations, but has 
waited patiently for the aggressive funding to put those 
recommendations into structures.
    State Extended Care Facilities Grant Program remains a valuable 
resource for the Department of Veterans Affairs; however, The American 
Legion still believes VA should increase the amount of per diem paid to 
these facilities, especially in light of the current economic downturn 
and the increased fiscal pressures state legislatures continue to face.
    The National Cemetery Administration continues to provide the 
veterans' community with cemeteries that reflect the appreciation of a 
grateful Nation toward those that served in the Armed Forces and their 
family members.
    Thank you for your continued commitment to America's veterans and 
their families.

            Sincerely,

                                          Steve Robertson, Director
                                    National Legislative Commission

                                 ______
                                 

                              FY 2009 Veterans Health Administration Non-Recurring Maintenance (NRM)/Energy ARRA Spend Plan
                                      *Projects in BOLD ITALICS incorporate energy efficiency and renewable energy.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                Location
           --------------------------------------------------                                        Estimated Budget     Prior Year
   VISN                                       Congressional               Project Title                    Cost          Obligations      ARRA Funding
                     City            State       District
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Anchorage               AK       At Large         Renovate Warehouse Space to Meet VA            $300,000             $--           $300,000
                                                               Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Anchorage               AK       At Large         Renovate Space for Clinical Programs,          $200,000             $--           $200,000
                                                               Building 1.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Fort Richardson         AK       At Large         Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Sitka                   AK       At Large         Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Alaska                                  $600,000             $--           $600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Montgomery              AL       3                Renovate Inpatient Area to be                $2,500,000             $--         $2,500,000
                                                               Residential Environment
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Montgomery              AL       3                Renovate and Modernize the EKG Unit            $220,000             $--           $220,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Montgomery              AL       3                Upgrade Sprinkler and Fire Alarm               $164,000             $--           $164,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Montgomery              AL       3                Modernize Nursing Home                       $1,783,513        $283,513         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Montgomery              AL       3                Renovate Restrooms with water                  $998,330         $90,800           $907,530
                                                               conservation measures
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Tuscaloosa              AL       7                Upgrade Cabling and Telephone Closets        $4,980,000        $480,000         $4,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Birmingham              AL       7                Upgrade Research Labs 4 & 5 Floors             $925,000             $--           $925,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Birmingham              AL       7                Renovate Critical Care Unit                    $829,927        $129,927           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Tuscaloosa              AL       7                Modernize Halls and Floors                     $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Tuscaloosa              AL       7                Replace Windows                                $905,000              $_           $905,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Birmingham              AL       7                Replace Windows                              $1,512,907        $126,988         $1,385,919
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Tuscaloosa              AL       7                Replace Elevators                              $705,000         $54,000           $651,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Birmingham              AL       7                Renovate Surgical Intensive Care Unit        $1,700,000        $200,000         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Tuscaloosa              AL       7                Upgrade Quality Management and               $1,072,041        $200,000           $872,041
                                                               Pharmacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Alabama                              $18,795,718      $1,565,228        $17,230,490
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          North Little Rock       AR       2                Electrical Upgrade in Building 102             $750,000             $--           $750,000
                                                               for facility Computer Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         North Little Rock       AR       2                Replace Boiler Plant                         $3,200,000              $_         $3,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          North Little Rock       AR       2                Renovate/Repair Elevators                    $4,000,000             $--         $4,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Little Rock             AR       2                Replace air Handling Equipment, Phase        $4,000,000              $_         $4,000,000
                                                               2
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Fayetteville            AR       3                Pave Gravel Parking Lot                         $98,000             $--            $98,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Fayetteville            AR       3                Construct Security Control Center              $252,000             $--           $252,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Fayetteville            AR       3                Upgrade Lightning Protection Systems           $190,000             $--           $190,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Fayetteville            AR       3                Repair/Replace Existing Columns in             $390,000             $--           $390,000
                                                               Building 1, 2, 3, and 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Fayetteville            AR       3                Upgrade Air Conditioning System in           $1,500,000              $_         $1,500,000
                                                               Building 2 for Dietetics
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Arkansas                             $14,380,000             $--        $14,380,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Fire and Life Safety/Security                  $546,125         $76,125           $470,000
                                                               Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Repair Building 14 Exterior                    $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Replace Elevator Controls, Phase 1             $785,000        $110,000           $675,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Upgrade/Repair Elevators in Building           $720,000             $--           $720,000
                                                               14 and 107
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Repair Foundation and Drainage System          $750,000             $--           $750,000
                                                               for Building
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Upgrade/Replace Fire Alarm System            $1,400,000             $--         $1,400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Prescott                AZ       1                Repair/Replace Roofing Building 17             $450,000         $10,000           $440,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Prescott                AZ       1                Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Prescott                AZ       1                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Replace/Upgrade Patient Ward Windows           $600,000              $_           $600,000
                                                               and Doors in Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Replace Building 1 and 16 Drain,             $2,200,000        $200,000         $2,000,000
                                                               Sewer, and Water Lines, Phase 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Automatic Transfer Switch Replacement        $1,600,000             $--         $1,600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Phoenix                 AZ       4                Renovate Supply, Processing and                $750,000              $_           $750,000
                                                               Distribution to provide for proper
                                                               humidity control
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Renovate 6th Floor for Motivating              $600,000             $--           $600,000
                                                               Overweight Veterans Everywhere
                                                               (MOVE) Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Bldg 1 & 16 Drain/Water Sewer                  $750,000             $--            $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Replace/Upgrade Electrical                   $2,750,000             $--           $275,000
                                                               Distribution Equipment, Phase 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Provide Backup Power per Regulation,           $750,000             $--            $75,000
                                                               Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Replace/Upgrade Electrical                   $3,500,000        $750,000         $2,750,000
                                                               Distribution System, Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Phoenix                 AZ       4                Environment of Care Corrections                $550,000             $--           $550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Phoenix                 AZ       4                Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Tucson                  AZ       7                Fire and Life Safety Corrections               $757,950        $257,950           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Tucson                  AZ       7                Install Fire Sprinklers in Building 3          $407,434         $57,434           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Tucson                  AZ       7                Renovate Restrooms for Patient                 $750,000             $--           $750,000
                                                               Privacy in Building 60
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Tucson                  AZ       7                Renovate Building 60 for Polytrauma            $350,000             $--           $350,000
                                                               Staff and Programs
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Tucson                  AZ       7                Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Arizona                              $25,155,080      $1,461,509        $19,868,571
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Sacramento (Mather)     CA       3                Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Sacramento (Mather)     CA       3                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Sacramento (McClellan)  CA       3                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Vallejo                 CA       7                Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Martinez (OPC)          CA       7                Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Vallejo                 CA       7                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Martinez                CA       7                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         San Francisco           CA       8                Renovate Building 9 and 10 to correct          $400,000              $_           $400,000
                                                               Heating Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       8                Replace/Upgrade Building 8 Elevator            $425,000             $--           $425,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       8                Campus Wide Elevator Study                     $225,000             $--           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       8                Repair/Upgrade Water Tower Utility           $2,000,000             $--         $2,000,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       8                Review American Disability Act                 $365,000             $--           $365,000
                                                               Compliance, and Pedestrian & Traffic
                                                               Flow
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Livermore               CA       10               Renovate for the Installation of New           $479,000             $--           $479,000
                                                               Patient Lift Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Livermore               CA       10               Renovate Building 26 Water Tank                $650,099             $--           $650,099
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Livermore               CA       10               Repair Below Grade Storm Drainage               $25,000          $4,026            $20,974
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Livermore               CA       10               Remediate Asbestos from Building               $250,099             $--           $250,099
                                                               Exterior Walls and Lead Paint from
                                                               Bridge
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       10               Renovate for Pharmacy Relocation             $2,000,000             $--         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       10               Renovate for Parking Behind Building           $300,000             $--           $300,000
                                                               11
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          San Francisco           CA       10               Install Utilities Behind Building 11           $425,000             $--           $425,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         San Francisco           CA       10               Evaluate Feasibility of a Solar                 $10,000              $_           $410,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         San Francisco           CA       10               Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         San Francisco           CA       10               Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Dixon                   CA       10               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        San Bruno               CA       12               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Martinez                CA       13               Renovate/Update Fire Sprinkler and             $200,000             $--           $200,000
                                                               Life Safety Compliance, Building 29
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Renovate for Life Safety and Egress             $30,000         $10,942            $19,058
                                                               Compliance per Regulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Review Facility for Fire and Life               $10,800             $--            $10,800
                                                               Safety Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Install Fire Sprinkler Control Valve            $15,099             $--            $15,099
                                                               Signs
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Renovate for the Installation of New           $508,000             $--           $508,000
                                                               Patient Lift Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Repair/Upgrade Loop Road, Phase 1A             $929,000             $--           $929,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Menlo Park              CA       14               Replace Air Handlers, Building 322             $230,000              $_           $230,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Renovate for Auto Shop and                     $650,099             $--           $150,000
                                                               Engineering Storage
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Menlo Park              CA       14               Replace Exhaust Units                        $2,000,099              $_         $2,000,099
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Loop Road--Design, Phase 3                     $335,975             $--           $335,975
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Demolition of Building 23                      $660,000             $--           $660,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Expand Storm Drains                          $1,813,740        $613,740         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Replace Roof                                   $131,084             $--           $131,084
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Renovate Interior Floor Covering for           $485,520             $--           $485,520
                                                               all buildings
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Menlo Park              CA       14               Replace Condensing Units                       $384,672              $_           $384,672
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Palo Alto               CA       14               Renovate Interior Lighting                     $249,854              $_           $249,854
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Replace Vinyl Floor Covering                    $75,000             $--            $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Palo Alto               CA       14               Renovation of Exterior Windows                   $4,728              $_             $4,728
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Loop Road, Phase 1B Construction             $1,700,000             $--         $1,700,000
                                                               Parking Lot
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Menlo Park              CA       14               Replace Exhaust Units, Building 324,         $1,000,099              $_         $1,000,099
                                                               Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Menlo Park              CA       14               Loop Road, Phase 2 Road and Parking          $2,800,000             $--         $2,800,000
                                                               Construction
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Demolition of Building 23                      $350,099             $--           $350,099
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Renovate Clinic B Bathrooms for                $250,000             $--           $250,000
                                                               American Disability Act Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Palo Alto               CA       14               Renovate for 64-slice CT & Relocate            $800,099         $50,099           $750,000
                                                               Ultrasound
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Menlo Park              CA       14               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Seaside                 CA       17               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Fresno                  CA       20               Remediate all known asbestos on              $2,200,000             $--         $2,200,000
                                                               station
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Fresno                  CA       20               Replace Steam Boilers                        $1,570,000              $_         $1,570,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Fresno                  CA       20               Replace Cooling Tower 1 & 2                  $1,600,000              $_         $1,600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Fresno                  CA       20               Replace Heating, Ventilation and Air         $2,750,000              $_         $2,750,000
                                                               Conditioning, Buildings 10, 11, 12,
                                                               13, 14
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Fresno                  CA       20               Repairs/ Replace Sidewalks                   $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Fresno                  CA       20               Repair/Upgrade Sidewalks and Parking         $1,900,000             $--         $1,900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         Sepulveda               CA       27               Replace Heating, Ventilation and Air         $1,125,000              $_         $1,125,000
                                                               Conditioning System for Building
                                                               B103, Animal Research
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Sepulveda               CA       27               Repair Roads and Parking, Phase 1            $1,113,919             $--         $1,113,919
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Sepulveda               CA       27               Repair Irrigation System                       $881,000             $--           $881,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         Sepulveda (ACC)         CA       27               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         Sepulveda (Vet Center)  CA       27               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate Operating Rooms, Building           $1,553,500             $--         $1,553,500
                                                               500
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Replace Roofs Building 218 and               $1,050,000             $--         $1,050,000
                                                               Building 507
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate Patient Bathrooms for               $1,175,000             $--         $1,175,000
                                                               Handicap Access
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate Nuclear Medicine for USP-823          $693,200             $--           $693,200
                                                               Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate to provide adequate drainage          $722,000             $--           $722,000
                                                               at Loading Dock, Building 508
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate Building 158, various               $3,025,000             $--         $3,025,000
                                                               systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Replace Nurse Call System, Building          $1,100,000             $--         $1,100,000
                                                               500
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         W. Los Angeles          CA       30               Retrofit Steam Piping, North Campus          $1,225,000              $_         $1,225,000
                                                               Phase 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Renovate Radiology/Nuclear Medicine,         $1,035,390             $--         $1,035,390
                                                               Building 500
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Retrofit Sewer System for Main               $1,792,000             $--         $1,792,000
                                                               Hospital Building, Phase 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Retrofit Sewer System for Main               $1,792,000             $--         $1,792,000
                                                               Hospital Building, Phase 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Replace Galvanized Piping in Building        $1,493,100             $--         $1,493,100
                                                               212
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         W. Los Angeles          CA       30               Renovate Restrooms and Correct               $1,230,000              $_         $1,230,000
                                                               Accessibility Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          W. Los Angeles          CA       30               Retrofit Sewer System for Main               $1,792,000             $--         $1,792,000
                                                               Hospital, Phase 6
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         Los Angeles             CA       30               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Los Angeles             CA       30               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Loma Linda              CA       41               Renovate Isolation Rooms                     $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Loma Linda              CA       41               Renovate Nursing Home Care Unit                $600,000             $--           $600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Loma Linda              CA       41               Renovate Laboratory                          $1,300,000             $--         $1,300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Loma Linda              CA       41               Purchase Additional Emergency                $5,000,000             $--         $5,000,000
                                                               Generator to meet load requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Riverside               CA       44               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Replace/Repair Main Sewer Line               $2,000,000             $--         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Renovate Spinal Cord Injury Unit               $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Renovate Interior Finishes, Building           $800,000             $--           $800,000
                                                               126
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Site Install Emergency Management            $5,500,000             $--         $5,500,000
                                                               Generator
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Renovate/Relocate Gait Lab                   $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Replace Electrical Equipment in              $2,200,000             $--         $2,200,000
                                                               Building 126, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Replace Sanitation Piping, Phase 2,          $2,000,000             $--         $2,000,000
                                                               Building 216
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Repair/Replace Fire Pump System                $165,000             $--           $165,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          Long Beach              CA       46               Repair/Resurface Roads and Parking,          $3,000,000             $--         $3,000,000
                                                               Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        San Diego               CA       52               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         San Diego               CA       53               Upgrade Supply, Processing and                 $835,000              $_           $835,000
                                                               Distribution Heating, Ventilation
                                                               and Air Conditioning Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         San Diego               CA       53               Upgrade Heating, Ventilation and Air         $2,125,000              $_         $2,125,000
                                                               Conditioning for Operating Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          San Diego               CA       53               Renovate Emergency Room                      $2,022,402             $--         $2,022,402
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          San Diego               CA       53               Emergency Generator Switchboard              $2,275,000             $--         $2,275,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          San Diego               CA       53               Renovate/Expand Prosthetics                    $150,000             $--           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
22          San Diego               CA       53               Renovate administrative space for            $2,150,000             $--         $2,150,000
                                                               Social Work and OEF/OIF
--------------------------------------------------------------------------------------------------------------------------------------------------------
*22         San Diego               CA       53               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--California                           $93,880,105        $678,807        $92,701,199
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Denver                  CO       1                Repair/Upgrade Heating, Ventilation            $600,000         $55,000           $545,000
                                                               and Air Conditioning in Sub-Basement
                                                               of Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Denver                  CO       1                Repair/Replace Heating, Ventilation            $750,000         $70,000           $680,000
                                                               and Air Conditioning Components in
                                                               Buildings 19 and 21
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Denver                  CO       1                Replace Piping in Building 1                   $750,000         $70,000           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Denver                  CO       1                Replace/Upgrade Exterior Finishes and          $660,000         $60,000           $600,000
                                                               Windows
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Denver                  CO       1                Improve Heating, Ventilation and Air           $550,000         $50,000           $500,000
                                                               Conditioning System for Energy
                                                               Reduction
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Denver                  CO       1                Replace/Upgrade Heating Piping in            $1,355,000         $55,000         $1,300,000
                                                               Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Denver                  CO       1                Repair Steam System Building 1                 $387,000         $37,000           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Grand Junction          CO       3                Replace Site Underground Electrical            $750,000         $75,000           $675,000
                                                               Feeds, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Grand Junction          CO       3                Replace Air Handling Unit                      $750,000         $70,000           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Grand Junction          CO       3                Replace Air Handling Unit, Building 5          $750,000         $75,000           $675,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Grand Junction          CO       3                Renovate for Employee Locker Rooms             $750,000         $75,000           $675,000
                                                               and Patient/Visitor Restrooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Grand Junction          CO       3                Install Solar Photovoltaic Array               $750,000         $75,000           $675,000
                                                               System, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Colorado                              $8,802,000        $767,000         $8,035,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Newington               CT       1                Correct Life Safety Deficiencies               $557,000             $--           $557,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Newington               CT       1                Repair and Replace Roofs, Phase 3              $732,075             $--           $732,075
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          West Haven              CT       3                Repair and Replace the Chilled Water         $1,087,000              $_         $1,087,000
                                                               Insulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           West Haven              CT       3                Renovate for Construction of Semi-           $8,841,000      $1,098,000         $7,743,000
                                                               Private and Private Inpatient Units
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Connecticut                          $11,217,075      $1,098,000        $10,119,075
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Washington              DC       At Large         Replace Chiller in Main Hospital             $2,500,000              $_         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Renovate Pharmacy                            $3,000,000             $--         $3,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Renovate Area for Installation of Cat          $560,000             $--           $560,000
                                                               Scanner
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Renovate Radiology                           $3,250,000             $--         $3,250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Upgrade Dental Area                          $1,000,000             $--         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Renovate the Research Animal Facility          $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Washington              DC       At Large         Replace the Sprinkler System                 $1,000,000             $--         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Washington              DC       At Large         Implement Selected Conservation              $3,333,333              $_         $3,333,333
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--District of Columbia                 $15,393,333             $--         $5,393,333
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Wilmington              DE       At Large         Upgrade and Replace the Heating,             $2,200,000              $_         $2,200,000
                                                               Ventilation and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Wilmington              DE       At Large         Upgrade Secondary Electrical                 $2,750,000             $--         $2,750,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Wilmington              DE       At Large         Replace Elevator                               $450,000             $--           $450,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Wilmington              DE       At Large         Upgrade and Replace Boiler Plant               $466,440              $_           $466,440
                                                               Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Wilmington              DE       At Large         Upgrade Heating, Ventilation and Air         $2,200,000              $_         $2,200,000
                                                               Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Delaware                              $8,066,440             $--         $8,066,440
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Lake City               FL       4                Replace Air Handling Units                     $450,458              $_           $450,458
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Lake City               FL       4                Replace Chiller                                $550,000              $_           $550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Lake City               FL       4                Replace Electrical Switches                    $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Lake City               FL       4                Repair and Upgrade Operating Room              $409,091              $_           $409,091
                                                               Heating, Ventilation and Air
                                                               Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Gainesville             FL       6                Relocate and Renovate for Vascular             $285,000             $--           $285,000
                                                               Lab
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Gainesville             FL       6                Construct an Intensive Care Step Down          $830,000             $--           $830,000
                                                               Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Gainesville             FL       6                Upgrade Physical Security                      $450,000             $--           $450,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Gainesville             FL       6                Replace Finishes                               $400,000             $--           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Gainesville             FL       6                Repair and Upgrade Electrical                $2,260,000             $--         $2,260,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Construct New Medical Gas Bldg                 $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Study for Electrical Distribution              $150,000             $--           $150,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Upgrade Heating, Ventilation and Air           $350,000              $_           $350,000
                                                               Conditioning Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Replace Steam Pipes                            $700,000              $_           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Upgrade Operating Room Heating,                $350,000              $_           $350,000
                                                               Ventilation and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Renovate and Upgrade Operating Room            $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Repair Steam Traps                             $195,000              $_           $195,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Upgrade and Renovate Operating Room            $605,000             $--           $605,000
                                                               Finishes
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Renovate for Supply, Processing and            $350,000             $--           $350,000
                                                               Distribution Cart Lift
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Orlando                 FL       8                Repair and Upgrade Fire Alarm System           $625,000             $--           $625,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Upgrade and Replace Heating,                   $500,000              $_           $500,000
                                                               Ventilation and Air Conditioning
                                                               Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       8                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Bay Pines               FL       10               Renovate Area for MRI Install                  $726,715             $--           $726,715
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Bay Pines               FL       10               Renovate Kitchen                             $1,477,357             $--         $1,477,357
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Bay Pines               FL       10               Replace and Upgrade Heating,                 $2,758,419              $_         $2,758,419
                                                               Ventilation and Air Conditioning
                                                               Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Bay Pines               FL       10               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Tampa                   FL       11               Renovate Area for Electro Physiology         $1,000,000             $--         $1,000,000
                                                               Lab
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Tampa                   FL       11               Renovate Area for Electro Physiology         $1,650,000             $--         $1,650,000
                                                               Lab Recovery
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Tampa                   FL       11               Upgrade Windows for Hurricane                $1,250,000              $_         $1,250,000
                                                               Hardening
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Tampa                   FL       11               Renovate Area for Install of Gamma             $750,000             $--           $750,000
                                                               Camera
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Tampa                   FL       11               Replace Research Exhaust Fan                   $750,000              $_           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Tampa                   FL       11               Renovate and Modernize for American            $700,000             $--           $700,000
                                                               Disability Act Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Tampa                   FL       11               Repair and Replace Steam Pipe System           $250,000              $_           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Tampa                   FL       11               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Orlando                 FL       15               Upgrade Operating Room Heating,                $350,000              $_           $350,000
                                                               Ventilation and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Miami                   FL       18               Repair Hallways for Life Safety              $1,210,053             $--         $1,210,053
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Miami                   FL       18               Upgrade and Repair Electrical                  $330,674             $--           $330,674
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Miami                   FL       18               Study Fire and Smoke Damper                    $300,244             $--           $300,244
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Miami                   FL       18               Replace Chilled Water Valves                   $834,334              $_           $834,334
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           Miami                   FL       18               Upgrade Community Living Center                $892,914             $--           $892,914
                                                               Elevators
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Miami                   FL       18               Upgrade Restrooms                            $4,214,923              $_         $4,214,923
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          Miami                   FL       18               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          W. Palm Beach           FL       22               Construct Cooling Tower Walls                  $267,777              $_           $267,777
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           W. Palm Beach           FL       22               Install Hurricane Shutters                     $112,713             $--           $112,713
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           W. Palm Beach           FL       22               Replace and Upgrade Fire Alarm System        $3,479,189             $--         $3,479,189
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          W. Palm Beach           FL       22               Modernize Patient Bathrooms                    $497,402              $_           $497,402
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           W. Palm Beach           FL       22               Upgrade Electrical Distribution                $444,463             $--           $444,463
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Florida                              $34,996,726             $--        $34,996,726
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Dublin                  GA       3                Replace Sanitary Sewer Lines                   $610,308         $30,828           $579,480
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Dublin                  GA       3                Replace and Upgrade Air Handling               $834,747         $89,437           $745,310
                                                               Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Dublin                  GA       3                Renovate for Inpatient Ward                    $877,500         $90,000           $787,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Dublin                  GA       3                Renovate for IT Space                          $753,750        $110,000           $643,750
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Dublin                  GA       3                Implement Ground Source Heat Pumps\1\        $2,152,000              $_         $2,152,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Atlanta                 GA       5                Modernize Community Living Center            $2,631,463             $--         $2,631,463
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Atlanta                 GA       5                Renovate Mental Health                         $490,000             $--           $490,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Atlanta                 GA       5                Upgrade and Replace Plumbing Systems         $2,200,000        $200,000         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Atlanta                 GA       5                Renovate Histology Lab                         $806,469        $170,512           $635,957
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Atlanta                 GA       5                Upgrade and Expand Emergency                 $1,766,856        $137,005         $1,629,851
                                                               Department
--------------------------------------------------------------------------------------------------------------------------------------------------------
*7          Augusta                 GA       10               Replace and Upgrade Heating,                   $548,550         $50,000           $498,550
                                                               Ventilation and Air Conditioning
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Augusta                 GA       12               Renovate Area for Position Electron          $1,000,000             $--         $1,000,000
                                                               Transformation/Cat Scanner
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Augusta                 GA       12               Renovate and Modernize Inpatient             $1,400,000             $--         $1,400,000
                                                               Wards
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Georgia                              $16,071,643        $877,782        $15,193,861
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Honolulu                HI       1                Repair/Clean Ductwork                          $275,000              $_           $275,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Honolulu                HI       1                Upgrade for Direct Digital Control             $275,000              $_           $275,000
                                                               for Heating, Ventilation and Air
                                                               Conditioning on E-Wing
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Honolulu                HI       1                Replace Air Conditioning Condensing            $250,000              $_           $250,000
                                                               and Air Handling Roof Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Honolulu                HI       1                Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Hawaii                                  $850,000             $--           $850,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Iowa City               IA       2                Energy Upgrades to Heating,                    $660,000              $_           $660,000
                                                               Ventilation and Air Conditioning
                                                               System, Building 40 & 41
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Iowa City               IA       2                Replace Roof for Building 7/Repair             $220,000             $--           $220,000
                                                               Roof Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Iowa City               IA       2                Update/Renovate Interior Finishes              $480,000             $--           $480,000
                                                               Building 1, Phase I
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Iowa City               IA       2                Renovate Inpatient Medical/Surgical          $2,280,000             $--         $2,280,000
                                                               Ward 7E
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Correct Electrical Deficiencies,             $1,020,000             $--         $1,020,000
                                                               Phase 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Des Moines              IA       3                Renovate Basement of Building 3 for          $1,100,000              $_         $1,100,000
                                                               Heating, Ventilation and Air
                                                               Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovate Cardiac Cath Special                  $100,000             $--           $100,000
                                                               Procedure Patient Prep and Recovery
                                                               Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Des Moines              IA       3                Relocate/Upgrade Air Intake for                $115,000              $_           $115,000
                                                               Primary Care
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovate/Install Dental Suction                $115,000             $--           $115,000
                                                               System in Clinical Annex Building
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovate Education Space in Building           $280,000             $--           $280,000
                                                               3
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovate for additional storage                $280,000             $--           $280,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Replace/Repair Steps for Building 3            $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovate/Repair Loading Dock                   $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Renovation for the Installation of             $200,000             $--           $200,000
                                                               New Patient Lift Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Des Moines              IA       3                Joint Commission on Accreditation of           $240,201             $--           $240,201
                                                               Health care Organizations Pre-Survey
                                                               Inspection
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Iowa                                  $7,690,201             $--         $7,690,201
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Boise                   ID       2                Replace Underground Electrical System        $1,820,000             $--         $1,820,000
                                                               and Generators
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Boise                   ID       2                Upgrade/Replace Electrical System and        $2,040,000             $--         $2,040,000
                                                               Emergency Generators
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Boise                   ID       2                Replace Electrical Systems                   $1,090,000             $--         $1,090,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Boise                   ID       2                Renovate 1st and 2nd Floors for                $800,000             $--           $800,000
                                                               Clinical Care, Building 110
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Boise                   ID       2                Evaluate Feasibility of Direct                 $342,857             $--           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Idaho                                 $6,092,857             $--         $6,092,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Install American Disability Act                $350,000             $--           $350,000
                                                               Automatic Fixtures in Bathroom
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Replace Electrical Distribution              $8,000,000             $--         $8,000,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Chicago (WS)            IL       7                Replace Ductwork                               $172,862              $_           $172,862
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Replace Water Main Lines                     $1,550,000             $--         $1,550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Design to Enclose Building                      $35,000             $--            $35,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Upgrade and Repair Medical Gas System        $8,000,000             $--         $8,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Chicago (WS)            IL       7                Install Ventilation in Dialysis                $700,509              $_           $700,509
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Relocate Psychology Suite                      $150,000             $--           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Repair Exterior Masonry                        $564,200             $--           $564,200
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Install New Electrical Cables                  $772,878             $--           $772,878
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Replace Roof                                 $1,220,000             $--         $1,220,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Remodel Physical Rehab/Extended Care         $6,000,000             $--         $6,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Chicago (WS)            IL       7                Replace Air Handling Units                     $251,300              $_           $251,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Reconfigure Fire Dampers                       $400,000             $--           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Hines                   IL       7                Replace Boiler Plant Controls                   $85,000              $_            $85,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Hines                   IL       7                Install Boiler Flue Gas Analyzers              $110,000              $_           $110,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Upgrade Tank Lining                             $60,000             $--            $60,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Install Natural Gas Emergency                   $50,000             $--            $50,000
                                                               Shutdown Valves
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Hines                   IL       7                Replace Heating, Ventilation and Air           $200,000              $_           $200,000
                                                               Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Hines                   IL       7                Upgrade and Repair Condensate Return           $125,000              $_           $125,000
                                                               Lines
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Hines                   IL       7                Relocate Prosthetics, Neurology, and         $4,000,000             $--         $4,000,000
                                                               Rehab Clinic
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Chicago (WS)            IL       7                Renovate Area for Install of Gamma             $241,000             $--           $241,000
                                                               Camera
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Replace Electrical Sub-Station               $2,180,000             $--         $2,180,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         North Chicago           IL       10               Upgrade Street Lights                        $1,200,000              $_         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         North Chicago           IL       10               Replace Windows                              $2,850,000              $_         $2,850,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Repair and Replace Roads and                   $500,000             $--           $500,000
                                                               Sidewalks
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Repair Drainage System                       $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Expand Phone Switch Room                        $50,000             $--            $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Demolish Porch                                  $95,000             $--            $95,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Upgrade Site for American Disability           $750,000             $--           $750,000
                                                               Act Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Renovate Education Spaces                      $120,000             $--           $120,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Upgrade Electrical Distribution                $575,000             $--           $575,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Abate Asbestos                                 $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          North Chicago           IL       10               Renovate and Modernize Showers                  $82,000             $--            $82,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               Water Tower Renovation--FCA                    $148,000             $--           $148,000
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               Mold Abatement & Water Intrusion             $3,416,000        $496,000         $2,920,000
                                                               Prevention--FCA Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               South Periphery Road Relocation                $336,000             $--           $336,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*15         Marion                  IL       12               Chiller Plant Addition                       $1,097,600        $117,600           $980,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               Relocate Generator and Electrical              $952,000             $--           $952,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               Repair and Recondition Building 15             $530,000             $--           $530,000
                                                               Exterior
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Marion                  IL       12               Renovate Halls and Replace Exit Doors          $500,000             $--           $500,000
                                                               in Building 43
--------------------------------------------------------------------------------------------------------------------------------------------------------
*11         Danville                IL       15               Replace Central Boiler Plant                $12,000,000              $_        $12,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Danville                IL       15               Replace Elevator Cabs & Controls             $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Illinois                             $64,169,349        $613,600        $63,555,749
--------------------------------------------------------------------------------------------------------------------------------------------------------
*11         Indianapolis            IN       7                Install New Chiller                          $2,100,000              $_         $2,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Indianapolis            IN       7                Upgrade Nurse Call System                    $1,870,000             $--         $1,870,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Indianapolis            IN       7                Resurface Parking Lots                         $896,000             $--           $896,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Indiana                               $4,866,000             $--         $4,866,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Leavenworth             KS       2                Building 21 Fire Safety Upgrades--FCA          $380,000         $30,000           $350,000
                                                               Correction
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Topeka                  KS       2                Renovate Radiology Department--FCA              $90,000             $--            $90,000
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Leavenworth             KS       2                Repair Concrete Sidewalks                      $100,000             $--           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Topeka                  KS       2                Replace Roof Eyebrows--FCA                     $750,000             $--           $750,000
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Topeka                  KS       2                Tuck point and Repair Roof of                $1,100,000        $100,000         $1,000,000
                                                               Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Leavenworth             KS       2                Renovate Pharmacy to meet ventilation          $330,000         $30,000           $300,000
                                                               requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
*15         Leavenworth             KS       2                Replace Windows in Buildings 88, 89,         $1,000,000              $_         $1,000,000
                                                               90, and 91, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Wichita                 KS       4                Correct Electrical Deficiencies              $4,600,000             $--         $4,600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Wichita                 KS       4                Replace Roofs on Buildings 5-7, 10-          $1,080,000         $80,000         $1,000,000
                                                               13, 19
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Kansas                                $9,430,000        $240,000         $9,190,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Louisville              KY       3                Replace Boilers                              $2,413,000        $259,000         $2,154,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Louisville              KY       3                Renovate Mental Health                       $2,170,560        $232,560         $1,938,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Louisville              KY       3                Replace Sewer Lines                            $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Louisville              KY       3                Repair and Replace Street Lighting             $184,000              $_           $184,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Ft. Thomas              KY       4                Renovate for Traumatic Brain Injury          $1,591,000             $--         $1,591,000
                                                               and Post-Traumatic Stress Disorder
                                                               Program
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Lexington               KY       6                Upgrade and Replace Electrical               $2,100,000        $190,000         $1,910,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Lexington               KY       6                Construct Additional Parking                 $1,650,000        $100,000         $1,550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Lexington               KY       6                Upgrade and Repair Electrical                  $770,000         $70,000           $700,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Lexington               KY       6                Renovate Clinics                               $719,000         $55,000           $664,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Lexington               KY       6                Renovate Police Dispatch                       $550,000         $50,000           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Kentucky                             $12,397,560        $956,560        $11,441,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         New Orleans             LA       2                Repair/Upgrade Energy Management               $750,000              $_           $750,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Shreveport              LA       4                Replace Kitchen Exhaust                        $500,000              $_           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Shreveport              LA       4                Renovate/Upgrade Operating Room--FCA         $5,200,000             $--         $5,200,000
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Shreveport              LA       4                Replace Fan Coils to meet Heating,             $550,000             $--           $550,000
                                                               Ventilation and Air Conditioning
                                                               requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Alexandria              LA       5                Renovate Kitchen and Lobby of                  $324,000             $--           $324,000
                                                               Building 9 for Mental Health Program
                                                               Offices
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Alexandria              LA       5                Recondition Boiler #1                          $246,000              $_           $246,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Alexandria              LA       5                Renovate/Upgrade Canteen Dining Area           $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Alexandria              LA       5                Renovate Heating, Ventilation and Air          $395,000              $_           $395,000
                                                               Conditioning in Laboratory, Building
                                                               7
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Louisiana                             $8,265,000             $--         $8,265,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Northampton             MA       2                Upgrade Supply, Processing and               $1,596,000        $196,000         $1,400,000
                                                               Distribution Heating, Ventilation
                                                               and Air Conditioning & Sterilizer
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Northampton             MA       2                Repair and Upgrade Fire Protection           $3,310,000        $250,000         $3,060,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Northampton             MA       2                Correct American Disability Act                $550,000         $50,000           $500,000
                                                               Building Access Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Leeds                   MA       2                Correct American Disability Act                $839,000         $39,000           $800,000
                                                               Building Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Bedford                 MA       6                Renovate Inpatient Psychiatric Wards         $7,165,000             $--         $7,165,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Bedford                 MA       6                Upgrade Heating, Ventilation and Air           $765,000              $_           $765,000
                                                               Conditioning, Animal Research
                                                               Facility
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Bedford                 MA       6                Replace and Upgrade Electrical               $4,033,000             $--         $4,033,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Bedford                 MA       6                Renovate Nursing Home Care Unit into           $721,000             $--           $721,000
                                                               a Community Living Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Brockton                MA       9                Replace Fire Alarm System                    $3,525,000             $--         $3,525,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          West Roxbury            MA       9                Upgrade Supply, Processing and                 $975,000         $85,000           $890,000
                                                               Distribution Heating, Ventilation
                                                               and Air Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          West Roxbury            MA       9                Replace and Upgrade Air Handling             $1,339,000        $120,000         $1,219,000
                                                               Equipment, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Massachusetts                        $24,818,000        $740,000        $24,078,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Upgrade and Replace Electrical               $1,870,000             $--         $1,870,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Perry Point             MD       1                Replace and Upgrade Heating,                   $450,000              $_           $450,000
                                                               Ventilation and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Upgrade the Patient Security System          $3,750,000             $--         $3,750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Roof                                   $548,000             $--           $548,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Perry Point             MD       1                Replace Chilled Water Line                     $150,000              $_           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Elevator and Shaft                     $550,000             $--            $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Perry Point             MD       1                Replace Windows                                $150,000              $_           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Elevators                               $90,000             $--            $90,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Upgrade Security for the Chemical               $25,000             $--            $25,000
                                                               Storage Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Dock Leveler Bldg 11W                   $20,000             $--            $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Upgrade and Replace Fire & Safety              $475,000             $--           $475,000
                                                               Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Repair Roads and Sidewalks                   $1,375,000             $--         $1,375,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Perry Point             MD       1                Repair and Upgrade Heating,                  $1,540,000              $_         $1,540,000
                                                               Ventilation and Air Conditioning
                                                               Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Exterior for Buildings 4H and        $1,000,000             $--         $1,000,000
                                                               5H
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Perry Point             MD       1                Replace Exterior for Buildings 11H,          $1,909,000             $--         $1,909,000
                                                               15H and 17H
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Perry Point             MD       1                Implement Selected Conservation              $3,333,333              $_         $3,333,333
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Baltimore               MD       7                Replace Steam Traps                            $200,000              $_           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Upgrade and Repair Electrical                  $200,000             $--           $200,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Loch Raven              MD       7                Replace Fire Alarm System                      $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Construct Entrance Vestibule Parking            $90,000             $--            $90,000
                                                               Garage P1
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Install Security Door 6A Mental                 $40,000             $--            $40,000
                                                               Health
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Baltimore               MD       7                Upgrade Acquisitions and Materials             $250,000              $_           $250,000
                                                               Management Service Heating,
                                                               Ventilation and Air Conditioning
                                                               Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Loch Raven              MD       7                Study and Provide Recommendations for          $100,000             $--           $100,000
                                                               Loch Raven Drainage
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Loch Raven              MD       7                Replace Dock Leveler                            $20,000             $--            $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Loch Raven              MD       7                Construct a Low Vision Clinic                  $100,000             $--           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Renovate Canteen Food Court                    $525,000             $--           $525,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Loch Raven              MD       7                Relocate Campus Main Telephone Feed             $50,000             $--            $50,000
                                                               Bldg 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Repair Roofs                                   $450,000             $--           $450,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Baltimore               MD       7                Upgrade and Repair Electrical                  $750,000             $--           $750,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Maryland                             $20,310,333             $--        $19,810,333
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Togus                   ME       1                Construct Private Bathrooms and              $7,386,493        $696,000         $6,690,493
                                                               Showers for Inpatient Wards in
                                                               Building 200
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Togus                   ME       1                Repair and Upgrade Building 200 and          $4,400,000             $--           $400,000
                                                               Building 200E Facade
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Augusta                 ME       1                Construct a Renewably Fueled                 $6,201,531         $31,531         $6,170,000
                                                               Cogeneration System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Maine                                $17,988,024        $727,531        $13,260,493
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Upgrade Electrical Distribution &              $765,000             $--           $765,000
                                                               Generator
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Replace Fire Pump                              $130,000             $--           $130,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Iron Mountain           MI       1                Replace Heating, Ventilation and Air           $532,000              $_           $532,000
                                                               Conditioning Telephone Room
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Replace Kitchen Coolers/Freezers                $50,000             $--            $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Construct Additional Parking and               $400,000             $--           $400,000
                                                               Utilities
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Repair Exterior Masonry                        $350,000             $--           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Repair Sidewalks                                $40,000             $--            $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Iron Mountain           MI       1                Renovate and Modernize Outpatient               $40,000             $--            $40,000
                                                               Lobby
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Iron Mountain           MI       1                Replace Chiller                                $350,000              $_           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Saginaw                 MI       5                Upgrade Primary Electrical                   $1,950,000             $--         $1,950,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Saginaw                 MI       5                Upgrade and Expand Electrical Closets        $2,263,000             $--         $2,263,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*11         Saginaw                 MI       5                Replace Heating, Ventilation and Air         $4,606,224              $_         $4,606,224
                                                               Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Battle Creek            MI       7                Replace Roads, Curbs, Gutter                 $1,124,000             $--         $1,124,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Detroit                 MI       13               Renovate for Mental Health                   $4,950,000             $--         $4,950,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Ann Arbor               MI       15               Renovate Inpatient and Outpatient            $2,500,000             $--         $2,500,000
                                                               Pharmacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Ann Arbor               MI       15               Renovate and Modernize Urgent Care           $2,500,000             $--         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
11          Ann Arbor               MI       15               Upgrade Emergency Room                       $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Michigan                             $24,050,224             $--        $24,050,224
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Repair/Upgrade Mechanical Systems              $100,000              $_           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Eyewash Upgrade ph. II                         $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Install Carpet, Mental Health                  $225,000             $--           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Pneumatic Tube Expansion                       $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Replace Automatic Transfer Switch--             $35,000             $--            $35,000
                                                               Medical Intensive Care Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Renovate for the Installation of               $150,000             $--           $150,000
                                                               Operating Room Boom to support
                                                               equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace Chilled Water Valves Ph. 2             $250,000              $_           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace/Repair Screens/Vents_Building          $100,000              $_           $100,000
                                                               49 and 70
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Upgrade Waste Anesthesia Gas System             $50,000             $--            $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace Condensate Return Piping, Ph.          $250,000              $_           $250,000
                                                               1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace Automatic Faucets                       $40,000              $_            $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Telephone Switch Room Upgrades                 $150,000             $--           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Replace Carpet--General                        $425,000             $--           $425,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Parking Lot and Road Upgrade                 $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Install Security System for IT                 $250,000             $--           $250,000
                                                               closets
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Construct Hospice Unit, Building 70            $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Ward Renovation                                $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Life Safety Assessment                          $60,000             $--            $60,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Design Ramp Snow Melt System for               $250,000             $--           $250,000
                                                               Building 70 and Loading Dock
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Design Transfer Switch Replacement             $120,000             $--           $120,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace Chiller #2 at Energy Center          $1,200,000              $_         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Renovate Building 70 for Patient               $350,000             $--           $350,000
                                                               Privacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Communication Closet A/C Upgrades              $300,000              $_           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Extended Care Center Renovation, Ph.           $450,000             $--           $450,000
                                                               1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Minneapolis             MN       5                Replace Heating, Ventilation and Air           $300,000              $_           $300,000
                                                               Conditioning Coils ph. I
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Elevator upgrades ph. II                     $1,700,000             $--         $1,700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Replace Water Booster Pumps                    $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Minneapolis             MN       5                Renovate for Provider Consultation             $220,000             $--           $220,000
                                                               Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         St. Cloud               MN       6                Install Heating, Ventilation and Air           $775,000              $_           $775,000
                                                               Conditioning System in Basement
                                                               Building 29
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          St. Cloud               MN       6                Renovate for Rehab Services                    $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          St. Cloud               MN       6                Replace Carpet in Domiciliary,                 $180,000             $--           $180,000
                                                               Building 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          St. Cloud               MN       6                Repair/Upgrade Roads throughout              $1,365,000             $--         $1,365,000
                                                               Campus, Phase 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          St. Cloud               MN       6                Repair/Upgrade Nurse Call System in            $650,000             $--           $650,000
                                                               Building 48, 49, 50 and 51
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         St. Cloud               MN       6                Install Metering for Electrical,               $240,000              $_           $240,000
                                                               Steam and Gas Lines
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          St. Cloud               MN       6                Upgrade/Renovate Supply, Processing          $1,300,000             $--         $1,300,000
                                                               and Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         St. Cloud               MN       6                Upgrade Ground Source Heat Pumps             $1,952,000              $_         $1,952,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Minnesota                            $16,637,000             $--        $16,637,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          St. Louis               MO       3                Correct Sprinkler Deficiencies               $1,411,000        $138,600         $1,272,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          St. Louis               MO       3                Emergency Power for Building 60 Main         $1,359,000        $146,000         $1,213,000
                                                               Kitchen
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          St. Louis               MO       3                Correct Secondary Power Deficiencies,        $1,723,000             $--         $1,723,000
                                                               Phase II
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          St. Louis               MO       3                Replace Public Address System,               $2,000,000        $180,000         $1,820,000
                                                               Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          St. Louis               MO       3                Renovate Existing Clinics                    $4,570,000        $500,000         $4,070,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Kansas City             MO       5                Renovate Building 2--FCA Corrections         $2,189,710        $189,710         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Kansas City             MO       5                Site prep for install of new Cook/             $580,000             $--           $580,000
                                                               Chill Equipment in Kitchen
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Kansas City             MO       5                Upgrade Emergency Power Building 1--         $3,900,000             $--         $3,900,000
                                                               FCA Correction
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Kansas City             MO       5                Renovate Mental Health Building                $900,000             $--           $900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Columbia                MO       9                Elevator Replacement/Renovation              $1,320,000             $--         $1,320,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Columbia                MO       9                Renovate Research                            $1,200,000             $--         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Columbia                MO       9                Renovate and Relocate Specialty Care           $500,000         $50,000           $450,000
                                                               to 6th Floor
--------------------------------------------------------------------------------------------------------------------------------------------------------
*15         Columbia                MO       9                Replace Exhaust Fans_FCA Corrections         $1,650,000              $_         $1,650,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
15          Columbia                MO       9                Renovate Pathology Labs                      $2,000,000             $--         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Missouri                             $25,302,710      $1,204,310        $24,098,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Jackson                 MS       3                Provide Back-Up Generator Capacity           $4,700,000             $--         $4,700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Jackson                 MS       3                Replace Medical Center Windows_Phase         $2,000,000              $_         $2,000,000
                                                               1
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Jackson                 MS       3                Clean and Recoat portions of Existing          $300,000             $--           $300,000
                                                               Room on Building 1 & 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Biloxi                  MS       4                Replace Elevators in Building 2 &19          $1,300,000             $--         $1,300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Biloxi                  MS       4                Repair/Replace Elevators and                 $2,200,000             $--         $2,200,000
                                                               Dumbwaiters in Building 1&3
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Biloxi                  MS       4                Replace Building 5 Roof & Update             $1,120,000             $--         $1,120,000
                                                               Exterior finish
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Biloxi                  MS       4                Renovate/Upgrade Building 17 Interior          $820,000             $--           $820,000
                                                               for American Disability Act
                                                               accessibility
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Mississippi                          $12,440,000             $--        $12,440,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Helena                  MT       At Large         Repair Mechanical Deficiencies                 $705,000         $55,000           $650,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Helena                  MT       At Large         Convert Building 154 to Low Pressure           $750,000         $70,000           $680,000
                                                               Steam
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Helena                  MT       At Large         Repair/Replace Masonry in Stairwells--         $550,000         $50,000           $500,000
                                                               FCA Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Helena                  MT       At Large         Remediate Lead Based Paint                     $750,000         $50,000           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Helena                  MT       At Large         Remediate Lead Based Paint                     $750,000         $50,000           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Helena                  MT       At Large         Implement Energy Conservation                  $750,000         $70,000           $680,000
                                                               Measures per regulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Fort Harrison           MT       At Large         Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Montana                               $4,597,857        $345,000         $4,252,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Durham                  NC       4                Replace Air Handling Units                   $3,700,000              $_         $3,700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Durham                  NC       4                Upgrade and Install New Electrical           $4,730,000             $--         $4,730,000
                                                               Distribution Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Durham                  NC       4                Renovate and Expand Physical Therapy           $800,000             $--           $800,000
                                                               and Occupational Therapy
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Durham                  NC       4                Resurface Roads and Parking Lots             $1,150,000             $--         $1,150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Fayetteville            NC       7                Upgrade Women's Clinic                         $925,000             $--           $925,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Fayetteville            NC       7                Replace Elevators                              $600,000             $--           $600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Fayetteville            NC       7                Upgrade Kitchen                                $700,000             $--           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Fayetteville            NC       7                Upgrade Elevator                               $700,000             $--           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Asheville               NC       11               Repair Dom Water System                        $878,000             $--           $878,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Asheville               NC       11               Repair and Replace Exterior                    $560,000             $--           $560,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Asheville               NC       11               Renovate for a Community Living                $420,000             $--           $420,000
                                                               Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Asheville               NC       11               Renovate Emergency Department, Phase           $910,000             $--           $910,000
                                                               I
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Asheville               NC       11               Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salisbury               NC       12               Upgrade Elevators                            $1,800,000             $--         $1,800,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Salisbury               NC       12               Upgrade and Replace Heating,                 $1,873,250              $_         $1,873,250
                                                               Ventilation and Air Conditioning
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salisbury               NC       12               Replace Water Pipes                            $857,250             $--           $857,250
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salisbury               NC       12               Modernize Patient Areas                      $1,210,500             $--         $1,210,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--North Carolina                       $21,864,000             $--        $21,864,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Fargo                   ND       At Large         Renovate Administrative Space for            $1,901,855             $--         $1,901,855
                                                               Clinical Ambulatory Care Exam Rooms
                                                               and Support Space
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Fargo                   ND       At Large         Replace/Upgrade Chiller Compressors            $370,000             $--           $370,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Fargo                   ND       At Large         Repair/Replace Sidewalk at Medical             $260,000             $--           $260,000
                                                               Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Fargo                   ND       At Large         Renovate Inpatient Pharmacy                    $734,375             $--           $734,375
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--North Dakota                          $3,266,230             $--         $3,266,230
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       1                Repair/Replace Roofs Buildings 12, 24          $300,000             $--           $300,000
                                                               and 45
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       1                Repair/Upgrade Main Fire Alarm Panel           $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Omaha                   NE       1                Repair/Update Condensate Pipes and             $125,000              $_           $125,000
                                                               Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Omaha                   NE       1                Replace/Update Water Softeners for             $150,000              $_           $150,000
                                                               Boilers and Domestic Water Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       2                Remodel Operating Room/Post                  $2,520,000             $--         $2,520,000
                                                               Anesthesia Care Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       2                Renovate Radiology for Position              $1,920,000             $--         $1,920,000
                                                               Electron Transformation (PET) CT
                                                               Install
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       2                Renovate for New Coolers and Freezers          $225,000             $--           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Omaha                   NE       2                Repair/Replace Steam Condensate                $300,000              $_           $300,000
                                                               Lines, Tanks and Pumps
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Omaha                   NE       3                Replace Air Handlers for Laboratory            $500,000              $_           $500,000
                                                               Space
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       3                Replace Electrical Distribution                $750,000             $--           $750,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Omaha                   NE       3                Replace/Upgrade Domestic Hot Water             $210,000             $--           $210,000
                                                               Heaters
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Nebraska                              $7,500,000             $--         $7,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Manchester              NH       1                Correct Corrosion and Upgrade Water          $1,111,500         $95,000         $1,016,500
                                                               Tower
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Manchester              NH       1                Renovate for Mental Health and                 $585,000         $50,000           $535,000
                                                               Primary Care
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--New Hampshire                         $1,696,500        $145,000         $1,551,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Cape May                NJ       2                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Salem                   NJ       2                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Fort Dix                NJ       3                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*NCA        Beverly                 NJ       3                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Repave Parking Lots and Roads                $2,500,000             $--         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Lyons                   NJ       10               Repair and Upgrade the Storm Water           $2,500,000             $--         $2,500,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Install Access Security System                 $850,000             $--           $850,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Renovate and Modernize the Inpatient           $500,000             $--           $500,000
                                                               Ward Halls and Floors
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          East Orange             NJ       10               Upgrade Heating, Ventilation and Air           $275,000              $_           $275,000
                                                               Conditioning for Cardiac Cath Lab
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Upgrade Pharmacy to 797 Code                   $207,000             $--           $207,000
                                                               Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Renovate Nuclear Medicine for New              $715,000             $--           $715,000
                                                               Gama Cameras
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Renovate the Ear, Nose and Throat              $330,000             $--           $330,000
                                                               Clinic
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           East Orange             NJ       10               Renovate and Modernize Inpatient             $2,500,000             $--         $2,500,000
                                                               Wards
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          East Orange             NJ       10               Upgrade Heating, Ventilation and Air         $2,500,000              $_         $2,500,000
                                                               Conditioning & Plumbing Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Lyons                   NJ       11               Repair Structural Deficiencies in              $385,000             $--           $385,000
                                                               Building
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Lyons                   NJ       11               Upgrade Security Project                     $1,200,000             $--         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--New Jersey                           $14,502,000             $--        $14,502,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Renovate Operating Room #2                     $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Pave Overflow Patient Parking Lot              $345,000         $20,000           $325,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Replace Fuel Storage Tanks for                 $713,000         $73,000           $640,000
                                                               Emergency Generators in Buildings 1,
                                                               3, and 10.
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Albuquerque             NM       1                Repair/Upgrade Steam and Condensate            $775,000         $75,000           $700,000
                                                               systems, Phase I
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Renovate 3rd Floor of Building 3 for           $449,065         $49,065           $400,000
                                                               Telehealth
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Albuquerque             NM       1                Renovate Operating Room and Supply,            $600,000              $_            $60,000
                                                               Processing and Distribution in
                                                               Building 41
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Renovate Primary Care Area, Building           $750,000             $--            $75,000
                                                               41
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Building 41, Handicap Accessible               $500,000             $--           $500,000
                                                               Parking
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Albuquerque             NM       1                Repair Chilled Water Loop Piping               $750,000              $_            $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Albuquerque             NM       1                Correct Fire and Life Safety                   $600,000             $--            $60,000
                                                               Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Albuquerque             NM       1                Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Albuquerque             NM       1                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--New Mexico                            $7,134,922        $217,065         $4,487,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Install Sprinklers, Building 1, Phase          $350,000             $--           $350,000
                                                               3
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Install Sprinklers, Building 1A                $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Install Sprinklers, Building 1, Phase          $350,000             $--           $350,000
                                                               2
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Upgrade Elevators in Building 1D and         $1,200,000             $--         $1,200,000
                                                               Dietetics
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Renovate Community Living Center,              $650,000             $--           $650,000
                                                               Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Reno                    NV       2                Replace/Upgrade Air Handling Units             $400,000              $_           $400,000
                                                               Building 10
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Reno                    NV       2                Replace/Upgrade Heating, Ventilation           $400,000              $_           $400,000
                                                               and Air Conditioning Control System,
                                                               Building 12
--------------------------------------------------------------------------------------------------------------------------------------------------------
*21         Reno                    NV       2                Replace Heating, Ventilation and Air           $400,000              $_           $400,000
                                                               Conditioning Control System,
                                                               Buildings 10 & 1D
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Replace Sidewalks Facility Wide                $110,000             $--           $110,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Replace Flooring for Various                   $150,000             $--           $150,000
                                                               Buildings
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Renovate for Urgent Care Center and            $975,000             $--           $975,000
                                                               Police Service
--------------------------------------------------------------------------------------------------------------------------------------------------------
21          Reno                    NV       2                Replace Sewer Line, Building 1                 $225,000             $--           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Nevada                                $5,510,000             $--         $5,510,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Renovate and Relocate Warehouse              $1,300,000             $--         $1,300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Renovate and Modernize Supply,               $1,800,000             $--         $1,800,000
                                                               Processing and Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Renovate Research Wet Labs                     $865,000             $--           $865,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Upgrade Research Dry Labs to current           $865,000             $--           $865,000
                                                               American Association for
                                                               Accreditation of Laboratory Animal
                                                               Care standards
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Northport               NY       2                Replace Windows                              $1,500,000              $_         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Install Sprinkler System                     $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Renovate Research                              $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Relocate Sleep Lab                             $550,000             $--           $550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Northport               NY       2                Replace Outdoor Lighting Cables                $500,000              $_           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Northport               NY       2                Renovate Pathology and Lab                     $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Northport               NY       2                Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Bronx                   NY       6                Renovate and Modernize for Geriatric           $740,000             $--           $740,000
                                                               Research, Education and Clinical
                                                               Center (GRECC) and Geriatric Primary
                                                               Care
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           St Albans               NY       6                Replace Boiler Plant Roof                      $400,000             $--           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          St Albans               NY       6                Replace and Upgrade Heating,                   $650,000              $_           $650,000
                                                               Ventilation and Air Conditioning
                                                               Components and Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           St Albans               NY       6                Install New Medical Gas Systems                $550,000             $--           $550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          St Albans               NY       6                Upgrade Light Fixtures to Energy               $600,000              $_           $600,000
                                                               Efficient Fixtures
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          St Albans               NY       6                Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Castle Point            NY       13               Repair and Upgrade Boilers                   $1,750,000              $_         $1,750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Brooklyn                NY       13               Replace Light Fixtures and Upgrade             $600,000              $_           $600,000
                                                               Heating, Ventilation and Air
                                                               Conditioning Components for Energy
                                                               Efficiency
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Upgrade the Electrical Distribution            $600,000             $--           $600,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Brooklyn                NY       13               Upgrade Heating, Ventilation and Air           $395,000              $_           $395,000
                                                               Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Replace and Upgrade Main Water Line            $400,000             $--           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Brooklyn                NY       13               Upgrade Ventilation System in                  $350,000              $_           $350,000
                                                               Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Replace Sprinkler System                       $155,000             $--           $155,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Renovate Radiology                             $657,000             $--           $657,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Repair and Replace Sidewalks, Parking          $495,000             $--           $495,000
                                                               Lots & Roads
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Repair Elevators                               $375,000             $--           $375,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Replace Roof on Building 91                    $350,000             $--           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          St Albans               NY       13               Upgrade the Heating, Ventilation and           $395,000              $_           $395,000
                                                               Air Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          St Albans               NY       13               Upgrade Bathrooms                              $605,000              $_           $605,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Abate Asbestos                                  $45,000             $--            $45,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Brooklyn                NY       13               Replace and Upgrade Light Fixtures             $445,000              $_           $445,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       13               Renovate Supply, Processing and              $7,125,000             $--         $7,125,000
                                                               Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           New York City           NY       14               Upgrade and Modernize GI Lab                 $3,750,000        $175,000         $3,575,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Northport               NY       14               Renovate and Upgrade Heating,                  $500,000              $_           $500,000
                                                               Ventilation and Air Conditioning for
                                                               Supply, Processing and Distribution
                                                               and Pharmacy Storage
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           New York City           NY       14               Replace Generators, Ph 2                     $4,755,383             $--          4,755,383
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          New York City           NY       14               Replace and Upgrade Heating,                 $1,623,800              $_         $1,623,800
                                                               Ventilation and Air Conditioning
                                                               Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           New York City           NY       14               Repair Parking Lot and Sidewalks               $850,000             $--           $850,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          New York City           NY       14               Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Bronx                   NY       16               Replace and Upgrade the Heating,             $1,348,000        $180,000         $1,168,000
                                                               Ventilation and Air Conditioning &
                                                               Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Brooklyn                NY       16               Replace and Upgrade the Dumbwaiter             $475,000             $--           $475,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Bronx                   NY       16               Upgrade Boiler Controls                        $224,000              $_           $224,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Bronx                   NY       16               Upgrade Emergency Electrical, Ph 2           $3,620,000        $120,000         $3,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Bronx                   NY       16               Replace Mechanical Room Floor                  $627,000             $--           $627,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Montrose                NY       19               Renovate for Patient Dining Area             $3,300,000             $--         $3,300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Castle Point            NY       19               Repair Exterior of Building to Tuck-         $1,900,000             $--         $1,900,000
                                                               Point and Seal Masonry
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Montrose                NY       19               Replace Steam Lines, Phase 2                 $3,450,000              $_         $3,450,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Castle Point            NY       19               Renovate for a Modern Community                $510,000             $--           $510,000
                                                               Living Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Castle Point            NY       19               Replace Fan Coils, Phase 1                     $850,000              $_           $850,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Castle Point            NY       19               Replace Roofs on Buildings 8 & 9             $1,000,000             $--         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Castle Point            NY       19               Replace Water Main Lines                     $2,500,000             $--         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Castle Point            NY       19               Replace Steam Traps                            $475,000              $_           $475,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Castle Point            NY       19               Install Wind Turbine                            $80,000              $_            $80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3          Castle Point            NY       19               Install Utility Metering                       $380,000         $40,000           $340,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3           Castle Point            NY       19               Replace Medical Gas Systems in                 $525,000             $--           $525,000
                                                               Patient Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Abate Asbestos in Sub Basement, Phase        $5,400,000             $--         $5,400,000
                                                               2
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Renovate and Upgrade Dental Suite            $3,700,000             $--         $3,700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Renovate and Expand Prosthetics              $1,050,000             $--         $1,050,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Albany                  NY       21               Replace Windows                              $1,100,000        $100,000         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Repair Warehouse Loading Docks                 $350,000             $--           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Renovate Post Anesthesia Care Unit             $997,500             $--           $997,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Remove Incinerator                             $900,000             $--           $900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Albany                  NY       21               Demolish Buildings 6, 7, 11 and 35             $900,000             $--           $900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Albany                  NY       21               Implement Selected Conservation              $2,400,000              $_         $2,400,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Rome                    NY       24               Renovate and Modernize the Outpatient          $250,000             $--           $250,000
                                                               Clinic, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Rome                    NY       24               Replace and Upgrade Air Handling               $775,000              $_           $775,000
                                                               Unit's
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Renovate 8th Floor for Community               $200,000             $--           $200,000
                                                               Living Center, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Replace Roofs                                  $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Provide Emergency Power to Bldg 16             $100,000             $--           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Renovate for Cardiology Suite                  $335,000             $--           $335,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Renovate Outpatient Exam Rooms                 $570,000             $--           $570,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Upgrade Electrical Panel Boards                $635,000             $--           $635,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Syracuse                NY       25               Upgrade the Electrical Distribution            $190,000             $--           $190,000
                                                               System by Adding a Power Monitoring
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Syracuse                NY       25               Replace Existing Chillers                    $2,000,000              $_         $2,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Syracuse                NY       25               Upgrade Light Fixtures to Energy               $580,000              $_           $580,000
                                                               Efficient Fixtures
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Syracuse                NY       25               Implement Selected Conservation              $2,400,000              $_         $2,400,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Batavia                 NY       26               Repair and Remove Boiler Plant Bunker          $560,000             $--           $560,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Batavia                 NY       26               Repair Stairs in front of Building 2           $500,000             $--           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Batavia                 NY       26               Renovate Primary Care for Patient              $150,000             $--           $150,000
                                                               Privacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Batavia                 NY       26               Implement Selected Conservation              $2,400,000              $_         $2,400,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Buffalo                 NY       28               Construct Private Inpatient Wards            $3,600,000             $--         $3,600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Buffalo                 NY       28               Repave Parking Lot for Patients                $700,000             $--           $700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Buffalo                 NY       28               Expand Dialysis Clinic                         $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Buffalo                 NY       28               Replace Domestic Water Booster Pumps           $560,000             $--           $560,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Buffalo                 NY       28               Repair Warehouse Roof                          $425,000             $--           $425,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Buffalo                 NY       28               Implement Selected Conservation              $2,400,000              $_         $2,400,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Buffalo                 NY       28               Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Bath                    NY       29               Replace Heating, Ventilation and Air         $1,956,000        $106,000         $1,850,000
                                                               Conditioning in Building 92
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Bath                    NY       29               Replace Window Heating, Ventilation          $1,084,000        $174,000           $910,000
                                                               and Air Conditioning units with
                                                               Central Air for Bldg 33
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Replace Elevator in Bldg 33                    $350,000             $--           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Canandaigua             NY       29               Design for a new Fire Alarm System              $75,000             $--            $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Replace and Upgrade the Electric               $300,000         $40,000           $260,000
                                                               Distribution System in Bldg 41
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Bath                    NY       29               Replace and Upgrade Heating,                   $200,000         $20,000           $180,000
                                                               Ventilation and Air Conditioning in
                                                               Bldg 39
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Canandaigua             NY       29               Upgrade and Modernize Patient                  $200,000             $--           $200,000
                                                               Corridors in Buildings 3 and 8
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Replace and Upgrade the Electrical           $2,500,000        $250,000         $2,250,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Renovate for Women's Health Center             $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Canandaigua             NY       29               Replace and Upgrade the Panic Alarm            $450,000             $--           $450,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Bath                    NY       29               Upgrade and Replace the Heating,               $750,000              $_           $750,000
                                                               Ventilation and Air Conditioning and
                                                               Fire Suppression System
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Canandaigua             NY       29               Replace Sanitary Sewer, B-36 & B-12            $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Relocate the Hospice and Gero-                 $750,000             $--           $750,000
                                                               Pyschiatric Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Bath                    NY       29               Replace Main Drainage System for Bldg        $1,800,000         $30,000         $1,770,000
                                                               76
--------------------------------------------------------------------------------------------------------------------------------------------------------
2           Canandaigua             NY       29               Upgrade and Repair Fuel Tanks                  $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Canandaigua             NY       29               Implement Selected Conservation              $2,400,000              $_         $2,400,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*2          Bath                    NY       29               Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--New York                            $110,797,683      $1,235,000       $109,562,683
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Cincinnati              OH       1                Expand Cath Lab                              $2,200,000             $--         $2,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Cincinnati              OH       1                Upgrade and Repair Exterior Facade           $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*10         Cincinnati              OH       1                Implement Selected Conservation              $2,500,000              $_         $2,500,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Dayton                  OH       3                Renovate Nursing Home Care Unit into         $2,750,000             $--         $2,750,000
                                                               a Community Living Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Dayton                  OH       3                Renovate Domiciliary                         $1,100,000             $--         $1,100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*10         Dayton                  OH       3                Implement Selected Conservation              $2,500,000              $_         $2,500,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*10         Chillicothe             OH       7                Repair Steam Lines                           $2,500,000              $_         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Chillicothe             OH       7                Replace Elevators                            $1,200,000             $--         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Chillicothe             OH       7                Renovate Physical Therapy                    $1,200,000             $--         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Chillicothe             OH       7                Renovate Basement                              $680,000             $--           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*10         Chillicothe             OH       7                Implement Selected Conservation              $2,500,000              $_         $2,500,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Cleveland               OH       11               Renovate Surgery                             $8,500,000             $--         $8,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Cleveland               OH       11               Renovate Elevator Lobby and Main             $4,913,331             $--         $4,913,331
                                                               Lobby
--------------------------------------------------------------------------------------------------------------------------------------------------------
10          Cleveland               OH       11               Renovate Canteen and Education               $3,500,000             $--         $3,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*10         Cleveland               OH       11               Implement Selected Conservation              $2,500,000              $_         $2,500,000
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Ohio                                 $39,643,331             $--        $39,643,331
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Muskogee                OK       2                Expand Parking Lot 12                          $550,000             $--           $550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Muskogee                OK       2                Replace Generators 26 & 46                   $1,815,000             $--         $1,815,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Muskogee                OK       2                Expand Parking Lot 14                          $330,000             $--           $330,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Muskogee                OK       2                Repair/Resurface Roads and Parking             $699,000             $--           $699,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Oklahoma City           OK       5                Replace Morgue Heating, Ventilation             $80,000              $_            $80,000
                                                               and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Oklahoma City           OK       5                Renovate for Primary Care Clinics              $530,000             $--           $530,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Oklahoma City           OK       5                Renovate for Medical Record Storage            $264,000             $--           $264,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Oklahoma City           OK       5                Renovate Police Training Room                  $276,000             $--           $276,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Oklahoma City           OK       5                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Oklahoma                              $4,554,000             $--         $4,554,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Portland                OR       1                Install New Chiller for Ambulatory             $100,000              $_           $100,000
                                                               Surgery
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate Lab                                   $465,000             $--           $465,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Remodel Surgical Waiting Area                  $110,000             $--           $110,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Remodel Patient Exam Rooms                     $290,000             $--           $290,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate for installation of New SPEC          $100,000             $--           $100,000
                                                               CT
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Building 100 Expansion Survey for               $25,000             $--            $25,000
                                                               Clinical Care
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate Primary Care Space for                $250,000             $--           $250,000
                                                               Women's Clinic, Building 103
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Upgrade/Repair Paging System, Phase 2          $473,223             $--           $473,223
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Upgrade Nitrogen Farm per Regulation            $95,726             $--            $95,726
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Repair Safety Deficiencies                     $100,000             $--           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate for the installation of Hi-           $150,000             $--           $150,000
                                                               Tech/Hi-Cost Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Construct Retaining Wall for Building          $225,000             $--           $225,000
                                                               16 Parking Lot
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate Basement of Building 16 for           $225,000             $--           $225,000
                                                               additional Exit
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Install Distributed Antenna, Building          $287,889             $--           $287,889
                                                               100, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
20           Portland               OR       1                 Install New PIV Door Locking System           $300,000             $--           $300,000
                                                               per Regulation
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Portland                OR       1                Renovate Operating Room                        $580,000             $--           $580,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          White City              OR       2                Repair/Resurface Main Roadways--FCA          $1,203,000         $93,000         $1,110,000
                                                               Correction
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          White City              OR       2                Renovate Building 212                          $495,000             $--           $495,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         White City              OR       2                Renovate Restrooms                             $225,000              $_           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Renovate/Relocate Alzheimer Unit,              $265,000             $--           $265,000
                                                               Building 81
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Upgrade Medical Gas System, Phase 2            $335,000             $--           $335,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Repair/Upgrade Nurse Call System for           $475,000        $125,000           $350,000
                                                               Patient Safety
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Repair/Replace Sewer and Storm Lines           $410,000         $40,000           $370,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Install Security Upgrades for Surgery          $163,000         $20,000           $143,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Roseburg                OR       4                Install Elevator Handrail and Replace           $55,500             $--            $55,500
                                                               Roof, Building 1 Elevator Tower
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Oregon                                $7,403,338        $278,000         $7,125,338
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Philadelphia            PA       1                Renovate Emergency Department                $4,750,000             $--         $4,750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Philadelphia            PA       1                Construct a New Computer Room                  $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Philadelphia            PA       1                Upgrade the Boiler Plant Controls              $466,440              $_           $466,440
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Coatesville             PA       1                Renovate Pharmacy                            $1,740,000         $40,000         $1,700,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Philadelphia            PA       1                Upgrade Behavioral Health Clinic             $1,150,000             $--         $1,150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Coatesville             PA       1                Upgrade Boiler Plant Controls                  $410,000              $_           $410,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Coatesville             PA       1                Upgrade and Replace Electrical               $1,750,000             $--         $1,750,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Philadelphia            PA       1                Renovate and Modernize the Dental Lab           $35,000             $--            $35,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Erie                    PA       3                Correct Boiler Plant Deficiencies              $466,440              $_           $466,440
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Upgrade and Renovate the Electrical          $2,556,000             $--         $2,556,000
                                                               Distribution Panels
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Butler                  PA       3                Replace Boilers                                $400,000              $_           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Improve Site Drainage                        $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Replace and Upgrade Electrical               $2,500,000             $--         $2,500,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Renovate Supply, Processing and                $126,000             $--           $126,000
                                                               Distribution for ETO Sterilizer
                                                               Installation
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Butler                  PA       3                Replace Windows                                $200,000              $_           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Assess the Water Tower Renovation               $50,000             $--            $50,000
                                                               Needs
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Butler                  PA       3                Renovate for Diagnostics                     $4,300,000             $--         $4,300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Pittsburgh              PA       4                Upgrade Emergency Power Distribution         $6,901,950             $--         $6,901,950
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Pittsburgh              PA       4                Renovate Surgical Intensive Care Unit        $2,400,000             $--         $2,400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Pittsburgh              PA       4                Replace Main Plumbing System                 $2,200,000             $--         $2,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Altoona                 PA       9                Upgrade and Replace Electrical               $1,470,000             $--         $1,470,000
                                                               Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Altoona                 PA       9                Upgrade and Replace Security Systems           $330,000             $--           $330,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Altoona                 PA       9                Upgrade Heating, Ventilation and Air            $51,000              $_            $51,000
                                                               Conditioning Deficiencies
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Altoona                 PA       9                Renovate and Modernize Outpatient              $110,000             $--           $110,000
                                                               Areas for American Disability Act
                                                               Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Altoona                 PA       9                Renovate Canteen                               $825,000             $--           $825,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Wilkes-Barre            PA       10               Renovate the Cath Lab                          $315,000             $--           $315,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Lebanon                 PA       17               Construct New Consolidated                   $4,100,000             $--         $4,100,000
                                                               Rehabilitation Services
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Lebanon                 PA       17               Renovate Patient Check-in and                $3,300,000             $--         $3,300,000
                                                               Appointment Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Lebanon                 PA       17               Install Chiller                                $250,000              $_           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Lebanon                 PA       17               Renovate Bathrooms for American              $1,570,000             $--         $1,570,000
                                                               Disability Act Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Pennsylvania                         $46,472,830         $40,000        $46,432,830
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Renovate Outpatient Care                     $1,432,043             $--         $1,432,043
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Repair and Upgrade Electrical                $3,640,403             $--         $3,640,403
                                                               Substation
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Install New Emergency Generator              $1,303,682             $--         $1,303,682
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Install Oxygen System                          $172,104             $--           $172,104
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          San Juan                PR       At Large         Replace Cooling Towers                         $383,741              $_           $383,741
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Replace Community Living Center                $390,390             $--           $390,390
                                                               Elevators
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Study to Address Life Safety Issues            $126,500             $--           $126,500
                                                               on Main Water Distribution System
--------------------------------------------------------------------------------------------------------------------------------------------------------
8           San Juan                PR       At Large         Replace Sanitary System                        $419,812             $--           $419,812
--------------------------------------------------------------------------------------------------------------------------------------------------------
*8          San Juan                PR       At Large         Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Puerto Rico                           $7,878,675             $--         $7,878,675
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Providence              RI       1                Add Heating, Ventilation and Air             $2,375,000        $225,000         $2,150,000
                                                               Conditioning for Inpatient Wards
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Providence              RI       1                Repair and Upgrade Electrical Wiring,        $1,650,000             $--         $1,650,000
                                                               Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           Providence              RI       1                Repair and Replace the Exterior              $5,600,000             $--         $5,600,000
                                                               Facade
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          Providence              RI       1                Convert High Pressure Steam Boilers          $2,350,000        $200,000         $2,150,000
                                                               to Low Pressure Steam Boilers, Phase
                                                               2
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Rhode Island                         $11,975,000        $425,000        $11,550,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Charleston              SC       1                Renovate Specialty Clinic                    $2,037,047             $--         $2,037,047
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Columbia                SC       2                Renovate for Handicap Access                   $917,605             $--           $917,605
--------------------------------------------------------------------------------------------------------------------------------------------------------
7           Columbia                SC       2                Renovate for Primary Care                    $1,700,000        $200,000         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--South Carolina                        $4,654,652        $200,000         $4,454,652
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Elevator Upgrade                             $1,200,000             $--         $1,200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Renovate Pharmacy Consultation Rooms           $502,476             $--           $502,476
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Renovate Dental Suites                         $326,181             $--           $326,181
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Construct Lead Lined Wall                       $90,000             $--            $90,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Tuck-Pointing Study                             $40,000             $--            $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Renovate for Mental Health Space               $110,000             $--           $110,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Sioux Falls             SD       At Large         Renovate/Upgrade Acute Patient Care            $500,000             $--           $500,000
                                                               Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Renovate Quality Management Space in           $275,000             $--           $275,000
                                                               Building 148
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Renovate/Upgrade Existing Police               $225,000             $--           $225,000
                                                               Office
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ft. Meade               SD       At Large         Replace IRM A/C Systems                        $200,000              $_           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Upgrade Security Systems for Medical           $460,000             $--           $460,000
                                                               Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Renovate Supply, Processing and                $150,000             $--           $150,000
                                                               Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Replace Corridor Floor Tile                    $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Renovate Nursing Home Care Unit                $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Repair Historic Buildings on Campus            $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ft. Meade               SD       At Large         Replace Hospital Windows                       $250,000              $_           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ft. Meade               SD       At Large         Heating, Ventilation and Air                    $50,000              $_            $50,000
                                                               Conditioning Repairs Building 113
                                                               and 148
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Replace/Update Hospital Interior                $50,000             $--            $50,000
                                                               Finishes
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ft. Meade               SD       At Large         Renovate Mental Health Outpatient              $450,000             $--           $450,000
                                                               Clinic, Phase 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ht Springs              SD       At Large         Remodel Primary Care for Patient               $665,000             $--           $665,000
                                                               Privacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ht Springs              SD       At Large         Replace Heating, Ventilation and Air           $610,000              $_           $610,000
                                                               Conditioning System Building 4
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ht Springs              SD       At Large         Road Replacement, Phase 1                      $400,000             $--           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ht Springs              SD       At Large         Replace Boiler 2                               $100,000              $_           $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*23         Ht Springs              SD       At Large         Replace Hospital Steam Lines and                $40,000              $_            $40,000
                                                               Regulators
--------------------------------------------------------------------------------------------------------------------------------------------------------
23          Ht Springs              SD       At Large         Repair/Upgrade Water Line for                  $110,000             $--           $110,000
                                                               Quarters
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--South Dakota                          $7,503,657             $--         $7,503,657
--------------------------------------------------------------------------------------------------------------------------------------------------------
*EN         TBD                     TBD      TBD              Construct a Solar Photovoltaic System        $1,486,000              $_         $1,486,000
                                                               at up to 8 Locations\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*EN         TBD                     TBD      TBD              Construct Wind Turbines for up to 6          $6,000,000              $_         $6,000,000
                                                               Locations\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*EN         TBD                     TBD      TBD              Implement Direct Geothermal at up to         $5,000,000              $_         $5,000,000
                                                               5 Sites
--------------------------------------------------------------------------------------------------------------------------------------------------------
*EN         TBD                     TBD      TBD              Install Advanced Meters to Meet            $110,000,000     $13,000,000        $97,000,000
                                                               Metering Mandates\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*EN         TBD                     TBD      TBD              Construct Renewably Fueled                  $38,636,000      $7,400,000        $31,236,000
                                                               Cogeneration Systems at up to 9
                                                               Sites\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--TBD                                 $161,122,000     $20,400,000       $140,722,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Renovate Administrative Space                $1,120,062         $99,062         $1,021,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Construct New Electrical Distribution          $950,000             $--           $950,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Renovate Canteen                               $400,000         $36,000           $364,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Renovate Pharmacy                              $400,000         $36,000           $364,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Replace Nurses Stations                        $336,065         $23,000           $313,065
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Mountain Home           TN       1                Replace Switch Board                           $549,000             $--           $549,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Mountain Home           TN       1                Repair and Upgrade Site Lighting               $176,000         $16,000           $160,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Mountain Home           TN       1                Evaluate Feasibility of a Wind                  $50,000             $--            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Nashville               TN       5                Renovate Research Lab                        $4,303,000        $461,000         $3,842,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Nashville               TN       5                Renovate Inpatient Ward                      $1,766,000        $140,000         $1,626,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Nashville               TN       5                Repair and Replace Exterior                  $1,000,000             $--         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Murfreesboro            TN       6                Upgrade Electrical Distribution              $3,560,000             $--         $3,560,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Murfreesboro            TN       6                Construct New Pharmacy Code                  $1,826,000        $196,000         $1,630,000
                                                               Requirements
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Murfreesboro            TN       6                Modernize and Upgrade Outpatient Area        $1,000,000             $--         $1,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Memphis                 TN       9                Renovate for Cat Scanner and                   $969,973             $--           $969,973
                                                               Ultrasound
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Memphis                 TN       9                Repair and Upgrade Medical Gas System          $668,000             $--           $668,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Memphis                 TN       9                Construct Intensive Care Unit Family           $280,000             $--           $280,000
                                                               Waiting Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Memphis                 TN       9                Replace Water Cooled Condensers                $246,000             $--           $246,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Tennessee                            $19,600,100      $1,007,062        $18,593,038
--------------------------------------------------------------------------------------------------------------------------------------------------------
*17         Bonham                  TX       4                Install New Heating, Ventilation and         $2,000,000              $_         $2,000,000
                                                               Air Conditioning System and Upgrade
                                                               Electrical in Building 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Houston                 TX       9                Repair/Replace Elevator Controls and           $850,000             $--           $850,000
                                                               Motor
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Houston                 TX       9                Site Prep/Renovation for Supply,               $500,000             $--           $500,000
                                                               Processing and Distribution
                                                               Equipment Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
16          Houston                 TX       9                Renovate Existing Parking Lot                $1,600,000             $--         $1,600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*16         Houston                 TX       9                Upgrade Heating, Ventilation and Air         $3,250,000              $_         $3,250,000
                                                               Conditioning Controls
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Replace/Upgrade Fire Alarm Panels              $560,000             $--           $560,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Amarillo                TX       13               4th Floor Heating, Ventilation and             $495,500         $50,000           $445,500
                                                               Air Conditioning Modifications
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Repair/Upgrade Water and Fire                  $400,000         $40,000           $360,000
                                                               Sprinkler System
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Renovate Nursing Home Care Unit                $750,000         $75,000           $675,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Renovate Patient Rooms for Isolation           $305,000         $30,000           $275,000
                                                               Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Renovate Nursing Home                          $900,000             $--           $900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Repair/Upgrade Flooring in Patient             $638,000             $--            $64,000
                                                               Care Areas of Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Renovate Intensive Care Unit Storage           $550,000             $--            $55,000
                                                               and Patient/Family Waiting Area
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Amarillo                TX       13               Replace Plumbing in Intensive Care             $275,000             $--            $28,000
                                                               Unit
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Amarillo                TX       13               Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Amarillo                TX       13               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         El Paso                 TX       16               Replace Domestic and Heating Water             $825,000         $72,000           $753,000
                                                               Valves
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          El Paso                 TX       16               Renovate Primary Care Space for                $280,000             $--           $280,000
                                                               Behavioral Health
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         El Paso                 TX       16               Repair/Replace Site Lighting and                $27,250          $2,250            $25,000
                                                               Ballasts_FCA Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         El Paso                 TX       16               Repair/Replace Damaged Heating,                $239,000         $17,000           $222,000
                                                               Ventilation and Air Conditioning
                                                               Ducts
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          El Paso                 TX       16               Convert Site to Desert Xeriscape               $550,000         $50,000           $500,000
                                                               Landscaping
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          El Paso                 TX       16               Renovate Patient Care Areas on 3rd             $220,000         $20,000           $200,000
                                                               Floor, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         El Paso                 TX       16               Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*17         Waco                    TX       17               Replace Heating, Ventilation and Air         $2,500,000              $_         $2,500,000
                                                               Conditioning, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Relocate Canteen from Building 8 to            $500,000             $--           $500,000
                                                               Building 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Repair/Upgrade Electrical Feeder               $760,000             $--           $760,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Renovate/Upgrade Existing Water Tower          $745,081             $--           $745,081
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Improve/Enhance Storm Water Drainage           $800,000             $--           $800,000
                                                               for Facility--FCA Correction
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Repair/Replace Roads, Phase 2                  $900,000             $--           $900,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*17         Waco                    TX       17               Replace Windows in Building 1                  $747,000              $_           $747,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Waco                    TX       17               Renovate Basement of Building 6 for          $1,000,000             $--         $1,000,000
                                                               Rehabilitation Service
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Asbestos Abatement                             $750,000         $74,000           $676,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Renovate 2nd and 3rd Floors of                 $400,000         $40,000           $360,000
                                                               Building 1 patient care areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Renovate Main Entrance to include              $750,000             $--           $750,000
                                                               asbestos abatement
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Big Spring              TX       19               Repair/Upgrade Steam and Chiller               $694,000         $67,000           $627,000
                                                               Pipes
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Ground Safety and Handicap                     $500,000         $64,000           $436,000
                                                               Accessibility Improvements
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Renovate Canteen in Building 1                 $598,000         $58,000           $540,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Plumbing System Improvements,                  $750,000             $--           $750,000
                                                               Building 1, Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
18          Big Spring              TX       19               Replace/Repair Air, Oxygen, and                $450,000             $--            $45,000
                                                               Vacuum System Piping
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Big Spring              TX       19               Implement Selected Conservation              $1,142,857              $_         $1,142,857
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*18         Big Spring              TX       19               Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          San Antonio             TX       20               Renovate Operating Room #2                     $600,000             $--           $600,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          San Antonio             TX       20               Renovate for New Outpatient Clinic           $3,525,000             $--         $3,525,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*17         Kerrville               TX       21               Upgrade/Repair Boiler Plant, Building          $756,173              $_           $756,173
                                                               19
--------------------------------------------------------------------------------------------------------------------------------------------------------
*17         Kerrville               TX       21               Replace/Upgrade Air Handler Units in         $1,900,050              $_         $1,900,050
                                                               various buildings throughout the
                                                               campus
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Kerrville               TX       21               Replace/Upgrade Roofs on Buildings           $1,184,000             $--         $1,184,000
                                                               11, 18, 46 & 47
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Dallas                  TX       30               Replace Campus Fire Alarm System             $3,753,000             $--         $3,753,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
17          Dallas                  TX       30               Building 2 Ward Renovation for               2,200,000$             $--         $2,200,000
                                                               Patient Privacy
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Texas                                $45,425,625        $659,250        $43,045,375
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Salt Lake City          UT       2                Replace/Repair of Primary Electrical           $750,000         $75,000           $675,000
                                                               Panel for Building 14
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Salt Lake City          UT       2                Replace Chilled Water Distribution             $750,000         $75,000           $675,000
                                                               Line, Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Salt Lake City          UT       2                Expand Fiber and Networking                    $750,000             $--           $750,000
                                                               Capability, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Salt Lake City          UT       2                Upgrade Electrical Distribution                $750,000         $75,000           $675,000
                                                               Substation
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Salt Lake City          UT       2                Repair/Upgrade Domestic Water                  $750,000         $75,000           $675,000
                                                               Distribution, Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Salt Lake City          UT       2                Johnson Control Upgrade/Replacement            $750,000         $75,000           $675,000
                                                               Phase 1 (energy)
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Salt Lake City          UT       2                Evaluate Feasibility of Direct                 $342,857              $_           $342,857
                                                               Geothermal\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Salt Lake City          UT       2                Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Salt Lake City          UT       2                Evaluate Feasibility of a Solar                 $10,000              $_            $10,000
                                                               Photovoltaic System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Utah                                  $4,902,857        $375,000         $4,527,857
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Hampton                 VA       3                Replace Nurse Call                             $715,950             $--           $715,950
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Hampton                 VA       3                Upgrade Fire Alarm Various Buildings         $1,118,500             $--         $1,118,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Hampton                 VA       3                Replace/Upgrade Electrical                   $6,216,000             $--         $6,216,000
                                                               Distribution Systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Richmond                VA       3                Upgrade and Replace Heating,                   $782,000              $_           $782,000
                                                               Ventilation and Air Conditioning
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Richmond                VA       3                Repair Exterior Facing with Caulk and        $1,170,000             $--         $1,170,000
                                                               Sealing
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Richmond                VA       3                Renovate Restrooms                             $650,000              $_           $650,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salem                   VA       6                Renovate for Environmental Compliance          $679,600             $--           $679,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salem                   VA       6                Repair and Replace Elevators                 $1,567,720             $--         $1,567,720
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Salem                   VA       6                Replace Steam Piping, Phase 2                  $723,243              $_           $723,243
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Salem                   VA       6                Replace Fire Alarm System                    $1,257,000             $--         $1,257,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Salem                   VA       6                Replace Light Fixtures                         $487,000              $_           $487,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Salem                   VA       6                Evaluate Feasibility of a Wind                  $50,000              $_            $50,000
                                                               Turbine\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Virginia                             $15,417,013             $--        $15,417,013
--------------------------------------------------------------------------------------------------------------------------------------------------------
1           White River Junction    VT       At Large         Upgrade Elevators                            $1,500,000             $--         $1,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          White River Junction    VT       At Large         Upgrade Heating, Ventilation and Air         $1,921,125        $180,000         $1,741,125
                                                               Conditioning in Building 1, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1          White River Junction    VT       At Large         Construct a Renewably Fueled                 $5,675,531         $31,531         $5,644,000
                                                               Cogeneration System\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Vermont                               $9,096,656        $211,531         $8,885,125
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Vancouver               WA       3                Install New Boilers                            $400,000              $_           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Vancouver               WA       3                Repair/Install TV and Radio in                 $225,000             $--           $225,000
                                                               Patient Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Spokane                 WA       5                Replace/Upgrade Generators--FCA              $3,300,000             $--         $3,300,000
                                                               Correction
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Renovate Supply, Processing and                $885,000             $--           $885,000
                                                               Distribution in Building 68
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Spokane                 WA       5                Replace/Upgrade Heating, Ventilation           $158,865              $_           $158,865
                                                               and Air Conditioning in Building 32
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Install Grease Trap for Canteen                $212,000             $--           $212,000
                                                               Kitchen, Building 75
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Replace Elevator, Repair Safety                $485,103             $--           $485,103
                                                               Deficiencies, Building 69--FCA
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                FCA--Replace Elevator B68                      $404,500         $29,279           $375,221
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Spokane                 WA       5                Repair/Upgrade Electrical                       $75,000             $--            $75,000
                                                               Distribution
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Replace Elevator, Building 80                  $404,520         $41,503           $363,017
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Spokane                 WA       5                Repair/Replace Heating, Ventilation             $75,000              $_            $75,000
                                                               and Air Conditioning Systems in
                                                               Building 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Walla Walla             WA       5                Correct Steam Distribution                     $221,663              $_           $221,663
                                                               Systems_FCA Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Spokane                 WA       5                Replace/Upgrade Existing High Voltage        $1,875,000         $75,000         $1,800,000
                                                               Substation
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Walla Walla             WA       5                Replace Boiler Deaerator Tank and              $170,000         $53,762           $116,238
                                                               Boiler Safety Devices
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Spokane                 WA       5                FCA--Upgrade Canteen Dining                    $190,000         $15,000           $175,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Enhance Outpatient Security                    $204,464         $58,688           $145,776
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Facility Asbestos Survey to ensure              $20,000             $--            $20,000
                                                               Compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Spokane                 WA       5                Install new Heating, Ventilation and           $660,000              $_           $660,000
                                                               Air Conditioning System
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Spokane                 WA       5                Community Living Center Renovation              $26,000             $--            $26,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Conduct Facility Lead Paint Survey to           $30,000             $--            $30,000
                                                               ensure compliance
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Walla Walla             WA       5                Paint water tower--FCA Correction              $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*20         Seattle                 WA       7                Replace Heating, Ventilation and Air           $618,000              $_           $618,000
                                                               Conditioning in Building 13
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate/Expand Prosthetics Clinic,            $327,000             $--           $327,000
                                                               Building 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate for installation of MRI               $168,000             $--           $168,000
                                                               Replacement
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate for Pulmonary Outpatient              $500,000             $--           $500,000
                                                               Clinic
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate Basement for Lab, to include        $1,600,000             $--         $1,600,000
                                                               Morgue and Hematology, Phase I--FCA
                                                               Corrections
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Remodel Outpatient Pharmacy for                $300,000             $--           $300,000
                                                               Patient Privacy and Security
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Repair/Install Grease Traps for                $100,000             $--           $100,000
                                                               Dietetics Kitchen
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate for Installation of Access            $299,000             $--           $299,000
                                                               Control System
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Upgrade Traffic Circle for Security            $495,000             $--           $495,000
                                                               Enhancements
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Repair/Upgrade Dumbwaiter for Supply,          $540,000             $--           $540,000
                                                               Processing and Distribution and
                                                               Surgery
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate Emergency Room                        $596,000             $--           $596,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate existing Canteen for Chapel,          $660,000             $--           $660,000
                                                               Building 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate Old Emergency Room for              $2,000,000             $--         $2,000,000
                                                               Musculo-Skeletal Specialty Care
                                                               Clinic
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Relocate Canteen Food Service to               $842,000             $--           $842,000
                                                               Basement Bldg. 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Relocate Canteen Retail Store to               $426,000             $--           $426,000
                                                               Basement Building 100
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          Seattle                 WA       7                Renovate Existing Fiscal Space for             $681,000             $--           $681,000
                                                               Education Offices
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Renovate Outpatient Pharmacy for               $260,000             $--           $260,000
                                                               Patient Privacy/Security
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Renovate/Expand Gold Clinic, Building          $100,000             $--           $100,000
                                                               81
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Upgrade Security/Rekey Locks at                $213,000             $--           $213,000
                                                               American Lake
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Renovate for New Dispatch Room in              $299,000             $--           $299,000
                                                               Building 19
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Renovate Warehouse for Medical               $1,100,000             $--         $1,100,000
                                                               Records, Building 19
--------------------------------------------------------------------------------------------------------------------------------------------------------
20          American Lake           WA       9                Renovate Building 85 for Eye Clinic,           $760,000             $--           $760,000
                                                               Compensation and Pension Exam
                                                               Program and Mental Health Research
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Washington                           $23,206,115        $273,232        $22,932,883
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Madison                 WI       2                Renovate Research                            $2,750,000             $--         $2,750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Madison                 WI       2                Renovate and Modernize Flooring and            $475,000             $--           $475,000
                                                               Walls
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Madison                 WI       2                Renovate Clinical Space                        $430,000             $--           $430,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Replace Medical Gas System                     $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Construct Parking Lot & Pave Gravel            $550,000             $--           $550,000
                                                               Lots
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Renovate and Expand Rehabilitation           $1,575,000             $--         $1,575,000
                                                               Service
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Tomah                   WI       3                Replace Windows                                $350,000              $_           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Tomah                   WI       3                Install Central Air Conditioning               $225,000              $_           $225,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Renovate Urgent Care                         $1,625,000         $50,000         $1,575,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Replace Nurse Call System                      $350,000             $--           $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Upgrade Electrical Distribution                $250,000             $--           $250,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Upgrade Electrical Distribution                $275,000             $--           $275,000
                                                               System
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Tomah                   WI       3                Renovate for Mental Health Clinics             $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace and Upgrade Fire Alarm System          $262,305             $--           $262,305
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Fire Alarm System                      $389,681             $--           $389,681
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Fire Alarm System                      $683,014             $--           $683,014
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Fire Alarm System                    $1,516,013             $--         $1,516,013
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Fire Alarm System                      $604,957             $--           $604,957
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Roof                                   $200,000             $--           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Roof                                   $499,795             $--           $499,795
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Operating Room Roofs                   $120,500             $--           $120,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
*12         Milwaukee               WI       4                Replace Heating, Ventilation and Air           $211,054              $_           $211,054
                                                               Conditioning Condenser
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Replace Roof                                   $499,795             $--           $499,795
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Re-insulate Roof                               $111,060             $--           $111,060
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Repair and Upgrade Exterior                     $25,000             $--            $25,000
                                                               Modification
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Install Smoke Barrier Walls                    $203,914             $--           $203,914
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Milwaukee               WI       4                Install Smoke Barrier Walls                    $152,936             $--           $152,936
--------------------------------------------------------------------------------------------------------------------------------------------------------
12          Madison                 WI       16               Renovate Clinical Space                      $3,040,000             $--         $3,040,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Wisconsin                            $17,975,024         $50,000        $17,925,024
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Clarksburg              WV       1                Renovate Emergency Room Area                   $575,000             $--           $575,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*4          Clarksburg              WV       1                Upgrade and Replace Boiler Plant               $466,440              $_           $466,440
                                                               Equipment
--------------------------------------------------------------------------------------------------------------------------------------------------------
4           Clarksburg              WV       1                Renovate Dental Lab                            $150,000             $--           $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Martinsburg             WV       2                Replace Heating, Ventilation and Air         $2,800,000              $_         $2,800,000
                                                               Conditioning in Building 501B
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Martinsburg             WV       2                Replace Main Transformer                       $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Martinsburg             WV       2                Replace Heating Plant Surge Tank               $200,000              $_           $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Martinsburg             WV       2                Replace Patient Wandering System               $300,000             $--           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Martinsburg             WV       2                Replace Nurse Call/Code Blue System            $750,000             $--           $750,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Martinsburg             WV       2                Relocate the Mailroom to Mitigate              $475,000             $--           $475,000
                                                               Security Vulnerability
--------------------------------------------------------------------------------------------------------------------------------------------------------
5           Martinsburg             WV       2                Upgrade Environmental Monitoring             $2,500,000             $--         $2,500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5          Martinsburg             WV       2                Implement Selected Conservation              $3,333,333              $_         $3,333,333
                                                               Measures\1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
*6          Beckley                 WV       3                Replace Steam and Plumbing Line                $980,000              $_           $980,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
6           Beckley                 WV       3                Modernize Patient Areas                        $665,000             $--           $665,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Huntington              WV       3                Replace Air Handling Units                   $4,000,000              $_         $4,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*9          Huntington              WV       3                Replace Steam Distribution System            $1,500,000        $160,000         $1,340,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Huntington              WV       3                Renovate Prosthetics & Rehab Medicine          $447,000         $47,000           $400,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Huntington              WV       3                Renovate and Modernize Inpatient Ward          $250,000             $--           $250,000
                                                               Finishes
--------------------------------------------------------------------------------------------------------------------------------------------------------
9           Huntington              WV       3                Upgrade Outpatient Waiting                     $250,000             $--           $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--West Virginia                        $20,391,773        $207,000        $20,184,773
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Renovate Surgery to include two                $900,000             $--           $900,000
                                                               additional Operating Rooms
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Sheridan                WY       At Large         Replace Secondary Electrical                   $550,000         $50,000           $500,000
                                                               Distribution, Phase 1
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Cheyenne                WY       At Large         Replace Heating, Ventilation and Air           $750,000         $70,000           $680,000
                                                               Conditioning Controls, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Sheridan                WY       At Large         Replace Water Tower Interior Coating           $330,000         $30,000           $300,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Repair/Upgrade interior finishes,              $750,000         $70,000           $680,000
                                                               Phase 3
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Sheridan                WY       At Large         Repair/Replace Sanitary Sewer System           $650,000        $150,000           $500,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Repair/Replace Roads, Sidewalks, and           $750,000         $70,000           $680,000
                                                               Parking Lots, Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Repair/Upgrade Exterior Finishes               $750,000         $70,000           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Sheridan                WY       At Large         Expand Parking Lots to meet patient            $820,000         $70,000           $750,000
                                                               and visitor demand
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Cheyenne                WY       At Large         Repair/Upgrade Heating, Ventilation            $750,000         $70,000           $680,000
                                                               and Air Conditioning
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Expand Emergency Power                         $750,000         $70,000           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Cheyenne                WY       At Large         Install Renewable Energy Systems,              $750,000         $70,000           $680,000
                                                               Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
*19         Sheridan                WY       At Large         Energy Reduction Project Phase 1               $750,000         $70,000           $680,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
19          Cheyenne                WY       At Large         Repair/Upgrade Interior Finishes,              $560,000         $60,000           $500,000
                                                               Phase 2
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Total--Wyoming                               $9,810,000        $920,000         $8,890,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
            ......................  .......  ...............  Cumulative Total                         $1,136,567,218     $37,918,467    $1,085,672,6522
--------------------------------------------------------------------------------------------------------------------------------------------------------
1 Projects are provided for with VISN wide contracts.
2 The total funding for projects included in these plans is slightly more than the ARRA funds provided in order to account for the potential slippage of
  projects due to unforeseen technical issues.



           FY 09 Veterans Health Administration Non-Recurring Maintenance (NRM)/ Energy ARRA Spending
                              Veterans Health Administration ARRA Spending Category
----------------------------------------------------------------------------------------------------------------
                                                                  All Energy
                                        Qty        Totals           Related        Renewable      Percentage of
                                                                   Projects         Energy            Total
----------------------------------------------------------------------------------------------------------------
Renewable Energy (Solar, Wind,           62        $64,435,000     $64,435,000     $64,435,000                6%
 Biomass, Geothermal)
----------------------------------------------------------------------------------------------------------------
Heating, Ventilation, and Air           170       $161,449,166    $161,449,166              --               15%
 Conditioning
----------------------------------------------------------------------------------------------------------------
Roads, Paving, and Grounds Projects      42        $37,627,919              --              --                3%
----------------------------------------------------------------------------------------------------------------
Safety, Security and Fire Alarms        102       $109,614,712              --              --               10%
----------------------------------------------------------------------------------------------------------------
Energy Conservation                      56        $75,643,849     $75,643,849              --                7%
----------------------------------------------------------------------------------------------------------------
Interior Renovation                     276       $299,492,360              --              --               28%
----------------------------------------------------------------------------------------------------------------
Exterior Renovations                     47        $34,157,722              --              --                3%
----------------------------------------------------------------------------------------------------------------
ADA Accessibility                        45        $43,617,198              --              --                4%
----------------------------------------------------------------------------------------------------------------
Building Infrastructure                 106       $141,089,603              --              --               13%
----------------------------------------------------------------------------------------------------------------
Metering                                  3        $97,580,000     $97,580,000              --                9%
----------------------------------------------------------------------------------------------------------------
Other                                    47        $20,965,123              --              --                2%
----------------------------------------------------------------------------------------------------------------
Total\1\                                956     $1,085,672,652    $399,108,015     $64,435,000              100%
----------------------------------------------------------------------------------------------------------------
1 The total funding for projects included in these plans is slightly more than the ARRA funds provided in order
  to account for the potential slippage of projects due to unforeseen.


  [GRAPHIC] [TIFF OMITTED] T8420A.001
  

  FY 09 Veterans Health Administration Non-Recurring Maintenance (NRM)/
                    Energy ARRA Spend Plan--By State
                              AARA Overview
------------------------------------------------------------------------
                                          Number of
                 State                    Projects       ARRA Funding
------------------------------------------------------------------------
AK                                                4             $600,000
------------------------------------------------------------------------
AL                                               14          $17,230,490
------------------------------------------------------------------------
AR                                                9          $14,380,000
------------------------------------------------------------------------
AZ                                               25          $19,868,571
------------------------------------------------------------------------
CA                                               99          $92,701,199
------------------------------------------------------------------------
CO                                               12           $8,035,000
------------------------------------------------------------------------
CT                                                4          $10,119,075
------------------------------------------------------------------------
DC                                                8          $15,393,333
------------------------------------------------------------------------
DE                                                5           $8,066,440
------------------------------------------------------------------------
FL                                               46          $34,996,726
------------------------------------------------------------------------
GA                                               13          $15,193,861
------------------------------------------------------------------------
HI                                                4             $850,000
------------------------------------------------------------------------
IA                                               15           $7,690,201
------------------------------------------------------------------------
ID                                                5           $6,092,857
------------------------------------------------------------------------
IL                                               43          $63,555,749
------------------------------------------------------------------------
IN                                                3           $4,866,000
------------------------------------------------------------------------
KS                                                9           $9,190,000
------------------------------------------------------------------------
KY                                               10          $11,441,000
------------------------------------------------------------------------
LA                                                8           $8,265,000
------------------------------------------------------------------------
MA                                               11          $24,078,000
------------------------------------------------------------------------
MD                                               29          $19,810,333
------------------------------------------------------------------------
ME                                                3          $13,260,493
------------------------------------------------------------------------
MI                                               17          $24,050,224
------------------------------------------------------------------------
MN                                               36          $16,637,000
------------------------------------------------------------------------
MO                                               14          $24,098,400
------------------------------------------------------------------------
MS                                                7          $12,440,000
------------------------------------------------------------------------
MT                                                7           $4,252,857
------------------------------------------------------------------------
NC                                               17          $21,864,000
------------------------------------------------------------------------
ND                                                4           $3,266,230
------------------------------------------------------------------------
NE                                               11           $7,500,000
------------------------------------------------------------------------
NH                                                2           $1,551,500
------------------------------------------------------------------------
NJ                                               16          $14,502,000
------------------------------------------------------------------------
NM                                               12           $4,487,857
------------------------------------------------------------------------
NV                                               12           $5,510,000
------------------------------------------------------------------------
NY                                              104         $109,562,683
------------------------------------------------------------------------
OH                                               15          $39,643,331
------------------------------------------------------------------------
OK                                                9           $4,554,000
------------------------------------------------------------------------
OR                                               25           $7,125,338
------------------------------------------------------------------------
PA                                               30          $46,432,830
------------------------------------------------------------------------
PR                                                9           $7,878,675
------------------------------------------------------------------------
RI                                                4          $11,550,000
------------------------------------------------------------------------
SC                                                3           $4,454,652
------------------------------------------------------------------------
SD                                               25           $7,503,657
------------------------------------------------------------------------
TBD                                               5         $140,722,000
------------------------------------------------------------------------
TN                                               18          $18,593,038
------------------------------------------------------------------------
TX                                               48          $43,045,375
------------------------------------------------------------------------
UT                                                9           $4,527,857
------------------------------------------------------------------------
VA                                               12          $15,417,013
------------------------------------------------------------------------
VT                                                3           $8,885,125
------------------------------------------------------------------------
WA                                               43          $22,932,883
------------------------------------------------------------------------
WI                                               28          $17,925,024
------------------------------------------------------------------------
WV                                               18          $20,184,773
------------------------------------------------------------------------
WY                                               14           $8,890,000
------------------------------------------------------------------------
Total                                           956      $1,085,672,6521
------------------------------------------------------------------------
\1\ The total funding for projects included in these plans is slightly
  more than the ARRA funds provided in order to account for the
  potential slippage of projects due to unforeseen technical issues.



                        FY 2009 Grants for State Extended Care Facilities ARRA Spend Plan
----------------------------------------------------------------------------------------------------------------
                          Location
       ----------------------------------------------                                   Total Grant      ARRA
 VISN                                 Congressional             Project Title               Cost       Funding
               City          State       District
----------------------------------------------------------------------------------------------------------------
18      Phoenix             AZ       4                Facility Renovation, Phase 1             $364         $364
----------------------------------------------------------------------------------------------------------------
18      Tucson              AZ       7                180-Bed NHC (New) & 35                $18,671      $18,671
                                                       Participant ADHC
----------------------------------------------------------------------------------------------------------------
                                                      Total--Arizona                        $19,035      $19,035
----------------------------------------------------------------------------------------------------------------
19      Walsenburg          CO       3                General Renovations                    $2,045       $2,045
----------------------------------------------------------------------------------------------------------------
                                                      Total--Colorado                        $2,045       $2,045
----------------------------------------------------------------------------------------------------------------
1       Rocky Hill          CT       1                Domiciliary Renovations--              $5,397       $5,397
                                                       Buildings 2, 3 and 4
----------------------------------------------------------------------------------------------------------------
                                                      Total--Connecticut                     $5,397       $5,397
----------------------------------------------------------------------------------------------------------------
8       Daytona Beach       FL       7                General Renovation & Facility          $3,250       $3,250
                                                       Upgrade
----------------------------------------------------------------------------------------------------------------
                                                      Total--Florida                         $3,250       $3,250
----------------------------------------------------------------------------------------------------------------
7       Milledgeville       GA       12               Dietary Facility Renovation              $715         $715
----------------------------------------------------------------------------------------------------------------
                                                      Total--Georgia                           $715         $715
----------------------------------------------------------------------------------------------------------------
23      Marshalltown        IA       4                Dining & Activity Room Expansion       $2,377       $2,377
----------------------------------------------------------------------------------------------------------------
23      Marshalltown        IA       4                Renovate Medical Clinic Space            $727         $727
----------------------------------------------------------------------------------------------------------------
                                                      Total--Iowa                            $3,104       $3,104
----------------------------------------------------------------------------------------------------------------
12      Manteno             IL       11               Construct Storage Building             $1,610       $1,610
----------------------------------------------------------------------------------------------------------------
12      Manteno             IL       11               Convert/Upgrade Resident Outdoor       $2,320       $2,320
                                                       Activity Space & Staff Offices
----------------------------------------------------------------------------------------------------------------
12      LaSalle             IL       11               80-Bed NHC Addition                    $8,308       $8,308
----------------------------------------------------------------------------------------------------------------
23      Quincy              IL       17               Bus & Ambulance Garage                   $565         $565
----------------------------------------------------------------------------------------------------------------
                                                      Total--Illinois                       $12,803      $12,803
----------------------------------------------------------------------------------------------------------------
11      Lafayette           IN       4                Facility Upgrade                         $869         $869
----------------------------------------------------------------------------------------------------------------
                                                      Total--Indiana                           $869         $869
----------------------------------------------------------------------------------------------------------------
1       Chelsea             MA       8                Roof Replacement--Quigley                $793         $793
                                                       Building
----------------------------------------------------------------------------------------------------------------
                                                      Total--Massachusetts                     $793         $793
----------------------------------------------------------------------------------------------------------------
1       Caribou             ME       2                Multipurpose Room Addition               $354         $354
----------------------------------------------------------------------------------------------------------------
1       South Paris         ME       2                Replace Flooring                         $353         $353
----------------------------------------------------------------------------------------------------------------
                                                      Total--Maine                             $707         $707
----------------------------------------------------------------------------------------------------------------
11      Grand Rapids        MI       3                Code Fire Suppression, Nurse             $704         $704
                                                       Call Replacement
----------------------------------------------------------------------------------------------------------------
                                                      Total--Michigan                          $704         $704
----------------------------------------------------------------------------------------------------------------
23      Fergus Falls        MN       7                Dementia--Special Care Unit--(24       $4,799       $4,799
                                                       Beds--New)
----------------------------------------------------------------------------------------------------------------
                                                      Total--Minnesota                       $4,799       $4,799
----------------------------------------------------------------------------------------------------------------
15      St. Louis           MO       1                Emergency Generator, Etc.                $944         $944
----------------------------------------------------------------------------------------------------------------
15      Warrensburg         MO       4                Emergency Generator, Etc.                $372         $372
----------------------------------------------------------------------------------------------------------------
15      Cameron             MO       6                Emergency Generator, Etc.                $372         $372
----------------------------------------------------------------------------------------------------------------
16      Mt. Vernon          MO       7                Emergency Generator, Etc.                $372         $372
----------------------------------------------------------------------------------------------------------------
15      St. James           MO       8                Emergency Generator, Etc.                $372         $372
----------------------------------------------------------------------------------------------------------------
15      Cape Girardeau      MO       8                Fire Lane, Hydrant and Lighting          $708         $708
----------------------------------------------------------------------------------------------------------------
15      Mexico              MO       9                Emergency Generator, Etc.                $372         $372
----------------------------------------------------------------------------------------------------------------
                                                      Total--Missouri                        $3,512       $3,512
----------------------------------------------------------------------------------------------------------------
6       Pending--Eastern    NC       1 & 3            100-Bed NHC (New)                      $8,147       $8,147
----------------------------------------------------------------------------------------------------------------
6       Pending--Western    NC       11               100-Bed NHC (New)                      $8,147       $8,147
----------------------------------------------------------------------------------------------------------------
                                                      Total--North Carolina                 $16,294      $16,294
----------------------------------------------------------------------------------------------------------------
3       Paramus             NJ       5                Multipurpose Room Addition             $1,415       $1,415
----------------------------------------------------------------------------------------------------------------
3       Paramus             NJ       5                HVAC Replacement, Phase 2                $475         $475
----------------------------------------------------------------------------------------------------------------
                                                      Total--New Jersey                      $1,890       $1,890
----------------------------------------------------------------------------------------------------------------
3       Stony Brook         NY       1                Emergency Generator and System           $470         $470
                                                       Upgrade
----------------------------------------------------------------------------------------------------------------
                                                      Total--New York                          $470         $470
----------------------------------------------------------------------------------------------------------------
10      Georgetown          OH       2                Security Upgrades, Phase 1               $330         $330
----------------------------------------------------------------------------------------------------------------
10      Georgetown          OH       2                Security Upgrades, Phase 2               $331         $331
----------------------------------------------------------------------------------------------------------------
10      Sandusky            OH       9                Kitchen Upgrade--Secrest Hall            $260         $260
----------------------------------------------------------------------------------------------------------------
10      Sandusky            OH       9                Corridor Renovation                      $325         $325
----------------------------------------------------------------------------------------------------------------
                                                      Total--Ohio                            $1,246       $1,246
----------------------------------------------------------------------------------------------------------------
4       Spring City         PA       6                112-Bed DOM Replacement + 8           $17,109      $17,109
                                                       Additional Beds
----------------------------------------------------------------------------------------------------------------
                                                      Total--Pennsylvania                   $17,109      $17,109
----------------------------------------------------------------------------------------------------------------
1       Bristol             RI       1                General Renovations                    $1,204       $1,204
----------------------------------------------------------------------------------------------------------------
                                                      Total--Rhode Island                    $1,204       $1,204
----------------------------------------------------------------------------------------------------------------
17      Tyler               TX       1                160-Bed NHC (New)                      $8,680       $8,680
----------------------------------------------------------------------------------------------------------------
16      Houston             TX       TBD              160-Bed NHC (New)                      $8,680       $8,680
----------------------------------------------------------------------------------------------------------------
        Pending             TX       TBD              160-Bed NHC (New)                      $8,680       $8,680
----------------------------------------------------------------------------------------------------------------
        Pending             TX       TBD              160-Bed NHC (New)                      $8,680       $8,680
----------------------------------------------------------------------------------------------------------------
                                                      Total--Texas                          $34,720      $34,720
----------------------------------------------------------------------------------------------------------------
19      Ogden               UT       1                120-Bed NHC (New)                     $12,573      $12,573
----------------------------------------------------------------------------------------------------------------
19      Salt Lake City      UT       2                General Renovations                      $645         $645
----------------------------------------------------------------------------------------------------------------
                                                      Total--Utah                           $13,218      $13,218
----------------------------------------------------------------------------------------------------------------
6       Roanoke             VA       6                General Renovations                      $372         $372
----------------------------------------------------------------------------------------------------------------
                                                      Total--Virginia                          $372         $372
----------------------------------------------------------------------------------------------------------------
12      Union Grove         WI       1                Upgrade Main Electrical                  $263         $263
                                                       Switchgear
----------------------------------------------------------------------------------------------------------------
12      Union Grove         WI       1                Aboveground Building Connectors        $2,217       $2,217
----------------------------------------------------------------------------------------------------------------
12      Union Grove         WI       1                24-Bed DOM Addition (New)              $1,625       $1,625
----------------------------------------------------------------------------------------------------------------
12      King                WI       8                Replace Resident Wandering               $386         $386
                                                       Monitoring System
----------------------------------------------------------------------------------------------------------------
12      King                WI       8                Ceiling Resident Lift System           $1,892       $1,892
----------------------------------------------------------------------------------------------------------------
12      King                WI       8                Remodel Laundry Facility                 $283         $283
----------------------------------------------------------------------------------------------------------------
                                                      Total--Wisconsin                       $6,666       $6,666
----------------------------------------------------------------------------------------------------------------
                                                      Cumulative Total                     $150,922  $150,922\1\
----------------------------------------------------------------------------------------------------------------
1\1\ Grant costs exceed ARRA funding because they are estimates and may be adjusted based upon actual costs as
  projects are completed.



    FY 2009 Grants for State Extended Care Facilities ARRA Spend Plan
                              ARRA Overview
------------------------------------------------------------------------
                                          Number of
                 State                    Projects       ARRA Funding
------------------------------------------------------------------------
AZ                                                2              $19,035
------------------------------------------------------------------------
CO                                                1               $2,045
------------------------------------------------------------------------
CT                                                1               $5,397
------------------------------------------------------------------------
FL                                                1               $3,250
------------------------------------------------------------------------
GA                                                1                 $715
------------------------------------------------------------------------
IA                                                2               $3,104
------------------------------------------------------------------------
IL                                                4              $12,803
------------------------------------------------------------------------
IN                                                1                 $869
------------------------------------------------------------------------
MA                                                1                 $793
------------------------------------------------------------------------
ME                                                2                 $707
------------------------------------------------------------------------
MI                                                1                 $704
------------------------------------------------------------------------
MN                                                1               $4,799
------------------------------------------------------------------------
MO                                                7               $3,512
------------------------------------------------------------------------
NC                                                2              $16,294
------------------------------------------------------------------------
NJ                                                2               $1,890
------------------------------------------------------------------------
NY                                                1                 $470
------------------------------------------------------------------------
OH                                                4               $1,246
------------------------------------------------------------------------
PA                                                1              $17,109
------------------------------------------------------------------------
RI                                                1               $1,204
------------------------------------------------------------------------
TX                                                4              $34,720
------------------------------------------------------------------------
UT                                                2              $13,218
------------------------------------------------------------------------
VA                                                1                 $372
------------------------------------------------------------------------
WI                                                6               $6,666
------------------------------------------------------------------------
Total                                            49            $150,9221
------------------------------------------------------------------------
\1\ Grant costs exceed ARRA funding because they are estimates and may
  be adjusted based upon actual costs as projects are completed.

 Veterans Benefits Administration--Hiring Temporary Claims Processors 
                            Expenditure Plan

                    VBA: $150M Recovery Act Hiring Temporary Claims Processors Operating Plan
                                                  TAFS: 0150B1
                                          (Dollars in thousands--000s)
----------------------------------------------------------------------------------------------------------------
                                             Total       Monthly Payroll      Monthly Non        Monthly Total
                FY 2009                  Cumulative FTE        ($K)          Payroll ($K)      Obligations ($K)
----------------------------------------------------------------------------------------------------------------
Apr                                                248           $2,009              $2,729              $4,738
----------------------------------------------------------------------------------------------------------------
May                                                539           $3,029              $4,379              $7,408
----------------------------------------------------------------------------------------------------------------
Jun                                                831           $4,296              $4,379              $8,675
----------------------------------------------------------------------------------------------------------------
Jul                                              1,133           $5,656              $4,379             $10,034
----------------------------------------------------------------------------------------------------------------
Aug                                              1,435           $6,312              $4,379             $10,691
----------------------------------------------------------------------------------------------------------------
Sep                                             1,5002           $6,824              $4,379             $11,203
----------------------------------------------------------------------------------------------------------------
FYTD (SEP)                                         476          $28,125             $24,623             $52,748
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                 Total   Monthly Payroll        Monthly Non       Monthly Total
FY 2010                                               Cumulative   ($K)        Payroll ($K)    Obligations ($K)
                                                   FTE
----------------------------------------------------------------------------------------------------------------
Oct                                              1,500           $6,953                $955              $7,908
----------------------------------------------------------------------------------------------------------------
Nov                                              1,500           $6,718                $956              $7,673
----------------------------------------------------------------------------------------------------------------
Dec                                              1,500           $7,260                $956              $8,216
----------------------------------------------------------------------------------------------------------------
Jan                                              1,500           $6,965                $956              $7,921
----------------------------------------------------------------------------------------------------------------
Feb                                              1,500           $6,708                $956              $7,664
----------------------------------------------------------------------------------------------------------------
Mar                                              1,500           $7,556                $956              $8,512
----------------------------------------------------------------------------------------------------------------
Apr                                              1,500           $7,289                $956              $8,244
----------------------------------------------------------------------------------------------------------------
May                                              1,500           $7,020                $956              $7,975
----------------------------------------------------------------------------------------------------------------
Jun                                              1,500           $7,311                $956              $8,267
----------------------------------------------------------------------------------------------------------------
Jul                                              1,500           $7,323                $956              $8,279
----------------------------------------------------------------------------------------------------------------
Aug                                              1,500           $7,335                $956              $8,291
----------------------------------------------------------------------------------------------------------------
Sep                                              1,500           $7,347                $956              $8,302
----------------------------------------------------------------------------------------------------------------
FYTD (SEP)                                       1,500          $85,784             $11,467             $97,252
----------------------------------------------------------------------------------------------------------------
Grand Total                                                    $113,910             $36,090            $150,000
----------------------------------------------------------------------------------------------------------------
$150M 0150B1
U.S. Department of Veterans Affairs, Veterans Benefits Administration

    Veterans Benefits Administration--Support for Economic Recovery 
                       Payments Expenditure Plan

                           VBA: $7.1M Recovery Act Veteran Economic Recovery Payments
                                                  TAFS: 0150R1
                                          (Dollars in thousands--000s)
----------------------------------------------------------------------------------------------------------------
                                             Total       Monthly Payroll      Monthly Non        Monthly Total
                FY 2009                  Cumulative FTE        ($K)          Payroll ($K)      Obligations ($K)
----------------------------------------------------------------------------------------------------------------
Apr                                                  5             $198                                    $198
----------------------------------------------------------------------------------------------------------------
May                                                  9             $189              $4,729              $4,918
----------------------------------------------------------------------------------------------------------------
Jun                                                 12             $198              $1,260              $1,458
----------------------------------------------------------------------------------------------------------------
Jul                                                 13             $156                                    $156
----------------------------------------------------------------------------------------------------------------
Aug                                                 13              $81                                     $81
----------------------------------------------------------------------------------------------------------------
Sep                                                 14              $85                                     $85
----------------------------------------------------------------------------------------------------------------
FYTD (SEP)                                          14             $907              $5,989              $6,896
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                                                 Total   Monthly Payroll        Monthly Non       Monthly Total
  FY 2010                                             Cumulative   ($K)        Payroll ($K)    Obligations ($K)
                                                   FTE
----------------------------------------------------------------------------------------------------------------
Oct                                                  8              $45
----------------------------------------------------------------------------------------------------------------
Nov                                                  7              $25
----------------------------------------------------------------------------------------------------------------
Dec                                                  6              $28
----------------------------------------------------------------------------------------------------------------
Jan                                                  5              $15
----------------------------------------------------------------------------------------------------------------
Feb                                                  5              $14
----------------------------------------------------------------------------------------------------------------
Mar                                                  5              $16
----------------------------------------------------------------------------------------------------------------
Apr                                                  4              $12
----------------------------------------------------------------------------------------------------------------
May                                                  4               $9
----------------------------------------------------------------------------------------------------------------
Jun                                                  4              $10
----------------------------------------------------------------------------------------------------------------
Jul                                                  4              $10
----------------------------------------------------------------------------------------------------------------
Aug                                                  3              $10
----------------------------------------------------------------------------------------------------------------
Sep                                                  3               $8
----------------------------------------------------------------------------------------------------------------
FYTD (SEP)                                           3             $203
----------------------------------------------------------------------------------------------------------------
Grand Total                                                      $1,110              $5,989              $7,100
----------------------------------------------------------------------------------------------------------------
$7.1M 0150R1
U.S. Department of Veterans Affairs, Veterans Benefits Administration



                                          FY 2009 National Cemetery Administration (NCA)/Energy ARRA Spend Plan
                                      *Projects in BOLD ITALICS incorporate energy efficiency and renewable energy.
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             Location
                                      ------------------------------------------------------                                  Estimated
                 MSN                                                        Congressional            Project Title           Budget Cost    ARRA Funding
                                              Cemetery           State         District
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                             Ft Richardson          AK           At Large             Slurry Seal Roads           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Total--Alaska           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                    Mobile          AL                  1         Paint Wall and Fences           $45,000       $45,000
                                                                                                                (Repair)
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                    Mobile          AL                  1             Maint Bldg--Paint            $5,000        $5,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Ft Mitchell          AL                  3                         Mower           $20,000       $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Total--Alabama           $70,000       $70,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                          Little RocAR                  2   Admin and Maint Bldgs--Paint          $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                          Little RocAR                  2       Minnesota Monument,1916           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                              Fayetteville          AR                  3                  Bldgs--Paint           $20,000       $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                              Fayetteville          AR                  3                  Reseal Roads           $15,000       $15,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                              Fayetteville          AR                  3                  Riding Mower           $25,000       $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Ft Smith          AR                  3                         Mower            $1,300        $1,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Ft Smith          AR                  3                         Mower            $1,300        $1,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Arkansas           $82,600       $82,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                  Prescott          AZ                  1       Slurry Seal New Road at           $20,000       $20,000
                                                                                                             Columbarium
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                            NMC of Arizona          AZ                  3      Repair Columbaria Floors          $165,000      $165,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                            NMC of Arizona          AZ                  3                Street Sweeper           $90,427       $90,427
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                            NMC of Arizona          AZ                  3            Articulated Dumper           $53,852       $53,852
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                            NMC of Arizona          AZ                  3                     Sand Rake           $20,643       $20,643
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                            NMC of Arizona          AZ                  3    Utility Vehicle (trade-in)            $2,083        $2,083
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Total--Arizona          $352,005      $352,005
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                             San Francisco            CA                8   Pacific Coast GAR Monument,           $15,000       $15,000
                                                                                                                    1897
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Sacramento            CA               10                 Electric Cart            $9,145        $9,145
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Sacramento            CA               10                 Electric Cart            $9,145        $9,145
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Golden Gate            CA               12      Install Spoils Bay Cover           $18,000       $18,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Golden Gate            CA               12         Replace Damaged Floor            $6,000        $6,000
                                                                                                       Covering In Admin
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Golden Gate            CA               12                 Replace Doors           $12,000       $12,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Golden Gate            CA               12             Slurry Seal Roads           $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Golden Gate            CA               12                      Shredder           $40,137       $40,137
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5                                       San Joaquin Valley            CA               18    Rooftop solar photovoltaic        $1,448,000    $1,448,000
                                                                                                                   power
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                        San Joaquin Valley            CA               18               Utility Vehicle           $16,237       $16,237
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                        San Joaquin Valley            CA               18               Utility Vehicle           $16,237       $16,237
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                          Los Angeles CA               30        Headstones/Markers and        $4,310,068    $4,310,068
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                          Los Angeles CA               30               Utility Vehicle           $18,900       $18,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                          Los Angeles CA               30    National Home for Disabled           $75,000       $75,000
                                                                                                Veteran Soldiers (NHDVS)
                                                                                                      Monument, ca. 1900
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                 Riverside            CA               44        Headstones/Markers and        $1,306,295    $1,306,295
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                 Riverside            CA               44             Slurry Seal Roads          $200,000      $200,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                 Riverside            CA               44                         Mower           $83,271       $83,271
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                 Riverside            CA               44              Turf VAC/Sweeper           $18,995       $18,995
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                 Riverside            CA               44           Hydraulic Excavator          $155,666      $155,666
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                              Ft Rosecrans            CA               52        Headstones/Markers and        $2,000,000    $2,000,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                              Ft Rosecrans            CA               52             Compact Excavator           $60,500       $60,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                              Ft Rosecrans            CA               52               Utility Vehicle           $28,167       $28,167
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                              Ft Rosecrans            CA               52                       Chipper            $9,649        $9,649
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                              Ft Rosecrans            CA               52      USS Bennington Monument,          $250,000      $250,000
                                                                                                                    1907
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Total--California       $10,156,412   $10,156,412
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1     Renovate lakeside erosion           $50,000       $50,000
                                                                                                 near Public Information
                                                                                                                  Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1               Utility Vehicle           $26,500       $26,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1                 Electric Cart            $9,860        $9,860
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1                              Lowering Dev$4,000        $4,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1             Compact Excavator           $65,000       $65,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1               Utility Vehicle           $26,200       $26,200
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1                              Landscape Ra$5,900        $5,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Logan       CO                1                        Dumper           $34,000       $34,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft Lyon        CO                4     Install equipment shelter           $45,000       $45,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Colorado          $266,460      $266,460
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Barrancas          FL                  1             Maint Bldg--Paint            $5,000        $5,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Barrancas          FL                  1                         Mower           $18,000       $18,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5   Admin and Maint Bldgs--Paint          $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5               Carillon--Paint            $5,000        $5,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5                  Reseal Roads           $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5                         Mower           $45,000       $45,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5               Utility vehicle           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5                       Backhoe           $80,000       $80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5            Articulated Dumper           $70,000       $70,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Florida          FL                  5            Articulated Dumper           $55,000       $55,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                             St. Augustine          FL                  7    Maint Bldg and Wall--Paint           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                             St. Augustine          FL                  7     Dade's Pyramids(3), 1 842          $100,000      $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Bay Pines          FL                 10                  Riding Mower           $25,000       $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Total--Florida          $543,000      $543,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Marietta          GA                 11       Monumental Arch, c.1870          $100,000      $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Total--Georgia          $100,000      $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                        NMC of the Pacific          HI                  1             Slurry Seal Roads           $80,000       $80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                        NMC of the Pacific          HI                  1               Compact Sweeper          $103,774      $103,774
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                        NMC of the Pacific          HI                  1            3-Way Dump Trailer            $8,800        $8,800
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Total--Hawaii          $192,574      $192,574
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Keokuk          IA                  2                       Mower, Lawn, Ridin$12,381       $12,381
                                                                                                               Mulch Kit
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Keokuk          IA                  2                      Vacuum, Leaf, Pull B$3,500        $3,500
                                                                                                                Trac Vac
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Total--Iowa           $15,881       $15,881
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Oak Woods          IL                  1   Confederate Mound Monument,          $250,000      $250,000
                                                                                                                    1893
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Abraham Lincoln   IL                 11      Replace Asphalt Roadways          $350,000      $350,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Abraham Lincoln   IL                 11   Truck, Utility, 4 WD, Casket          $39,000       $39,000
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Abraham Lincoln   IL                 11   Harrow, Disc., Pull Behind,            $2,000        $2,000
                                                                                                           3-Point Hitch
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                Mound City          IL                 12     Illinois State Soldiers &          $150,000      $150,000
                                                                                                  Sailors Monument, 1874
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               North Alton          IL                 12          Confederate POW Dead          $250,000      $250,000
                                                                                                          Monument, 1910
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Danville          IL                 15        Headstones/Markers and          $704,000      $704,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Danville          IL                 15                Replace Chain Link Fence $75,000       $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Danville          IL                 15                              Loader, Uti$37,000ompact,$37,000
                                                                                                                  Attach
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                  Danville          IL                 15    Soldiers (NHDVS) Monument,           $15,000       $15,000
                                                                                                                    1917
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Rock Island          IL                 17    Truck, Utility, 4 WD, with           $43,000       $43,000
                                                                                                                        Lift Kit
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Rock Island          IL                 17      Truck, Utility, 4 WD, w/           $39,000       $39,000
                                                                                                                 Attach.
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Rock Island          IL                 17          Truck, Utility, 4 WD           $28,000       $28,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Butler          IL                 18        Headstones/Markers and          $431,935      $431,935
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Butler          IL                 18     Attachments, Dozer & Snow            $9,690        $9,690
                                                                                                          Blade & Bucket
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Butler          IL                 18   Carriage, Casket, Stainless            $1,995        $1,995
                                                                                                                   Steel
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Butler          IL                 18                Street Sweeper           $43,000       $43,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Illinois        $2,468,620    $2,468,620
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5        Headstones/Markers and          $124,000      $124,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5   New Asphalt Road at section           $75,000       $75,000
                                                                                                                   11/12
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5        Replace Gravel Road w/           $65,000       $65,000
                                                                                             Asphalt Paving at section 2/
                                                                                                                   4-3/6
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5                      Vacuum, Leaf, Gas P$30,875       $30,875
                                                                                                             Pull Behind
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5                Truck, Utility            $9,762        $9,762
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5    Tiller, Pull Behind, 51'',            $2,300        $2,300
                                                                                                              Med. Grade
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5    Scraper, Box, Pull Behind,              $490          $490
                                                                                                                    48''
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5                       Mower, Lawn, Ridin$17,091       $17,091
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5   Screener, Dirt, Pull Behind,          $22,919       $22,919
                                                                                                             Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5   Trailer, Utility, 12,000 lb,           $4,000        $4,000
                                                                                                  81-1/2'' Wide, 2 Axles
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Marion          IN                  5    Soldiers (NHDVS) Monument,           $10,000       $10,000
                                                                                                                    1914
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                New Albany          IN                  9        Headstones/Markers and          $320,000      $320,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                New Albany          IN                  9          Generator, Electric,            $1,000        $1,000
                                                                                                   Portable, Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                New Albany          IN                  9          Generator, Electric,            $1,000        $1,000
                                                                                                   Portable, Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          Total--Indiana          $683,437      $683,437
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft LeavenwortKS                  2        Paint maintenance shop            $8,000        $8,000
                                                                                                                exterior
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft LeavenwortKS                  2        Resurface Roadways and          $200,000      $200,000
                                                                                                         replace curbing
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                       Ft LeavenwortKS                  2                              Lowering Dev$4,000        $4,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Scott          KS                  2      Repair and resurface all          $250,000      $250,000
                                                                                                                roadways
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                          LeavenwortKS                  2   Repair/replacement of stone          $250,000      $250,000
                                                                                                  lined drainage ditches
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                          LeavenwortKS                  2        Paint Maintenance Shop           $15,000       $15,000
                                                                                                                exterior
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3                                                         LeavenwortKS                  2            Replace windows in           $12,000       $12,000
                                                                                                        Maintenance Bldg
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                          LeavenwortKS                  2               Utility Vehicle           $33,000       $33,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                          LeavenwortKS                  2           NHDVS Obelisk, 1919           $35,000       $35,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                          LeavenwortKS                  2    NHDVS Chapel Fountain, ca.           $15,000       $15,000
                                                                                                                    1900
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Total--Kansas          $822,000      $822,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                          Lebanon   KY                  2    Roof Covered Material Bins           $70,000       $70,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                          Lebanon   KY                  2   Truck, Utility, 4WD, Diesel           $22,000       $22,000
                                                                                                                  Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                          Lebanon   KY                  2          Generator, Electric,            $1,000        $1,000
                                                                                                   Portable, Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                          Lebanon   KY                  2               Mower, Riding, Lawn, 60'' $11,000       $11,000
                                                                                                           Mulching Deck
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                            Zachary Taylor          KY                  3      Truck, Utility, 4 WD, w/           $39,000       $39,000
                                                                                                                 Attach.
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                            Zachary Taylor          KY                  3    Zachary Taylor Monument (&           $50,000       $50,000
                                                                                             secondary small obelisk & a
                                                                                               memorial sundial), 1 930s
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6        Headstones/Markers and          $591,540      $591,540
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
 4                                              Camp Nelson          KY                  6       Emergency Generator for           $10,000       $10,000
                                                                                                              Admin Bldg
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6                              Loader, Bac$82,000       $82,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6      Auger, 12'' & 18'' Bits,            $5,500        $5,500
                                                                                                   Hydraulic, Attachment
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6   Truck, Utility, 4WD, Diesel           $22,000       $22,000
                                                                                                                  Engine
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6                      Roller, Lawn, Self $35,000       $35,000
                                                                                             Propelled, Vibrator Enhanced
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6               Mower, Riding, Lawn, 34''  $4,127        $4,127
                                                                                                               Cross Cut
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6                      Bucket, Loader, Atta$1,500        $1,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6     Aerator, Core, Hydraulic,            $1,100        $1,100
                                                                                                             Pull Behind
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Camp Nelson          KY                  6          Generator, Electric,            $1,000        $1,000
                                                                                                   Portable, Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Kentucky          $946,767      $946,767
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                Alexandria          LA                  5             Maint Bldg--Paint            $4,000        $4,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Baton Rouge          LA                  6   Massachusetts Monument, 1909          $15,000       $15,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Port Hudson          LA                  6            Articulated Dumper           $55,000       $55,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                 Total--Louisiana  $74,000       $74,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Massachusetts          MA                 10                  Wind turbine        $1,610,000    $1,610,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Massachusetts          MA                 10                 Soil Screener           $76,500       $76,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Massachusetts          MA                 10                    Dump Truck           $87,522       $87,522
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Massachusetts          MA                 10        Tractor w/front loader           $35,780       $35,780
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Total--Massachusetts        $1,809,802    $1,809,802
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                    Point Lookout   MD                  5   Soldiers & Sailors Monument,         $250,000      $250,000
                                                                                                                    1911
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Baltimore          MD                  7   Remove Stone Sidewalks--Repl          $70,000       $70,000
                                                                                                     w/ Stamped Concrete
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Baltimore          MD                  7       4x4 Stake Body truck w/           $47,635       $47,635
                                                                                                towing, plow & lift gate
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Baltimore          MD                  7                       Tractor           $20,350       $20,350
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Loudon ParMD                  7   Maryland Sons Monument, 1884          $60,000       $60,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Loudon ParMD                  7   Unknown Dead Monument, 1895           $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Loudon ParMD                  7            GAR Monument, 1898           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Loudon ParMD                  7      Maryland Naval Monument,           $10,000       $10,000
                                                                                                                    1896
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Maryland          $517,985      $517,985
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                     Togus          ME                  1        Headstones/Markers and          $732,000      $732,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                     Togus          ME                  1   Soldiers & Sailors Monument           $60,000       $60,000
                                                                                                          (1 of 2), 1889
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                     Togus          ME                  1   Soldiers & Sailors Monument           $50,000       $50,000
                                                                                                          (2 of 2), 1916
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Total--Maine          $842,000      $842,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6    Truck, Pickup, 2 WD, Stake           $49,944       $49,944
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6   Exchanger, Coolant, Recycle,           $2,390        $2,390
                                                                                                          Radiator Fluid
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6     Box, Tool, Mechanic's Set            $4,901        $4,901
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6                      Vacuum, Leaf, Pull $36,000       $36,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6        Trailer, Utility, Pull            $8,550        $8,550
                                                                                                      Behind, 8.5' X 24'
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                 Ft Custer          MI                  6         Saw, Table, Portable,              $550          $550
                                                                                                                Electric
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8                              Lowering De$12,369ault,  $12,369
                                                                                                               Hydraulic
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8   Truck, Utility, 4 WD, Casket          $39,000       $39,000
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8   Cultivator, Soil, Attachment           $4,948        $4,948
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8           Breaker, Hydraulic,            $5,762        $5,762
                                                                                                              Attachment
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8      Saw, Chain, Gas Powered,              $407          $407
                                                                                                                    20''
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Great Lakes     MI                  8    Saw, Pole, Pruning, 1 Each              $520          $520
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Michigan          $165,341      $165,341
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5     Replace Asphalt Paving at          $300,000      $300,000
                                                                                                           Various Areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5     Truck, Dump, 4 WD, Diesel           $96,000       $96,000
                                                                                                                    Eng.
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5                              Loader, Bac$82,000       $82,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5   Sweeper, Street, Gas Powered          $96,000       $96,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5        Tractor, Utility, 4 WD           $58,000       $58,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5          Truck, Utility, 4 WD           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Ft Snelling          MN                  5          Truck, Utility, 4 WD           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Total--Minnesota          $692,000      $692,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3         Replace Chapel Siding          $150,000      $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3         Enclosed Pole Barn w/           $75,000       $75,000
                                                                                                           concrete slab
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3         Replace Asphalt Roads        $1,000,000    $1,000,000
                                                                                                                Various Locations
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3          Sweeper, Street, Gas          $126,109      $126,109
                                                                                                     Powered, Broom Bear
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3       Tampers, 2 Cycle Engine           $15,748       $15,748
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3     Winch, Electric Power, 12            $1,548        $1,548
                                                                                                                    Volt
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3    Box, Tool, Mechanic's Set,              $996          $996
                                                                                                                  Upper/Lower
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3    Truck, Pickup, 4 WD, W/Box           $81,000       $81,000
                                                                                                                     Bed
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3   Screener, Dirt, Pull Behind           $89,000       $89,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3        Tractor, Utility, 4 WD           $26,000       $26,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3          Truck, Utility, 4 WD           $28,000       $28,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3   Truck, Utility, 4 WD, Casket          $39,000       $39,000
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3   Truck, Utility, 4 WD, Casket          $39,000       $39,000
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                        Jefferson Barracks          MO                  3   35th Division Water Fountain          $10,000       $10,000
                                                                                                          Memorial, 1952
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                            Jefferson City          MO                  4     39th MO Infantry Regiment           $10,000       $10,000
                                                                                                          Monument, 1873
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                               Springfield          MO                  7                Replace Chain Link Fence $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Missouri        $1,731,401    $1,731,401
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Natchez          MS                  3               Utility Vehicle           $25,000       $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                    Biloxi          MS                  4                        Tamper            $3,400        $3,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                    Biloxi          MS                  4                    Mini Truck           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                    Biloxi          MS                  4   National Cemetery Memorial,          $100,000      $100,000
                                                                                                                    1941
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Total--Mississippi          $138,400      $138,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  New Bern           NC                 1                  Reseal Roads            $5,000        $5,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  New Bern           NC                 1   Rhode Island Monument, 1909           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  New Bern           NC                 1   Massachusetts Monument, 1908          $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Raleigh           NC                 2             Maint Bldg--Paint            $2,000        $2,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                Wilmington           NC                 7                 Replace Fence           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Salisbury           NC                12                  Reseal Roads           $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Salisbury           NC                12                  Riding Mower           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Salisbury           NC                12          Maine Monument, 1908           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Salisbury           NC                12   Unknown Dead Monument, 1875           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Salisbury           NC                12   Pennsylvania Monument, 1909           $75,000       $75,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Total--North Carolina          $312,000      $312,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3        Headstones/Markers and          $687,112      $687,112
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3   Concrete pad under fill pile          $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3        Install new floral and            $4,000        $4,000
                                                                                                      activities signage
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3                                             Ft McPherson          NE                  3     Modify Public Information           $10,000       $10,000
                                                                                                         Center lighting
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3   Repair sidewalk at Committal           $5,000        $5,000
                                                                                                                 Shelter
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3                                             Ft McPherson          NE                  3            Replace windows in           $20,000       $20,000
                                                                                                    Maintenance Building
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3                   Challenger Lifts       $2,600        $2,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3      Utility Vehicle w/Casket           $32,500       $32,500
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson          NE                  3                  Tire Changer            $1,500        $1,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                              Ft McPherson           3                 NE                         Mower           $22,600       $22,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Nebraska          $835,312      $835,312
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                              Finn's Point          NJ                  2          Union Monument, 1879           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                              Finn's Point          NJ                  2          Confederate POW Dead          $250,000      $250,000
                                                                                                          Monument, 1910
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Total--New Jersey          $290,000      $290,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Bayard          NM                  2                   Top Dresser            $9,539        $9,539
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Bayard          NM                  2                        Tamper            $3,200        $3,200
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Bayard          NM                  2                              Lowering Dev$4,000        $4,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3          Install mezzanine in           $15,000       $15,000
                                                                                                        Maintenance Bldg
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3   Renovate spoils area (remove          $25,000       $25,000
                                                                                                       excess materials)
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3            Repair cracking in           $75,000       $75,000
                                                                                                    columbaria structure
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3        Resurface Roadways and          $350,000      $350,000
                                                                                                         replace curbing
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3                   Snow blower            $3,500        $3,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3                       Backhoe           $58,355       $58,355
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3               Utility Vehicle           $22,500       $22,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Santa Fe          NM                  3                       Aerator           $22,300       $22,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Total--New Mexico          $588,394      $588,394
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1        Headstones/Markers and        $2,000,000    $2,000,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1                                                Calverton          NY                  1    Rooftop solar photovoltaic          $582,000      $582,000
                                                                                                                   power
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1   Replace Facade on Admin and          $211,500      $211,500
                                                                                                         Committal Bldgs
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton           1                 NY    Replace Admin Oil USD with           $40,920       $40,920
                                                                                                            Convault AST
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1      Mini excavator & trailer           $49,350       $49,350
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1    Two burners to thaw frozen           $10,800       $10,800
                                                                                                                  ground
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1           Two 4x4 dump trucks           $79,600       $79,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                 Calverton          NY                  1   Air compressor w/jackhammer           $12,000       $12,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Long IslanNY                  2            5 Utility Vehicles           $80,000       $80,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                          Long IslanNY                  2             Interment vehicle           $22,726       $22,726
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Cypress Hills          NY                 12      Remove/Repl All Roads at           $85,800       $85,800
                                                                                              Cypress Hills & Union Plot
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Cypress Hills          NY                 12      Remove/Repl All Roads at        $1,009,000    $1,009,000
                                                                                              Cypress Hills & Union Plot
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Cypress Hills          NY                 12          Eagle Monument, 1934           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Cypress Hills          NY                 12     French Monument, ca. 1920           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Saratoga          NY                 20               Utility vehicle           $25,700       $25,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Saratoga          NY                 20                         Mower           $16,029       $16,029
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                      Bath          NY                 29                         Mower           $18,000       $18,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                      Bath          NY                 29                    Dump Truck           $47,000       $47,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Woodlawn          NY                 29               Utility Tractor           $38,163       $38,163
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Woodlawn          NY                 29    Snow blower attachment for            $3,700        $3,700
                                                                                                         Utility Tractor
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--New York        $4,352,288   $4,35$2,288
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Dayton          OH                  3                              Lowering Dev$7,900asket,  $7,900
                                                                                                             Pull Behind
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Dayton          OH                  3   Tamper, Pneumatic, Portable,           $3,640        $3,640
                                                                                                             Gas Powered
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Dayton          OH                  3          Truck, Utility, 4 WD           $36,788       $36,788
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                    Dayton          OH                  3     National Soldiers (NHDVS)          $510,000      $510,000
                                                                                                          Monument, 1877
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                Camp Chase          OH                 15      Memorial Boulder & Arch,           $25,000       $25,000
                                                                                                             1880 & 1902
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16   Truck, Utility, 4 WD, Casket          $39,000       $39,000
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16      Dump, Articulating, 4 WD           $39,600       $39,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16      Truck, Utility, 4 WD, w/           $39,000       $39,000
                                                                                                                 Attach.
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16            Broom, Angle, 84''            $4,400        $4,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16   Aerator, Core, 6' Wide, Pull           $3,000        $3,000
                                                                                                      Behind, Heavy Duty
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                      Ohio Western Reserve          OH                 16          Truck, Utility, 4 WD           $28,000       $28,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                             Total--Ohio          $736,328      $736,328
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2       Front entrance sign and           $10,000       $10,000
                                                                                                            planting bed
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2       Repair/Replace concrete            $8,000        $8,000
                                                                                                   sidewalk to flag pole
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2   Renovate existing flag pole           $35,000       $35,000
                                                                                                            and lighting
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2                        Tamper            $3,700        $3,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2                      Utility Loader      $2,400        $2,400
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2                      Utility Loader     $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Ft Gibson          OK                  2                      Backhoe Loader     $50,900       $50,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
*3                                                  Ft Sill          OK                  4   Repair defective gaskets in            $4,000        $4,000
                                                                                                       glazing at Public
                                                                                                      Information Center
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Ft Sill          OK                  4                        Dumper           $55,000       $55,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Ft Sill          OK                  4                Compact Roller            $4,950        $4,950
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Oklahoma          $213,950      $213,950
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5                                              Eagle Point          OR                  2   Replace Windows In Committal          $35,000       $35,000
                                                                                                                 Shelter
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Eagle Point          OR                  2             Slurry Seal Roads           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Eagle Point          OR                  2               Utility Vehicle           $26,978       $26,978
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                               Eagle Point          OR                  2               Utility Vehicle           $26,978       $26,978
--------------------------------------------------------------------------------------------------------------------------------------------------------
*5                                               Willamette          OR                  3           Upgrade Admin Bldg Lighting   $13,000       $13,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3    Install Electric Gate/Side            $6,000        $6,000
                                                                                                                     Two
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3   Install Maintenance Shop Oil          $27,000       $27,000
                                                                                                   and Grease Dispensers
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3   Slurry Seal Roads, Ph I & II         $150,000      $150,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3            Articulated Dumper           $53,852       $53,852
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3           Fertilizer Spreader            $6,834        $6,834
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3           Fertilizer Spreader            $6,834        $6,834
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3        Diesel Utility Vehicle           $15,680       $15,680
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                Willamette          OR                  3                   Over seeder            $8,437        $8,437
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           Total--Oregon          $406,593      $406,593
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1                                           Indiantown Gap          PA                 17      Repair Admin HVAC System           $60,720       $60,720
--------------------------------------------------------------------------------------------------------------------------------------------------------
*1                                           Indiantown Gap          PA                 17       Replace Glass Windows &           $80,000       $80,000
                                                                                                 Doors, B-1 (Admin Bldg)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                            Indiantown Gap          PA                 17                      Turf vac           $16,490       $16,490
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                            Indiantown Gap          PA                 17                              Lawn Tractor$8,956        $8,956
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                      NC of the Alleghenies         PA                 18      Utility Vehicle w/casket           $40,896       $40,896
                                                                                                                 carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                      NC of the Alleghenies         PA                 18                      Utility Loader w/ s$19,274       $19,274
                                                                                                auger power head and bit
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             Prospect Hill          PA                 19       Soldiers Monument, 1874          $100,000      $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Total--Pennsylvania          $326,336      $326,336
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large                              Lowering dev$2,700        $2,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large   Utility Vehicle w/hydraulic           $30,000       $30,000
                                                                                                                    lift
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large        Utility vehicle w/2 ft           $15,000       $15,000
                                                                                                               extension
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large      Rotary Brush for Tractor            $6,550        $6,550
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large                Street sweeper           $88,000       $88,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Puerto Rico          PR           At Large            Articulated Dumper           $55,000       $55,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                      Total--Puerto Rico          $197,250      $197,250
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2            Admin Bldg--Repair           $20,000       $20,000
                                                                                                       Electrical System
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2          Electric Maint Truck            $7,500        $7,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2                Turbine Blower            $7,000        $7,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2                 Parts Cleaner            $1,000        $1,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2               Pressure Washer            $1,000        $1,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2                MIG Welder Kit              $500          $500
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2                         Mower           $15,000       $15,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2                  Casket Truck            $1,500        $1,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Beaufort           SC                 2     Union Dead Box Tomb, 1870           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Florence           SC                 6                       Backhoe           $70,000       $70,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Florence           SC                 6            Articulated Dumper           $55,000       $55,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Florence           SC                 6                Street sweeper           $28,000       $28,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Florence           SC                 6                         Mower           $20,000       $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                  Florence           SC                 6                         Mower           $20,000       $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                   Total--South Carolina          $256,500      $256,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large     Provide protection for IT           $10,000       $10,000
                                                                                             equipment in Admin basement
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large       Repair/Replace domestic           $35,000       $35,000
                                                                                                              water line
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large        Re-paint wood trim and            $5,000        $5,000
                                                                                             surfaces on Admin and Maint
                                                                                                                   Bldgs
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large   Establish section P for in-           $15,000       $15,000
                                                                                                    ground cremain sites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large    Replace irrigation control            $5,000        $5,000
                                                                                                         valve solenoids
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large       Road repair/ renovation          $897,000      $897,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large             Hydraulic Breaker            $3,700        $3,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large                4X4 Dump Truck           $46,900       $46,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large       Vehicle, Casket Carrier           $28,500       $28,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large                         Mower           $20,000       $20,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Black Hills          SD           At Large                   Snow blower            $3,900        $3,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Hot Springs          SD           At Large        Headstones/Markers and           $70,000       $70,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Hot Springs          SD           At Large        Replace old wire fence           $15,000       $15,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               Hot Springs          SD           At Large    Battle Mountain Sanitarium           $35,000       $35,000
                                                                                                          Monument, 1914
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Total--South Dakota        $1,190,000    $1,190,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                             Mountain Home          TN                  1    Admin & Maint Bldgs--Paint           $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                             Mountain Home          TN                  1                         Mower           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Knoxville          TN                  2      Union Soldiers Monument,          $250,000      $250,000
                                                                                                                    1906
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Chattanooga          TN                  3   Admin Bldg and Maint Bldg--           $20,000       $20,000
                                                                                             Paint interior and exterior
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Chattanooga          TN                  3   Admin Bldg--Repair Bldg and           $15,000       $15,000
                                                                                                       Renovate Cabinets
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Chattanooga          TN                  3               Utility vehicle           $25,000       $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Chattanooga          TN                  3       Monumental Arch, c.1870          $100,000      $100,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                               Chattanooga          TN                  3    Andrew's Raiders Monument,           $10,000       $10,000
                                                                                                                    1890
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Nashville          TN                  5   Admin and Maint Bldgs--Paint          $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Nashville          TN                  5      Monumental Arch, c. 1870          $250,000      $250,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                 Nashville          TN                  5      Minnesota Monument, 1920
-----------------------------------------------------------------------------------------------------------------------------------$10,000-------$10,000
2                                                   Memphis          TN                  9   Admin and Maint Bldgs--Paint          $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Memphis          TN                  9               Utility Vehicle           $27,000       $27,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Memphis          TN                  9   State of Illinois Memorial,           $40,000       $40,000
                                                                                                                    1928
--------------------------------------------------------------------------------------------------------------------------------------------------------
2                                                   Memphis          TN                  9      Minnesota Monument, 1916           $25,000       $25,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Total--Tennessee          $832,000      $832,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16      Reroof and Renovate Pump            $8,000        $8,000
                                                                                                                   House
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16          Repair/Replace storm          $250,000      $250,000
                                                                                             drainage throughout cemetery
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16     Update signage to reflect            $5,000        $5,000
                                                                                                             Xeroscaping
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16      Replace existing fencing           $10,000       $10,000
                                                                                                    around storage area.
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16        Resurface Roadways and          $400,000      $400,000
                                                                                                         replace curbing
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16                 Electric Cart            $8,503        $8,503
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16               Utility Vehicle           $22,500       $22,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16               Utility Vehicle           $22,500       $22,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                  Ft Bliss          TX                 16                     Sand rake           $17,800       $17,800
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18        Headstones/Markers and        $3,183,980    $3,183,980
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18           Remove, repair, and          $100,000      $100,000
                                                                                             resurface Hemicycle assembly
                                                                                                                   areas
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18   Repair & repaint 3 committal          $15,000       $15,000
                                                                                                     shelter metal roofs
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18              Road Maintenance          $450,000      $450,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                  Utility Cart            $5,500        $5,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                  Utility Cart            $5,500        $5,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                       Tractor           $16,700       $16,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                  Utility Cart            $6,300        $6,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                  Utility Cart            $6,300        $6,300
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                   Houston          TX                 18                     Excavator           $52,700       $52,700
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21        Headstones/Markers and        $4,916,846    $4,916,846
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21    Repair/Recondition/Repaint            $8,000        $8,000
                                                                                             casket biers at 5 committal
                                                                                                                shelters
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21        Resurface Roadways and          $650,000      $650,000
                                                                                                         replace curbing
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21               Utility Vehicle           $29,000       $29,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21              1 Ton Dump Truck           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21                   1 Ton Truck           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21   2 Each Water Tank 300 Gallon          $10,000       $10,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21               Utility Vehicle           $29,000       $29,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21                        Hoist Lift Frame  $5,000        $5,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21      Utility Vehicle w/Casket           $32,500       $32,500
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                            Ft Sam Houston          TX                 21                       Sweeper           $11,900       $11,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Kerrville          TX                 23        Headstones/Markers and          $280,000      $280,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                 Kerrville          TX                 23     Install irrigation system           $50,000       $50,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                    Dallas          TX                 24      Utility Vehicle w/Casket           $29,900       $29,900
                                                                                                                 Carrier
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                    Dallas          TX                 24                         Mower           $29,900       $29,900
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                                    Dallas          TX                 24               Utility Vehicle           $22,500       $22,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                           Dallas-Ft Worth          TX                 24            Install additional            $5,000        $5,000
                                                                                                irrigation at section 27
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                           Dallas-Ft Worth          TX                 24    Establish sections 16 thru           $25,000       $25,000
                                                                                                19 for in-ground cremain
                                                                                                                   sites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               San Antonio          TX                 28        Headstones/Markers and          $350,000      $350,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
3                                               San Antonio          TX                 28   Renovate and expand existing         $150,000      $150,000
                                                                                                       irrigation system
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                            Total--Texas       $11,300,828   $11,300,828
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Quantico          VA                  1        Headstones/Markers and          $898,091      $898,091
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Quantico          VA                  1    Replace Gutters Committals           $24,362       $24,362
                                                                                                A, B, C, Admin, & Public
                                                                                                                Restroom
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Quantico          VA                  1       Replace All Brick Paver           $60,720       $60,720
                                                                                                     Walkways w/Concrete
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Quantico          VA                  1                Street Sweeper          $146,500      $146,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Quantico          VA                  1     Turf vac with dethatching           $31,000       $31,000
                                                                                                                   wheel
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                   Hampton          VA                  3      Replace Maintenance Bldg           $84,000       $84,000
                                                                                                               Roofs (2)
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                   Hampton          VA                  3        Union Soldiers (NHDVS)          $250,000      $250,000
                                                                                                          Monument, 1868
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Culpeper          VA                  7   Pennsylvania Monument, 1909           $40,000       $40,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Culpeper          VA                  7           Restore Brick Walls          $228,690      $228,690
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Culpeper          VA                  7               Utility tractor           $26,000       $26,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                  Culpeper          VA                  7               Utility vehicle           $17,000       $17,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                                Winchester          VA                 10        Headstones/Markers and          $642,520      $642,520
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--Virginia        $2,448,883    $2,448,883
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                    Tahoma          WA                  8                  Road Repairs           $30,000       $30,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                    Tahoma          WA                  8         Street Sweeper/Vacuum           $75,619       $75,619
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                    Tahoma          WA                  8      Compact Dual Drum Roller           $18,000       $18,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
5                                                    Tahoma          WA                  8                 Electric Cart           $11,600       $11,600
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                       Total--Washington          $135,219      $135,219
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4          Replace Water System          $250,000      $250,000
                                                                                                     throughout Cemetery
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4                Replace Chain Link Fence $90,000       $90,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4       Replace Asphalt Roads @          $220,000      $220,000
                                                                                                            Sections A-C
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4                              Loader, Bac$51,869ompact $51,869
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4      Articulated Dumper, Turf           $35,000       $35,000
                                                                                                                   Track
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4   Sprayer, Water, 200 Gallon,            $2,250        $2,250
                                                                                                              Skid Mount
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4               Bucket, Front, Loader, 68'', $794          $794
                                                                                                              Skid Steer
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4        Headstones/Markers and           $81,000       $81,000
                                                                                                              Gravesites
--------------------------------------------------------------------------------------------------------------------------------------------------------
4                                                      Wood          WI                  4   Civil War Soldiers & Sailors         $250,000      $250,000
                                                                                                          Monument, 1903
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Total--Wisconsin          $980,913      $980,913
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             West Virginia          WV                  1    Provide-Install Irrigation           $20,460       $20,460
                                                                                                            Booster Pump
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             West Virginia          WV                  1                Repair Roadway           $16,500       $16,500
--------------------------------------------------------------------------------------------------------------------------------------------------------
1                                             West Virginia          WV                  1    4x4 dump truck w/snow plow           $34,562       $34,562
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                    Total--West Virginia           $71,522       $71,522
--------------------------------------------------------------------------------------------------------------------------------------------------------
*                                                  NCA wide         TBD                        Implement selected energy          $345,000      $345,000
                                                                                                  and water conservation
                                                                                                                measures
--------------------------------------------------------------------------------------------------------------------------------------------------------
*                                                  NCA wide         TBD                      150 Facilities_Environmental       $1,500,000    $1,500,000
                                                                                                      management systems
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Total--NCA wide        $1,845,000    $1,845,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Cumulative Total       $50,000,000  $50,000,000\
                                                                                                                                                      1\
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ The following NCA activities are included under the general heading of ``Monument and Memorial Repairs and Energy Projects'': (1) national shrine
  projects to raise, realign, and clean headstones/markers and repair sunken graves at various locations across the country; (2) repairs to historic
  monuments and memorials at national cemeteries; (3) projects for repairing roads, buildings, and other cemetery infrastructure at locations
  nationwide; (4) equipment purchases for cemetery operations; and (5) projects that conserve energy and water through the use of wind turbines, solar
  power and other measures.


                       FY 09 National Cemetery Administration (NCA)/Energy ARRA Spend Plan
                           National Cemetery Administration ARRA Spending by Category
----------------------------------------------------------------------------------------------------------------
                                                                            All Energy
                                                     Qty       Totals        Related     Renewable    Percentage
                                                                             Projects      Energy      of Total
----------------------------------------------------------------------------------------------------------------
Renewable Energy (Solar, Wind, Biomass,                3       $3,640,000   $3,640,000   $3,640,000           7%
 Geothermal)
----------------------------------------------------------------------------------------------------------------
Heating, Ventilation, and Air Conditioning             1          $60,720      $60,720           --           0%
----------------------------------------------------------------------------------------------------------------
Roads, Paving, and Grounds Projects                   52       $8,376,480           --           --          17%
----------------------------------------------------------------------------------------------------------------
Safety, Security and Fire Alarms                       2          $16,000           --           --           0%
----------------------------------------------------------------------------------------------------------------
Energy Conservation                                    9       $2,019,000   $2,019,000           --           4%
----------------------------------------------------------------------------------------------------------------
Building Infrastructure                                3         $305,000           --           --           1%
----------------------------------------------------------------------------------------------------------------
Monument and Memorial Repair                          49       $4,380,000           --           --           9%
----------------------------------------------------------------------------------------------------------------
National Shrine                                       19      $23,629,386           --           --          47%
----------------------------------------------------------------------------------------------------------------
Interior Renovation                                   12         $516,920           --           --           1%
----------------------------------------------------------------------------------------------------------------
Exterior Renovations                                  25         $970,552           --           --           2%
----------------------------------------------------------------------------------------------------------------
Equipment                                            216       $5,970,942           --           --          12%
----------------------------------------------------------------------------------------------------------------
Other                                                  4         $115,000           --           --           0%
----------------------------------------------------------------------------------------------------------------
Total                                                395      $50,000,000   $5,719,720   $3,640,000         100%
----------------------------------------------------------------------------------------------------------------


                                                                                                     [GRAPHIC] [TIFF OMITTED] T8420A.002
                                                                                                     


 FY 2009 National Cemetery Administration (NCA)/Energy ARRA Spend Plan1
                              ARRA Overview
------------------------------------------------------------------------
                                          Number of
                 State                    Projects       ARRA Funding
------------------------------------------------------------------------
AK                                                1              $10,000
------------------------------------------------------------------------
AL                                                3              $70,000
------------------------------------------------------------------------
AR                                                7              $82,600
------------------------------------------------------------------------
AZ                                                6             $352,005
------------------------------------------------------------------------
CA                                               24          $10,156,412
------------------------------------------------------------------------
CO                                                9             $266,460
------------------------------------------------------------------------
CT                                                0                   --
------------------------------------------------------------------------
DC                                                0                   --
------------------------------------------------------------------------
DE                                                0                   --
------------------------------------------------------------------------
FL                                               13             $543,000
------------------------------------------------------------------------
GA                                                1             $100,000
------------------------------------------------------------------------
HI                                                3             $192,574
------------------------------------------------------------------------
IA                                                2              $15,881
------------------------------------------------------------------------
ID                                                0                   --
------------------------------------------------------------------------
IL                                               17           $2,468,620
------------------------------------------------------------------------
IN                                               14             $683,437
------------------------------------------------------------------------
KS                                               10             $822,000
------------------------------------------------------------------------
KY                                               16             $946,767
------------------------------------------------------------------------
LA                                                3              $74,000
------------------------------------------------------------------------
MA                                                4           $1,809,802
------------------------------------------------------------------------
MD                                                8             $517,985
------------------------------------------------------------------------
ME                                                3             $842,000
------------------------------------------------------------------------
MI                                               12             $165,341
------------------------------------------------------------------------
MN                                                7             $692,000
------------------------------------------------------------------------
MO                                               16           $1,731,401
------------------------------------------------------------------------
MS                                                4             $138,400
------------------------------------------------------------------------
MT                                                0                   --
------------------------------------------------------------------------
NC                                               10             $312,000
------------------------------------------------------------------------
ND                                                0                   --
------------------------------------------------------------------------
NE                                               10             $835,312
------------------------------------------------------------------------
NH                                                0                   --
------------------------------------------------------------------------
NJ                                                2             $290,000
------------------------------------------------------------------------
NM                                               11             $588,394
------------------------------------------------------------------------
NV                                                0                   --
------------------------------------------------------------------------
NY                                               20           $4,352,288
------------------------------------------------------------------------
OH                                               11             $736,328
------------------------------------------------------------------------
OK                                               10             $213,950
------------------------------------------------------------------------
OR                                               13             $406,593
------------------------------------------------------------------------
PA                                                7             $326,336
------------------------------------------------------------------------
PR                                                6             $197,250
------------------------------------------------------------------------
RI                                                0                   --
------------------------------------------------------------------------
SC                                               14             $256,500
------------------------------------------------------------------------
SD                                               14           $1,190,000
------------------------------------------------------------------------
TBD                                               2           $1,845,000
------------------------------------------------------------------------
TN                                               15             $832,000
------------------------------------------------------------------------
TX                                               39          $11,300,828
------------------------------------------------------------------------
UT                                                0                   --
------------------------------------------------------------------------
VA                                               12           $2,448,883
------------------------------------------------------------------------
VT                                                0                   --
------------------------------------------------------------------------
WA                                                4             $135,219
------------------------------------------------------------------------
WI                                                9             $980,913
------------------------------------------------------------------------
WV                                                3              $71,522
------------------------------------------------------------------------
WY                                                0                   --
------------------------------------------------------------------------
Total                                           395          $50,000,000
------------------------------------------------------------------------
1 The following NCA activities are included under the general heading of
  ``Monument and Memorial Repairs and Energy Projects'': (1) national
  shrine projects to raise, realign, and clean headstones/markers and
  repair sunken graves at various locations across the country; (2)
  repairs to historic monuments and memorials at national cemeteries;
  (3) projects for repairing roads, buildings, and other cemetery
  infrastructure at locations nationwide; (4) equipment purchases for
  cemetery operations; and (5) projects that conserve energy and water
  through the use of wind turbines, solar power and other measures.


                                 ______
                                 


            Information Technology Recovery Expenditure Plan
                   U.S. Department of Veterans Affairs
------------------------------------------------------------------------
                      Chapter 33--Post-9/11 GI Bill
-------------------------------------------------------------------------
     Funding Requirement              Cost              Description
------------------------------------------------------------------------
Project infrastructure,              $46,925,000   SPAWAR to provide the
 configuration management,                          necessary resources
 application development,                           and support
 testing, and training                              infrastructure to
                                                    manage the
                                                    strategic, tactical,
                                                    business and
                                                    technical components
                                                    of the program
                                                    execution; to
                                                    design, procure,
                                                    install, and
                                                    configure the
                                                    necessary hardware,
                                                    operating systems,
                                                    and network
                                                    infrastructure; to
                                                    design, develop,
                                                    implement, and
                                                    maintain the
                                                    necessary data
                                                    integration
                                                    infrastructure; and
                                                    to develop and
                                                    execute all testing
                                                    efforts to support
                                                    the end-to-end
                                                    development,
                                                    deployment, and
                                                    maintenance of the
                                                    system.
------------------------------------------------------------------------
Operations                            $1,075,000   Provide on-going life
                                                    cycle solution
                                                    management and
                                                    maintenance support
                                                    for the solution.
------------------------------------------------------------------------
New Hires for VA                        $500,000   Additional IT staff
                                                    will be hired to
                                                    support field
                                                    station and program
                                                    management personnel
                                                    in planning and
                                                    administering the
                                                    execution of the
                                                    Chapter 33 program.
------------------------------------------------------------------------

------------------------------------------------------------------------
Chapter 33 Subtotal                  $48,500,000   .....................
------------------------------------------------------------------------

------------------------------------------------------------------------
Paperless Processing of Veterans Benefits
------------------------------------------------------------------------
Funding Requirement                             Cos              Descrip
                                                    tion
------------------------------------------------------------------------

------------------------------------------------------------------------
Network upgrades for VBA              $1,500,000   Partial funding for
 infrastructure                                     the required network
                                                    upgrades to
                                                    stabilize the VBA
                                                    network. Redesign
                                                    continues with the
                                                    upgrade of DS3
                                                    circuits to all
                                                    regional offices and
                                                    selected outbased
                                                    sites.
------------------------------------------------------------------------

------------------------------------------------------------------------
Paperless Subtotal                    $1,500,000   .....................
------------------------------------------------------------------------

------------------------------------------------------------------------
VETSNET--Economic Recovery Payment Capabilities
------------------------------------------------------------------------
Funding Requirement                             Cos              Descrip
                                                    tion
------------------------------------------------------------------------

------------------------------------------------------------------------
Modifications to existing               $100,000   Modifications to the
 Compensation and Pension                           existing application
 payment application                                in the Veterans
                                                    Service Network
                                                    (VETSNET), VA's
                                                    primary Compensation
                                                    and Pension payment
                                                    system.
------------------------------------------------------------------------
VETSNET Subtotal                        $100,000   .....................
------------------------------------------------------------------------

------------------------------------------------------------------------
Grand Total                          $50,100,000   .....................
------------------------------------------------------------------------


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