[Senate Hearing 111-81]
[From the U.S. Government Publishing Office]


                                                         S. Hrg. 111-81
 
                HEARING ON PENDING BENEFITS LEGISLATION

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



                                HEARING

                               BEFORE THE

                     COMMITTEE ON VETERANS' AFFAIRS
                          UNITED STATES SENATE

                     ONE HUNDRED ELEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 29, 2009

                               __________

       Printed for the use of the Committee on Veterans' Affairs


 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 senate




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                     COMMITTEE ON VETERANS' AFFAIRS

                   Daniel K. Akaka, Hawaii, Chairman
John D. Rockefeller IV, West         Richard Burr, North Carolina, 
    Virginia                             Ranking Member
Patty Murray, Washington             Johnny Isakson, Georgia
Bernard Sanders, (I) Vermont         Roger F. Wicker, Mississippi
Sherrod Brown, Ohio                  Mike Johanns, Nebraska
Jim Webb, Virginia                   Lindsey O. Graham, South Carolina
Jon Tester, Montana
Mark Begich, Alaska
Roland W. Burris, Illinois
Arlen Specter, Pennsylvania \2\
                    William E. Brew, Staff Director
                 Lupe Wissel, Republican Staff Director




----------
\2\ Hon. Arlen Specter was recognized on May 5, 2009, as a majority 
Member.


                            C O N T E N T S

                              ----------                              

                             April 29, 2009
                                SENATORS

                                                                   Page
Akaka, Hon. Daniel K., Chairman, U.S. Senator from Hawaii........     1
Burr, Hon. Richard, Ranking Member, U.S. Senator from North 
  Carolina.......................................................    21
    Prepared Statement...........................................    21
Wicker, Hon. Roger F., U.S. Senator from Mississippi.............     2
Burris, Hon. Roland W., U.S. Senator from Illinois...............    26

                               WITNESSES

Mayes, Bradley G., Director, Compensation and Pension Service, 
  Veterans Benefits Administration, U.S. Department of Veterans 
  Affairs; accompanied by Richard Hipolit, Assistant General 
  Counsel, U.S. Department of Veterans Affairs; and Thomas M. 
  Lastowka, Director, VA Regional Office and Insurance Center, 
  Veterans Benefits Administration, U.S. Department of Veterans 
  Affairs........................................................     3
    Prepared statement...........................................     7
    Written additional views submitted by VA after the hearing...    17
    Response to requests arising during the hearing by:
      Hon. Daniel K. Akaka.......................................    23
      Hon. Roger F. Wicker.......................................    25
    Response to post-hearing questions submitted by:
      Hon. Daniel K. Akaka.......................................    31
      Hon. Richard Burr..........................................    33
      Hon. Bernard Sanders.......................................    34
        Attachments A and B......................................    37
Jackson, Robert, Assistant Director, National Legislative 
  Service, Veterans of Foreign Wars of the United States.........    40
    Prepared statement...........................................    42
    Written additional views submitted by VFW after the hearing..    48
    Response to post-hearing questions submitted by Hon. Daniel 
      K. Akaka...................................................    48
Kelley, Raymond C., National Legislative Director, AMVETS........    49
    Prepared statement...........................................    50
    Response to post-hearing questions submitted by Hon. Daniel 
      K. Akaka...................................................    53
Mason, R. Chuck, Legislative Attorney, Congressional Research 
  Service........................................................    53
    Prepared statement...........................................    55
    Written information for the record...........................    74
DePlanque, Ian, Assistant Director, Veterans Affairs and 
  Rehabilitation Commission, The American Legion.................    58
    Prepared statement...........................................    59
    Response to post-hearing questions submitted by Hon. Daniel 
      K. Akaka...................................................    62
Poynter, Rebecca Noah, Director, Military Spouse Business 
  Organization...................................................    63
    Prepared statement...........................................    65
    Response to post-hearing questions submitted by Hon. Daniel 
      K. Akaka...................................................    67
        Attachments..............................................    70

                                APPENDIX

Johanns, Hon. Mike, U.S. Senator from Nebraska; prepared 
  statement......................................................    85
Nelson, Hon. Ben, U.S. Senator from Nebraska; prepared statement.    85
McWilliam, John M., Deputy Assistant Secretary, Veterans' 
  Employment and Training Service, U.S. Department of Labor; 
  prepared statement.............................................    87
Iraq and Afghanistan Veterans of America (IAVA); prepared 
  statement......................................................    89
Paralyzed Veterans of America; prepared statement................    91
Ryan, Norbert R., Jr., USN (Ret.), President, Military Officers 
  Association of America (MOAA)..................................    95


                HEARING ON PENDING BENEFITS LEGISLATION

                              ----------                              


                       WEDNESDAY, APRIL 29, 2009

                                       U.S. Senate,
                            Committee on Veterans' Affairs,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 9:32 a.m., in 
room 562, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 
Chairman of the Committee, presiding.
    Present: Senators Akaka, Sanders, Burris, Begich, Burr, 
Isakson, and Wicker.

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

    Chairman Akaka. The U.S. Senate Committee of Veterans 
Affairs will come to order.
    Aloha, good morning, and welcome to today's hearing.
    Like the Health Legislative hearing last week, we have an 
ambitious agenda today that reflects the work and commitment of 
many Members of this Committee on both sides of the aisle. The 
bills we are reviewing today reflect a bipartisan effort of 
this Committee to help VA adapt to the needs of veterans and 
their families.
    The legislation before us focuses on providing assistance 
to veterans disabled while serving their country and assisting 
servicemembers as they transition from military to civilian 
life. Both are areas in which this Committee has worked and 
will continue to work as we develop another strong package of 
veterans' benefits legislation.
    Before we begin, I want to speak briefly about the items on 
the agenda that I have introduced. As veterans and their 
families all across this Nation struggle to stretch their 
dollars, the passage of S. 407, the Veterans' Compensation 
Cost-of-Living Adjustment Act of 2009, is critical. Among other 
benefits, it would increase the rates of compensation for 
veterans with service-connected disabilities, and it would 
increase the rates of dependency and indemnity compensation for 
the survivors of certain disabled veterans.
    Many of the three million-plus recipients of these benefits 
depend upon the tax-free payments, not only to provide for 
their own basic needs but for the needs of their families. 
Without an annual COLA increase, these veterans and their 
families would see the value of their hard-earned benefits 
slowly diminish. We would be delinquent if we did not ensure 
that those who sacrificed so much for this country receive the 
benefits and services they have earned.
    S. 514, the Veterans Rehabilitation and Training 
Improvements Act of 2009, would ensure that veterans in VA's 
vocational rehabilitation program receive a subsistence 
allowance equal to the pay grade of an E-5's housing stipend. 
And if a veteran completes VA's Vocational Rehabilitation 
Program, the bill also authorizes VA to reimburse that veteran 
for rehabilitation-related expenses, like childcare. 
Furthermore, the bill removes a cap on VA's independent living 
services.
    S. 718, the Veterans' Insurance and Benefits Enhancement 
Act of 2009, is a comprehensive bill that would provide 
important benefits to veterans both young and old. This 
legislation would increase Veterans' Mortgage Life Insurance 
coverage, and supplemental Service-Disabled Veterans' Insurance 
for disabled veterans. It would also establish a new insurance 
program for service-connected veterans.
    In addition, this legislation would expand eligibility for 
retroactive benefits from Traumatic Injury Protection coverage 
under the Servicemembers' Group Life Insurance program. 
Importantly, this bill would also increase certain benefits 
that have not been updated for many years for veterans and 
their survivors.
    Last, I have introduced legislation S. 919 that would ease 
the burden placed on combat veterans to provide information on 
an event that caused a particular disability. This legislation 
would require VA to issue regulations that would specify events 
that are characteristic of particular combat zones and for 
which a veteran's testimony concerning exposure to those events 
should be conceded.
    I am eager for an open discussion on these meaningful 
pieces of legislation. I thank you all for joining us this 
morning, and I look forward to hearing from all the witnesses.
    At this time, I would like to call on Senator Wicker for 
any statements that you wish to make.

              STATEMENT OF HON. ROGER F. WICKER, 
                 U.S. SENATOR FROM MISSISSIPPI

    Senator Wicker. Thank you very much, Mr. Chairman.
    We have two very distinguished panels to hear from today, 
and I therefore will waive an opening statement so that we can 
get right to the testimony. Thank you, sir.
    Chairman Akaka. Thank you very much, Senator.
    I want to welcome our principal witness from VA, Brad 
Mayes, who is the Director of the Compensation and Pension 
Service for VBA. He is accompanied by Richard Hipolit, 
Assistant General Counsel and Tom Lastowka, the Director of 
VA's Regional Office and Insurance Center. I had the pleasure 
of visiting several months ago. I thank you both for being 
here. VA's full testimony will appear in the record.
    Mr. Mayes, will you please begin with your testimony?

   STATEMENT OF BRADLEY G. MAYES, DIRECTOR, COMPENSATION AND 
 PENSION SERVICE, VETERANS BENEFITS ADMINISTRATION, DEPARTMENT 
OF VETERANS AFFAIRS; ACCOMPANIED BY RICHARD HIPOLIT, ASSISTANT 
 GENERAL COUNSEL, DEPARTMENT OF VETERANS AFFAIRS AND THOMAS M. 
 LASTOWKA, DIRECTOR, VA REGIONAL OFFICE AND INSURANCE CENTER, 
   VETERANS BENEFITS ADMINISTRATION, DEPARTMENT OF VETERANS 
                            AFFAIRS

    Mr. Mayes. Mr. Chairman, thank you for having us here 
today.
    Before I get started I was hoping you would permit me to go 
a little bit beyond the standard 5 minutes given the number of 
bills that we have to talk about today and the complexity and 
the importance of those bills.
    Chairman Akaka. Mr. Mayes, you may continue with your 
testimony.
    Mr. Mayes. Thank you, Mr. Chairman, Senator Wicker.
    I am pleased to be here today to provide the Department of 
Veterans Affairs' views on pending benefits legislation. I will 
not be able to address a few of the bills on today's agenda 
because we did not have time to coordinate the Administration's 
position and develop cost estimates, but we will provide that 
information in writing for the record.
    Further, the Administration defers to the Departments of 
Labor and Defense regarding a position on S. 263 and S. 475 
since those departments are primarily affected by this proposed 
legislation.
    Regarding S. 347, VA does not support enactment of this 
bill because VA already has the authority to adjust the 
schedule of payments under the Traumatic Servicemembers' Group 
Life Insurance program as needed. Furthermore, VA previously 
considered as part of its ``Year-One Review'' of the TSGLI 
program whether the payment for a qualifying loss of a dominant 
hand should be higher than the payment for a qualifying loss of 
a non-dominant hand.
    And VA concluded that a distinction was not necessary since 
the purpose of the TSGLI program is primarily to provide short-
term financial assistance to servicemembers and their families 
because the families often suffer financial hardship to be with 
the injured members during their treatment and recovery 
periods. VA's compensation program, not TSGLI, is designed to 
compensate for the long-term effects of injuries incurred in 
service, and the compensation program does pay a greater 
benefit for loss of dominant hand.
    S. 407, the Veterans' Compensation Cost-of-Living 
Adjustment Act of 2009 would, as you said, Mr. Chairman, direct 
the Secretary of Veterans' Affairs to increase administratively 
the rates of disability compensation for veterans with service-
connected disabilities, including additional amounts authorized 
for dependents and the clothing allowance, DIC, and it would be 
effective December 1, 2009. VA supports a cost-of-living 
adjustment of this nature.
    S. 514, the Veterans' Rehabilitation and Training 
Improvements Act of 2009, would provide for an increase in the 
amount of subsistence allowance payable to veterans 
participating in voc rehab programs under Chapter 31 of Title 
38 United States Code, allow reimbursement of certain costs to 
those veterans, and remove the limitation on the number of 
veterans who may be provided programs of independent living.
    We support, in principle, efforts to facilitate successful 
completion of voc rehab programs under Chapter 31. However, 
recent changes to VA education benefits, including the new 
Post-9/11 GI Bill may affect Chapter 31 participation and 
completion rates. The Department is evaluating the impact of 
this new benefit package and the implications for the 
Vocational Rehabilitation and Employment Program to include the 
need to adjust the subsistence allowance. For this reason, VA 
is unable to support increased subsistence rates at this time; 
however, VA does not object to the removal of the limitation on 
the number of veterans who may enter programs of independent 
living subject to the availability of offsets for additional 
costs associated with that expansion.
    S. 663, the Belated Thank You to the Merchant Mariners of 
World War II Act of 2009, would establish in the General Fund 
of the Treasury a Merchant Mariner Equity Compensation Fund 
from which VA would pay $1,000 per month to eligible members of 
the Oceangoing Merchant Marine who had service between December 
7, 1941 and December 31, 1946.
    There can be no doubt that merchant mariners were exposed 
to many of the same rigors and risks of service as those 
confronted by members of the Navy and the Coast Guard during 
World War II. However, the universal nature of the benefit that 
S. 663 would provide for individuals with qualifying service, 
and the amount of the benefit that would be payable or 
difficult to reconcile with the benefits VA currently pays to 
other veterans, as well as members of the Oceangoing Merchant 
Marine Service during World War II, S. 663 would create what is 
essentially a service pension for a particular class of 
individuals.
    The bill would authorize the inequitable payment of a 
greater benefit to a Merchant Mariner simply based on 
qualifying service than a veteran currently receives for a 
service-connected disability rated at 60 percent disabling. 
Accordingly, the bill would provide to Merchant Mariners 
significant preferential treatment not provided to other 
veterans.
    S. 691 and S. 746 would require VA to establish national 
cemeteries in El Paso County, Colorado and in the Sarpy County, 
Nebraska region, respectively. VA does not support the proposed 
legislation because the criteria VA has adopted and Congress 
has endorsed for determining the need for new national 
cemeteries requires that there be at least 170,000 veterans not 
currently served by a burial option in a national or State 
veterans' cemetery residing within 75 miles of the proposed 
site. And based on these criteria, the need for a new national 
cemetery is not demonstrated in these locations.
    Regarding S. 718, the Veterans' Insurance and Benefits 
Enhancement Act of 2009, Section 101, would create a new life 
insurance program that would provide up to $50,000 of coverage 
to veterans who are less than 65 years old and have a service-
connected disability. VA supports Section 101 subject to 
Congress' enactment of legislation offsetting the increased 
costs associated with this provision because it would meet 
service-disabled veterans' needs by providing more adequate 
amounts of life insurance than currently available under the 
SDVI program. However, VA does not support paying for 
administrative costs from premiums because the Administration 
believes that the cost of entitlement should be separate and 
distinct from the cost of administering those entitlements.
    Section 102 would increase the maximum amount of 
supplemental SDVI from $20,000 to $30,000. VA supports Section 
102 provided offset source of funding.
    VA defers to the Department of Defense on the merits of 
Section 103 because DOD would bear the costs associated with 
this enactment.
    Veterans Mortgage Life Insurance is available to eligible 
individuals age 69 or younger with severe service-connected 
disabilities who receive a specially-adapted housing grant. 
Currently, the maximum amount of VMLI provided is the lesser of 
$90,000 or the amount of the loan outstanding on the housing 
unit. Section 104 would increase the $90,000 limitation to 
$150,000, and then $200,000 after January 1, 2012. Subject to 
legislation offsetting the increased costs, VA supports Section 
104.
    Section 105 would correct a previous inequity in the law 
and provide that all insurable spouses of servicemembers, 
whether those members are disabled or not, would have the same 
time period in which to convert their TSGLI coverage to a 
privately obtained policy consistent with the other conversion 
time periods specified in the statute. However, Section 105 
would specify that a dependent's coverage would terminate 
within a specified period after the member separated or was 
released from the uniformed services. This phrase would not 
include Ready Reservists who are separated or released from an 
assignment rather than from the Uniformed Services. And VA 
supports this provision, and there are no associated costs.
    Section 201 of the bill would require the VA to increase 
the monthly payment of temporary DIC that is payable for one or 
more dependent children under the age of 18 years. VA supports 
enactment of this provision, the benefit costs of which would 
be insignificant.
    VA supports enactment of Section 202 because it would 
accomplish the same purpose for which VA proposed legislation 
to the last Congress. In 2001, Congress made wartime veterans 
age 65 years or older eligible for pension without regard to 
the permanent and total disability requirement. In 2006, the 
Court of Appeals for Veterans' Claims held that veterans age 65 
or older are also eligible for the higher rate of pension 
authorized for veterans who are permanently housebound without 
regard to the permanent and total disability requirement. 
Although the Court's holding is arguably a plausible 
interpretation of the literal terms of the statute, we believe 
it is inconsistent with Congress' intent because it results in 
inconsistent and illogical treatment of veterans' claims and 
subverts the primary purpose of authorizing the higher rate of 
pension.
    Believing that Congress did not intend such an inequitable 
result, we proposed legislation to overturn the Court's 
interpretation, and we support enactment of this section for 
those reasons. And we estimate cost savings of $3.2 million the 
first year and $175.5 million over 10 years.
    Regarding Section 203, I would like to state for the record 
that my written testimony, Mr. Chairman, cited findings in a 
2001 program evaluation of benefits for survivors of veterans 
with service-connected disabilities as the basis for the 
Administration's opposition to increases to the monthly rates 
of DIC for surviving spouses and parents. And while the study 
did form the basis for the Administration's opposition to rate 
increases as stipulated at Section 203(a) for surviving spouses 
who were entitled to DIC at the housebound or aid and 
attendance rate, it didn't adequately address the needs of 
surviving parents.
    A subsequent program evaluation of the parents' DIC program 
in 2004, which I did not reference in my written testimony, 
recommended an increase in the parents' DIC rate. As such, I 
would ask that you provide me the opportunity to look more 
closely at this benefit to determine if, in fact, cost of 
living adjustments have already been made similar to those 
proposed in this section of the bill, and whether further 
adjustment is necessary.
    Sir, I want to get this right. VA did not have sufficient 
time to prepare benefit cost estimates for this provision. With 
the Committee's permission, we will provide a cost estimate for 
the record.
    Section 204(a) of the bill increases the maximum monthly 
pension amounts from 90 to 100 for spouseless and childless 
veterans, and we do not object to these increases.
    Sections 301 and 302 would require VA to make supplemental 
payments in addition to currently required statutory payments 
for funeral and burial-related expenses if--and only if--funds 
are specifically appropriated in advance for that purpose. VA 
has not supported similar legislation in the past because 
funding a single benefit from multiple sources can create 
numerous complications in administration and represents an 
unsound budgeting practice.
    Section 401(a) would add to the list of disabilities that 
qualify a compensation-receiving veteran or active duty 
servicemember for assistance in obtaining an automobile or 
other conveyance or adaptive equipment an additional 
disability--a severe burn injury, as determined pursuant to VA 
regulations. Section 401(b) would make various stylistic 
changes to Section 3901.
    Regarding Section 402, we plan to review the scope of our 
existing authority to determine if there are circumstances 
under which severe burn victims are not adequately covered by 
the automobile and specially adaptive equipment grants.
    And finally, S. 820, the Veterans Mobility Enhancement Act 
of 2009 would increase from $11,000 to $22,500 the maximum 
amount of assistance VA is authorized to provide an eligible 
person to obtain an automobile or other conveyance. It would 
also require VA to increase that amount, effective October 1 of 
each year to an amount equal to 80 percent of the average 
retail cost of new automobiles for the preceding calendar year. 
It would require VA to establish the method for determining 
that average retail cost.
    We understand the importance of providing sufficient 
resources for vehicles or adaptive equipment to servicemembers 
and veterans who rely on them, but we cannot support this bill 
at this time. In order to best support the goals of the 
program, we do need some time to review the appropriate amount 
to provide for this benefit.
    Regarding S. 842--the final bill that I have comments in my 
oral statement for--Section 1 of the bill, concerning mortgages 
and mortgage foreclosures, relates to the Servicemembers Civil 
Relief Act, a law primarily affecting active duty service 
personnel. Accordingly, VA defers to the views of DOD with 
regard to that section. And Section 2 would authorize VA to 
purchase a VA-guaranteed home loan from the mortgage holder, if 
the loan is modified by a bankruptcy judge under the authority 
of 11 U.S.C. Sec. 1322(b). VA cannot support any additional 
repurchasing authority until the budgetary impacts of such 
authority on existing and future cohorts of loans can be 
reviewed.
    Mr. Chairman, thank you for your indulgence with my long 
oral statement. This concludes my statement, and I would be 
pleased to answer any questions you or the other Members of 
this Committee may have.
    [The prepared statement of Mr. Mayes follows:]
  Prepared Statement of Bradley G. Mayes, Director, Compensation And 
 Pension Service, Veterans Benefits Administration, U.S. Department of 
                            Veterans Affairs
    Mr. Chairman and Members of the Committee: I am pleased to be here 
today to provide the Department of Veterans Affairs' (VA) views on 
pending benefits legislation. I will not be able to address a few of 
the bills on today's agenda because VA received them in insufficient 
time to coordinate the Administration's position and develop cost 
estimates, but we will provide that information in writing for the 
record. Those bills are S. 315, section 203 of S. 728, S. 847, the 
draft ``Clarification of Characteristics of Combat Service Act of 
2009,'' and a draft bill to modify the commencement of the period of 
payment of original awards of compensation for veterans who are retired 
or separated from the uniformed services for disability.
        s. 263 ``servicemembers access to justice act of 2009''
    S. 263, the ``Servicemembers Access to Justice Act of 2009,'' would 
make several revisions to the Uniformed Services Employment and 
Reemployment Rights Act of 1994, as amended. Because that Act is 
administered by the Department of Labor, VA defers to the Department of 
Labor concerning the Administration's position on S. 263.
    Because this bill required extensive coordination among several VA 
components, we did not have sufficient time before this hearing to 
finalize a position. However, we will provide our position to the 
Committee in writing for the record.
                                 s. 347
    The Servicemembers' Group Life Insurance program includes 
protection for covered servicemembers from certain qualifying losses 
directly resulting from traumatic injury in service (known as Traumatic 
Servicemembers' Group Life Insurance or ``TSGLI''). Current law 
requires that the qualifying losses prescribed by VA by regulation 
include ``[l]oss of a hand * * * at or above the wrist.'' Section 1(a) 
of S. 347 would authorize VA, in specifying the amount of the payment 
to be made under the TSGLI program for each qualifying loss, to 
distinguish between the severity of a qualifying loss of a dominant 
hand and a qualifying loss of a non-dominant hand. Section 1(b) would 
require VA to issue regulations providing mechanisms for payments for 
such losses incurred before the date of enactment of this bill.
    VA does not support enactment of this bill because it is 
unnecessary. VA already has the authority to adjust the schedule of 
payments under the TSGLI program as needed. Furthermore, VA has 
previously considered, as part of its ``Year-One Review'' of the TSGLI 
program, whether the payment for a qualifying loss of a dominant hand 
should be higher than the payment for a qualifying loss of a non-
dominant hand and concluded that it should not, for the reasons 
discussed below.
    The TSGLI program is modeled after the accidental death and 
dismemberment programs in the commercial sector. In the commercial 
sector, there is no precedent for paying a higher benefit for a 
``dominant'' hand. Furthermore, medical professionals we consulted on 
the issue of dominance of one hand or arm in the course of the Year-One 
Review commented that some individuals use the ``non-dominant'' arm as 
the primary arm for a few activities, i.e., there is some degree of 
variability with respect to which arm is dominant for different 
activities. They also pointed out that some individuals are 
ambidextrous. These factors would complicate the adjudication of such 
claims.
    The purpose of the TSGLI program is to provide short-term financial 
assistance to servicemembers and their families because the families 
often suffer financial hardship to be with the injured members during 
their treatment and recovery periods. The amount of a payment depends 
on the nature of the injury and the expected time needed for recovery. 
There is no evidence to date that loss of a dominant hand requires a 
longer recovery and rehabilitation period than loss of a non-dominant 
hand does.
    We are also concerned about the impact of this proposal on our 
ability to maintain a peacetime premium of $1.00 per month, as Congress 
intended. Although the relatively low incidence of amputation of the 
dominant hand alone would not likely affect the premium, it would open 
the door to requests for disparate treatment of other injuries, such as 
loss of a dominant foot or leg, the dominant eye, burns on the dominant 
side of the body, etc. The establishment of higher payments for other 
dominant-side losses could result in the need to charge a higher 
premium for coverage.
    The law provides that covered members are covered against inability 
to carry out the activities of daily living resulting from traumatic 
brain injury and defines the term ``inability to carry out the 
activities of daily living'' as inability to independently perform 2 or 
more of 6 specified functions, such as bathing, dressing, and eating. 
We are also concerned that enactment of S. 347 could result in requests 
for disparate treatment if it were alleged that traumatic brain 
injuries had a greater impact on the dominant side of the body than the 
non-dominant side.
    Finally, VA's compensation program, not TSGLI, is designed to 
compensate for the long-term effects of injuries incurred in service. 
The compensation program does pay a greater benefit for loss of a 
dominant hand.
    VA estimates that enactment of S. 347 would result in costs of $1.1 
million over five years and $2.3 million over ten years.
s. 407 ``veterans' compensation cost-of-living adjustment act of 2009''
    S. 407, the ``Veterans' Compensation Cost-of-Living Adjustment Act 
of 2009,'' would direct the Secretary of Veterans Affairs to increase 
administratively the rates of disability compensation for veterans with 
service-connected disabilities, including the additional amounts 
authorized for dependents and the clothing allowance, and of dependency 
and indemnity compensation for the survivors of veterans whose deaths 
are service related, effective December 1, 2009. The rates of increase 
would be the same as the cost-of-living adjustment that will be 
provided under current law to Social Security recipients. The bill 
would also authorize VA to adjust the rates of disability compensation 
payable under prior laws to persons who have not received compensation 
under chapter 11 of title 38, United States Code.
    VA supports a cost-of-living adjustment of this nature. We believe 
this legislation is necessary to ensure the affected benefits against 
any eroding effects of inflation. The worthy beneficiaries of these 
benefits deserve no less.
            s. 475 ``military spouses residency relief act''
    S. 475, the ``Military Spouses Residency Relief Act,'' would make 
revisions to the Servicemembers Civil Relief Act concerning the spouses 
of servicemembers. Because S. 475 would primarily affect servicemembers 
and their spouses, VA defers to the Department of Defense (DOD) 
concerning the Administration's position on the bill.
   s. 514 ``veterans rehabilitation and training improvements act of 
                                 2009''
    S. 514, the ``Veterans Rehabilitation and Training Improvements Act 
of 2009,'' would provide for an increase in the amount of subsistence 
allowance payable by VA to veterans participating in vocational 
rehabilitation programs under chapter 31 of title 38, United States 
Code, allow reimbursement of certain costs to those veterans, and 
remove the limitation on the number of veterans who may be provided 
programs of independent living.
    Specifically, section 2 of S. 514 would increase the rates of 
subsistence allowance provided veterans under section 3108(b) of title 
38, United States Code. The amount of monthly subsistence allowance 
payable would be equal to the national average of the amount of basic 
allowance for housing payable under section 403 of title 37, United 
States Code, for a member of the uniformed services in pay grade E-5. 
The revision would increase the amount of subsistence allowance 
provided to veterans participating in training and employment services 
under chapter 31 to be roughly equivalent to the housing allowance 
veterans will receive under the chapter 33 Post-9/11 GI Bill.
    Section 3 of the bill would authorize reimbursement of costs 
incurred by a veteran as a direct consequence of participation in a 
rehabilitation program under chapter 31. Such cost would include child-
care expenses and clothing for employment interviews, as well as other 
costs VA would prescribe in regulations. Reimbursement of these costs 
could serve as an incentive for veterans to complete their 
rehabilitation programs.
    Section 4 of the bill would remove section 3120(e) from chapter 31, 
thereby removing the limitation on the number of veterans who may enter 
independent living programs each fiscal year.
    We support, in principle, efforts to facilitate successful 
completion of vocational rehabilitation programs under chapter 31, and 
we recognize that increasing the subsistence allowance and 
reimbursements provided to veterans participating in training and 
employment services will encourage more veterans to continue their 
rehabilitation programs. Increased rates of subsistence allowance would 
allow veterans to pursue rehabilitation on a full-time basis, leading 
to entry into employment in a shorter period of time. However, we are 
unable to support sections 2 and 3 of S. 514 at this time.
    Recent changes to VA education benefits, including the new Post-9/
11 GI Bill, may affect chapter 31 participation and completion rates. 
In addition, as recommended by the Dole-Shalala Commission on Wounded 
Warriors, VA is currently completing a review of its compensation 
program and proposed transition payments, which may have implications 
for the vocational rehabilitation program. Complete review of 
comprehensive benefits, including possible transition benefits and 
current subsistence allowance, is necessary before VA can fully 
evaluate the subsistence allowance and reimbursement increases proposed 
in S. 514. The Department plans to evaluate its total benefit package 
and recommend necessary improvements. For these reasons, and due to the 
bill's large increase in direct costs without an identified offset, VA 
cannot support this bill. VA estimates that the costs for sections 2 
and 3 of S. 514 if enacted would be $361.4 million during the first 
year, $2.2 billion over 5 years, and $4.4 billion over 10 years.
    Subject to the availability of offsets for additional costs 
associated with the expansion, VA does not object to the removal of the 
limitation on the number of veterans who may enter programs of 
independent living so that all veterans who need independent living 
services now and in the future may receive them. In 2007, in connection 
with a similar provision, VA estimated that costs would be $2.9 million 
in the first year and $104 million over ten years. We will provide for 
the record an updated cost estimate for section 4 of S. 514.
        s. 663 ``belated thank you to the merchant mariners of 
                       world war ii act of 2009''
    S. 663, the ``Belated Thank You to the Merchant Mariners of World 
War II Act of 2009,'' would establish in the general fund of the 
Treasury a ``Merchant Mariner Equity Compensation Fund,'' from which VA 
would pay $1,000 per month to eligible individuals. An eligible 
individual would be one who: (1) before October 1, 2009, submits to VA 
an application containing such information and assurances as VA may 
require; (2) has not received benefits under the Servicemen's 
Readjustment Act of 1944; and (3) engaged in qualified service. 
Qualified service would be essentially oceangoing Merchant Marine 
service between December 7, 1941, and December 31, 1946.
    The bill would also authorize for fiscal years 2010 through 2014 
appropriations, which would remain available until expended. It would 
require VA to include in its budget submissions for each fiscal year 
detailed information on the operation of the compensation fund, 
including the number of applicants, the number of eligible individuals 
receiving benefits, the amounts paid out, the administration of the 
fund, and an estimate of the amounts necessary to fully fund the 
compensation fund for that and each of the three subsequent fiscal 
years. Finally, the bill would require VA to prescribe, not later than 
180 days after enactment, regulations to carry out the program.
    VA does not support enactment of this bill for several reasons. 
First, to the extent that S. 663 is intended to offer belated 
compensation to Merchant Mariners for their service during World War 
II, many Merchant Mariners and their survivors are already eligible for 
veterans' benefits based on such service.
    Pursuant to authority granted by section 401 of the ``GI Bill 
Improvement Act of 1977,'' Public Law 95-202, the Secretary of Defense 
in 1988 certified Merchant Mariner service in the oceangoing service 
between December 7, 1941, and August 15, 1945, as active military 
service for VA benefit purposes. As a result, these Merchant Mariners 
are eligible for the same benefits as other veterans of active service. 
This bill appears to contemplate concurrent eligibility with benefits 
Merchant Mariners may already be receiving from VA, a special privilege 
not available to other veterans. Furthermore, to the extent that 
Merchant Mariners may be distinguished from other veterans due to the 
belated recognition of their service, there are myriad other groups, 
listed at 38 C.F.R. Sec. 3.7(x), that could claim to have been 
similarly disadvantaged. These groups include the Women's Air Force 
Service Pilots, the Women's Army Auxiliary Corps, the famed Flying 
Tigers, and many others who also gained their status decades after 
their courageous service and contribution to victory in 1945.
    There can be no doubt that Merchant Mariners were exposed to many 
of the same rigors and risks of service as those confronted by members 
of the Navy and the Coast Guard during World War II. However, the 
universal nature of the benefit that S. 663 would provide for 
individuals with qualifying service and the amount of the benefit that 
would be payable are difficult to reconcile with the benefits VA 
currently pays to other veterans. S. 663 would create what is 
essentially a service pension for a particular class of individuals. 
Additionally, this bill would authorize the inequitable payment of a 
greater benefit to a Merchant Mariner, simply based on qualifying 
service, than a veteran currently receives for a service-connected 
disability rated as 60-percent disabling. Accordingly, S. 663 would 
provide to Merchant Mariners significant preferential treatment not 
provided to other veterans.
    VA estimates that enactment of S. 663 would result in a total 
additional benefit cost of approximately $116 million in the first year 
and an additional benefit cost of $497 million over ten years.
                           s. 691 and s. 746
    Section 1(a) of S. 691 and section 1(a) of S. 746 would require VA 
to establish a national cemetery in El Paso County, Colorado, and in 
the Sarpy County, Nebraska, region, respectively, to serve the needs of 
veterans and their families in the ``southern Colorado region'' and the 
region encompassing eastern Nebraska, western Iowa, and northwest 
Missouri.
    In each bill, section 1(b) would require VA to consult with various 
Federal, State, and local officials before selecting the site for the 
cemetery. Section 1(c) would authorize VA to accept, on behalf of the 
United States, the gift of an appropriate parcel of real property to 
use in establishing the cemetery and would provide that the property be 
considered a gift for purposes of Federal income, estate, and gift 
taxes. Section 1(d) would require VA to report to Congress, as soon as 
practicable after the date of enactment, on the establishment of the 
cemetery, including a schedule for establishment and an estimate of 
costs associated with establishment. Section 1(e) of S. 691 lists the 
counties in Colorado that the term ``southern Colorado region'' would 
comprise. Section 1(e) of S. 746 lists the counties in Nebraska, Iowa, 
and Missouri that the term ``Sarpy County region'' would comprise.
    VA does not support S. 691 or S. 746. The criteria VA has adopted 
and Congress has endorsed for determining the need for new national 
cemeteries require that there be at least 170,000 veterans not 
currently served by a burial option in a national or state veterans 
cemetery residing within 75 miles of the proposed site. Based on these 
criteria, the need for a new national cemetery is not demonstrated.
    S. 691 references 29 counties to be served by a new national 
cemetery in El Paso County, Colorado. However, the majority of these 
counties are already served by an open national or state veterans 
cemetery. The remaining counties do not meet our current population 
threshold for establishing a new national cemetery. In fact, the vast 
majority of veterans who reside in the El Paso County area are 
currently served by either Fort Logan National Cemetery or Fort Lyon 
National Cemetery. Fort Logan National Cemetery will have casket and 
cremation burial space available until approximately 2019. Fort Lyon 
National Cemetery will have casket and cremation burial space available 
until approximately 2030. Other areas further west-southwest of El Paso 
County are served by Veterans Memorial Cemetery of Western Colorado, 
located in Grand Junction, Colorado, in Mesa County.
    Although there is no national or state veterans cemetery option for 
the veterans of eastern Nebraska, the 75-mile service area for the 
proposed Sarpy County location does not meet the veteran population 
threshold. As of September 30, 2008, approximately 110,000 Nebraska, 
Iowa, and Missouri Veterans reside within the Sarpy County service 
area. In addition, of the 82 Nebraska, Iowa, and Missouri counties 
listed in the bill and described as the ``Sarpy County region,'' only 
27 are located within 75 miles of Sarpy County. Fifty-five counties 
listed would not be served by a cemetery in the proposed location based 
on the criteria endorsed by Congress.
    Besides objecting to S. 691 and S. 746 based on the lack of 
demonstrated need for a new cemetery, we note that the cost of 
establishing a new cemetery in these regions would be considerable. 
Based on recent experience, the cost for establishing a new national 
cemetery ranges from $500,000 to $750,000 for environmental compliance 
requirements; $1 million to $2 million for master planning and design; 
$1 million to $2 million for construction document preparation; $5 
million to $10 million for land acquisition (if required); and $20 
million to $30 million for the initial phase of construction. The 
average annual cost for operating a new national cemetery ranges from 
$1 million to $2 million.
    As required by law, VA is establishing 12 new national cemeteries, 
9 of which have been opened for burials. The locations for these 
cemeteries were determined from demographic studies of the veteran 
population, which allow VA to focus its efforts on areas that will 
serve the greatest number of veterans. VA will begin to plan now for a 
successor cemetery in anticipation of Fort Logan's closure in 2019. VA 
believes land for the successor cemetery should be acquired closer to 
the Denver metropolitan area. The new Land Acquisition Line Item in the 
Major Construction account will facilitate the purchase of suitable 
land whenever it becomes available.
    As an alternative, the VA State Cemetery Grants program can provide 
additional burial options for veterans in areas not served by an 
existing national or state veterans cemetery. Through this program, VA 
may provide up to 100 percent of the cost to establish, expand, or 
improve a state veterans cemetery, including the cost of initial 
equipment to operate the cemetery. VA worked with Colorado officials in 
providing more than $6 million to establish a state veterans cemetery 
in Grand Junction and would be pleased to assist Colorado in exploring 
this option in other areas of the State. Similarly, VA has worked with 
Nebraska officials to fund a state cemetery that will serve veterans in 
the Alliance, Nebraska, area. That grant is expected to be awarded in 
late FY 2009.
  s. 728 ``veterans' insurance and benefits enhancement act of 2009''
                       title i--insurance matters
    Section 101 of S. 728, the ``Veterans' Insurance and Benefits 
Enhancement Act of 2009,'' would create a new life insurance program 
that would provide up to $50,000 of coverage to veterans who are less 
than 65 years old and have a service-connected disability. A veteran 
would be able to elect an amount less than $50,000 that is evenly 
divisible by $10,000, but the amount of an insured's coverage would 
decrease by 80 percent at age 70. To obtain coverage, an eligible 
veteran would have to apply for the insurance not later than 2 years 
after being notified by VA that he or she has a service-connected 
disability or 10 years after separation from the Armed Forces, 
whichever date is earlier. Premiums would be based on the 2001 
Commissioners Standard Ordinary Basic Table of Mortality and interest 
at the rate of 4\1/2\ percent per year, and they would not increase 
while the insurance is in force. Premiums would be waived for certain 
veterans who have a totally disabling service-connected disability or 
who are 70 years of age or older.
    The insurance would be granted on a nonparticipating basis. All 
premiums would be credited to a revolving fund in the United States 
Treasury, from which any payments would be directly made. 
Appropriations to the fund would be authorized. Administrative costs 
for the program would be paid from premiums. Payments for claims in 
excess of the amounts credited to the fund would be paid from 
appropriations. There would be a one-year open season beginning on 
April 1, 2010, during which a veteran currently insured under Service-
Disabled Veterans' Insurance (SDVI) who is under age 65 could exchange 
his or her SDVI for the new insurance. However, an insured's combined 
amount of coverage under SDVI, Supplemental SDVI, and the new program 
could not exceed $50,000.
    Currently, SDVI provides up to $10,000 in coverage, as either a 
permanent or term insurance plan, and premiums are based on an 
insured's age until the insured reaches age 70, when the premium rates 
are capped. SDVI insureds who become eligible for a waiver of premiums 
due to total disability can obtain Supplemental SDVI of up to $20,000, 
for a total available amount of SDVI coverage of $30,000. Current SDVI 
premium rates per $1,000 of coverage are higher than quotes for healthy 
individuals from commercial life insurance companies.
    Subject to Congress' enactment of legislation offsetting the 
increased costs that would be associated with the enactment of this 
section, VA supports section 101 because it would meet service-disabled 
veterans' needs by providing more adequate amounts of life 
insurance than currently available under the SDVI program at more 
reasonable rates that would be level for the life of the insured.
    However, VA does not support paying for administrative costs from 
premiums because the Administration believes that the cost of 
entitlements should be separate and distinct from the cost of 
administering those entitlements. Furthermore, we do not believe that 
supplementing a discretionary appropriation with mandatory receipts is 
an appropriate budgeting practice.
    VA estimates that enactment of section 101 would result in costs of 
$83.0 million over 5 years and $326 million over 10 years.
    Section 102 would increase the maximum amount of Supplemental SDVI 
from $20,000 to $30,000.
    VA supports section 102, provided Congress identifies an offsetting 
source of funding. By increasing to $30,000 the amount of available 
supplemental SDVI, this provision would address a major concern of 
veterans, as reported in the study ``Program Evaluation of Benefits for 
Survivors of Veterans with Service-Connected Disabilities.'' It would 
increase the financial security of disabled veterans by affording them 
the opportunity to purchase additional life insurance coverage 
otherwise not available to them.
    VA estimates that enactment would result in costs of $2.1 million 
over 5 years and $7.3 million over 10 years.
    Section 103 would remove the geographic requirement for eligibility 
for retroactive TSGLI benefits. It would extend eligibility for 
retroactive benefits for traumatic injury protection coverage under 
TSGLI to all members of the uniformed services who sustained a 
qualifying loss from a traumatic injury between October 7, 2001, and 
November 30, 2005, regardless of geographic location.
    Section 1032 of Public Law No. 109-13 authorized the payment of 
TSGLI to any servicemember insured under Servicemembers' Group Life 
Insurance (SGLI) who sustains a traumatic injury that results in one of 
certain losses. Under section 1032(c) of Public Law 109-13, TSGLI also 
was authorized for members of the uniformed services who experienced a 
traumatic injury between October 7, 2001, and December 1, 2005, 
provided the qualifying loss was a direct result of injuries incurred 
in Operation Enduring Freedom (OEF) or Operation Iraqi Freedom (OIF). 
Section 501 (b)(1) of the Veterans' Housing Opportunity and Benefits 
Improvement Act of 2006, Public Law 109-233, narrowed eligibility for 
retroactive TSGLI to apply only to servicemembers who suffered a 
qualifying loss as a direct result of a traumatic injury incurred in 
the theater of operations for OEF or OIF during the period beginning on 
October 7, 2001, and ending at the close of November 30, 2005. Section 
103 would eliminate the requirements that a qualifying loss directly 
result from a traumatic injury incurred in the theater of operations 
for OEF or OIF. The amendment would be effective on January 1, 2010.
    VA defers to the Department of Defense (DOD) on the merits of this 
section, because DOD would bear the costs associated with its 
enactment. VA estimates that enactment of section 103, which would 
provide retroactive eligibility for the period from October 7, 2001, 
through November 30, 2005, would result in a cost of $47.7 million for 
the entire period.
    Veterans' Mortgage Life Insurance (VMLI) is available to eligible 
individuals age 69 or younger with severe service-connected 
disabilities who receive a specially adapted housing grant. Currently, 
the maximum amount of VMLI provided is the lesser of $90,000 or the 
amount of the loan outstanding on the housing unit. Section 104 would 
increase the $90,000 limitation to $150,000 and then $200,000 after 
January 1, 2012.
    Subject to Congress' enactment of legislation offsetting the 
increased costs that would be associated with the enactment of this 
section, VA supports section 104 because the percentage of total 
mortgage balances covered by the current amount of VMLI available has 
decreased over the past several years. The maximum VMLI amount was last 
increased from $40,000 to $90,000 in 1992, but the percentage of total 
mortgage balances covered by VMLI has declined since then from 91 
percent to 64 percent because of the increase in housing costs during 
that period. Section 104 would bring the program to a level of coverage 
more in line with today's mortgages.
    VA estimates that enactment of section 104 would result in benefit 
costs of $22.0 million over 5 years and $54.9 million over 10 years.
    Before last year, SGLI coverage of a covered servicemember's 
insurable dependent ended either 120 days after the member elected to 
end coverage or the earliest of three dates: (1) 120 days after the 
member died; (2) 120 days after the date the member's coverage ended; 
or (3) 120 days after the dependent ceased to be an insurable 
dependent. Section 403(b) of Public Law 110-389, at VA's request, 
amended the second of the three listed dates to be simply the date the 
member's coverage ended. The purpose was to provide that an insurable 
dependent's coverage would end when the member's coverage ended, 
generally 120 days after separation or release from active service, 
rather than 120 days after the member's coverage ended, or 240 days 
after the member's separation or release from active service. That 
amendment, however, inadvertently allowed certain insurable dependents' 
coverage to continue long after the members' separation or release from 
service--insurable dependents of persons on active duty or Ready 
Reservists who are totally disabled on the date of separation or 
release from service or assignment. Such insureds on active duty are 
potentially eligible for continued coverage for up to 2 years after the 
date of separation or release from service and such Ready Reservists 
are potentially eligible for an additional one year of coverage after 
separation or release from an assignment. Under the recent amendment, 
the insurable dependents of insureds on active duty are also 
potentially eligible for continued coverage for up to 2 years after the 
date of separation or release from service or in the case of an 
insurable dependent of a Ready Reservist up to 1 year after the date of 
separation or release from an assignment.
    Section 105 of the bill would correct the inadvertent omission of 
those insurable dependents from the scope of the recent amendment. 
Section 105 would amend the second of the 3 dates listed above to be 
``120 days after the date of separation or release from the uniformed 
services.'' Under that provision, no insurable dependent, not even 
those of members who remain covered for up to 1 or 2 years after 
service or assignment, could remain covered under SGLI for more than 
120 days after the member's separation or release from service or 
assignment.
    VA supports this provision. It would equitably provide that all 
insurable spouses of servicemembers, whether those members are disabled 
or not, would have the same time period in which to convert their SGLI 
coverage to a privately-obtained policy, consistent with the other 
conversion time periods specified in section 1 968(a)(5) of title 38 of 
the United States Code. However, section 105 would specify that a 
dependent's coverage would terminate within the specified period after 
the member is separated or released ``from the uniformed services.'' 
This phrase would not include Ready Reservists who are separated or 
released from an ``assignment'' rather than from the ``uniformed 
services.''
    No costs are associated with this provision.
               title ii--compensation and pension matters
    Section 201 of S. 728 would require VA to increase the monthly 
payment of temporary dependency and indemnity compensation (DIC) 
payable for a limited period under 38 U.S.C. Sec. 1311(f) to a 
surviving spouse with one or more dependent children under the age of 
18 years, whenever benefit payments under title II of the Social 
Security Act are increased as a result of an increase in the cost of 
living. These DIC payments would be increased by the same percentage as 
Social Security benefits are increased, effective the same date as the 
Social Security benefit increase is effective.
    VA supports enactment of this provision, the benefit costs of which 
would be insignificant.
    Section 202 would clarify that veterans entitled to pension based 
on advanced age alone rather than on permanent and total disability do 
not qualify for special monthly pension under subsections (d), (e), or 
(f)(2)-(4) of section 1521, United States Code. Wartime veterans age 65 
or older would continue to be eligible for rates of pension prescribed 
by subsections (b), (c), (f)(1) and (5), and (g) of section 1521. It 
would also clarify that pension based on age alone is subject to three 
limitations also applicable to pension based on permanent and total 
disability: (1) certain children's income is attributable to a veteran 
for purposes of determining the veteran's annual income; (2) a veteran 
is considered to be living with a spouse who resides elsewhere unless 
they are estranged; and (3) a veteran who is entitled to pension based 
on his or her own wartime service and based on someone else's service 
is entitled to receive only the greater benefit. These amendments would 
apply to pension claims filed on or after the date of enactment.
    VA supports enactment of section 202 because it would accomplish 
the same purpose for which VA proposed legislation to the last 
Congress. In 2001, Congress made wartime veterans age 65 years or older 
eligible for pension without regard to the permanent-and-total-
disability requirement of the statute authorizing pension to veterans 
who are permanently and totally disabled. In 2006, the Court of Appeals 
for Veterans Claims held that veterans age 65 or older are also 
eligible for the higher rate of pension authorized for veterans who are 
permanently housebound, without regard to the permanent-and-total-
disability requirement. Although the court's holding is arguably a 
plausible interpretation of the literal terms of the statutes, we 
believe it is inconsistent with Congress' intent because it results in 
inconsistent and illogical treatment of veterans' claims and subverts 
the primary purpose for authorizing the higher rate of pension--to 
provide additional pension to veterans with additional expenses due to 
their high degree of disability above and beyond permanent and total 
disability. Under the court's interpretation, elderly veterans who are 
not permanently and totally disabled could receive a higher pension 
rate than elderly veterans who are permanently and totally disabled. 
Believing that Congress did not intend such an inequitable result, we 
proposed legislation to overturn the court's interpretation, and we 
support enactment of section 202.
    We estimate cost savings of $3.2 million the first year and $175.5 
million over 10 years.
    Section 203(a) would increase monthly rates of DIC for disabled 
surviving spouses. Section 203(b) would increase the maximum and 
minimum monthly rates of DIC payable to parents and provide for an 
increased monthly payment for parents who, by reason of disability, are 
permanently housebound but do not qualify for parents in need of aid 
and attendance. Section 203(c) would codify increases already made in 
the annual income limits applicable to parents' DIC. Section 203(d) 
would replace the obsolete term ``six months' death gratuity'' in 38 
U.S.C. Sec. 1315(f)(1)(A) because the death gratuity paid by DOD under 
10 U.S.C. Sec. Sec. 1475-1 480 is a fixed amount, rather than the 
equivalent of six months of a servicemember's pay. Section 203(e) would 
subject the new rate of DIC for a housebound parent and the minimum 
monthly amounts of parents' DIC to annual increases indexed to cost-of-
living increases in Social Security benefits. The amendments made by 
section 203 would take effect on October 1, 2009, and would apply to 
DIC payable for months beginning on or after that date. However, there 
would be no cost-of-living increase in the minimum monthly DIC rates 
during fiscal year 2010.
    VA is committed to administering DIC payments that meet program 
goals. The 2001 ``Program Evaluation of Benefits for Survivors of 
Veterans with Service-Connected Disabilities''--the same study that 
provides the basis for our support of the proposed increases to life 
insurance--found that DIC successfully meets the needs of 
beneficiaries. While our support for cost-of-living increases as 
proposed under S. 407 demonstrates our commitment to providing adequate 
and necessary increases over time, we believe that the increases to DIC 
proposed under section 203 are not necessary to achieve the goals of 
the program.
    In addition, the purpose of increasing the minimum monthly payment 
for parents' DIC from $5 to $100 and indexing that figure for inflation 
is not clear. Because paying parents an arbitrary minimum monthly 
amount of DIC that is higher than the payment computed under the need-
based formula established in VA's implementing regulations at 38 C.F.R. 
Sec. 3.25 is a departure from the need-based principles underlying 
parents' DIC, any increase in the minimum rate would constitute a 
further departure from need-based principles, and indexing the minimum 
payment for inflation would amplify this departure.
    VA did not have sufficient time to prepare benefit cost estimates 
for this provision. No additional administrative costs are anticipated. 
With the Committee's permission, we will provide a cost estimate for 
the record.
    Section 204(a) would increase from $90 to $100 the maximum monthly 
pension amounts for spouse-less and childless veterans who are being 
furnished VA domiciliary or nursing home care or are covered by a 
Medicaid plan for services furnished by a nursing facility. These 
limits would be subject to annual cost-of-living increases indexed to 
such increases to Social Security benefits. Section 204(b) would 
subject children in receipt of death pension to the limits currently 
applicable to institutionalized veterans and surviving spouses. Under 
section 204(c), these amendments would be effective October 1, 2009, 
but no cost-of-living adjustment would be made during fiscal year 2010.
    VA does not object to these increases in maximum pension payments 
to affected individuals so long as Congress enacts offsetting savings. 
Application of the limits to children in receipt of death pension would 
be reasonable. And under the annual cost-of-living adjustment, these 
beneficiaries would receive benefit increases commensurate with those 
provided for other VA benefits.
    We estimate costs of $5.3 million over one year and $10.7 million 
over 2 years.
             title iii--burial and memorial affairs matters
    Sections 301 and 302 would require VA to make supplemental payments 
in addition to currently required statutory payments for funeral and 
burial-related expenses, but if and only if funds are specifically 
appropriated in advance for that purpose. Specifically, those sections 
would require a supplemental payment of $900 for non-service-connected 
deaths, $2,100 for service-connected deaths, and $445 for the plot or 
interment allowance. Each supplemental payment would be subject to the 
availability of funds specifically provided for the particular type of 
allowance in advance by an appropriations act. These sections would 
require an annual adjustment to the supplemental payment amounts in 
relation to the Consumer Price Index, applicable to deaths occurring in 
subsequent fiscal years. They would require VA to periodically estimate 
the funding needed to provide supplemental payments for all eligible 
recipients for the remainder of the fiscal year in which such an 
estimate is made and the appropriations needed to provide all eligible 
recipients supplemental payments in the next fiscal year. VA would have 
to submit these estimates to the Committees on Appropriations and 
Veterans' Affairs of the Senate and House of Representatives four times 
a year. Finally, these sections would authorize appropriations for 
these purposes. These changes would be effective October 1, 2009, and 
apply to deaths occurring on or after that date.
    Veterans' advocates have argued for higher payments because the 
current allowances generally do not cover present-day burial and 
funeral costs or plot expenses. Advocates have also pushed for annual 
cost-of-living increases for funeral, burial, and plot benefits. 
However, VA cannot support the bill as drafted. The supplemental 
benefits would only be available up to the point at which discretionary 
funding is exhausted, which could lead to inequities in the level of 
benefits available to individuals. VA has not supported similar 
legislation in the past because funding a single benefit from multiple 
sources (e.g., from the mandatory Compensations, Pensions, and Burial 
account and a new discretionary account) can create numerous 
complications in administration and represents an unsound budgeting 
practice. Finally, the frequent reporting requirements to Congress 
would be administratively burdensome and would distract VA from 
providing Veterans with timely claims adjudication and payment.
    We estimate that enactment of section 301 of this bill would result 
in costs of $106.3 million during the first year, $569.2 million over 5 
years, and $1.3 billion over 10 years. We estimate that enactment of 
section 302 of this bill would result in costs of $30.4 million during 
the first year, $162.5 million over 5 years, and $367.7 million over 10 
years. No administrative costs are associated with this bill.
                        title iv--other matters
    Section 401(a) would add to the list of disabilities that qualify a 
compensation-receiving veteran or an active duty servicemember for 
assistance in obtaining an automobile or other conveyance or adaptive 
equipment an additional disability--a severe burn injury, as determined 
pursuant to VA regulations. Section 401(b) would make various stylistic 
changes to section 3901 of title 38, United States Code.
    Section 402(a) would require VA to make a supplemental payment in 
addition to the currently required statutory payment for the purchase 
of an automobile or other conveyance, but only if funds are 
specifically appropriated in advance for that purpose. Specifically, it 
would require the supplemental payment to equal the difference between 
the amount of payment that would be made if the maximum amount were 
$22,484 and the current $11,000 amount authorized by section 3902(a).
    Section 402(a) would also require VA to annually increase a 
specified adjusted amount ($22,484) to 80 percent of the average retail 
cost of new automobiles for the preceding calendar year. It would 
require VA to periodically estimate the funding needed to provide 
supplemental payments for all eligible recipients for the remainder of 
the fiscal year in which such an estimate is made and the 
appropriations needed to provide all eligible recipients supplemental 
payments in the next fiscal year and to submit these estimates to the 
Committees on Appropriations and Veterans' Affairs of the Senate and 
House of Representatives four times a year.
    Finally, section 402(c) would authorize appropriations for these 
purposes, and, under section 402(d), these changes would be effective 
October 1, 2009, and apply to payments made under section 3902 on or 
after that date.
    We plan to review the scope of our existing authority to determine 
if there are circumstances under which severe burn victims are not 
adequately covered. In any event, VA cannot support the bill as 
drafted. The supplemental benefits would be available only up to the 
point at which discretionary funding is exhausted, which could lead to 
inequities in the level of benefits available to individuals. VA has 
not supported similar legislation in the past because funding a single 
benefit from multiple sources can create numerous complications in 
administration and represents an unsound budgeting practice. Finally, 
the frequent reporting requirements to Congress would be 
administratively burdensome and would distract VA from providing 
Veterans with timely claims adjudication and payment. For an estimate 
of the costs associated with the increase section 402 would provide, 
please see our comments regarding S. 820.
          s. 820 ``veterans mobility enhancement act of 2009''
    S. 820, the ``Veterans Mobility Enhancement Act of 2009,'' would 
increase from $11,000 to $22,500 the maximum amount of assistance VA is 
authorized to provide an eligible person to obtain an automobile or 
other conveyance. It would also require VA to increase that amount, 
effective October 1 of each year (beginning in 2010), to an amount 
equal to 80 percent of the average retail cost of new automobiles for 
the preceding calendar year. It would require VA to establish the 
method for determining that average retail cost and authorize VA to use 
data developed in the private sector if VA determines that the data are 
appropriate.
    We understand the importance of providing sufficient resources for 
vehicles or adaptive equipment to servicemembers and veterans who rely 
on them, but we cannot support this bill at this time. In order to best 
support the goals of this program, we will need time to review the 
appropriate amount to provide for this benefit payment.
    We estimate benefit costs of $16.2 million in the first year and 
$159.9 million over ten years.
                                 s. 842
    Section 1 of this bill concerning mortgages and mortgage 
foreclosures relates to the Servicemembers Civil Relief Act, a law 
primarily affecting active duty service personnel. Accordingly, VA 
defers to the views of DOD with regard to that section.
    Section 2 of this bill would authorize VA to purchase a VA-
guaranteed home loan from the mortgage holder, if the loan is modified 
by a Bankruptcy Judge under the authority of 11 U.S.C. Sec. 1322(b). 
Specifically, it would permit VA to pay the mortgage holder the unpaid 
balance of the loan, plus accrued interest, as of the date a bankruptcy 
petition is filed. In exchange, the mortgage holder would be required 
to assign, transfer, and deliver to the Secretary all rights, interest, 
claims, evidence, and records with respect to the loan.
    VA is aware of legislation that, if enacted, would eliminate the 
apparent incongruity between section 2 of this bill and the current 
Bankruptcy Code. Section 103 of H.R. 1106, as passed by the House of 
Representatives on March 5, would eliminate the prohibition against 
modifying mortgages on principal residences. Additionally, the section 
2 provision appears duplicative of the authority that would be provided 
to VA in section 121 of H.R. 1106. VA cannot support any additional 
repurchasing authority until the budgetary impacts of such authority on 
existing and future cohorts of loans can be reviewed. Because VA cannot 
determine the effects of section 2 as a stand-alone provision, VA 
cannot currently estimate the costs or savings associated with the 
provision.
    Section 103 of H.R. 1106, as passed by the House of Representatives 
on March 5, would eliminate the prohibition against modifying mortgages 
on principal residences. Additionally, the section 2 provision appears 
duplicative of the authority that would be provided to VA in section 
121 of H.R. 1106. VA cannot support any additional repurchasing 
authority until the budgetary impacts of such authority on existing and 
future cohorts of loans can be reviewed. Because VA cannot determine 
the effects of section 2 as a stand-alone provision, VA cannot 
currently estimate the costs or savings associated with the provision.
                                 s. 847
    We did not have sufficient time before this hearing to develop a 
position on this bill, but will provide our position to the Committee 
in writing for the record.
  draft clarification of characteristics of combat service act of 2009
    We did not have sufficient time before this hearing to develop a 
position on this bill, but will provide our position to the Committee 
in writing for the record.
  a draft bill to modify the commencement of the period of payment of 
    original awards of compensation for veterans who are retired or 
          separated from the uniformed services for disability
    We did not have sufficient time before this hearing to develop a 
position on this bill, but will provide our position to the Committee 
in writing for the record.

    Mr. Chairman, this concludes my statement. I would be pleased to 
answer any questions you or the other members of the Committee may 
have.

                                 ______
                                 
       Additional Written Views Submitted by VA After the Hearing
                         The Secretary of Veterans Affairs,
                                      Washington, DC, May 14, 2009.
Hon. Daniel K. Akaka,
Chairman,
Committee on Veterans' Affairs,
U.S. Senate, Washington, DC.

    Dear Mr. Chairman: I am writing to provide you with the views of 
the Department of Veterans Affairs (VA) on the following bills: S. 315, 
S. 847, S. 919, and a draft bill to modify the commencement of the 
payment of original awards of compensation for veterans who are retired 
or separated from the uniformed services for disability. These bills 
were included on the Senate Veterans' Affairs Committee agenda for the 
April 29, 2009, hearing, but VA was unable to provide its views in time 
for that hearing. We are also providing cost estimates for S. 514 and 
section 203 of S. 728, as promised during the hearing.
          s. 315 ``veterans outreach improvement act of 2009''
    S. 315, the ``Veterans Outreach Improvement Act of 2009,'' would 
require the Secretary of Veterans Affairs to establish a separate 
account and three separate subaccounts for the funding of outreach 
activities for each of VA's three major benefits administrations: the 
Veterans Benefits Administration (VBA), the Veterans Health 
Administration (VHA), and the National Cemetery Administration (NCA). 
In requesting its budget for each fiscal year, VA would have to 
separately state the amount requested for outreach activities for each 
such administration, as well as the Department as a whole. S. 315 would 
require the Secretary to establish, maintain, and review procedures for 
ensuring the effective coordination of outreach activities within VA. 
It would also authorize VA to make grants to state and local 
governments and nonprofit community-based organizations for the 
purposes of carrying out, coordinating, and improving outreach and 
assistance in the development and submittal of benefit claims. In 
addition, a Veterans agency of a state receiving a grant under S. 315 
could use the grant funds or award all or any portion of the grant to 
local governments, other public entities, or nonprofit community-based 
organizations in that state.
    VA supports the bill's objectives of improving outreach to Veterans 
and better coordinating and supporting outreach efforts with state 
Veterans agencies, county Veterans service offices, and nonprofit 
community-based organizations. VA requests that the Committee forbear 
legislation until a comprehensive review of outreach efforts by the 
Department is concluded, as detailed below.
    Regarding the effective coordination of outreach activities within 
the Department, the Secretary of Veterans Affairs has already tasked 
the Office of Intergovernmental Affairs (IGA) with this responsibility. 
IGA will conduct a Department-wide audit of VA's outreach to better 
coordinate efforts, share resources, unify communication with veterans, 
and set a baseline for measuring future success.
    We also recommend that legislation providing grants to stakeholders 
to conduct outreach on VA's behalf await a VA determination about 
whether that is the most effective way to augment our outreach 
activities. IGA plans to conduct focus groups with Veterans and 
representatives of state Veterans agencies, county Veterans services 
offices, tribal governments, Veterans Service Organizations, Military 
Service Organizations, nonprofit community-based organizations, and 
other stakeholders to determine the most effective ways to coordinate 
and support their outreach activities. With information provided by the 
internal audit and the focus groups, IGA will work with VBA, VHA, NCA, 
and other VA offices to develop a veteran-centric, results-driven, 
forward-looking outreach plan using 21st-century technology to enhance 
outreach efforts. The plan will identify specific ways VA can work with 
stakeholders to ensure that all veterans and their families know what 
benefits they are entitled to and understand how to access them.
    VA cannot provide a cost estimate for S. 315 at this time because 
it is unclear what the size of the outreach effort would be and how it 
would interact and overlap with existing functions.
                                 s. 847
    Currently, section 3695(a) of title 38, United States Code, limits 
the aggregate entitlement for any person who receives educational 
assistance under two or more of the programs listed in that section to 
48 months. This limitation is applicable, most notably, to the 
Montgomery GI Bill Active Duty (MGIB-AD) program (chapter 30), the 
Vietnam Era Assistance Program (chapter 32), the Survivors' and 
Dependents' Educational Assistance (DEA) program (chapter 35), the new 
Post-9/11 GI Bill (chapter 33), the Montgomery GI Bill Selected Reserve 
program (chapter 1606 of title 10), and the Reserve Educational 
Assistance Program (chapter 1607 of title 10). Section 1(a) of S. 847 
would remove the DEA program from this list of educational assistance 
programs with a 48-month-aggregate-benefit limitation effective on the 
date of the enactment of the Act. This amendment would allow an 
individual who earns entitlement based on his or her own service in the 
Armed Forces not to have such entitlement reduced because they received 
benefits under the DEA program.
    Section 1(b) of S. 847 states that such law would not revive any 
entitlement to DEA or other assistance under the provisions of law 
listed under section 3695(a) that was terminated by that section prior 
to enactment of the Act. Section 1(c) of S. 847 would revive, however, 
any entitlement to assistance under the provisions of law listed under 
section 3695(a) that was reduced because the individual used his or her 
DEA benefits if, the day before enactment of the Act, the individual 
had not used a total of 48 months entitlement.
    (We note that section 1(c) of S. 847 could be read to mean that 
those individuals who used 48 months of entitlement (including DEA 
benefits) before date of enactment and who are still within their 
delimiting period could also have their entitlement recalculated 
without consideration of their use of DEA benefits.)
    The President's Budget includes numerous programs to support our 
Veterans and their families. However, we are unable to support this 
measure at this time. VA has not yet begun to administer the new Post-
9/11 GI Bill benefit, a generous new benefit for Veterans that includes 
authority for some servicemembers to transfer eligibility to their 
dependents. We need more time to study how this new program impacts 
usage of all VA education benefits before supporting any changes to the 
benefit package. In addition, VA cannot support this measure because no 
funding for such a proposal is included in the Administration's fiscal 
year 2010 budget.
    VA does not have the specific data necessary to cost this proposal. 
While VA can determine the number of participants who used prior VA 
training and the amount of entitlement used in previous programs, we 
cannot extract the specific DEA population. Further, VA has no way of 
determining how many servicemembers elected not to participate in the 
MGIB-AD program because of their prior use of DEA benefits or how many 
individuals potentially eligible for the Post-9/11 GI Bill are or were 
eligible for chapter 35 benefits.
      s. 919 ``clarification of characteristics of combat service
                             act of 2009''
    S. 919, the ``Clarification of Characteristics of Combat Service 
Act of 2009,'' would amend 38 U.S.C. Sec. 1154(a) to revise the 
requirements for VA regulations pertaining to service connection of 
disabilities. Currently, section 1154(a) mandates VA regulations 
requiring that, when adjudicating a claim for service connection, due 
consideration be given to the places, types and circumstances of a 
Veteran's service as shown by the Veteran's service record, official 
history of each organization in which the veteran served, the Veteran's 
medical records, and all pertinent medical and lay evidence. In 
addition to these regulations, S. 919 would require regulations 
requiring that, in the case of a Veteran who served in a particular 
combat zone, VA must ``accept credible lay or other evidence as 
sufficient proof that the veteran encountered an event that the 
Secretary specifies in such regulations as associated with service in 
particular locations where the veteran served or in particular 
circumstances under which the veteran served in such combat zone.'' 
Under S. 919, the term ``combat zone'' would be defined in accordance 
with section 112 of the Internal Revenue Code of 1986 or a predecessor 
provision of law.
    VA opposes enactment of S. 919 for the following reasons. S. 919 
would require VA to implement a complex scheme under which VA would be 
required to specify in regulations ``events'' that are ``associated 
with service in particular locations'' or ``in particular circumstances 
under which the veteran served in'' combat zones designated under 26 
U.S.C. Sec. 112. The breadth of such a task would be mammoth. Although 
S. 919 refers to ``service in particular locations'' and in ``combat 
zones,'' hostilities can occur anywhere around the globe, overseas as 
well as on American soil, and thus, to be inclusive, the regulations 
required by S. 919 would have to cover the entire world. In addition, 
the language of the proposed amendment is too vague, offering no 
guidance on what would constitute an ``event'' that is ``associated 
with service in particular locations where the veteran served or in 
particular circumstances under which the veteran served in  * * *  
combat.'' Further, VA does not have the expertise to define events 
associated with service in particular locations or particular 
circumstances of combat.
    We also oppose defining the term ``combat zone'' in accordance with 
26 U.S.C. Sec. 112. Section 112(c)(2) of title 26, United States Code, 
defines ``combat zone'' as any area that the President by Executive 
Order designates as an area in which U.S. Armed Forces are engaging or 
have engaged In combat. There are currently three combat zones 
designated by Executive Order (26 U.S.C. Sec. 112 note), including the 
airspace above each: (1) Persian Gulf, Red Sea, Gulf of Oman, certain 
portions of the Arabian Sea, Gulf of Aden, and total land areas of 
Iraq, Kuwait, Saudi Arabia, Oman, Bahrain, Qatar, and United Arab 
Emirates, beginning January 17, 1991; 
(2) Federal Republic of Yugoslavia (Serbia/Montenegro), Albania, 
Adriatic Sea, and Ionian Sea north of the 39th parallel, beginning 
March 24, 1999; and (3) Afghanistan, beginning September 19, 2001. Two 
other Executive Orders (26 U.S.C. Sec. 112 note) previously designated 
the following areas as combat zones: (1) Vietnam and adjacent waters 
within certain limits, for certain periods of service; and (2) Korea 
and adjacent waters, for service during certain periods.
    VA opposes defining ``combat zone'' in accordance with 26 U.S.C. 
Sec. 112 because of the breadth of the title 26 definition and 
implementing regulations and because it would exclude certain Veterans 
who served during other periods of hostilities. Combat activities have 
not been terminated by the President in three of the currently 
designated combat zones. For example, members who served in Bahrain 
after fighting ceased in the first Persian Gulf War and before fighting 
began in Operation Enduring Freedom (OEF) on October 6, 2001, or 
Operation Iraqi Freedom (OIF) on March 20, 2003, are covered under one 
of these Executive Orders. If VA regulations promulgated pursuant to 
S. 919 provided a reduced burden of proof to all veterans covered by 
these Executive Orders, Veterans who served in Bahrain during a period 
of relative calm would have the same reduced burden of proof as 
Veterans who served in Bahrain during the first Persian Gulf War or 
OIF. Further, these Executive Orders do not cover service in World War 
II and certain smaller engagements, such as Grenada.
    Furthermore, 26 CFR Sec. 1.112-1(e), which implements 26 U.S.C. 
Sec. 112, provides that a member who performs military service in an 
area outside the area designated as a combat zone under 26 U.S.C. 
Sec. 112(c)(2) is deemed to have service in that combat zone ``while 
the member's service is in direct support of military operations in 
that zone'' and the member is qualified for special pay under 37 U.S.C. 
Sec. 310. For example, the Department of Defense (DOD) has certified 
service in Kyrgyzstan and Uzbekistan beginning on October 1, 2001, and 
in Yemen beginning on April 10, 2002, as service in direct support of 
OEF and service in Israel between January 1, 2003, and July 2003 and 
service in Jordan, beginning March 19, 2003, as service in direct 
support of OIF.
    There is no termination date for service in certain areas 
designated by DOD as service in direct support of operations in a 
combat zone. If VA regulations provided a reduced burden of proof to 
all veterans covered by 26 CFR Sec. 1.112-1(e), veterans who served, 
for example, in Jordan in 2008 and 2009 would have the same reduced 
burden of proof under the proposed rule as veterans who served in 
Jordan immediately after hostilities began in OIF.
    We also believe that S. 919 is unnecessary. Section 1154(b) of 
title 38, United States Code, already provides a relaxed evidentiary 
standard for service connection of disabilities that result from a 
veteran's engagement in combat with the enemy. The purpose of 38 U.S.C. 
Sec. 1154(b) is to recognize the hardships and dangers involved with 
military combat and to acknowledge that official documentation is 
unlikely during the heat of combat. As a result, Veterans who engaged 
in combat with the enemy and file claims for service-connected 
disability benefits related to that combat are not subject to the same 
evidentiary requirements as non-combat veterans but rather are afforded 
a relaxed evidentiary standard to ensure they are not disadvantaged by 
the circumstances of their combat service in proving their benefit 
claims. Many of the Veterans who served in the combat zones designated 
by Executive Orders likely qualify for the reduced evidentiary standard 
in section 1154(b). On the other hand, there is no such need for a 
lowered evidentiary standard for veterans who did not engage in combat 
with the enemy but did serve in a combat zone designated by Executive 
Order because evidence necessary to establish service connection is 
likely to be more easily obtained through routine military record 
keeping. We believe that this approach is fair and equitable.
    VA cannot provide specific benefit costs associated with enactment 
of S. 919 due to its lack of clarity. There are no data available to 
assess the numbers of claims that would be granted based on application 
of regulations promulgated under this provision.
  a draft bill to modify the commencement of the period of payment of 
    original awards of compensation for veterans who are retired or 
          separated from the uniformed services for disability
    This unnumbered draft bill would require VA to pay compensation 
awarded based on an original claim to veterans who retired or separated 
from service for a disability as of the effective date of the award of 
compensation. Current law prohibits the payment of benefits based on an 
award or an increased award of compensation for any period before the 
first day of the calendar month following the month in which the award 
or increased award became effective. The draft bill would also provide 
that, in the case of Veterans retired or separated from active service 
due to disability who must provide a waiver of retired pay in order to 
receive VA benefits, the effective date of the waiver would be the 
effective date of the award of compensation if the waiver is filed not 
later than 30 days after retirement or separation from military 
service. Currently, under 38 U.S.C. Sec. 5111(b)(2), if a person in 
receipt of retired or retirement pay would also be eligible to receive 
VA compensation upon the filing of a waiver, such waiver does not 
become effective until the first day of the month following the month 
in which such waiver is filed. The draft bill would apply to awards of 
compensation based on original claims that become effective on or after 
the date of enactment.
    VA does not support the draft bill because it would provide up to 
one additional month of VA compensation for only one group of Veterans, 
i.e., Veterans who retire or separate from service due to disability. 
Also, we are unaware of a need to expedite payment of VA compensation 
to this single group of disabled Veterans. Veterans who retire or 
separate from service because of disability currently begin receiving 
disability retirement pay shortly after discharge from service and then 
receive VA compensation after the military retired pay centers have 
processed waivers provided by the Veterans and military retirement pay 
has been reduced by an amount equal to the VA compensation to which the 
veterans are entitled. We note as well that many of the Veterans who 
would be entitled to additional VA compensation under this bill may 
also be entitled to combat-related special compensation under 10 U.S.C. 
Sec. 1413a and to concurrent receipt of military retired pay under 10 
U.S.C. Sec. 1414.
    VA estimates the cost associated with this draft bill, if enacted, 
would be $4.5 million for the first year and $49.2 million over 10 
years. Also, there would be substantial administrative cost to 
reprogram the VETSNET system to provide these payments.
      s. 514 ``veterans rehabilitation and training improvements 
                             act of 2009''
    Section 4 of S. 514, the ``Veterans Rehabilitation and Training 
Improvements Act of 2009,'' would remove the limitation on the number 
of veterans who may be provided programs of independent living. VA 
estimates that there would be no costs associated with this section if 
enacted. The current cap of 2,600 participants has not been reached in 
the past two fiscal years, and the number of participants has actually 
decreased from 2,115 cases in 2007 to 1,728 cases in 2008. This trend 
indicates that the program is not growing at this time and removing the 
limit of 2,600 participants would not result in additional participants 
or cost. Therefore, VA believes this legislation to be unnecessary.
                         section 203 of s. 728
    Section 203 would increase monthly rates of dependency and 
indemnity compensation (DIC) for disabled surviving spouses, increase 
the maximum and minimum monthly rates of DIC payable to parents, 
provide increased monthly payments for parents who, by reason of 
disability, are permanently housebound but do not qualify for aid and 
attendance, and codify increases already made in the annual income 
limits applicable to parents' DIC. The new rate of DIC for a housebound 
parent and the minimum monthly amounts of parents' DIC would be subject 
to annual increases indexed to cost-of-living increases in Social 
Security benefits. The amendments made by section 203 would become 
effective on October 1, 2009, and would apply to DIC payable for months 
beginning on or after that date. However, there would be no cost-of-
living increase in the minimum monthly DIC rates during fiscal year 
2010. VA does not support section 203 because these proposed increases 
to DIC are not necessary to achieve the goals of the program.
    VA estimates the cost associated with this amendment, if enacted, 
to be $4.6 million in the first year and nearly $49.6 over 10 years.
    The Office of Management and Budget has advised that there is no 
objection to the submission of this report from the standpoint of the 
Administration's program.
            Sincerely,
                                          Eric K. Shinseki.

    Chairman Akaka. Thank you very much, Mr. Mayes, for your 
testimony.
    I am going to call on Senator Burr, the Committee's Ranking 
Member, for his opening statement, after which I'll come 
forward with questions to you.

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

    Senator Burr. Mr. Chairman--I thank the Chairman and I 
would ask unanimous consent that my statement be part of the 
record. And my apologies to our witnesses today, but D.C. 
traffic is somewhat unpredictable, especially when it rains; 
and trying to get back in after I was dumb enough to leave the 
city this morning was a big mistake. I thank you.
    [The prepared statement of Senator Burr follows:]
       Prepared Statement of Hon. Richard Burr, Ranking Member, 
                    U.S. Senator from North Carolina
    Thank you, Mr. Chairman. Welcome to you and to our witnesses. I'd 
also like to extend a special welcome to the military spouses who are 
with us today. Thank you all for being here and, more importantly, 
thank you for the contributions and sacrifices you make every day on 
behalf of our Nation.
    I know we have a long list of bills to discuss today, so I will try 
to keep my remarks brief. But I do want to take a few moments to 
comment on three bills I have been working on. The first is S. 475, the 
Military Spouses Residency Relief Act.
    In recent decades, there has been a growing recognition that 
military spouses play a very important role in the success of our Armed 
Forces. In fact, ``Military Spouse Day'' was first proclaimed by 
President Reagan 25 years ago to recognize (quote) ``the profound 
importance of spouse commitment to the readiness and well-being of 
servicemembers . . . and to the security of our Nation.''
    Today, the importance and sacrifices of military spouses are just 
as profound. They move around the country and the world in support of 
our Nation's servicemembers. They leave behind their homes, friends, 
and jobs in order to put servicemembers and the military ahead of their 
own needs.
    Unfortunately, current laws do little to ease the burden on 
military spouses and sometimes even add to their confusion and their 
costs. Under the Servicemembers' Civil Relief Act, the servicemember 
can continue to vote in the state they consider home, but the spouse 
cannot. The servicemember's military pay is taxed only in their home 
state, but the spouse may have to file tax returns in every state they 
live in. And, in many states, the family assets have to be held solely 
in the servicemember's name in order to protect them from being taxed 
by those states.
    I'm sure we can all understand the headaches this can cause for 
military families, as they move to a new state every few years. But, 
what's worse is the message this sends to military spouses. As the 
National Military Family Association put it back in 1992 (quote), ``the 
current situation has left many military spouses feeling they are 
perceived as excess baggage.''
    Mr. Chairman, I hope we can all agree that this situation should 
not be allowed to continue. It's time that we finally update our laws 
to reflect the important role that military spouses play and the 
tremendous sacrifices they make. I believe this bill would take a step 
in that direction.
    It would allow military spouses to vote and pay taxes in their home 
states. This should reduce some of the confusion and hassles of moving 
every time the servicemember is ordered to a new duty station. This 
bill will also allow military spouses the flexibility to hold property 
in their own names, something the rest of us probably take for granted.
    Perhaps more importantly, it will send a clear message to military 
spouses that we, as a Nation, appreciate their sacrifices and are 
grateful for the contributions they make every day to the success of 
our Armed Forces.
    I'm pleased that this bill already has 24 Senate cosponsors, 
including a majority of Members of this Committee. A similar bill 
introduced by Representative John Carter has the backing of over 90 
members of the House. With that widespread support, I hope we can move 
this bill quickly and provide the long-overdue relief that these unsung 
heroes of the Armed Forces deserve.
    Mr. Chairman, the second bill I want to discuss would eliminate the 
delay--now required by law--in how soon VA disability payments begin 
after a veteran is medically discharged from the military. It would 
allow these veterans to leave the military at whatever time best suits 
their needs, without the stress and financial burden caused by a delay 
in receiving their VA disability checks. I hope this would help injured 
servicemembers experience a more seamless transition from active duty 
to civilian life.
    The final bill I want to mention would allow more veterans, such as 
those with severe Traumatic Brain Injuries, to receive higher amounts 
of monthly aid and attendance benefits. This would provide them with 
the financial tools to arrange whatever services they need to live in 
their own homes--rather than being institutionalized--and to integrate 
as fully as they can into their communities.
    For veterans with Traumatic Brain Injuries, like Ted Wade from 
North Carolina, it would allow them to choose how their needs will be 
met, give them more flexibility and independence, and ultimately 
improve the quality of their lives.
    Mr. Chairman, I appreciate you calling this hearing to discuss 
these and other bills affecting veterans' benefits. I look forward to 
working with you and the Members of this Committee to advance 
legislation that will help improve the lives of servicemembers, 
veterans, and their families.

    I thank the Chair.

    Chairman Akaka. Without objection, your statement will be 
placed in the record.
    Mr. Mayes, your testimony argues that a review of the 
Compensation Program may have implications for the future of 
the vocational rehabilitation programs. When will you be in a 
position to fully evaluate the adequacy of the living allowance 
given to voc rehab participants?
    Mr. Mayes. Mr. Chairman, there are a couple of things at 
play regarding changes to the subsistence allowance for the 
vocational rehabilitation benefit. One, of course, is the Econ 
System study that the Department initiated last year. Economic 
Systems, Inc., as part of that study, is looking at the 
compensation program. They looked at transition assistance, and 
as you know, the Veterans Benefits Improvement Act of 2008 
required us to report the Secretary's finding to Congress. And 
that report is due to Congress in May.
    So, part of that review was to look at the transition 
benefits available to veterans. But I think more importantly 
are the implications of the changes to the education benefit 
with respect to the Chapter 33 benefit that we are in the 
process of executing right now. Because the amount or the rate 
of payment to veterans who will be participating in that 
program is going to be significantly more in many cases than 
what they are getting under the Chapter 30 program, we are 
trying to understand if veterans would indeed switch over from 
the Chapter 31 program to the Chapter 33 program. And if that 
is the case, then the number of veterans availing themselves of 
the 31 program would be reduced. And it might change our 
position somewhat with respect to what we can do with the 
subsistence allowance.
    Chairman Akaka. Thank you.
    Mr. Mayes, you mentioned that VA's 2004 evaluation found 
that 79 percent of parents whose children died in service to 
our country have incomes at or below the poverty line. From my 
vantage point, I find it insulting that these low income 
parents receive a meager $5.00 per month under the current 
program. Will you please provide for the record revised views 
of this section that takes into account the 2004 evaluation?
    Mr. Mayes. Yes, Mr. Chairman. Absolutely.
    We need to go back and review not just the 2001 study but 
the 2004 study and make sure that we are talking very closely 
with staff from your Committee to make sure we understand the 
intent and that we are consistent with our program objectives. 
We will do that, sir.
    [See below for Mr. Mayes' response.]
    Chairman Akaka. Mr. Mayes, VA recognizes the need to 
provide sufficient resources for vehicles and adaptive 
equipment for veterans who rely on them. We also have wide 
recognition from everyone involved in this issue that the 
current benefit is inadequate, yet your testimony suggests that 
even more time is needed to determine what an appropriate 
amount would be.
    My question to you is how much time do you think VA needs 
to determine an appropriate amount for the benefit?
    Mr. Mayes. Mr. Chairman, I think one of the values of these 
hearings is it forces us to dig and to take a look very closely 
at what we are doing. And we've done that. I've asked my policy 
staff to take a close look at the automobile allowance.
    I really have two questions from a policy point of view. 
Should the allowance compensate fully for the purchase of an 
automobile or subsidize the purchase of an automobile? And the 
second policy question is, what's a reasonable amount for the 
purchase of an automobile? And prior to this hearing we didn't 
have time to reach a conclusion on that, which is why I was not 
able to support the bill as drafted at this time.
    We are looking at that. I am asking for that in a matter of 
weeks so that we can form a firm position either with respect 
to a legislative proposal or working with the Committee staff 
so that we can reach some consensus on what that should be. So 
I think--I would like to give myself a little bit of wiggle 
room--within 4 or 5 weeks we will be ready to talk more about 
that.
    [The response from Mr. Mayes follows:]
Response to Requests Arising During the Hearing by Hon. Daniel K. Akaka 
   to Bradley G. Mayes, Director, Compensation and Pension Service, 
 Veterans Benefits Administration, U.S. Department of Veterans Affairs
    Question 1. Will you please provide for the record revised views of 
the draft versions of S. 728, section 203, that takes into account the 
2004 program evaluation?
    Response. As mentioned in previous testimony, VA supports cost-of-
living increases in the annual income limit applicable to parents' DIC. 
VA's concern is that arbitrarily increasing the minimum amount from $5 
to $100 represented a departure from the needs-based principles 
underlying the Parents' DIC program. These principles were enacted in 
1956 by Public Law 6-811, which designated the program as a needs-based 
income support program for the surviving parents of veterans who died 
in service or after service due to service-connected disabilities.
    As part of an evaluation of the Parents' DIC Program, Economic 
Systems, Inc., proposed that VA have an additional outcome of the 
program, specifically that parents who receive DIC view the program as 
a source of recognition and appreciation by the Nation for the loss of 
a child due to service to our country.\1\ Another finding from the 
study was that parents often did not apply for DIC for years after 
becoming eligible because they were not aware of the benefit.\2\ An 
important component of showing parents the recognition and appreciation 
they deserve is performing adequate outreach to make sure that all 
eligible parents understand and receive the benefits to which they are 
entitled.
---------------------------------------------------------------------------
    \1\ Evaluation of the Parents' DIC Program. ORC Macro, Economic 
Systems, Inc., Hay Group. Final Report, December 2004. Page 12.
    \2\ Ibid. Page ix.
---------------------------------------------------------------------------
    The primary recommendation from the previous evaluation of the 
Parents' DIC Program was to increase the DIC benefit amount. In recent 
years, Congress has authorized such increases.\3\ Parents that 
currently receive a minimum of $5 per month represent recipients who 
have countable family income at the higher end of the income-limitation 
chart. For example, parents who are still married and have an annual 
income between $6,638 and $18,087 currently receive $5 per month. VA 
understands the idea of paying parents $5 per month in DIC payments 
carries a negative connotation, despite the fact that those receiving 
this amount have more income and are likely more financially stable 
than those receiving higher amounts of DIC. If the minimum payment were 
increased to $100 per month, then modifications to the sliding scale 
payment formula are necessary to prevent inequity and unfairness to 
some recipients whose income levels fall just below the ranges that 
warrant the minimum payment amount. If the minimum payment amount is 
increased, the factors previously discussed should be considered.
---------------------------------------------------------------------------
    \3\ Ibid. Page 136.

    Question 2. Regarding section 402, should the automobile allowance 
fully compensate for the purchase of an automobile or subsidize the 
purchase of an automobile, and what's a reasonable amount for the 
purchase of an automobile?
    Response. As mentioned in our previous testimony, VA supports 
legislation to increase the automobile allowance provided that Congress 
enacts offsetting savings for the cost of this increase. 
VA acknowledges that the current automobile allowance limit of $11,000 
is inadequate to reasonably assist with the purchase of a new vehicle.
    In 1971, the automobile allowance was $2,800. We compared this 
allowance to information supplied by the Department of Energy in their 
fact sheet #520, ``Average Price of a New Car, 1970 to 2006'' dated May 
26, 2008. According to the Department of Energy, in 1971 the average 
price of a new car (foreign or domestic) was $3,742. The $2,800 
allowance under Section 3902 represented 75 percent of the new car 
price. In December 2003, the current allowance of $11,000 was 
incorporated into the statute. That allowance only represented 52 
percent of the price of a new car, which was $21,169 according to the 
same fact sheet provided by the Department of 
Energy.
    Because the Department of Energy's fact sheet does not provide 2008 
data, we turned to the Web site Edmunds.com, a well-known and respected 
Web site used by many consumers and auto industry companies for 
information. We selected the five top-selling automobiles, in the 
vehicle classes of 1) van/minivan; 2) mid-size sedans; and 3) Sport 
Utility Vehicles (SUVs). We made the following assumptions when 
determining the current price of a vehicle: 1) 2009 model cars released 
in 2008; 2) 2008 prices for the base model of each vehicle; and 3) the 
five top-selling vehicles in its class. After assembling the data, we 
determined that the average price of a vehicle in 2008 was $22,557.
    The automobile allowance should subsidize the purchase of an 
automobile. VA does not believe that the intent of the statute was to 
fully compensate the purchase of an automobile. Based on our research 
above, VA believes that the intent of the law in 1971 was to provide an 
automobile allowance at 75 percent of the average cost of a new 
vehicle. In order to get back to that original percentage, it is 
reasonable that the VA provide an automobile allowance up to $17,000 
for those Veterans found eligible for this benefit. $17,000 represents 
75% of the full cost of an automobile using our methodology above.

    Chairman Akaka. Mr. Mayes, I want to clarify something from 
VA's written testimony. Is it correct to say that VA recognizes 
the need for a veterans' cemetery in Colorado but in a 
different location than the one stated in the proposed 
legislation?
    Mr. Mayes. I am going to refer that question to Mr. Hipolit 
on my right.
    Mr. Hipolit. I believe our testimony recognizes that the 
Fort Logan Cemetery will essentially be full by about 2019, and 
that at that later date there will be a need in Colorado for an 
additional cemetery after Fort Logan closes. So we are just 
beginning the planning stages now, I believe, looking forward 
to that period to see where an appropriate location might be. I 
think we've stated that something closer to the Denver area is 
probably going to be recommended. We are just starting the 
planning stages right now because that's a little ways down the 
road.
    Chairman Akaka. Thank you. Now I'd like to call on Senator 
Wicker for your questions.
    Senator Wicker. Thank you very much.
    Mr. Mayes, I really just have one question, and that's 
concerning language that was included in the Housing and 
Economic Recovery Act last year.
    As I understand it, S. 842 has been introduced by Senator 
Kerry. It would amend the Servicemen's Civil Relief Act real 
property protection provision by eliminating the 9-month sunset 
that was included in the Housing Recovery Act. I understand you 
have reservations about this, as do I, but has the department 
used it at all during the time that it has been in effect? I 
understand--and correct me if I am wrong--that it would give 
the VA the authority, if it is a VA-backed loan, to pay the 
lender the balance of the mortgage. Am I correct on that? And 
has this provision been used at all? Give me your thoughts on 
that concept.
    Mr. Mayes. Senator, I am going to be very direct. That's 
outside my area of expertise. That's a question that I would 
like to take for the record and make sure that we provide you 
with a very thorough, accurate response. It is my 
understanding, as it is yours, that, in fact, we could make the 
lender whole based on those provisions. But I'd like to take 
that for the record.
    Senator Wicker. I am perfectly satisfied with that and look 
forward--I wonder how long that might take.
    Mr. Mayes. I think we can do that in short-order.
    Mr. Hipolit. I think we are providing things for the record 
by May 14. That is our target.
    Senator Wicker. OK. Well, that will be here before we know 
it. So, thank you very much. And I don't have any other 
questions, Mr. Chairman.
    [VA's response to Senator Wicker's question follows:]
Response to Requests Arising During the Hearing by Hon. Roger F. Wicker 
   to Bradley G. Mayes, Director, Compensation and Pension Service, 
    Veterans Benefits Administration, Department of Veterans Affairs
    The following is in response to Senator Wicker's question about 
S. 842. VA would like to clarify that the bill appears to be addressing 
two separate statutes. The first concerns a revision to the 
Servicemembers Civil Relief Act, and the second applies to a previously 
introduced proposal to amend the Bankruptcy Code to allow judges to 
modify home mortgages.
                               section 1
    Section 1 of S. 842 proposes to eliminate the December 31, 2010, 
sunset of the Housing and Economic Recovery Act of 2008 (HERA) revision 
to the Servicemembers Civil Relief Act (SCRA). Accordingly, the HERA 
extension of the protection in the SCRA against mortgage foreclosures 
from 90 days to 270 days after active duty service ends would continue 
indefinitely.
    Senator Wicker's question related to whether VA has ``used'' SCRA. 
Since it is a protection afforded active duty servicemembers, it is 
invoked by servicemembers with their servicers, without the involvement 
of the Department. Furthermore, it applies to servicemembers with any 
type of mortgage, not only VA guaranteed mortgages. As such, VA does 
not have any information on the extent to which the revised protections 
have been implemented since the passage of HERA. The SCRA is a law 
administered by the Department of Defense (DOD).
                               section 2
    Section 2 of S. 842 would amend 38 U.S.C. Sec. 3732(a) to grant VA 
authority to purchase a VA-guaranteed home loan from the mortgage 
holder, in the event that the loan is modified by a Bankruptcy Judge 
under the authority of 11 U.S.C. Sec. 1322(b). Specifically, VA would 
be permitted to pay the mortgage holder the unpaid balance of the loan, 
plus accrued interest, as of the date of the filing of the petition 
under Title 11. In exchange, the mortgage holder would be required to 
assign, transfer, and deliver, to the Secretary, all rights, interest, 
claims, and records, with respect to the loan.
    For the purposes of this response, VA assumed that Senator Wicker's 
question related to VA's existing authority for purchasing guaranteed 
loans. VA has used its existing authority in 38 U.S.C. Sec. 3732(a) for 
many years to acquire VA-guaranteed home loans in situations where loan 
holders have been unwilling or unable to extend further forbearance. 
This authority is exercised when VA's own analysis indicates that, 
despite the loan holder's decision, the veteran has in fact resolved 
the issue that created a delinquency and is able to resume regular 
monthly payments.
    VA typically reamortizes acquired loans and reduces the interest 
rate to make the payments affordable. Increased loss mitigation efforts 
by private loan holders (specifically an increase in the number of loan 
modifications) have reduced the need for VA to refund loans, although 
this may change due to the current economic situation.

    Chairman Akaka. Thank you very much, Senator Wicker. Let me 
call on Senator Burris for his questions.

              STATEMENT OF HON. ROLAND W. BURRIS, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Burris. Thank you Mr. Chairman and Ranking Member 
Burr.
    I'd like to naturally extend my warm welcome to our guests 
who are here. I am looking at all this legislation and just 
wondering where do I start. It is like the kid in the candy 
store in terms of which ones I want to pick. But I am excited 
about the agenda. I am a cosponsor on quite a few of these 
bills, especially with the Veterans' Cost-of-Living Adjustment 
Act of 2009 and the Veterans' Rehabilitation and Training 
Improvement Act of 2009. We must make sure that we can get 
these passed. Of course, I support many of these other items. I 
hope we can utilize the expertise gathered here today to gain 
some consensus on this agenda.
    In terms of questions, Mr. Mayes, I want to know about 
Senate Bill 347. And do you believe that this bill could 
lower--from their current level of the TSGLI--payments for the 
loss of a non-dominant hand? Do you have any comments on that?
    Mr. Mayes. Senator, I will refer that question to Mr. 
Lastowka, who heads our insurance program.
    Chairman Akaka. Mr. Lastowka, please.
    Mr. Lastowka. Senator, we believe that the legislation is 
not necessary. We believe the current law provides the 
Secretary the authority to set a different level of payment for 
the dominant hand. We considered the dominant hand question 
during the ``Year-One TSGLI Review'' which we promised the 
Committee we would undertake, and which we have submitted. In 
our discussions with medical and rehabilitation experts during 
the review, and focusing on the purpose of TSGLI, which is to 
provide immediate financial relief, we felt that it was not 
appropriate to pay more for the dominant hand than the less 
dominant. In addition, paying a greater benefit for a dominant 
hand may have implications for assessing other traumatic 
injuries. We believe the payment is adequate for the intent of 
TSGLI; and we believe that for ongoing disability the 
Compensation Program--which does recognize a greater degree of 
disability for the dominant hand--is sufficient.
    Senator Burris. Sir, I am left-handed. And if something 
were to happen to my left hand there would be a tremendous 
impact on me trying to learn to use my right hand.
    Mr. Lastowka. I understand that, Senator.
    Senator Burris. I hope that there's enough leeway in the 
Secretary's discretion to be able to make a difference. But I 
know how the bureaucracy works and that won't even get up to 
the Secretary. That will be laid down in some bureaucratic desk 
somewhere, and that poor veteran who lost his left hand will 
then be going around not 1 year, not 2 years, but 3 years 
trying to show that he's now trying to adjust to his right 
hand. And he probably wouldn't get any type of a response to 
it. So I hope that you all will take another look at that bill.
    Mr. Lastowka. We are constantly looking at the question in 
terms of 2 years, 3 years, and in fact, the lifetime of the 
veteran. We believe the best avenue for compensating for the 
loss of the dominant hand is the VA Compensation Program, which 
would provide a greater long-term benefit. The purpose of the 
TSGLI program, on the other hand, is to take care of the 
immediate family needs of severely disabled servicemembers. But 
we will continue to look at not only this issue, but the 
program in general, sir.
    Senator Burris. Thank you very much.
    If there's a second round, Mr. Chairman, I'll probably have 
some questions for the second panel, if my schedule allows me 
to be here. But thank you very much, Mr. Chairman.
    Chairman Akaka. Thank you, Senator Burris.
    And now I'd like to call on our Ranking Member, Senator 
Burr, and provide him with as much time as he needs.
    Senator Burr. Thank you, Mr. Chairman. You're generous; and 
aloha.
    I want to stay on the same theme that Senator Burris was 
on. We've now had several commissions over 50 years talking 
about the need to reform our disability compensation. What is 
the Administration's position on reforming disability 
compensation?
    Mr. Mayes. Senator, I am the Director of the Compensation 
and Pension Program, and I've been doing this job almost 3 
years. I thought I knew what we were doing until I got here.
    I think that in the statute the Disability Compensation 
Program is clear in that we are supposed to make up the 
earnings gap that exists for a servicemember who is injured or 
suffers a disease while they are on active duty. And I like to 
think of it--as I've looked at this closely and reviewed what 
the VDBC said and the Institute of Medicine said, and Dole-
Shalala said--as I've looked at these studies, I equate the 
Disability Comp Program to a Workman's Compensation Program in 
the civilian sector, only a very, very special program with 
very special features. Once you're in, you're in for life. If 
your disability gets worse over your lifetime, then all you do 
is come and tell us. If it is substantiated, we pay you more 
money. If down the road you discover you have another 
disability that you believe is related to that service, there's 
no prohibition from claiming that and we will adjudicate that 
claim.
    So I think, as I am looking at it, and as the VDBC looked 
at it and CNA looked at the data, generally they found that it 
is making up the earnings gap. There are some areas where we 
need some improvement. Neuropsychiatric disorders was cited by 
CNA, especially in the lower evaluation categories. But I think 
it is making up the earnings gap, which is the statutory intent 
of the program--the Disability Comp Program.
    Senator Burr. And, with all due respect, I didn't ask you 
to evaluate the current program and whether it met the 
statutory requirements of filling in the earnings gap. I am 
getting at the heart of what I think Senator Burris was asking. 
If he's left-handed, he loses his left hand, there's not just 
the gap of compensation. There is a quality-of-life issue 
because he's got to learn to comb his hair with his right hand. 
He's got to learn to do everything with his right hand, not 
just make money.
    And I think every Commission that's come back said a 
quality-of-life payment should be something that should be 
considered in the future, especially when we are in a conflict 
like we are now where the loss of limb is probably the more 
typical injury to a servicemember. And, you know, it shocks me 
to look back over the 50 years and see the similarities of 
every Commission that came out and the incredible 
predictability of the bureaucracy in Washington to say, well, 
you know what? It doesn't need to change. It is 50 years old 
and it really doesn't need to change.
    I was just as frank with the last Administration as I will 
be with this one, and I'll do it as long as the Administration 
fights. Granted, I realize this is a very delicate balance that 
we've got to reach to try to design a compensation system that 
lives up to the expectations of the next generation of 
warriors, but also in some way takes care of the past 
generations that have become very comfortable with a system 
that says if you think you've gotten worse, then come in and we 
will increase your disability payment because the disability 
has gotten worse. Though, I think under today's standards--if 
we look at some of the items that we consider disabilities 
under our current system that have been paid since it was 
created--they are not disabilities today. They do not in any 
way impact one's earning capacity. There is no earnings gap but 
we pay them.
    I am the first one to say that you can't go back and take 
it away, but we can be smart enough and bold enough to say it 
has got to be different in the future. That, when a 
servicemember loses an arm, the compensation package that's 
been in place for 50 years does not sufficiently cover that. 
Without a quality-of-life component to it, you just cannot look 
at that servicemember and say we've tried to make you whole.
    So let me just ask real quick as it relates to severe 
Traumatic Brain Injuries and the need to get access to aid and 
attendance benefits, if they need them. The Disability 
Commission said, and I quote this, ``The primary focus is on 
physical impairments and locomotion. Very little emphasis is 
placed on cognitive or psychological impairments and the needs 
of those conditions for supervision and management as well as 
aid and attendance.''
    First of all, who qualifies for the higher levels of aid 
and attendance benefits today?
    Mr. Mayes. I am going to refer that question to Mr. 
Hipolit. Before I do, though, I would like to say we did make a 
dramatic change to the regulation dealing with Traumatic Brain 
Injury. I think that was published last year, and we recognized 
that we've got to more adequately compensate for cognitive 
impairment. That regulation has facets that address cognitive 
impairment and also allow for the payment of aid and attendance 
at the L-rate for Traumatic Brain Injury.
    But specific to your question, the higher level of aid and 
attendance, I'll defer to Mr. Hipolit.
    Senator Burr. Thank you.
    Mr. Hipolit. Yes, as Mr. Mayes mentioned, there are two 
levels of aid and attendance we pay. There's the L-rate, which 
is the standard rate. That can also be paid to some other 
people at some of the other levels in Section 1114. The higher 
rate is paid under section R-2. That's for a person who is in 
need of a higher level of care. That rate is basically for 
somebody who needs services in their home of a medical nature 
and who needs to have somebody come in to give them injections 
or other types of services.
    So, it is essentially somebody who has a particularly 
severe disability who qualifies for the R category. And then in 
that category, if they need these health-related services in 
their home, those would be the persons who would qualify for 
the higher rate.
    Senator Burr. Mr. Hipolit, would you agree with the 
Disability Commission that aid and attendance benefits 
currently do not focus on those individuals with cognitive 
impairments?
    Mr. Hipolit. I think the standard aid and attendance 
benefit is more generally applicable, but the higher level of 
care doesn't focus on cognitive disability. The higher level of 
care is more focused on some other types of disabilities.
    Senator Burr. So, VA would be aware of veterans who appear 
to need those benefits but do not currently qualify?
    Mr. Mayes. We are exploring the possibility that maybe we 
need to modify the regulations to allow the higher level of aid 
and attendance for veterans suffering from Traumatic Brain 
Injury or severe cognitive impairment. The regulation that we 
published, though, specifically cites the possibility that we 
can pay aid and attendance at the L-rate. It directs our 
decisionmakers to consider aid and attendance at the L-rate 
when they are evaluating cognitive impairment under that 
particular diagnostic code--diagnostic code 8045 in our 
schedule.
    The real question is that higher level. And the barrier to 
achieving that higher level of aid and attendance are the 
qualifying criteria--the losses or loss of use--to be in the 
zone to be able to be awarded the higher level at the R-rate. 
And that's what we are exploring from a policy point of view.
    Senator Burr. And please understand, for all three of you, 
I have deep respect for what you do. This is not an issue that 
popped up yesterday. As a matter of fact, we now have 7 years 
of experience in the current conflicts where the tragedy, if 
there is one, is that we've had Traumatic Brain Injuries come 
back every week and yet we still have a system that's talking 
about reviewing what we need to provide from the standpoint of 
the benefit package.
    You know, I've got a soldier from North Carolina that was 
discharged from the military in Germany because they were 
convinced he would not live for the trip across the ocean. Much 
to his strong will he did. The worst mistake we could have made 
was to discharge him versus to keep him in the system. And I 
can tell you, today he does not qualify for the higher rate. 
And he needs everything that you've described. His wife--if she 
wasn't there, for goodness sakes, I don't know what would 
transpire. But he does not qualify for the higher rate. And 
this was a soldier that was going to die. That's how severe his 
injury was.
    I've got a number of questions that I am going to submit in 
writing because they deal with legislation that I am in the 
process of putting together. But let me just plead with you. 
There's a human face behind every one of these issues. And I 
realize we may not be capable of doing disability reform 
comprehensively. Gosh knows--Mr. Chairman knows--I have tried 
to push it. And there's great reluctance up here to do it. It 
doesn't change my opinion of the great need for us to 
accomplish that. We need to sort this out. It is way too 
complicated, way too difficult, and it does not reimburse the 
individuals adequately, those that really deserve and need the 
reimbursement.
    Now, I am not saying that people get something that they 
don't deserve. I think to ignore the fact that today's warriors 
have different expectations about their quality-of-life and 
what they can accomplish after the loss of a limb, is to stick 
our head in the sand and say, ``You know what, over time they 
will become just like everybody else--happy to get a check.'' I 
am here to tell you that when we eliminate the opportunity to 
continue life as is for them, we've made a huge mistake. We 
have made a long-term strategic blunder if we do that.
    So, I would ask you as you work on these things--and I know 
they are complicated and I know they take time--understand 
there is a sense of urgency to do it. The only mistake that we 
can possibly make is to do nothing and to accept the status quo 
as the benefit package that today's generation of warriors is 
going to receive for the rest of their life. And they'll be 
here in 50 years talking about 100 years' worth of studies into 
a disability compensation package that needed to be reformed, 
and they'll point to us as ones that let it pass under our 
watch. And I will assure you that will not be a thing that we 
will wear proudly.
    Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much Senator Burr. I hope 
you had enough time for your questions and your comments.
    Let me finish off with any further questions from Senator 
Burris?
    Senator Burris. No, Mr. Chairman. I am OK. I have to head 
to the other committee.
    Chairman Akaka. Thank you very much.
    Senator Burris. Thank you, Mr. Chairman.
    Chairman Akaka. Senator Begich, do you have any questions 
or statements?
    Senator Begich. I am good right now.
    Chairman Akaka. Thank you very much.
    I want to thank the first panel and I want to thank my 
Ranking Member for his profound statement to the panel and 
especially the VA. We have so much to do. I am glad you are 
devoted. We will continue to try to work together to get the 
responses that we need from you to improve the system.
    Again, I want to thank you all for coming and spending the 
time with us. I look forward to working with you in the years 
to come. Thank you very much, first panel.
 Response to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka, 
            Chairman, to the Department of Veterans Affairs
    Question 1. VA currently has the authority to adjust the schedule 
of payments under TSGLI. Please describe the process by which 
qualifying losses were recommended to be added to the schedule during 
the TSGLI One Year Review.
    Response. The Traumatic Servicemembers' Group Life Insurance 
(TSGLI) year-one review team consulted with medical experts, researched 
numerous medical journals and articles, reviewed TSGLI cases, analyzed 
trends, and conducted surveys of approved and disapproved claimants in 
order to recommend changes and additions to the TSGLI schedule of 
losses.
    The team consulted with world-recognized experts in such fields as 
orthopedic surgery, trauma and wound ballistics, and burn management, 
who were on staff at facilities including Brooke Army Medical Center, 
U.S. Army Research Laboratory at Aberdeen Proving Grounds, U.S. Army 
Institute of Surgical Research, and Central Arkansas Veterans 
Healthcare System. Team members also personally interviewed medical 
personnel, patients, family members and caseworkers at Walter Reed Army 
Medical Center, National Naval Medical Center, Center for the Intrepid, 
and Richmond Department of Veterans Affairs (VA) Polytrauma Center. 
Many of the experts interviewed for the study made recommendations that 
were eventually adopted on how benefits should be enhanced or expanded. 
Additionally, a review of current medical literature on extremity loss, 
limb salvage, paralysis, and activities of daily living was also 
completed as part of the year-one review.
    Team members personally reviewed over 200 approved and disapproved 
TSGLI claims, and analyzed data on the length of time injured 
servicemembers were hospitalized. A survey of TSGLI claimant 
satisfaction was also conducted and the results analyzed as part of 
this review effort. The team met with the branch of service TSGLI 
claims processing offices and heard from claims adjudicators on how 
TSGLI benefits could be improved or expanded based on their 
observations since the inception of the program. The team also met with 
advocacy groups like the Wounded Warrior Project in order to obtain 
feedback from their members on the benefit.
    The team consulted with commercial insurance industry experts on 
the current practices of the Accidental Death and Dismemberment 
industry to determine if coverage offered through the TSGLI program was 
comparable to that provided by commercial insurers.
    All of the recommendations included in the final TSGLI year-one 
review report came from the medical experts, advocacy groups, TSGLI 
branch of service processing offices, or claimants themselves.
    VA's Insurance Service reviewed and assessed all the information 
obtained from the sources above to make a final determination on which 
losses should be covered by TSGLI. VA weighed factors such as the 
severity of the loss, the likely impact on the servicemember's family 
during rehabilitation, commercial practices, and the expressed 
congressional intent of the TSGLI legislation. This assessment resulted 
in the addition of four new losses to the original schedule of losses 
and expansion of the criteria for six existing losses.

    Question 2. What is the breakdown of traumatic injuries that have 
been deemed as qualifying losses and compensated under the TSGLI 
program? For example, limb loss, loss of sight, Traumatic Brain Injury, 
etc?
    Response. Attachment A provides the TSGLI schedule of losses. 
Attachment B contains a complete breakdown of all TSGLI losses, 
including the number and total payments approved for each schedular 
loss. [Attachments follow all VA responses.]

    Question 3. In this year's Independent Budget, there is a section 
dedicated to the need to increase the amount of automobile grants and 
adaptive equipment. For this report, the average price of a new car is 
based on a figure provided by the National Automobile Dealers 
Association. Is there a reason VA would not also rely on this 
organization to determine the average price of a new car when 
determining the appropriate amount for the automobile benefit? If VA 
believes that the amount of the automobile benefit should be based on 
something other than the average price of an automobile, how would VA 
determine what that amount should be?
    Response. There is no reason VA would not rely on data from the 
National Automobile Dealers Association to establish the average cost 
of a new automobile. VA is currently undertaking an analysis to 
determine the appropriate level for the allowance and whether the 
amount should fully cover the average replacement cost of a new 
automobile or a portion of the average cost. We anticipate completion 
of that analysis in the near future and will share our recommendation 
with the Committee once it is complete.

    Question 4. In VA's Comments on the Government Accountability 
Office's Draft Report on ``VA Vocational Rehabilitation and Employment: 
Better Incentives, Workforce Planning and Performance Could Improve 
Program,'' as Secretary Shinseki transmitted them to me on March 26, 
2009, it was noted that current law does not provide for payment of 
subsistence allowance during a program consisting solely of employment 
services under the Chapter 31 program. It was further noted that VR&E 
Service drafted a legislative proposal for consideration by the 
Secretary. What is the status of that proposal and when might we expect 
to see it?
    Response. VA is developing this proposal for consideration and 
possible inclusion in the legislative proposal package for a future 
budget cycle.

    Question 5. During the hearing, a representative from VA attempted 
to explain why a veteran would qualify for the higher level of aid and 
attendance (A&A) under Title 38, Section 1114(r)(2), usually referred 
to as ``R-2''. Other than administering medication, what types of 
services are provided in the home for veterans receiving R-2 A&A? Of 
these services, are there any that a person with cognitive disabilities 
would not require?
    Response. As explained in 38 CFR Sec. 3.352(b)(2), the services 
contemplated under (r)(2) are personal health care services provided on 
a daily basis in the Veteran's home by a person who is licensed to 
provide such services or who provides such services under the regular 
supervision of a licensed health care professional, without which the 
Veteran would require hospital, nursing home, or other residential 
institutional care.
    Personal health-care services include such services as physical 
therapy, administration of injections, placement of indwelling 
catheters, bowel management, the changing of sterile dressings, or 
similar services that require health care training or the regular 
supervision of a trained health-care professional.
    Veterans with cognitive disabilities may require assistance with 
activities of daily living, such as feeding, bathing, dressing, etc. 
and may establish entitlement to aid and attendance at the rate 
prescribed in section 1114(l). Section 1114(r)(2) authorizes special 
monthly compensation (SMC) only when there is a need for a higher level 
of care than aid and attendance and the Veteran is entitled to SMC 
under 38 U.S.C. Sec. 1114(o) or the maximum rate of SMC under section 
1114(p) or the intermediate rate between 38 U.S.C. Sec. 1114(n) and (o) 
plus the rate under 38 U.S.C. Sec. 1114(k). Veterans with cognitive 
disabilities would be entitled to the additional allowance under 
section 1114(r)(2) only if they meet these requirements of the statute.

    Question 6. Does VA currently have the authority to provide the R-2 
rating as an extra-scheduled rating for Traumatic Brain Injury?
    Response. VA does not have the authority to grant an (r)(2) rating 
on an extra-schedular basis for Traumatic Brain Injury (TBI) rated 
under Diagnostic Code (DC) 8045 in the VA rating schedule. The newly 
promulgated criteria for assessing disability due to residuals of TBI 
include assessment of three areas of a Veteran's ability to function: 
cognitive, physical, and emotional/behavioral. Physical dysfunction due 
to TBI is evaluated under an appropriate DC, and cognitive impairment 
and other residuals of TBI not classified elsewhere in the rating 
schedule are rated under DC 8045. Thus, the area of functioning 
affected by a Veteran's TBI upon which the Veteran's TBI would be rated 
under DC 8045 do not include the types of disability that meet the 
statutory criteria for entitlement to SMC under 38 U.S.C. 
Sec. 1114(r)(2).

    Question 7. During oral testimony, it was stated that VA is 
currently reviewing whether Traumatic Brain Injury should be 
compensated at the higher Aid and Attendance level. When will VA's 
review be complete?
    Response. VA intends to complete its review and make any policy 
recommendations that arise from it in the context of a future budget 
cycle.

    Question 8. During the hearing, there was a lengthy discussion 
regarding the ``quality of life'' issue as it relates to disability. 
Has VA begun to formulate how ``quality of life'' would be defined if 
it were ever to factor into the compensation system?
    Response. VA contracted with Economic Systems, Inc. to analyze 
providing compensation for loss of wage-earning capacity and quality of 
life (QOL). VA's report on this study and its implications regarding 
quality of life is forthcoming.

    Question 9. If a person successfully overcame certain limitations, 
physical or mental, caused by his or her disability, would that 
person's quality-of-life be better, and therefore require less 
compensation, than a person who is unable to overcome similar 
limitations?
    Response. This determination falls outside the scope of current VA 
authority.
                                 ______
                                 
  Response to Post-Hearing Questions Submitted by Hon. Richard Burr, 
         Ranking Member, to the Department of Veterans Affairs
    Question 1. I have been working on a bill to help veterans with 
severe Traumatic Brain Injuries get access to higher levels of ``aid 
and attendance'' benefits, if they need them. As the Veterans' 
Disability Benefits Commission said about these benefits, ``The primary 
focus is on physical impairments and locomotion. Very little emphasis 
is placed on cognitive (e.g., TBI) or psychological impairments and the 
needs of those conditions for supervision and management as well as aid 
and attendance.''

    Question 1A. How many veterans suffering from severe Traumatic 
Brain Injury currently qualify for benefits under 38 U.S.C. 1114(l) but 
do not qualify for the higher levels of aid and attendance benefits?
    Response. There are currently 165 Veterans service-connected for 
TBI, who are also in receipt of special monthly compensation (SMC) due 
to the need for aid and attendance at the level of section 1114(l). 
Section 1114(r) provides additional compensation to Veterans who are 
already entitled to SMC under 38 U.S.C. Sec. 1114(o) or the maximum 
rate of SMC under section 1114(p) or to the intermediate rate between 
subsections (n) and (o) plus the rate under section 1114(k). The 
additional allowance provided in subsection (r)(1) based on the need 
for aid and attendance is the same level of care referred to in section 
1114(l). Section 1114(r)(2) provides a higher allowance if the Veteran, 
in addition to needing regular aid and attendance, requires daily care, 
such as catheterization or injections, that must be provided by a 
person with medical training. None of the Veterans receiving SMC under 
section 1114(l) meet the requirements for additional allowances under 
38 U.S.C. Sec. 1114(r)(1) or (2).

    Question 1B. How much additional compensation is provided to a 
veteran under section 1114(l), and do you believe that amount is 
sufficient compensation for an individual with severe Traumatic Brain 
Injury who requires assistance 24 hours per day?
    Response. Presently, the statute provides that a single Veteran 
evaluated as 100 percent disabled for service-connected disabilities is 
entitled to receive $2,673 monthly. The same Veteran, if determined to 
be in need of regular aid and attendance would be entitled to receive 
$3,327 monthly. The difference is $654.
    A Veteran, in addition to monthly compensation of $3,327, would 
also be entitled to receive all medical care from VA, to include 
inpatient and outpatient care, medications, and various therapy 
modalities. This Veteran would also have access to multiple home health 
care options through the VA medical center. Such care would likely 
relieve the Veteran of any health care costs unless such care was 
declined.
    We believe that the law provides significant compensation and 
health care benefits to a Veteran who is determined to be in need of 
regular aid and attendance. However, those Veterans with profound 
cognitive impairment due to TBI are not currently eligible for the 
higher level of aid and attendance if they do not meet the requirements 
of 38 U.S.C. Sec. 1114(r).

    Question 2. I have also been working on a bill to eliminate the 
potential delay in receipt of VA disability compensation for veterans 
being medically discharged from service.

    Question 2A. Under current law, if VA is ready to award benefits to 
a severely injured veteran upon discharge from service, how long will 
it take for VA disability checks to actually show up if the veteran, 
for whatever reason, is discharged at the beginning of a month?
    Response. The effective date of an award of benefits is set by 38 
U.S.C. Sec. 5110. However, under 38 U.S.C. Sec. 5111(a), VA may not pay 
compensation for any period before the first day of the calendar month 
following the month in which the award became effective. VA 
compensation is paid on the first of the month following the month for 
which VA may pay compensation under section 5111. For example, if a 
Veteran was discharged from service on January 31, 2009, and if the 
effective date of the Veteran's award of VA compensation is February 1, 
2009, the first month for which VA could pay compensation under section 
5111 is March 2009. The first VA payment of compensation to the Veteran 
would occur at the beginning of April 2009.

    Question 2B. Are you aware of any justifications for why there 
should be a delay in receiving VA compensation?
    Response. As explained above, 38 U.S.C. Sec. 5111(a) (implemented 
at 38 CFR 3.31) provides that no payment may be made to any individual 
for any period before the first day of the calendar month following the 
month in which the award was effective. And, as noted, VA payments are 
made the first of each month for the preceding month. This applies for 
original awards of benefits or for increases in benefits.
    Regarding the interval between when a claim is received and when it 
is decided, VA endeavors to render decisions in a timely fashion. The 
nature of individual claims, legal requirements governing the claims 
process, and success or lack thereof in obtaining necessary evidence 
can affect the time to decide a claim and initiate the payment of 
benefits.

    Question 3. One of the bills I have been working on would allow 
servicemembers who have lost limbs and cannot use prosthetic devices, 
for any reason, to qualify for increased special monthly compensation. 
Under current law, it appears that these higher payments are only 
available if the inability to use a prosthetic appliance is caused by 
the site of the amputation or because of complications.

    Question 3A. Can you explain VA's current policy on this?
    Response. The level of SMC based on inability to use prosthetic 
appliances is limited by law to the criteria mandated in 38 U.S.C. 
Sec. 1114(m). The statute provides SMC for Veterans who, as a result of 
a service-connected disability, have ``suffered the anatomical loss or 
loss of use of both hands, or of both legs at a level, or with 
complications, preventing natural knee action with prostheses in place, 
or of one arm and one leg at levels, or with complications, preventing 
natural elbow and knee action with prostheses in place.'' Entitlement 
to an increased rate of compensation under 38 U.S.C. Sec. 1114(n)-(r) 
would depend upon whether a Veteran's disability satisfies these 
additional statutory criteria.

    Question 3B. Do you know of any justification for denying increased 
special monthly compensation if there is a good reason why the veteran 
is unable to use prosthetic appliances?
    Response. The levels of SMC awarded to Veterans who are unable to 
use prosthetic appliances is set by section 1114(m). VA reviews all 
available medical evidence to determine the correct level of SMC based 
on current law and regulations.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Bernard Sanders to 

                   the Department of Veterans Affairs
    Question 1. Mr. Mayes, in your prepared statement you said that the 
VA cannot support my legislation S. 820, the Veterans' Mobility 
Enhancement Act of 2009 that I have introduced to increase the 
automobile and special adaptive equipment grant program. Specifically 
you said, ``[w]e understand the importance of providing sufficient 
resources for vehicles or adaptive equipment to servicemembers and 
veterans who rely on them, but we cannot support this bill at this 
time. In order to best support the goals of this program, we will need 
to review the appropriate amount to provide for this benefit.'' Can you 
explain to me what the VA views as an appropriate amount of benefit for 
disabled veterans using the automobile and special adaptive equipment 
grant program? How does VA determine what amount is appropriate?
    Response. We agree that an increase is warranted in the automobile 
allowance such that the benefit adequately assists qualifying Veterans 
in obtaining a suitable vehicle. However, we have not completed our 
analysis to determine the appropriate increase in the automobile 
allowance and whether the amount should fully cover the average 
replacement cost of a new automobile or a portion of the average cost. 
We anticipate completion of that analysis in the near future and will 
share our recommendation with the Committee once it is complete.

    Question 2. Mr. Mayes, in your prepared statement you mention that 
the VA did not have time to comment on S. 315, the Veterans Outreach 
Improvement Act of 2009, the legislation that I have introduced with 
Senator Feingold to require, among other components, VA to have a 
specific outreach account in their annual budget and to increase the 
support VA provides to state and local organizations and governments 
providing outreach to our veterans to let them know about available 
services.

    Question 2A. Can you tell me what the Veterans Benefit 
Administration currently does to inform veterans about the services and 
benefits available to them?
    Response. Veterans Benefit Administration (VBA) provides benefit 
information to servicemembers, Veterans and their beneficiaries through 
a variety of means. As more Veterans communicate through electronic 
mediums, VBA presents up-to-date information regarding new programs and 
initiatives on its Web site. VBA also uses traditional methods such as 
direct mailing and phone contacts for those Veterans who prefer not to 
communicate electronically. Some specific outreach initiatives are 
highlighted below.
Post-9/11 GI Bill outreach.
     Information about the new benefit is on the Education 
Service Web site (www.gibill.va.gov).
     In addition to the Education Service Web site, an 
informational page on the new benefit has also been posted on Facebook.
     Our Web site averages 40-50 million visits per month which 
is double our activity from the preceding year.
     600,000 individuals have signed up to receive updates from 
this Web site.
     VA completed the mailing of 2 million informational 
letters to potentially eligible Veterans.
     VA worked with the Department of Defense (DOD) to provide 
information on leave and earning statements and DOD/service portal Web 
sites.
     VA also collaborates with the Department of Labor's 
Veterans' Employment and Training Service to assist Veterans find 
suitable employment.
Post-9/11 GI Bill outreach to colleges and universities.
     VBA recently mailed all colleges and universities to 
advise them of the major provisions of the Post-9/11 GI Bill, most 
specifically the Yellow Ribbon Program. The Yellow Ribbon Program 
allows a school to enter into an agreement to pay tuition and fee 
expenses not covered by the Post-9/11 GI Bill. VA has received 126 
Yellow Ribbon Program agreements. All agreements were due by June 15, 
2009.
     VBA also worked closely with national organizations 
representing colleges and universities to provide them information and 
training about the new GI Bill program.
     VBA continues to provide information at Veterans' service 
organizations (VSO) meetings, Department of Education student financial 
aid regional and national conferences, and Student Veterans of America 
meetings.
Pre-discharge Claims outreach.
     VBA expanded the pre-discharge claims processing program 
to allow servicemembers who are stationed at any military installation 
to participate in the benefits delivery at discharge (BDD) program.
     VBA added an additional program, called quick start, which 
allows servicemembers who are within 60 days of discharge to file 
claims for service-connected compensation prior to leaving service.
     VBA coordinated with DOD to post a BDD fact sheet and e-
brochure on VA and DOD/Service Web sites.
Transition Assistance Program and Disabled Transition Assistance 
        Outreach.
     VBA provides servicemembers and their families with 
transition assistance briefings and disabled training assistance 
briefings.
     In 2008, nearly 8,700 briefings were provided to more than 
299,000 attendees and over 830 briefings were provided to over 15,260 
servicemembers overseas.
Outreach to Veterans on employment.
     VBA's ``VetSuccess.gov'' Web site expanded in March 2009 
to make it easier for Veterans to navigate, and employers to post jobs 
and find qualified Veterans to fill their vacancies.
     VA collaborates with National Association of State 
Workforce Agencies and direct employers to include a job central data 
bank of over 500,000 jobs.
     Also, three VetSuccess videos may be viewed via YouTube. 
These short, testimonial videos depict three Veterans who successfully 
completed their programs of rehabilitation and share their 
inspirational stories.
Specialized claims outreach.
     On November 4, 2008, around 28,000 outreach letters were 
sent to Veterans who may qualify for presumptive conditions associated 
with Agent Orange.
     On March 17, 2009, approximately 32,000 outreach letters 
were sent to Veterans with service-connected TBI encouraging them to 
request reexamination based on the new rating criteria.
     Amyotrophic lateral sclerosis, radiation, and former 
prisoner of war outreach letters are being sent to Veterans and 
survivors.
Specially Adapted Housing (SAH) Grant Outreach.
     In July 2008, Congress passed legislation related to SAH 
grant program authorizing temporary assistance residence grants to 
active-duty servicemembers, increasing grant amounts, and extending 
eligibility to Veterans/servicemembers with permanent and total 
service-connected disabilities as a result of severe burns.
     VBA released a press release, issued field employee 
guidance, educated the VSOs of this program change, and on August 2008 
Loan Guarantee educated the military community at the Brooke Army 
Medical Center of this new burn legislation.
     VBA released a new SAH video in November 2008 called 
``Homes for Heroes'' that outlines the expanded SAH program for 
severely injured active duty servicemembers and Veterans.
Traumatic Servicemembers' Group Life Insurance Outreach.
     VBA collaborates with DOD and the military services to 
develop special outreach procedures to implement new qualifying 
injuries/losses within TSGLI.
     Based on guidance by VBA, each military service's TSGLI 
office automatically reconsiders all previously denied claims and all 
claims in which less than $100,000 has been paid.
     Additionally, VBA insurance center contacts Operation 
Enduring Freedom/Operation Iraqi Freedom (OEF/OIF) separating 
servicemembers who had SGLI coverage and have been rated by their 
respective branch of service or by VA as 50-100 percent disabled. VBA 
insurance personally contacts by phone this group to inform them of 
SGLI extension, VGLI, TSGLI, and SDVI which averages between 100-200 
contacts monthly.

    Question 2B. Do you know how much money the VBA spends on outreach 
activities and services each year? If so, please provide that number 
broken down into as many specific activities as possible.
    Response. In fiscal 2008, VBA provided over 100,000 hours in 
support of our on-going outreach mission. Currently, VBA does not have 
a separate budget for outreach as this is part of our on-going mission 
to inform servicemembers, Veterans, survivors, dependents and 
stakeholders of benefits and services offered through the VBA.

    Question 2C. Does the VBA use contracts with outside entities to 
provide outreach services? If so, what kind of organizations do you 
contract with?
    Response. VBA contracts with State Approving Agencies (SAA) 
primarily for approval of education and training courses in each state. 
In conjunction with their duties, SAAs provide outreach on education 
benefits available under Federal and State laws. VBA does not contract 
with other outside entities to provide outreach services.









    Chairman Akaka. I would like to welcome the second panel. 
First, I welcome Robert Jackson, who is the Assistant Director 
of National Legislative Service for the Veterans of Foreign 
Wars. Next, we have Ray Kelley, who is the Legislative Director 
of AMVETS. I also welcome R. Chuck Mason, a Legislative 
Attorney from CRS, and Mr. Ian DePlanque, who is the Assistant 
Director for the Claims Service of Veterans Affairs and 
Rehabilitation Commission at the American Legion. And finally, 
Rebecca Poynter, who is the director of Military Spouse 
Business Organization, is also here with us today.
    Mr. Jackson, we will please begin with your testimony.

   STATEMENT OF ROBERT JACKSON, ASSISTANT DIRECTOR, NATIONAL 
  LEGISLATIVE SERVICE, VETERANS OF FOREIGN WARS OF THE UNITED 
                             STATES

    Mr. Jackson. Thank you, Mr. Chairman, Ranking Member Burr, 
Members of the Committee.
    Thank you for the opportunity to provide testimony on 
pending Veterans' Benefits Legislation. The 1.8 million men and 
women of the Veterans of Foreign Wars of the United States do 
appreciate the voice you give them at these important hearings.
    Due to the number of bills on the agenda, I am going to 
focus on one bill, the Veterans' Rehabilitation and Training 
portion. And I request my written testimony be entered into the 
official record.
    While the VFW supports the intent of Senate Bill 514, the 
Veterans' Rehabilitation and Training Improvement Act, we 
believe more can and should be done to address the core issues 
facing the Vocational Rehabilitation and Employment Service, or 
VR&E. Specifically, this legislation would require the amount 
of monthly subsistence allowance paid to a veteran 
participating in a VA rehabilitation program to be equal to the 
national average of the basic allowance of for housing paid to 
a member of the Armed Forces at Pay grade E-5. The legislation 
would also provide reimbursement for costs incurred during 
participation if a veteran successfully completes the program.
    We believe that while this is a very important step, a 
disparity would still exist between Chapter 31 and Chapter 33 
Subsistence Allowance Benefits. In utilizing a national 
average, many veterans may still choose not to use the Chapter 
31 benefit because they may receive a higher stipend with 
Chapter 33. This would particularly be true in areas with a 
high cost of living. That is why the VFW would prefer to see 
Chapter 31's benefit paid at the same rate as a veteran 
receiving Chapter 33. Additionally, we support providing 
reimbursement for costs incurred by veterans as a result of 
participation, however, these costs need to be paid while a 
veteran is enrolled when assistance is most needed, not 
following their successful completion.
    We also support the legislation's proposed repeal of the 
per-fiscal-year limit on the number of veterans who may 
participate in the VA Independent Living Services and 
Assistance program.
    In past testimony, the VFW has cited several other changes 
that need to be made to ensure the VR&E program is the best 
transitional and rehabilitative program in VA's arsenal.
    First, the VFW would like to see the delimiting date 
removed from VR&E. Currently, the delimiting date is set at 12 
years after separation from the military, or 12 years following 
the date a servicemember learns of their rating for a service-
connected disability. This fails to take into account the fact 
that many service-related injuries will not hinder the veteran 
to the point of needing help or rehabilitation until many years 
following the injury.
    Eliminating the delimiting date would allow veterans to 
access the VR&E program on a needs basis for the entirety of 
their employable lives. Veterans would still have to be 
approved for VR&E as having an employment handicap resulting 
from their service-connected disability and would still be 
subject to total cap of services. However, dropping the 
arbitrary delimiting date would ensure rehabilitation for 
veterans should their service-connected disability progress 
over time.
    Second, for many veterans with dependents, the VR&E 
educational tract provides insufficient support. Veterans with 
dependents are often those with the most pressing needs to 
secure meaningful long-term employment. Many seriously disabled 
veterans are unable to pursue all of their career options or 
goals due to the limited resources provided to disabled 
veterans with spouses and children. Unfortunately, these heroes 
utilize VR&E's employment track at a rate higher than disabled 
veterans without dependents. The VFW believes this is likely 
because immediate employment, while possibly not the best long-
term rehabilitation outlook for the veteran, provides higher 
financial stability in the short-term to the veteran and the 
family who otherwise may not be able to afford the costs 
associated with the veteran's long-term educational 
rehabilitation.
    The VFW would like to see VR&E institute a program to help 
veterans with dependents while they receive training 
rehabilitation and education. This could be achieved by 
establishing a sufficient allowance to assist with the cost-of-
living and in some cases by providing childcare vouchers or 
stipends as childcare is a substantial expense for many of 
these veterans.
    And finally, the VR&E needs to reduce time from enrollment 
to start of services. Currently, it can take up to several 
months for a veteran to begin a program of training in VR&E. 
This occurs primarily because VR&E is required to validate that 
an entitlement is present. In a recent conversation with VR&E's 
central office, the VFW learned that it is extraordinarily rare 
that a veteran's entitlement is not found for the VR&E program. 
If a veteran has proven eligibility for VR&E, the VFW believes 
entitlement should be assumed, thereby minimizing veterans' 
time in gaining access to VR&E programs.
    Mr. Chairman, thank you once again for inviting us to 
testify. This concludes my statement and I'd be happy to answer 
any questions you may have.
    [The prepared statement of Mr. Jackson follows:]
  Prepared Statement of Robert Jackson, Assistant Director, National 
   Legislative Service, Veterans of Foreign Wars of the United States
    Mr. Chairman, Ranking Member Burr and Members of the Committee: 
Thank you for the opportunity to provide testimony on pending veterans' 
benefits legislation. The 1.8 million men and women of the Veterans of 
Foreign Wars of the U.S. appreciate the voice you give them at these 
important hearings.
            s. 263, the servicemembers access to justice act
    The VFW strongly supports this legislation. The Servicemembers 
Access to Justice Act (SAJA) would close several loopholes and 
strengthen the protections in current law to ensure that 
servicemembers' and veterans' employment and reemployment rights are 
effectively enforced under the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (USERRA). We thank Senator Casey and 
the original cosponsors of this legislation for its introduction, and 
we urge its passage.
    We especially appreciate Section 2 of the legislation. It would 
waive states sovereign immunity under the 11th amendment, insuring 
servicemembers rights in regard to state law. Additionally, the bill 
would make pre-deployment arbitration dispute agreements unenforceable, 
require the award of attorney fees to servicemembers who prevail in 
actions to enforce USERRA, and define the parameters of successor in 
interest for companies that are bought and sold.
    Meaningful reform of USERRA is long overdue. With more than one 
million veterans already on the unemployment rolls, the VFW is deeply 
concerned with the protection of the servicemember, and ensuring that 
the servicemember is reemployed by their previous employer in 
accordance with the law is of paramount importance. According to the 
Department of Defense's (DOD) Status of Forces study released in 
November 2007, among Post-9/11 returning National Guard and Reservists, 
nearly 11,000 were denied prompt reemployment and more than 20,000 lost 
their seniority, pay, and other benefits. Moreover, 20,000 saw their 
pensions cut and more than 15,000 did not receive the training they 
needed to return to their former jobs.
    This legislation would eliminate those problems by closing 
loopholes to ensure that returning reservists keep their jobs and 
employment benefits as required under current law. Specifically, the 
bill would make it easier for servicemembers to obtain justice when 
their employment rights are violated by prohibiting employers from 
requiring them to give up their ability to enforce their rights under 
USERRA in court in order to get a job or keep a job.
             s. 315, the veterans' outreach improvement act
    The VFW is pleased to offer our support for this legislation, which 
would increase congressional oversight of the VA's outreach activities 
and authorize the Secretary of Veterans Affairs to work with State, 
local and community-based organizations to perform outreach.
    Specifically, this bill would improve outreach activities performed 
by the VA by creating separate funding line items for outreach 
activities within the budgets of the VA and its agencies, to ensure 
oversight of the VA's outreach activities. Additionally, the bill would 
create an intra-agency structure to coordinate outreach activities, 
allowing VA components to consolidate their efforts, share proven 
outreach mechanisms, and avoid duplication of effort. Finally, the bill 
would allow the VA to award grant funds to State, local and community-
based organizations to conduct outreach activities.
    We believe that the passage of this legislation would help to 
facilitate consistent implementation of VA's outreach responsibilities 
around the country. This can only serve to better the care VA provides 
to this Nation's veterans. For this reason, we support this bill.
                                 s. 347
    The VFW supports this legislation, which would allow the Secretary 
of Veterans Affairs to consider the loss of a dominant hand when 
determining severity of loss for purposes of traumatic injury 
protection under Servicemembers' Group Life Insurance.
    Many occupational therapists, who provide treatment to amputees, 
maintain that a person who has lost a dominant hand must overcome 
greater physiological and psychological barriers than someone losing a 
non-dominant hand. This legislation would give VA the authority to 
distinguish the difference and to award greater compensation for the 
loss of a dominant hand.
    s. 407, the veterans' compensation cost-of-living adjustment act
    The VFW supports this legislation as it allows our disabled 
veterans and their dependents to keep pace with the rising costs of 
goods and services, which is especially difficult in these tough 
economic times.
    Congress regularly enacts an annual cost-of-living adjustment for 
veterans' compensation in order to ensure that inflation does not erode 
its purchasing power. Without an annual COLA increase, these veterans 
and their families would see the value of their hard-earned benefits 
slowly diminish.
    This bill would index the cost-of-living adjustment in the rates of 
disability compensation, dependents compensation, the clothing 
allowance and DIC rates. This adjustment would be parallel to the rate 
of increase for Social Security benefits.
    We would note that we continue to oppose the rounding-down of 
compensation to the lowest dollar, which was instituted several years 
ago as a budget reduction measure. We feel that this unfairly penalizes 
those who have already given much to this country.
           s. 475, the military spouses residency relief act
    The VFW supports this legislation, which would give a military 
spouse who moves out of state because of military orders the same 
option to claim one state of domicile, regardless of where they move. 
If a spouse chooses to take advantage of this, the servicemember and 
the spouse must have the same state of residence. This bill makes the 
move from station to station easier, removing the need to update 
drivers' licenses, filing tax returns for multiple states, and changing 
vehicle and voter registrations with each move.
    Currently, servicemembers have the ability to claim a state of 
residence and maintain that residency regardless of where military 
orders may send them. Unfortunately, military spouses are not granted 
this same benefit. Consequently, military spouses cannot retain joint 
ownership of the family vehicle in most states and are much less likely 
to have their names on deeds and titles of family property because of 
the implications of moving to another state. Additionally, while 
servicemembers can vote while deployed overseas, this right is not 
always extended to spouses.
   s. 514, the veterans rehabilitation and training improvements act
    While the VFW supports S. 514, we believe it does not go far enough 
to address the core issues facing the Vocational Rehabilitation and 
Employment Service (VR&E). Specifically, this legislation would require 
the amount of subsistence allowance paid to a veteran for a month in 
which the veteran participates in a VA rehabilitation program to be 
equal to the national average of the basic allowance for housing paid 
to a member of the Armed Forces in pay grade E-5. The legislation would 
also provide reimbursement for costs incurred during participation if a 
servicemember successfully completes the program.
    We believe this is an important step in the right direction, but a 
disparity would still exist between Chapter 31 and 33 living allowance 
benefits. In utilizing a national average, many veterans may still 
choose not to use Chapter 31 because they may receive a higher stipend 
with Chapter 33. This would particularly be true in areas with a high 
cost of living. That is why the VFW would prefer to see Chapter 31's 
educational stipend paid at the same rate as a veteran receiving 
Chapter 33. Additionally, there is merit in providing reimbursement for 
costs incurred by veterans as a result of participation; however, these 
costs need to be paid while a veteran is enrolled, not following their 
successful completion, because that is when assistance is most needed.
    We also support the legislation's proposed repeal of the per-
fiscal-year limit on veterans who may participate in the VA Independent 
Living Services and Assistance program.
    In recent testimony, the VFW sited several other changes that need 
to be made to ensure the VR&E program is the best transitional and 
rehabilitative program in the VA's arsenal, as follows:
Removal of the delimiting date
    The VFW would like to see the delimiting date removed for VR&E. 
Currently, the delimiting date is set at 12 years after separation from 
the military, or 12 years following the date a servicemember learns of 
their rating for a service-connected disability. This fails to take 
into account the fact that many service related injuries will not 
hinder the veteran to the point of needing help or rehabilitation until 
many years following the injury.
    Eliminating VR&E's delimiting date would allow veterans to access 
the VR&E program on a needs basis for the entirety of their employable 
lives. Veterans would still have to be approved by VR&E as having an 
employment handicap resulting from their service-connected disability 
and would still be subject to the total cap of services. However, 
dropping the arbitrary delimiting date would insure rehabilitation for 
veterans should their service-connected disability progress over time.
For Many Disabled Veterans with Dependents VR&E Education Tracks are Ins
        ufficient
    For many veterans with dependents the VR&E educational track 
provides insufficient support. Veterans with dependents are the second 
largest group seeking assistance from VR&E and they are often those 
with the most pressing needs to secure meaningful long-term employment. 
Many seriously disabled veterans are unable to pursue all of their 
career options or goals due to the limited resources provided to 
disabled veterans with children and spouses. We must not forget that 
these veterans are utilizing VR&E because of a disability they incurred 
in service to our country. Unfortunately, these heroes utilize VR&E's 
employment track at a rate higher than disabled veterans without 
dependents. The VFW believes this is likely because immediate 
employment, while possibly not the best long-term rehabilitation 
outlook, immediately provides higher resources to the family that 
cannot afford long-term educational rehabilitation.
    The Veterans of Foreign Wars would like to see VR&E institute a 
program to help veterans with dependents while they receive training, 
rehabilitation and education. This could be achieved by establishing a 
sufficient allowance to assist with the cost-of-living and in some 
cases by providing childcare vouchers or stipends. Childcare is a 
substantial expense for many of these veterans. Without aid of some 
form, many disabled veterans will be unable to afford the costs 
associated with long-term educational rehabilitation.
    By assisting these veterans with these expenses, we can increase 
the likelihood they will enjoy long-term success and an increased 
quality of life. This will lead to decreased usage of VA services and 
is a worthwhile proactive approach.
VR&E Performance Metrics Need to be Revised to Emphasize Long-term 
        Success
    Currently VR&E measures the ``rehabilitation rate'' as the number 
of veterans with disabilities that achieve their VR&E goals and are 
declared rehabilitated compared to the number that discontinue or leave 
the program before achieving these goals. ``Rehabilitated'' within the 
employment track means that a veteran has been gainfully employed for a 
period of 60 days following any VR&E services they received. This form 
of performance measure could have the latent consequence of 
incentivizing short-term employment solutions over long-term 
strategies.
    The VFW would like to see all VR&E performance metrics changed to 
reflect the employable future of the veteran. A veteran's success in 
completing a rehabilitation program followed by his employment does not 
necessarily mean he has been rehabilitated for the course of his 
employable future. Changing the metrics to reflect a career-long 
standing will incentivize long-term approaches to VR&E programs. If an 
injury is aggravated following rehabilitation then a servicemember may 
need additional rehabilitation to ensure employability.
VR&E Needs to Reduce Time from Enrollment to Start of Services
    The current VR&E program can take up to several months to begin a 
program of training. This occurs primarily because VR&E is required to 
validate that entitlement is present. In a recent conversation with 
VR&E's central office, the VFW learned that it is extraordinarily rare 
that entitlement is not found for the VR&E program. If a veteran has 
proven eligibility for VR&E, the VFW believes entitlement ought to be 
assumed thereby minimizing veterans time in gaining access to VR&E 
programs.
s. 663, the belated thank you to the merchant mariners of world war ii 
                                  act
    This bill would amend title 46, United States Code to provide 
benefits to certain individuals who served in the United States 
Merchant Marines during WWII.
    The VFW recognizes the heroic service of Merchant Mariners during 
WWII. Their sacrifices and heroic efforts were instrumental in winning 
the Second World War. However, we cannot support this legislation to 
pay a monthly benefit of $1000 to these merchant mariners or to their 
surviving spouses, which would be in addition to any current veterans' 
benefit that would be otherwise payable. We believe that this payment 
would be disproportionate, in terms of recognition and benefits, to 
those received by veterans who have been placed in harm's way.
                             s. 691/s. 746
    The VFW's departments of Colorado and Nebraska have worked 
diligently with the VA to establish national cemeteries in eastern 
Nebraska and southern Colorado and we encourage this Committee to 
approve a national cemetery in each region. Both requests fulfill the 
requirement by the VA under the Veterans Millennium Health Care and 
Benefits Act (Pub. L. 106-117) of a population threshold of 170,000 
people living within a 75-mile radius of a state cemetery.
      s. 728, the veterans' insurance and benefits enhancement act
    This comprehensive legislation, which the VFW is pleased to 
support, addresses a broad range of veterans' benefits and improves 
services for veterans both young and old. The bill includes several 
important provisions that would make enhancements to--veterans' 
benefits--in the following areas:
    A new insurance program for veterans with service-connected 
disabilities: This new program would provide up to a maximum of $50,000 
in level premium term life insurance coverage with the premium rates 
based on an updated mortality table. Consequently, premiums under this 
program would be fairer to veterans.
    Expanded eligibility for retroactive benefits from traumatic injury 
protection coverage under Servicemembers' Group Life Insurance: 
Currently, all insured servicemembers under SGLI from December 1, 2005 
to the present are covered by traumatic injury protection regardless of 
where their injuries occurred. Unfortunately, servicemembers who 
sustained traumatic injuries between October 7, 2001, and November 30, 
2005, that were not incurred as a direct result of OEF/OIF service are 
not eligible for a retroactive payment. This legislation would expand 
eligibility to these servicemembers.
    A $10,000 increase to the amount of supplemental insurance totally 
disabled veterans may purchase under the Service-Disabled Veterans 
Insurance Program: Many veterans who are totally disabled have 
difficulty obtaining commercial life insurance. This legislation would 
increase the amount of supplemental life insurance available from 
$20,000 to $30,000, providing these veterans with a more reasonable 
amount of life insurance coverage.
    An increase in the amount of Veterans' Mortgage Life Insurance that 
a service-connected disabled veteran may purchase: The current economic 
climate necessitates the need for this provision, which would increase 
the maximum amount of Veterans' Mortgage Life Insurance that a service-
connected disabled veteran may purchase from the current maximum of 
$90,000 up to $200,000. In the event of a veteran's death, the 
veteran's family is protected because VA will pay the balance of the 
mortgage owed up to the maximum amount of insurance purchased.
    Other provisions within the bill would provide an upgrade of 
certain benefits for veterans and their survivors, including the 
extension of eligibility for automobiles and adaptive equipment for 
servicemembers and veterans with severe burn injuries; increasing the 
benefit rate for parents whose children die either during military 
service or as a result of a service-connected disability; and securing 
indexed cost-of-living increases for certain additional benefits for 
veterans and their families.
                                 s. 820
    The VFW supports this legislation because it will improve the lives 
of our most seriously disabled service-connected veterans.
    This legislation reflects the VFW's recommendations published in 
the FY 2010 Independent Budget, regarding the enhancement of the 
automobile assistance allowance for disabled veterans.
    More than 50 years ago, Congress set the amount of the automobile 
allowance to cover the full cost of an automobile. However, over time 
the value of that allowance has been significantly eroded because 
adjustments have been irregular and not reflective of the increased 
cost. This legislation restores equity between the cost of an 
automobile and the allowance by basing the allowance to 80 percent of 
the average retail cost of new automobiles for the preceding calendar 
year. Under this legislation, the automobile allowance would increase 
from $11,000, which represents 39 percent of the average cost of a new 
automobile, to $22,800, which represents the average cost of an 
automobile in model year 2008.
                                 s. 842
    This legislation provides needed foreclosure protection for our 
military families, and the VFW is proud to support it.
    In the midst of the worst increase in mortgage defaults in close to 
70 years, the foreclosure activity rate has gotten higher for the 
military compared to the rest of the Nation. Servicemembers and their 
families are constantly on the move from one duty station to the next 
and are finding it increasingly difficult to sell their homes in a 
housing market that is anything but stable.
    In short, our military families are in desperate need of relief.
    Last year, Congress passed legislation amending the Servicemembers 
Civil Relief Act, protecting servicemembers from losing homes for 
nonpayment of mortgages only while on active duty and for nine months 
after they return home. The sunset provision for that protection 
expires at the end of 2010.
    S. 842 would repeal the sunset provision and allow the VA to pay 
mortgage holders unpaid balances on housing loans guaranteed by the VA. 
Additionally, the legislation allows for long-term refinancing of 
mortgages.
    These soldiers and sailors fought for our country, they should not 
have to fight to save their homes.
                                 s. 847
    The VFW is pleased to support this legislation, which would 
eliminate the unfair restriction on separately earned benefits for 
Dependents' Educational Assistance (DEA) beneficiaries who also qualify 
for and accrue benefits under other VA and DOD educational benefit 
programs as a result of their own military service.
    The DEA program provides education and training opportunities to 
eligible dependents of veterans who have permanent and total service-
connected disabilities or who have died of these disabilities. The 
program offers up to 45 months of education benefits, which may be used 
for degree and certificate programs, apprenticeship, and on-the-job 
training. Currently the VA provides for a $915 per month entitlement 
for full time institutional training and a $737 per month entitlement 
for full-time farm cooperative training.
    Specifically, this bill will allow servicemembers to utilize both 
the full 45-month DEA entitlement earned through a family member's 
service, as well as the full G.I. Bill entitlement they earn 
themselves, and will ensure that these individuals receive the 
compensation they deserve as children or spouses of those who have 
serious service-connected disabilities or who died while honorably 
serving their country.
    The VFW agrees with Sen. Webb's assertion that ``. . . the 
compensation the VA provides for spouses and dependents should not be 
counted against any educational benefits that a survivor has earned 
through his or her own service to our country.''
 draft legislation: clarification of characteristics of combat service 
                                  act
    The VFW is supportive of this draft legislation, which would 
provide that evidence in a veteran's record of assignment in a combat 
zone shall be sufficient for a veteran to prove his or her combat 
service, when other military documents are unavailable.
    Currently, veterans who can establish that they served in combat do 
not have to produce official military records to support their claim 
for disabilities related to that service. But some veterans, disabled 
by their service in Iraq and Afghanistan, are unable to benefit from 
this evidentiary requirement because they have difficulty proving 
personal participation in combat by official military documents. This 
draft legislation would remove those documentation barriers and allow 
the veteran to proceed through the process of determining the extent of 
his or her service-connected disability for claim purposes.

    This concludes my statement. I would be happy to answer any 
questions you may have.
                                 ______
                                 
 Additional Views Submitted After the Hearing from Veterans of Foreign 
                       Wars of the United States



                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka to 
             Veterans of Foreign Wars of the United States
    Responses were not received as of press time.
    Chairman Akaka. Thank you very much, Mr. Jackson. Now we 
will hear from Mr. Kelley.

STATEMENT OF RAYMOND C. KELLEY, NATIONAL LEGISLATIVE DIRECTOR, 
                             AMVETS

    Mr. Kelley. Chairman Akaka, Ranking Member Burr, Members of 
the Committee, thank you for inviting AMVETS to present our 
views regarding pending veterans' benefits legislation.
    For the sake of time I will only comment on legislation or 
provisions within legislation in which AMVETS has concerns.
    AMVETS supports the intent of S. 315, but we recommend the 
VA be required to provide a more detailed outline of their 
outreach plan. AMVETS believes that only providing budget 
justification materials when submitting their fiscal year 
budget request to Congress is not sufficient. A more detailed 
outreach plan must be provided to ensure appropriate funding 
levels.
    AMVETS wholly supports the Veterans' Compensation Cost-of-
Living Adjustment Act of 2009. However, AMVETS strongly opposes 
rounding down of disability compensation and DIC. Currently, 
there are approximately 27,000 veterans who do not have 
reasonable access to national or State cemeteries using 
Colorado Springs as a center of the 75-mile radius. This falls 
well below the current VA formula of 170,000 veterans within a 
75-mile radius and the independent budget's recommendation to 
reduce veteran threshold to 110,000 veterans within the same 
75-mile radius.
    Of the 29 counties that are listed in S. 691, only 12 have 
all or some part of the county within the radius threshold. 
AMVETS realizes that Fort Logan will be closing no later than 
2019, and a new cemetery will need to be built in its place. 
Replacing the cemetery in the southern portion of the State 
will reduce accessibility for the higher populated northern 
portion of the State.
    AMVETS does not support S. 691, but recommends the NCA 
begin looking for a suitable cemetery location along the I-25 
corridor south of Denver, but far enough north that veterans 
who live as far south as Pueblo and as far north as Fort 
Collins and Greeley could be served as well. For veterans who 
live in regions that will not be served by either the Fort 
Logan or a newly established cemetery, AMVETS suggests the 
State work with NCA State Grants Programs to satisfy the burial 
needs of veterans who live in Colorado.
    There are three sections within S. 728 that AMVETS would 
like to discuss. AMVETS supports Section 201 of the 
legislation, however, rounding down to the nearest whole dollar 
should be eliminated. In Sections 301 and 302, AMVETS supports 
the supplemental benefits for veterans' funeral and burial 
expense and plot allowance. This provision meets the request of 
past independent budgets through supplemental appropriate 
funds. AMVETS requests the supplemental payments be made 
permanent and match the request of the 2010 independent budget.
    S. 746 describes the Sarpy County region as an area that 
includes 82 counties in three States. But using NCA formula, 
only 27 of the counties will fall within the 75-mile radius. 
AMVETS agrees with the intent of the legislation because it 
falls within the Independent Budget's recommendation of 110,000 
veterans' population threshold. However, including 55 counties 
that fall outside the threshold model will leave veterans in 
these areas unserved by the State or national cemetery. AMVETS 
suggests the States involve assess the need outside the 
threshold radius, and if needed apply for grants through the 
NCA's State Grants Program.
    AMVETS supports the clarification of characteristics of the 
Combat Service Act of 2009. AMVETS also agrees that defining 
combat zones to ensure that all servicemembers who are in the 
theater of operation have a more lenient burden of proof for 
service connectivity is important. AMVETS believes there is a 
definition that is between the too strict engaged in combat 
with the enemy and a combat zone being defined by the Internal 
Revenue Code. Defining combat zone as a theater of operation as 
agreed on by the two Secretaries involved will include all 
servicemembers who should be granted a lesser burden of proof 
without jeopardizing the integrity of the provision.
    Mr. Chairman, thank you again for providing AMVETS the 
opportunity to testify before the Committee today, and I'll be 
happy to answer any questions you may have.
    [The prepared statement of Mr. Kelley follows:]
               Prepared Statement of Raymond C. Kelley, 
                 National Legislative Director, AMVETS
    Chairman Akaka, Ranking Member Burr, Members of the Committee, 
Thank you for inviting AMVETS to present our views regarding bending 
veterans benefits legislation.
                                 s. 263
    AMVETS supports S. 263, the ``Servicemembers Access to Justice Act 
of 2009.'' This bill will provide meaningful protection from employment 
discrimination because of military service by strengthening the 
Uniformed Service Employment and Reemployment Rights Act (USERRA). 
S. 263 will hold employers more responsible by:

    1. invoking waiver of the 11th Amendment in cases concerning USERRA 
violations.
    2. amending Chapter 1 of title 9 U.S.C. to clarify that USERRA 
disputes are exempt from mandatory arbitration.
    3. making it mandatory for courts to act on behalf the 
servicemember in cases of discriminatory firing by amending section 
4323(d).
    4. expanding section 4323(d), title 38 U.S.C. to include Federal 
employers as well as state and local governments and private employers, 
as well as making the amount of damages payable as $10,000 or the 
actual amount of damages, which ever is greater.
    5. requiring the award of attorney's fees in cases of employer 
USERRA violations.
    6. protecting servicemembers in instances when the company he/she 
works for is purchased by an outside company by amending section 
4303(4), title 38.
    7. giving veterans the right to bring their case before state or US 
District Courts.
                                 s. 315
    S. 315 ``Veterans Outreach Improvement Act of 2009'' will authorize 
funds for VA to establish an enhanced outreach program as well as 
provide grants to state and local governments and nonprofit community-
based organizations to enhance outreach and provide services that will 
assist veterans and dependents of veterans in realizing eligibility and 
assisting in applying for and receiving benefits. AMVETS supports the 
intent of S. 315, but we recommend that VA be required to provide a 
more detailed outline of their outreach plan. AMVETS believes that only 
submitting their budget justification materials when submitting their 
fiscal year budget request to Congress is not a specific enough 
implementation plan.
                                 s. 347
    S. 347 will amend section 1980A(d) title 38, U.S.C. to distinguish 
between the severity of a qualifying loss of a dominate hand and a non-
dominate hand. AMVETS supports this provision.
                                 s. 407
    AMVETS wholly supports the ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 2009.'' this provision provides the same cost-of-
living increase as is payable under title II of the Social Security 
Act. In this matter, the legislation is consistent with the requests of 
the Independent Budget and will ensure that our service-connected 
disabled veterans and their families will receive timely increases to 
their compensation. However, AMVETS strongly opposes ``rounding down'' 
of disability compensation and DIC. This cost-savings practice comes at 
the expense of our veterans and their dependants and survivors. 
Rounding down cost-of-living increases is a tax on one of the most 
sacred benefits provided by our government. Continuing this 31 year-old 
practice robs monies from our most deserving to reconcile the budget or 
provide funding for other purposes.
                                 s. 475
    AMVETS supports S. 475, the ``Military Spouses Residency Relief 
Act.'' This Act will afford the same ``home-of-record'' status as the 
servicemember. Allowing spouses the ability to retain residency in a 
state regardless of where they are physically living while accompanying 
a military spouse who is on official military orders. Because of this 
legislation, military spouses will retain voting rights as well as 
maintain tax status in their home-of-record state.
                                 s. 514
    AMVETS believes that one of the underlying reasons disabled 
veterans do not complete Vocational Rehabilitation and Education (VR&E) 
Training is that the living stipend is not sufficient in assisting 
sustain a family while the veteran is in training. A full-time 
institutional program will grant $613 per month for a family of four. 
Under this bill the same veteran would be provided more than $1200 per 
month. This legislation will certainly reduce the financial burden of a 
veteran who is participating in VR&E. AMVETS supports this legislation.
                                 s. 691
    Currently, there are approximately 27,000 veterans who do not have 
reasonable access to a national or state cemetery using Colorado 
Springs as the center of the 75 mile radius. This falls well below the 
current VA formula of 170,000 veterans within a 75 mile radius and the 
Independent Budgets recommendation to reduce the veteran threshold to 
110,000 veterans within a 75 mile radius. Of the 29 counties that are 
listed in S. 691 only 12 have all or some part of the county within the 
radius threshold. AMVETS realizes that Fort Logan will be closing no 
later than 2019 and a new cemetery will need to be built in its place, 
but placing the cemetery in the southern portion of the state will 
reduce accessibility for the higher populated northern portion of the 
state. AMVETS does not support this legislation but recommends that NCA 
begin looking for a suitable cemetery location along the I-25 corridor 
south of Denver, but far enough north that veterans who live as far 
south as Pueblo and as far north as Fort Collins and Greeley could be 
served as well. For veterans who live in regions that will not be 
served by either fort Logan or a newly established cemetery, AMVETS 
suggests that state work with NCA's State Grants Program to satisfy the 
burial needs of veterans who live in Colorado.
                                 s. 663
    AMVETS holds no position on this issue.
                                 s. 728
    Sec. 101--Ninety years after Service-Disabled Veterans' Insurance 
was made available the policy remains the same, $10,000. To make this 
policy meaningful again, AMVETS supports amending section 1922A title 
38 U.S.C. to increase the SDVI to $50,000.
    Sec. 102--AMVETS supports this provision
    Sec. 103--AMVETS supports this provision
    Sec. 104 exceeds the recommendations of the Independent Budget by 
increasing the Veterans' mortgage Life Insurance from $90,000 to 
$150,000 and then increases it again in 2012 to $200,000. AMVETS 
supports this provision.
    Sec. 201--amending section 1311(f) of title 38 U.S.C. to reflect 
the cost-of-living increase that are provided in title II of the Social 
Security Act is consistent with the IB, and AMVETS supports this 
provision; however, rounding down to the nearest whole dollar is 
nothing more than a tax on an earned benefit and should be eliminated.
    Sec. 202--AMVETS supports this provision
    Sec. 203--AMVETS supports this provision.
    Sec. 204--AMVETS supports this provision.
    Sec. 301--AMVETS supports the supplemental benefits for veterans 
for funeral and burial expenses. This provision meets the requests of 
past Independent Budgets through supplemental appropriated funds. 
AMVETS requests these supplemental payments be made permanent and match 
the requests of the 2010 IB which requests increasing the service-
connected burial benefit to $6,160 for those veterans who live outside 
the NCA threshold for national or state cemetery accessibility and 
increase the benefit to $2,793 for veterans who live inside the NCA 
threshold for cemetery accessibility. This provision also requests 
supplemental payments for non-service-connected burial benefits. Again, 
AMVETS believes these payments should be made permanent to reflect the 
recommendations of the 2010 Independent Budget. Under this 
recommendation, the amount payable to a veteran who lives outside the 
NCA threshold should be increased to $1,918 and veterans who live 
inside the threshold should receive $854 as a burial benefit.
    Sec. 302--the supplemental plot allowance provided in this 
provision meets the expectations of past Independent Budgets and AMVETS 
supports the provision, but again AMVETS believes these payments should 
be made permanent and be increased to $1,150 to reflex the suggestions 
of the 2010 IB.
    Sec. 401--AMVETS supports this provision
    Sec. 402--AMVETS supports this provision
                                 s. 746
    Using the center of Sarpy County as the center point there are 
110,000 veterans who currently do not have access to a national or 
state cemetery. Again, under current NCA formula this region does not 
qualify for a national cemetery. However, the finding of the 2008 
``Evaluation of the VA Burial Benefits Program'' and the 
recommendations of the Independent Budget suggest the population 
threshold should be reduced to 110,000 veterans within a 75 mile 
radius. S. 746 describes the Sarpy County Region as an area that 
includes 82 counties in three states, but using NCA formula, only 27 of 
the counties will the 75 mile radius. AMVETS agrees with the intent of 
the legislation because it falls within the IB's recommendations of 
110,000 veterans' population threshold. However, including 55 counties 
that fall outside the threshold model will leave veterans in these 
areas unserved by a state or national cemetery. AMVETS suggests the 
states involved assess the need outside the threshold radius and if 
needed apply for grants through the NCA's State Grants Program.
                                 s. 820
    S. 820, The ``Veterans' Mobility Enhancement Act of 2009'' 
increases the automobile assistance allowance for veterans. It matches 
the Independent Budget's recommendations that this benefit should be 
80% of the average retail cost of a new automobile. Currently, the 
allowance pays only 39% of the cost of a new vehicle. It is important 
that many of the veterans who qualify for this benefit will require an 
automobile that will meet their needs. These automobiles are often 
larger with specific adaptations that place the cost of these vehicles 
much higher than the average cost of today's automobiles. AMVETS 
supports this legislation.
    AMVETS supports the ``Clarification of Characteristics of Combat 
Service Act of 2009.'' Often times in a combat zone, access to 
permanent medical records or a medical facility is difficult at best. 
Ensuring a veteran will not be denied access to VA care because of the 
circumstances in which s/he served is important. AMVETS also agrees 
that defining combat zone to ensure that all servicemembers who are in 
a theater of operation have a more lenient burden of proof for service 
connectivity. AMVETS believes there is a definition that is between the 
too strict ``engaged in combat with the enemy'' and combat zone being 
defined by the Internal Revenue Code. The first definition often 
precludes servicemembers who service in a theater of operation but 
because of their Military Occupational Specialty are not traditionally 
seen as being engaged in combat with the enemy. Whereas the Internal 
Revenue Code based definition may be too broad of a term in many cases, 
but still exclude servicemembers who are serving abroad in the larger, 
overall Global War on Terrorism. Somewhere between these two 
definitions is the answer. Defining combat zone as theater of operation 
as agreed upon by the two Secretaries involved will include all 
servicemembers who should be granted a lesser burden of proof without 
jeopardizing the integrity of this provision.
    AMVETS supports this legislation. It will ensure that disabled 
veterans will not have to wait for the beginning of the month to 
receive disability payments. By enacting this bill, veterans will not 
only receive immediate compensation for their disability, they will not 
be financially penalized by a system that waits to make payment at the 
beginning of the month.

    Mr. Chairman, thank you again for providing AMVETS the opportunity 
to testify before your Committee today. This concludes my testimony and 
I will be happy to answer any questions you might have.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka to 
                                 AMVETS
    Responses were not received as of press time.

    Chairman Akaka. Thank you very much, Mr. Kelley.
    Now we will hear from Mr. Mason.

      STATEMENT OF R. CHUCK MASON, LEGISLATIVE ATTORNEY, 
                 CONGRESSIONAL RESEARCH SERVICE

    Mr. Mason. Mr. Chairman, Ranking Member Burr, and 
Distinguished Members of the Committee, I'd like to thank you 
for inviting me to testify today.
    While the Congressional Research Service takes no position 
on pending legislation, you requested comment on Senate 475, 
the Military Spouses Residency Relief Act. If enacted, the bill 
would amend three sections of the Servicemembers' Civil Relief 
Act that could arguably reduce confusion related to residency 
and taxation issues that often arise as a result of frequent 
duty station transfers for military families.
    Congress has long recognized the need for protective 
legislation for servicemembers whose service to the national 
compromises their ability to meet obligations and protect their 
legal interests. During the Civil War, Congress enacted an 
absolute moratorium on civil actions brought against soldiers 
and sailors. During World War I, Congress passed the Soldiers' 
and Sailors' Civil Relief Act of 1918, which did not create a 
moratorium on legal actions but instead directed trial courts 
to apply principles of equity to determine the appropriate 
action to take whenever a servicemember's rights were involved 
in a controversy. During World War II, Congress essentially 
reenacted the expired 1918 statute as the Soldiers' and 
Sailors' Civil Relief Act of 1940, and then amended it 
substantially in 1942. One of the 1942 amendments was the 
creation of the prohibition on multiple State taxation of the 
property and income of a servicemember. In 2003, Congress 
enacted the Servicemembers' Civil Relief Act as a modernization 
and restatement of the Soldiers' and Sailors' Civil Relief Act 
and its protections.
    In 1953, the United States Supreme Court in Dameron v. 
Brodhead held that the act to be constitutional under Congress' 
power to raise and support armies and to declare war. The 
Dameron case involved a challenge to the 1942 amendment 
regarding multiple State taxation. In upholding the statute, 
the Court stated that the purpose of the act is to provide for, 
strength, and expedite the national defense by protecting 
servicemembers, enabling them to devote their energy to the 
defense needs of the Nation. If enacted, S. 475 would extend 
rights under three sections of the Act to include the 
servicemember's spouse.
    Currently, under S. 508, a servicemember receives an 
exemption from residency and minimum age requirements related 
to various land rights, including the right to access and use 
public lands and to maintain mining claims, mineral permits, 
and leases. A spouse of a servicemember does not receive the 
same rights. However, under the proposed bill, spouses would 
receive the residency requirement exception enjoyed by the 
servicemember.
    Section 511 of the Act prevents multiple State taxation on 
the property and income of military personnel serving within a 
tax jurisdiction by reason of military service. The Act 
provides that servicemembers neither lose or acquire a State of 
domicile or residence for taxation purposes when they serve at 
a duty station outside their home State in compliance with 
military orders. However, a servicemember who conducts other 
nonservice-related business may be taxed by the duty station 
jurisdiction for the resulting income. And while this section 
does not protect the income of a spouse or other military 
dependent from taxation in the duty station jurisdiction, the 
jurisdiction cannot include the military compensation earned by 
the nonresident servicemembers to compute the tax liability 
imposed on the nonmilitary income earned by the servicemember 
or his or her spouse.
    Under the proposed bill, a new subsection addressing the 
income of military spouses would be created. The spouse of a 
servicemember would neither lose nor acquire a State of 
domicile or residence for taxation purposes when he or she 
accompanies a spouse to a duty station outside the home State 
in compliance with military orders. Any income earned by the 
spouse while in that jurisdiction pursuant to the orders would 
not be subject to the tax jurisdiction outside of their home 
State.
    Finally, under Section 705 of the Act, military personnel 
are not deemed to have changed their State residence or 
domicile for the purpose of voting for any Federal, State, or 
local office solely because of their absence from their 
respective State in compliance with military orders. Under the 
proposed bill, the spouse of a servicemember would receive the 
same protection afforded the servicemember. It would not change 
his or her State residence or domicile for the purpose of 
voting solely because of the absence in accompanying their 
spouse on their orders.
    In reviewing the proposed legislation, several issues may 
arise:
    First, the language addressing residence for tax purposes 
of spouses of servicemembers may create a disparity in 
treatment between the servicemember and his or her spouse. As 
proposed, any income earned by a spouse while accompanying a 
servicemember would not be subject to taxation in the 
jurisdiction of military service. However, a servicemember 
would earn additional income be it through a business endeavor 
or part-time job. The servicemember's additional income would 
still be subject to taxation in the duty station jurisdiction.
    Also, the constitutionality of the proposed language also 
appears to raise a question of first impression. While it is 
well settled that the SCRA is constitutional under Congress' 
authority to raise and support the armies and to declare war, 
it is unclear if that power also encompasses the ability to 
exempt any individual not actually in the Armed Forces from 
taxation in the jurisdiction where his or her spouse is 
stationed. Any inquiry on the constitutionality question would 
likely hinge on whether exempting the spouse from taxation 
serves to assist the servicemember to devote their entire 
energy to the defense needs of the Nation.
    Mr. Chairman, that concludes my prepared statement. I would 
be happy to answer any questions you or other Members of the 
Committee may have.
    [The prepared statement of Mr. Mason follows:]
      Prepared Statement of R. Chuck Mason, Legislative Attorney, 
         American Law Division, Congressional Research Service
              s. 475 military spouses residence relief act
    Chairman Akaka, Ranking Member Burr, and Distinguished Members of 
the Committee, my name is Chuck Mason. I am a legislative attorney for 
the American Law Division of the Congressional Research Service. I 
would like to thank you for inviting me to testify today regarding 
S. 475, the ``Military Spouses Residency Relief Act.''
                              introduction
    The Soldiers' and Sailors' Civil Relief Act of 1940 (SSCRA) 
provided civil protections and rights to individuals based on their 
service in the U.S. Armed Forces. On December 19, 2003, Congress 
enacted Public Law 108-189, the Servicemembers Civil Relief Act (SCRA), 
in response to the increased utilization of Reserve and National Guard 
military units in the Bush Administration's ``Global War on 
Terrorism,'' and as a modernization and restatement of the protections 
and rights previously available to servicemembers under the SSCRA.\1\ 
Much like with the SSCRA, the SCRA has been amended since its initial 
passage and proposed changes continue to be introduced in Congress.
---------------------------------------------------------------------------
    \1\ See H. Rept. 108-81, at 32 (April 30, 2003). See also, S. Rept. 
108-197, at 9 (November 17, 2003) (stating that the military had 
activated approximately 300,000 Reserves since September 2001, and that 
a DOD survey indicated that the self-employed Reservists reported an 
average $6,500 in lost income when mobilized or deployed).
---------------------------------------------------------------------------
    Congress has long recognized the need for protective legislation 
for servicemembers whose service to the Nation compromises their 
ability to meet obligations and protect their legal interests. During 
the Civil War, Congress enacted an absolute moratorium on civil actions 
brought against soldiers and sailors.\2\ During World War I, Congress 
passed the Soldiers' and Sailors' Civil Relief Act of 1918,\3\ which 
did not create a moratorium on legal actions against servicemembers, 
but instead directed trial courts to apply principles of equity to 
determine the appropriate action to take whenever a servicemember's 
rights were involved in a controversy. During World War II, Congress 
essentially reenacted the expired 1918 statute as the Soldiers' and 
Sailors' Civil Relief Act of 1940, and then amended it substantially in 
1942 to take into account the new economic and legal landscape that had 
developed between the wars. During consideration of the amendments in 
the 87th Congress, Congressman Overton Brooks (D-LA) stated,
---------------------------------------------------------------------------
    \2\ Act of June 11, 1864, ch. 118, 13 Stat. 123.
    \3\ 40 Stat. 440 (1918).

        This bill springs from the desire of the people of the United 
        States to make sure as far as possible that men in service are 
        not placed at a civil disadvantage during their absence. It 
        springs from the inability of men who are in service to 
        properly manage their normal business affairs while away. It 
        likewise arises from the differences in pay which a soldier 
        received and what the same man normally earns in civil life.\4\
---------------------------------------------------------------------------
    \4\ H. Rept. 108-81, at 33 (April 30, 2003) (quoting statement by 
Congressman Overton Brooks (D-LA) on the floor of the House during 
consideration of amendments in 1942 to the SSCRA. 87 Cong. Rec. H. 5553 
(June 11, 1942)).

    Congress enacted amendments on several occasions during subsequent 
conflicts, including 2002 when the benefits of the SSCRA were extended 
to certain members of the National Guard.\5\ In 2003, Congress enacted 
the SCRA as a modernization and restatement of the SSCRA and its 
protections.
---------------------------------------------------------------------------
    \5\ Public Law 107-330, 116 Stat. 2820 (December 6, 2002) 
(Extending benefits of SSCRA to members of the National Guard called up 
by their respective state Governors to support Federal efforts during 
national emergencies (including the war against terrorism)).

    The SCRA \6\ is an exercise of Congress's power to raise and 
support armies (U.S. Const. Art. I, sec. 8, cl. 12) and to declare war 
(Art. I, sec. 8, cl. 11).\7\ The purpose of the Act is to provide for, 
strengthen, and expedite the national defense by protecting 
servicemembers, enabling them to ``devote their entire energy to the 
defense needs of the Nation.'' \8\ The SCRA protects servicemembers by 
temporarily suspending certain judicial and administrative proceedings 
and transactions that may adversely affect their legal rights during 
military service. Forgiving of all debts or the extinguishment of 
contractual obligations on behalf of servicemembers who have been 
called up for active duty is not required, nor is absolute immunity 
from civil lawsuits provided. Instead, it provides for the suspension 
of claims and protection from default judgments. In this way, it seeks 
to balance the interests of servicemembers and their creditors, 
spreading the burden of national military service to a broader portion 
of the citizenry. In Engstrom v. National Bank of Eagle Lake, the 
United States Court of Appeals for the Fifth Circuit acknowledged the 
balancing required when it stated ``[a]lthough the act is to be 
liberally construed it is not to be used as a sword against persons 
with legitimate claims.'' \9\
---------------------------------------------------------------------------
    \6\ One of the amendments affected by Public Law 108-189 is the 
change in the name of the Act from Soldiers' and Sailors' Civil Relief 
Act (SSCRA) to Servicemembers Civil Relief Act (SCRA). The name of the 
Act was changed to the more inclusive SCRA ``because soldiers, sailors, 
marines and airmen are collectively referred to as ``servicemembers'' 
in other statutes'' (H. Rept. 108-81, at 35 (April 30, 2003)).
    \7\ Dameron v. Brodhead, 345 U.S. 322 (1953).
    \8\ 50 U.S.C. app. Sec. 502.
    \9\ Engstrom v. First Nat'l Bank, 47 F.3d, 1459, 1462 (5th Cir. 
Tex. 1995).
---------------------------------------------------------------------------
    While the Congressional Research Service takes no position on 
pending legislation, you requested comment on S. 475, the ``Military 
Spouses Residency Relief Act.'' If enacted, S. 475 would amend three 
sections of the Servicemembers Civil Relief Act: (1) Section 508, Land 
rights of servicemembers; (2) Section 511, Residence for tax purposes; 
and (3) Section 705, Guarantee of residency for military personnel. 
Arguably, the proposed amendments could reduce confusion related to 
residency and taxation issues, that often arise as a result of frequent 
duty station transfers, for military families.
Land rights of servicemembers--Sec. 508 (50 U.S.C. app. Sec. 568).
    Various land rights are protected by the Servicemembers Civil 
Relief Act, including rights in public lands, desert-lands, mining 
claims, and mineral permits and leases. Under these protections, 
servicemembers may maintain rights to access and use public lands and 
to enter desert-lands obtained before entering military service. The 
servicemember may also retain mining claims and mineral permits and 
leases even in the event of nonperformance of the requirements of the 
lease while on active duty. Generally, an individual must be at least 
21 years old in order to exercise such land rights; however the Act 
creates an exception to the age requirement and allows all 
servicemembers, regardless of age, to exercise rights related to lands 
owned or controlled by the United States. Additionally, any residency 
requirements, related to the establishment of a residence within a 
limited time, for purposes of exercising the land rights, are suspended 
for six months after release from military service. As enacted, the Act 
does not provide the same protections and rights to a servicemember's 
spouse or dependents.
    Under S. 475, the spouse of a servicemember would be entitled to 
the suspension of residency requirements, with respect to exercising 
land rights, for a period of six months after the servicemember is 
released from military service.
Residence for tax purposes--Sec. 511 (50 U.S.C. app. Sec. 571).
    In order to prevent multiple state taxation on the property and 
income of military personnel serving within various tax jurisdictions 
\10\ by reason of military service, the Act provides that 
servicemembers neither lose nor acquire a state of domicile or 
residence for taxation purposes when they serve at a duty station 
outside their home state in compliance with military orders. A 
servicemember who conducts other nonservice-related business while in 
military service may, however, be taxed by the duty station 
jurisdiction for the resulting income. This section does not protect 
the income of a spouse or other military dependent from taxation in the 
duty station jurisdiction. However, a tax jurisdiction cannot include 
the military compensation earned by nonresident servicemembers to 
compute the tax liability imposed on the non-military income earned by 
the servicemember or spouse. Personal property of a servicemember will 
not be subject to taxation by a jurisdiction other than his or her 
domicile or residence while serving at a duty station outside of his or 
her home state. However, relief from personal property taxes does not 
depend on whether the property is taxed by the state of domicile. 
Property used for business is not exempt from taxation. An Indian 
servicemember whose legal residence or domicile is a Federal Indian 
reservation will only pay taxes under the laws of the Federal Indian 
reservation and not to the state where the reservation is located.
---------------------------------------------------------------------------
    \10\ ``Tax jurisdiction'' is defined to include ``a State or a 
political subdivision of a State,'' which would include the District of 
Columbia and any commonwealth, territory or possession of the United 
States (Sec. 101(6)). ``Taxation'' includes licenses, fees, or excises 
imposed on an automobile that is also subject to licensing, fees or 
excise in the servicemember's state of residence. ``Personal property'' 
includes intangible and tangible property including motor vehicles.
---------------------------------------------------------------------------
    S. 475 would create a new subsection addressing the income of a 
military spouse. Under the proposed language, the spouse of a 
servicemember would neither lose nor acquire a state of domicile or 
residence for taxation purposes when he or she accompanies a spouse to 
a duty station outside the home state in compliance with military 
orders. Any income earned by the spouse, while in that jurisdiction 
pursuant to the military orders, would not be subject to the tax 
jurisdiction outside of their home state. Personal property of the 
spouse of a servicemember would also not be subject to taxation by a 
jurisdiction other that his or her domicile or residence while 
accompanying his/her spouse to a duty station outside of his or her 
home state.
Guarantee of residency for military personnel--Sec. 705 (50 U.S.C. app. 
        Sec. 595).
    Military personnel are not deemed to have changed their state 
residence or domicile for the purpose of voting for any Federal, state, 
or local office, solely because of their absence from the respective 
state in compliance with military or naval orders.
    S. 475 would guarantee that the spouse of a servicemember would not 
change his or her state residence or domicile for the purpose of voting 
for any Federal, state, or local office, solely because of an absence 
from the respective state while accompanying a spouse to a duty station 
in compliance with military orders.
                        issues for consideration
    In reviewing the proposed legislation, several questions may arise:

    1. The language addressing residence for tax purposes of spouses of 
servicemembers may create a disparity in treatment between the 
servicemember and his or her spouse. As proposed, any income earned by 
a spouse while accompanying a servicemember would not be subject to 
taxation in the jurisdiction of military service. However, if a 
servicemember were to earn additional income, be it through a business 
endeavor or a part-time job, the servicemember's additional income 
would be subject to taxation in that jurisdiction.
    2. The constitutionality of the proposed language also appears to 
raise a question of first impression. It is well settled that the SCRA 
is constitutional under Congress' authority to raise and support the 
armies and to declare war. The U.S. Supreme Court in Dameron v. 
Brodhead,\11\ a case addressing the ability of Congress to exempt 
servicemembers from taxation where stationed, stated that the purpose 
of the Act is to provide for, strengthen, and expedite the national 
defense by protecting servicemembers, enabling them to ``devote their 
entire energy to the defense needs of the Nation.'' It is unclear if 
the power to raise and support the armies or to declare war also 
encompasses the ability to exempt an individual, not actually in the 
Armed Forces, from taxation in the jurisdiction where his or her spouse 
is stationed. Any inquiry on the constitutionality of the question 
would likely hinge on whether exempting the spouse from taxation 
outside of his or her home state assists the servicemember to ``devote 
their entire energy to the defense needs of the Nation?''
---------------------------------------------------------------------------
    \11\ Dameron v. Brodhead, 345 U.S. 322 (1953).

    Chairman Akaka. Thank you very much, Mr. Mason, for your 
testimony.
    Now we will hear from Mr. DePlanque.

   STATEMENT OF IAN DePLANQUE, ASSISTANT DIRECTOR, VETERANS 
   AFFAIRS AND REHABILITATION COMMISSION, THE AMERICAN LEGION

    Mr. DePlanque. Good morning, Mr. Chairman, Ranking Member 
Burr, and Members of the Committee.
    On behalf of the American Legion, I would like to thank you 
for providing the opportunity to offer testimony regarding the 
broad variety of pending legislation here in the Senate.
    You've already received our written testimony which details 
the specifics of the American Legion positions on the full list 
of legislation, and in the interest of brevity I'll offer 
additional comment on only a few points which require 
clarification.
    To begin with, we recently received two pieces of draft 
legislation from Ranking Member Burr subsequent to the 
preparation of our written statement. While we would like 
additional time to further review in detail, initial review of 
them we are generally supportive, as they appear to be an 
expansion and an enhancement of the benefits offered to 
veterans, particularly amputee veterans and transitioning 
veterans who must choose between the Medical Board's decision 
and a VA compensation offer.
    Regarding the prosthesis issue and something that was 
brought up earlier by Senator Burris, I would ask in terms of 
forming a vision, if everyone in the room was to be told you 
have a choice--you can keep one hand--I believe everyone would 
be able to make a determination relatively simply as to which 
hand they would prefer to keep. I would also ask the gentlemen 
present to consider if tomorrow morning you got up and were 
asked to shave with your non-dominant hand, you would recognize 
this might be more of an obstacle than your normal morning 
rituals of shaving with your dominant hand.
    As Ranking Member Burr pointed out, we need to continue to 
examine the Rating Schedule. We need to continue to examine the 
compensation that we offer our veterans for the disabilities 
that they suffer. And we need to sometimes recognize that 
outside the earning potential the effects on the quality-of-
life need to be considered for the veterans who suffer from 
these disabilities.
    As we are also discussing our understanding of the changing 
times in addressing our disability compensation system, I would 
add that the current piece of legislation--the clarification of 
the characteristics of Combat Service Act of 2009 addresses the 
Section 1154 of Title 38, which refers to the confirmation of 
incidence in combat. In 1941, when Congress first brought this 
forward, they recognized that it was very difficult to keep 
records in combat and therefore, we have been more willing to 
accept the word of honor of a servicemember that as long as the 
actions were consistent with the hardships and conditions of 
combat--as long as the action described was consistent with 
that--we would accept the word that the incident occurred. 
Which consist of only one part of the three-part process 
involved in service connection of an injury.
    We are recognizing that there is a changing face of the 
modern battlefield. Much has changed in the last 70 years. Many 
of the incidents that were intended to be recognized as 
experiences of combat are not as easily proved that combat took 
place. In Afghanistan, a soldier could witness a child crossing 
a mine field and detonating a mine. As this did not happen to 
an American servicemember, this may not be documented. In 
Saigon, a soldier could witness a monk self-emulating on the 
street. This also may not be documented or as easily 
documented, but we all recognize that these are actions that 
are consistent with the daily occurrences in a combat zone.
    All servicemembers need to be treated with the same hand. 
It is far easier under the current regulations for combat arms 
soldiers to prove the existence of combat, yet we all know that 
it is not just combat arms soldiers, and sailors, and airmen, 
and Marines, who were facing the existence of these activities 
of combat situations. It is all soldiers, and we believe that 
it is time that that be recognized in a combat zone.
    I would like to thank you for offering us this opportunity, 
and I would be happy to answer any questions the Chairman or 
Members of the Committee have.
    [The prepared statement of Mr. DePlanque follows:]
   Prepared Statement of Ian DePlanque, Assistant Director, Veterans 
       Affairs and Rehabilitation Commission, The American Legion
    Mr. Chairman and Members of the Committee: Thank you for this 
opportunity for The American Legion to present its views on the broad 
list of veterans' legislation being considered by this Committee.
          s. 263, servicemembers access to justice act of 2009
    The purpose of this bill is to waive a state's sovereign immunity 
with respect to the enforcement of uniformed services members' 
employment or reemployment rights or benefits under the Uniformed 
Services Employment and Reemployment Rights Act of 1994 (USERRA).
    The American Legion is deeply concerned with the protection of 
recently separated military veterans' employment and reemployment 
rights and believes the Federal Government must demonstrate zero-
tolerance of illegal and egregious hiring practices that ignore USERRA 
provisions. Furthermore, The American Legion supports the amendment and 
strengthening of USERRA to ensure that National Guard and Reservists 
receive the employment and reemployment rights afforded to them through 
their dedicated service to the country and as required under law.
    The American Legion supports this bill which will strengthen 
veterans' employment and reemployment rights.
           s. 315, veterans outreach improvement act of 2009
    The purpose of this bill is to amend title 38, United States Code 
(U.S.C.), to improve the outreach activities of the Department of 
Veterans Affairs (VA), and for other purposes. The bill proposes to do 
so through the improvement of budgeting and funding of VA outreach 
activities across the board in multiple aspects not limited to health 
care, public affairs, the National Cemetery Administration and other 
aspects.
    The American Legion believes that proper and thorough outreach is 
essential to ensuring this Nation's veterans and their dependents are 
fully informed and aware of all of the benefits to which they may be 
entitled to receive based on their honorable military service to our 
Nation.
                                 s. 347
    The purpose of this bill to amend title 38, U.S.C., to allow the 
Secretary of VA to distinguish between the severity of a qualifying 
loss of a dominant hand and a qualifying loss of a non-dominant hand 
for the purposes of traumatic injury protection under Servicemember 
Group Life Insurance, and for other purposes.
    The American Legion has no stated position on this bill, and 
continues to monitor the disposition of the legislation. The American 
Legion cites their specific concerns that no piece of legislation be 
made to reduce or curtail a benefit or benefits provided to veterans.
    It is important to distinguish that the enactment of any 
legislation should not diminish the compensation due to veterans for 
such catastrophic injuries as the loss of a hand, dominant or non-
dominant. The American Legion notes that this piece of legislation 
specifically appears to address the mechanisms of payment of benefits 
to eligible veterans before the period of enactment.
  s. 407, veterans' compensation cost-of-living adjustment act of 2009
    The purpose of this bill is to increase, effective as of December 
1, 2009, the rates of compensation for veterans with service-connected 
disabilities and the rates of dependency and indemnity compensation for 
the survivors of certain disabled veterans. The amount of increase 
shall be the same percentage as the percentage by which benefit amounts 
payable under title II of the Social Security Act (42 U.S.C. 401, et 
seq.) are increased effective December 1, 2009.
    The American Legion supports this annual cost-of-living adjustment 
in compensation benefits, including dependency and indemnity 
compensation (DIC) recipients. It is imperative that Congress annually 
considers the economic needs of disabled veterans and their survivors 
and provide an appropriate cost-of-living adjustment to their benefits, 
especially should the adjustment need to be higher than that provided 
to other Federal beneficiaries, such as recipients of Social Security.
             s. 475, military spouses residency relief act
    The purpose of this bill is to amend the Servicemembers Civil 
Relief Act to guarantee the equity of spouses of military personnel 
with regard to matters of residency, and for other purposes. The 
legislation seeks to prevent any loss of beneficial status of residency 
for purposes such as taxes, voting and other matters, to spouses of 
servicemembers who are required to relocate related to the service 
requirements of the servicemember.
    The American Legion recognizes the needs of family members of 
veterans in addition to the needs of those who serve. Much in the same 
manner as our previous support of measures which extended existing 
veterans' benefits to the family members, such as in the field of 
education, The American Legion is supportive of this type of 
legislation.
 s. 514, veterans rehabilitation and training improvements act of 2009
    The purpose of this bill is to amend title 38, U.S.C., to enhance 
vocational rehabilitation benefits for veterans, and for other 
purposes.
    The bill, in effect, normalizes subsistence payments to be in line 
with a national average of the housing allowance available to an E-5 
enlisted servicemember. It further allows for reimbursements for 
veterans who complete rehabilitation programs consistent with existing 
voc-rehab provisions, as well as repeals limitations on the numbers of 
veterans involved in independent living and assistance programs.
    This constitutes upgrades in several areas of benefits offered to 
veterans through the vocational rehabilitation and training programs. 
The American Legion fully supports this bill.
                                 s. 691
    The purpose of this bill is to direct the VA Secretary of to 
establish a National Cemetery for veterans in the Southern Colorado 
region, and for other purposes.
    The American Legion supports the establishment of additional 
national and state veterans' cemeteries and columbaria wherever a need 
for them is apparent and petitions Congress to provide required 
operations and construction funding to ensure VA burial in a national 
or state veterans cemetery is a realistic option for veterans and their 
eligible dependents.
        s. 663, a belated thank you to the merchant mariners of 
                        world war ii act of 2009
    The purpose of this bill is to amend title 38, U.S.C., to direct 
the VA Secretary to establish the Merchant Mariner Equity Compensation 
Fund, to provide benefits to certain individuals who served in the 
United States Merchant Marine (including 
the Army Transport Service and the Naval Transport Service) during World
 War II.
    The American Legion has no standing position on this piece of 
legislation. However, it is the general policy of The American Legion 
to voice concerns about provisions which set up one class of veterans 
in an exclusionary manner to other groups or classes of veterans. It 
has long been The American Legion's position that a veteran is a 
veteran regardless of branch of service or occupational specialty. All 
of the men and women who have answered the call to serve their country 
are equal veterans and thus deserve equitable treatment under the law.
          s. 728, veterans insurance and benefits act of 2009
    The purpose of this bill is to provide enhancements to a broad 
variety of veterans' benefits. The benefits contained include 
improvements to benefits for veterans not only in insurance matters, 
but also to their compensation, pension and more.
    The bill contains a long needed increase in the supplemental funds 
provided for funeral and burial expenses under the bill's Title III. 
The American Legion has long called for an increase in these funds, 
altered very little in the past since their inception in 1973, and 
therefore supports this bill.
                                 s. 746
    The purpose of this bill is to direct the VA Secretary to establish 
a National Cemetery in the Sarpy County region to serve veterans in the 
eastern Nebraska, western Iowa, and northwest Missouri regions.
    The American Legion supports the establishment of additional 
national and state veterans' cemeteries and columbaria wherever a need 
for them is apparent and petitions Congress to provide required 
operations and construction funding to ensure VA burial in a national 
or state veterans cemetery is a realistic option for veterans and their 
eligible dependents.
                                 s. 820
    The purpose of this bill is to amend title 38, U.S.C., to enhance 
the automobile assistance for veterans, and for other purposes. This 
bill is noted to be an enhancement of the existing benefit provided to 
eligible veterans.
    The American Legion supports all existing benefits due to veterans. 
As this bill represents an increase to one of those existing benefits, 
The American Legion is supportive of this bill.
                                 s. 842
    The purpose of this bill is to repeal the sunset of certain 
enhancements of protections to servicemembers relating to mortgages and 
mortgage foreclosures, to amend title 38, U.S.C., to authorize the VA 
Secretary to pay mortgage holders unpaid balances on housing loans 
guaranteed by the Department of Veterans Affairs, and for other 
purposes.
    The American Legion supports this extension of benefits in line 
with the intents of H.R. 1106. Particularly in times of economic 
uncertainty The American Legion supports these efforts to assist the 
families of veterans in the protection of the housing benefits to which 
they are entitled.
                                 s. 847
    The purpose of this proposed legislation is to provide that 
utilization of survivors' and dependents' educational assistance shall 
not be subject to the 48-month limitation on the aggregate amount of 
assistance utilizable under multiple veterans and related educational 
assistance programs.
    The American Legion has no standing resolution or specific position 
on this bill. However, The American Legion has been generally 
supportive of legislation and intents to enhance the benefits afforded 
to families and survivors of veterans.
                          draft legislation-- 
     clarification of characteristics of combat service act of 2009
    The purpose of this bill is to amend section 1154 of title 38, 
U.S.C., to clarify the additional requirements for consideration to be 
afforded time, place, and circumstances of service in determinations 
regarding service-connected disabilities.
    The American Legion is seeking clarification of the portion of the 
legislation which reads, in part:

        ``(A) Additional provisions in effect requiring that in each 
        case where a veteran is seeking service connection for any 
        disability due consideration shall be given to the places, 
        types, and circumstances of such veteran's service as shown by 
        such veteran's service record, the official history of each 
        organization in which such veteran served, such veteran's 
        medical records, and all pertinent medical and lay evidence.''

    Such language would not be acceptable should it provide that 
greater consideration be granted on the basis of a servicemember's 
Military Occupational Specialty/Air Force Specialty Code, or for any 
other reason to differentiate that one class of service be given 
greater priority over another class of service. The American Legion has 
long maintained a standard of recognizing the contributions of all 
servicemembers who choose to defend the country of the United States.
    The subsequent section, that which refers to the clarification of 
the definitions and provisions under section 1154(b), title 38, U.S.C., 
is apparently in keeping with the provisions supported by The American 
Legion in recent testimony before the House Veterans' Affairs 
Subcommittee on Disability Assistance and Memorial Affairs on this 
topic. The American Legion is supportive, in recognition of the 
changing realities of modern warfare and war fighting, of the 
application of the provisions of that subsection to all veterans deemed 
to have service in a combat zone. This is a provision that has 
traditionally been afforded solely to the establishment of events in 
service which would lead to service-connection for a disability. 
Therefore, this is a provision which would apply to deserving veterans 
who can prove a valid diagnosis of a present condition and provide a 
medical nexus opinion linking that condition to the stated event.
    Such events are noted to be consistent with previous interpretation 
of the statue to be consistent with the hardships and circumstances of 
service in a combat zone. The American Legion supports this provision 
of the legislation.
                               conclusion
    Thank you again, Mr. Chairman, for allowing The American Legion to 
present comments on these important measures. We will provide the 
Committee with further comments on the mentioned piece of draft 
legislation from Senator Akaka, if necessary. Also, should any further 
clarification or questions arise, we would be happy to provide any 
answers the Committee may require. As always, The American Legion 
welcomes the opportunity to work closely with you and your colleagues 
on enactment of legislation in the best interest of America's veterans 
and their 
families.
                                 ______
                                 
Response to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka to 
Ian DePlanque, Assistant Director, Veterans Affairs and Rehabilitation 
                    Commission, The American Legion
    Question 1. It appears to me that S. 475, if enacted, would place a 
spouse in a more advantageous position to Servicemembers on the 
question of payment of state taxes. Under current law, Servicemembers 
are required to pay taxes in the state of their actual residence on all 
non-military pay earned in that state. Under S. 475, a spouse would 
not. As an example, if S. 475 were enacted, a military couple who runs 
a gardening service as a side business would be taxed differently. The 
servicemember would have to pay state tax in the state where the 
business is located and the spouse would, if the spouse's home of 
record is one of the seven states where there is no state income tax, 
pay no state income tax. Can you comment on this differential 
treatment?
    Response. Given the example above, an inequitable situation exists 
regardless of whether this bill is enacted or not. Ultimately, the 
concern would be that the most favorable situation be created for the 
overall family. The spouse and the servicemember should not be 
considered in competition with one another, rather the picture should 
be more holistic. Presumably the spouse and the servicemember would 
seek the most favorable tax status to retain the maximum wealth for 
their family, given in particular the struggles of some service 
families with pay scales in comparison to the private sector. The 
spouse is part of an intact family unit, so the overall result would 
presumably be more favorable to the servicemember family if any part of 
that family can enjoy more favorable tax status.

    Question 2. For a number of states, especially Virginia, North 
Carolina and my home state of Hawaii, each of which has a significant 
population of active duty military personnel, enactment of S. 475 could 
result in a substantial loss of revenue to the state. These and other 
states would, of course, still have to provide basic services, such as 
schools, roads, and recreational facilities, and meet the needs for 
fire, police and other public safety concerns. It stands to reason--and 
I believe it happens in practice--that an active duty servicemember who 
enters the service in New York and is first stationed in Norfolk, 
Virginia, will retain his residency in New York, but, if that 
Servicemembers is subsequently transferred to Texas, the Servicemembers 
will most likely give up New York residency in order to take advantage 
of the fact that Texas has no state income tax. When that same 
servicemember is then transferred to Hawaii, his or her new 
``permanent'' home of record will remain Texas--and it will remain 
Texas until the servicemember retires, when the Servicemembers may or 
may not return to Texas.

     Do you agree that this is a likely scenario?
     Do you see any inequity in this result?
     What obligation do you believe individuals have in 
contributing to the locality in which they are living?

    Response. While it is likely that all individuals will seek the 
most favorable tax status available to them, it is not true to think 
that through state income tax alone do servicemembers and their 
families contribute to a locality. The very presence of the substantial 
military facilities in these states provide a great number of civilian 
jobs to local non-military residences, and these servicemembers still 
support the economy of these states with their purchases, sales taxes, 
and any applicable tolls. Servicemembers already engage in this 
transfer of residence, furthermore, these personnel are called upon to 
traverse the globe in the service of their countries and do so without 
question. Many fondly identify with certain states or localities in 
which they reside, have resided, and intend to return to . . . and thus 
wish to maintain an active role in the support of those communities 
from a distance.

    Question 3. Given the fact that there could well be a challenge to 
the constitutionality of S. 475 if the bill is enacted, please describe 
what you believe would be a successful response to such a challenge.
    Response. The American Legion does not hold a position on the 
constitutionality or lack thereof of S. 475. Therefore we can offer no 
comment one way or another as to the possible effects or 
interpretations of such.

    Chairman Akaka. Thank you very much, Mr. DePlanque.
    And now we will hear from Ms. Poynter.

 STATEMENT OF REBECCA NOAH POYNTER, DIRECTOR, MILITARY SPOUSE 
                     BUSINESS ORGANIZATION

    Ms. Poynter. Mr. Chairman, thank you for the opportunity to 
be here today and testify in support of the Military Spouses 
Residency Relief Act. I am here to speak on behalf of all 
military spouses who support this Act and to ask the Committee 
for its recognition and fair treatment of military spouses.
    My name is Rebecca Poynter. I am a proud Army wife. My 
husband is a former Apache pilot warrant officer in the 82nd 
Airborne and is currently a major in the Army Medical Service 
Corps. I am here with my close friend, proud Navy spouse, 
Joanna Williamson. Joanna's husband is a former Marine and now 
serves as a Navy Lieutenant Commander.
    Just as is the case for thousands of military families, in 
less than 45 days, Joanna's family will make their sixth 
military move in 8 years as they relocate from Virginia to 
California. Her husband will immediately deploy to Afghanistan. 
Likewise, my husband and I will move from Maryland to Oklahoma. 
Both of us--both Joanna and I--support our husbands' careers 
and we are dedicated to the United States Armed Forces.
    The military spouses gathered here today represent the 
thousands of us across the country who support the Residency 
Relief Act. Our coalition includes veteran and active duty 
organizations: MOAA, AUSA, NMFA, the Air Force Association, and 
the Air Force Sergeants Association.
    Throughout our Nation's history, the Federal Government has 
recognized that military service carries with it multiple 
relocations, and as a result, profound complications. In 1940, 
the Soldiers' and Sailors' Relief Act was enacted to protect 
servicemembers in those civil matters which are impacted by 
State residency. Under the protection of the SCRA, military 
members are allowed to declare a single home State that is a 
permanent State of residency while on active duty and for the 
duration of their service. The spouse who is not covered under 
this law is equally subject to the Federal relocation orders, 
yet is not similarly protected. Spouses must change their State 
residency with each move and it is the military spouses who 
face the unique challenges of constant relocations.
    In our voluntary military, 54 percent of servicemembers are 
married. There are approximately 750,000 active duty spouses, 
92 percent of whom are women.
    An important point for your consideration is that this Act 
allows for a single choice by providing to the military spouse 
the option of aligning with their servicemember spouse in 
sharing the same home State.
    With the Military Spouses' Residency Relief Act, Congress 
has the opportunity to significantly improve the quality-of-
life issues of voting, personal property ownership, and 
employment and education access. These are currently 
complicated, suppressed, and deterred by military moves.
    Military spouses are disenfranchised from voting; 
oftentimes not arriving to a new State in time to vote in 
primaries, and they do not have ample opportunity to get to 
know the Federal, State, or local candidates. It is confusing 
when one State allows a military spouse to vote via absentee 
ballot, yet the State where the spouse is physically located 
does not. Where is she supposed to vote? Furthermore, military 
spouses who have purchased property or homes have a vested 
interest in that State. The ability to vote locally is in the 
best interest of not only the voter, but of the candidate and 
political system, as well.
    In regard to personal property, a serious matter, current 
and often conflicting State laws create financial and 
administrative burdens resulting in the suppression of assets 
for military spouses. While an active duty servicemember may 
title, register, and maintain a car in their home State, their 
spouse may not. With each move, if a spouse chooses to keep his 
or her tenancy on property, they are required to pay hundreds 
of dollars each time they relocate. Spouses are forced to put 
all property in the name of the servicemember. The relocation 
process ends up suppressing the ability of all military spouses 
to own personal property, which in itself has a number of 
negative, long-lasting effects, including the ability to 
maintain solid credit histories.
    Regarding employment, DOD acknowledges military spouses as 
major contributors to their families' financial well-being. 
Approximately 50 percent of spouses work. Military spouses are 
underemployed. We make $3.00 an hour less than our civilian 
counterpart. The Department of Defense says it is our frequent 
relocations that are the cause and states the primary challenge 
to military spouses is sustaining a career.
    We are deeply encouraged by the Department of Defense 
outreach and funding of portable career training through the 
Military Spouse Career Advancement Initiative. However, in 
pursuing portable careers, the complication of multiple State 
residency causes tax confusion, educational costs, and 
administrative burdens which negatively impact the quality-of-
life for military families.
    Please allow me to briefly share one story from a spouse 
who supports this bill. In this particular case, a female 
military spouse had resided in multiple States and she suffered 
professional damage as those three States fought over her 
residency. The tax issue almost cost her a security clearance, 
as well as her job.
    Regarding education, spouses report being deterred from 
educational opportunities. For example, an unemployed spouse 
did not pursue an online masters program because after a 
military move, out-of-state tuition was simply too costly.
    For those seeking education, retaining, maintaining a 
portable profession, all growing and positive trends with 
military spouses, a single home State can help the spouse spend 
less time clarifying residency and more time earning an income 
or completing an education.
    With multiple military moves and without a consistent home 
State, the financial burdens of personal property, impediments 
to voting, deterrence to employment and education, will 
continue to fall squarely on the shoulders of us, the military 
spouse.
    Mr. Chairman and Members of this Committee, military 
spouses are a Federal population. We are moved along with our 
servicemembers on Federal orders. Military spouses do not have 
a choice as to where or when they are relocated, or how often. 
Therefore, it is incumbent upon our Federal representatives in 
Congress to protect military spouses as they have already done 
so with military members.
    Thank you, Mr. Chairman. This concludes my testimony.
    [The prepared statement of Ms. Poynter follows:]
         Prepared Statement of Rebecca Noah Poynter, Director, 
                 Military Spouse Business Organization
    Mr. Chairman, thank you for the opportunity to be here today to 
testify in support of the Military Spouses Residency Relief Act. We are 
here to speak on behalf of all military spouses who support this act 
and to ask the Committee for its recognition and fair treatment of 
military spouses by supporting this provision.
    My name is Rebecca Poynter. I am a proud Army wife. My husband 
served as an Apache Pilot warrant officer in the 82nd Airborne and is 
currently a major in the Army Medical Service Corps. I am here with my 
close friend and proud Navy spouse, Joanna Williamson. Joanna's husband 
is a former Marine and now serves as a Navy Lieutenant Commander.
    Just as is the case for thousands of military spouses, in less than 
45 days, Joanna's family will make their 6th military move in 8 years 
as they relocate from Virginia to California. Her husband will deploy 
to Afghanistan in June. Likewise, we will move from Maryland to 
Oklahoma; both of us in support of our husband's career and in 
dedication to the U.S. Armed Forces.
    Joanna and I represent the thousands of military spouses across the 
country who support the Military Spouses Residency Relief Act. Our 
coalition also has the support from a number of veteran and active duty 
service support organizations including; MOAA, AUSA, NMFA, the Air 
Force Association, and the Air Force Sergeants Association.
    Throughout our Nation's history, the Federal Government has 
recognized that military service carries with it multiple relocations 
and as result, profound complications to state residency. In 1940, the 
Soldiers' and Sailors' Relief Act was enacted to protect servicemembers 
in those civil matters which are impacted by state residency.
    Under the protection of the SCRA, military members are allowed to 
declare a single ``home state,'' that is a permanent state of 
residency, while on active duty for the duration their service. The 
spouse, who is not covered under this law is equally subject to the 
Federal relocation orders, yet is not similarly protected. Spouses must 
change their state residency with each move and it is the military 
spouse who bears the burden of constant relocation.
    In our all volunteer military, 54% of servicemembers are married. 
There are approximately 750, 000 active duty spouses, 92% of whom are 
women.
    An important point for your consideration is that this Act allows 
for a single choice by providing to the military spouse the option of 
aligning with their servicemember spouse in having the same home state.
    By passing the Military Spouses Residency Relief Act, Congress has 
the opportunity to significantly improve the quality-of-life issues of 
voting, personal property, and employment and education access. These 
are currently complicated, suppressed and deterred by military moves.
    Military Spouses are disenfranchised from voting; often times not 
arriving to a new state in time to vote in primaries and do not have 
ample opportunity to get to know the Federal, state or local candidates 
or adequate time to learn their policies and legislative agendas. It is 
confusing when one state allows a military spouse to vote via absentee 
ballot, yet the state where the spouse is physically located does not. 
Where is she supposed to vote? Furthermore, military spouses who 
purchase a home or property, have a vested interest in that community. 
The ability to vote locally is in the best interest of not only the 
voter but of the candidate and political system as well.
    For personal property; current, and often conflicting, state laws 
create financial and administrative burdens for the military spouse 
resulting in the suppression of assets. While an active duty 
servicemember may title, register, and maintain, a car in their home 
state, their spouse may not. With each move, if a spouse chooses to 
keep his/her joint tenancy of personal property, they must change the 
registration and/or titling to the new state; requiring the spouse to 
pay several hundred dollars each time they relocate. To alleviate these 
types of fees, many spouses are forced to put all property in the name 
of the servicemember. The relocation process ends up suppressing the 
ability of all military spouses to own personal property which in 
itself has a number of negative long lasting effects including the 
ability to develop and to maintain solid credit histories.
    Regarding employment, the Department of Defense acknowledges 
military spouses as major contributors to their families' financial 
well being. Approximately 50% of military spouses work yet we are 
under-employed. Military spouses make $3.00 less per hour than our 
civilian counterparts. The Department of Defense recognizes our 
frequent relocations as the cause and states the primary challenge for 
military spouses is sustaining a career.
    We are deeply encouraged by the Department of Defense's and the 
Department of Labor's outreach and funding of portable career training 
through the Military Spouse Career Advancement Initiative. However, in 
pursuing a portable career the complications of multiple state 
residencies causes state tax confusion, educational costs and 
administrative tax burdens which negatively impact the quality-of-life 
for our military families.
    Please allow me to briefly share a few of the disturbing stories 
from spouses who support this bill. In one particular case a female 
military spouse who had resided in multiple states suffered 
professional damage as three states fought over her residency. She 
reports that this tax issue almost cost her security clearance and 
ultimately her job. Other working spouses express concern over the 
expense of filing tax returns in multiple states, none of which are the 
same state as their servicemember spouse.
    Regarding education, spouses report being deterred from educational 
opportunities. For example, one spouse was deterred from an online 
masters program because after a military move, out-of-state tuition was 
simply too costly.
    For those seeking education or retraining or to maintain a portable 
profession, all growing and positive trends among military spouses, a 
single home state can lessen administrative, educational and tax 
burdens and help the spouse spend less time clarifying residency and 
more time earning an income or completing an education.
    With multiple military moves and without a consistent home state, 
the financial burdens of personal property, impediments to voting, 
deterrents to employment and education will continue to fall squarely 
on the shoulders of us, the military spouse.
    On the eve of May 8th, Military Spouse Appreciation Day, a day 
which, since 1984 has acknowledged the unique role of our Nation's 
military spouses, Joanna and I along with the hundreds of thousands of 
military families look forward to Congress' continued recognition of 
military spouses with the hopeful passage of the Military Spouses 
Residency Relief Act.
    Mr. Chairman and Members of the Committee, military spouses are a 
Federal population; we are moved, along with our servicemembers, on 
Federal orders. Military spouses do not have a choice as to when or 
where they are relocated. Therefore, it is incumbent upon our Federal 
representatives in Congress to protect military spouses as they have 
already done so with our military members.
    In the words of the Secretary of the Army, the honorable Pete 
Geren, who tells military families in installations around the world, 
``We recruit the soldier but we retain the family.'' To fulfill our 
Nation's promise to military families we ask this panel to favorably 
report the Military Spouses Residency Relief Act out of Committee so 
this bill can go to the floor and all of your colleagues can vote to 
pass this vital piece of military family legislation.

    Thank you Mr. Chairman, this concludes my testimony.
                                 ______
                                 
 Responses to Post-Hearing Questions Submitted by Hon. Daniel K. Akaka 
      to Rebecca Noah Poynter, Director, Military Spouse Business 
                              Organization
    Question 1. It appears to me that S. 475, if enacted, would place a 
spouse in a more advantageous position to servicemembers on the 
question of payment of state taxes. Under current law, servicemembers 
are required to pay taxes in the state of their actual residence on all 
non-military pay earned in that state. Under S. 475, a spouse would 
not. An example: if S. 475 were enacted, a military couple who runs a 
gardening service as a side business would be taxed differently. The 
servicemember would have to pay state tax in the state where the 
business is located and the spouse would, if the spouse's home of 
record is one of the seven states where there is no state income tax, 
pay no state income tax. Can you comment on this differential 
treatment?
    Response. If the servicememember and the military spouse owned 
together a geographically-based business and their home state was a no-
income tax state the following would result:

        His income from the business would be taxed as it is secondary 
        and in the host state. Her income would not be taxed as it is 
        primary income. However, to make this example completely 
        consistent, if she had had a second job--say working at the 
        movie theater--then theater income would be taxed by the host 
        state as secondary income.

    However, please note the difference between a geographically-based 
business and a portable business which is a much more likely scenario. 
A portable business is one that can be transported from location to 
location and may have absolutely no income from within the state in 
which it happens to have been moved.
    In order to build a geographically-based business in contrast to a 
truly portable business, a servicemember and his/her spouse would need 
to be associated with a community for 3 to 5 years to acquire 
andmaintain customers and to produce income. Having large equipment 
such as a truck and insurance needed for working on the property of 
others makes this business too impractical to establish especially for 
a servicemember trying to store such equipment in conjunction with 
military housing. Your example also assumes there is income to be 
declared, as small businesses are not normally successful in the first 
3 years particularly this one, which involves the purchase or lease of 
equipment and relies on long-term presence a in community.

    Question 2. For a number of states, especially Virginia, North 
Carolina and my home state of Hawaii, each of which has a significant 
population of active duty military personnel, enactment of S. 475 could 
result in a substantial loss of revenue to the state. These and other 
states would, of course, still have to provide basic services, such as 
schools, roads, and recreational facilities, and meet the needs for 
fire, police and other public safety concerns. It stands to reason--and 
I believe it happens in practice--that an active duty servicemember who 
enters the service in New York and is first stationed in Norfolk, 
Virginia, will retain his residency in New York, but, if that 
servicemember is subsequently transferred to Texas, the servicemember 
will most likely give up New York residency in order to take advantage 
of the fact that Texas has no state income tax. When that same 
servicemember is then transferred to Hawaii, his or her new 
``permanent'' home of record will remain Texas--and it will remain 
Texas until the servicemember retires, when the servicemember may or 
may not return to Texas.

    A. Do you agree that this is a likely scenario?
    B. Do you see any inequity in this result?
    C. What obligation do you believe individuals have in contributing 
to the locality in which they are living?
    D. In a situation the reverse of yours, Mrs. Poynter, if a military 
spouse was initially stationed in Maryland and then received a 
Permanent Change of Station to Texas, do you believe that that spouse 
would feel differently about the need for this legislation?

    Response A. This question addresses the servicemember's actions as 
they pertain to Sec. 511 of the SCRA. Congress has already considered 
this possibility in the current law. The clear implication is that 
Congress believes the right of the majority is more important than the 
speculative scenario. It is not common practice in my experience for a 
servicemember to change residency for this purpose.
    In regards to the military spouse, we are a population who are 
relocated due to Federal military orders and we seek the extension of 
protection of an already existing law that protects our servicemember 
spouse.
    Response B. The inequity results in not giving the military spouse 
the same consideration as the servicemember which disadvantages the 
spouse by not giving access to the same domicile protection that is 
provided to the servicemember.
    One glaring example of where a spouse experiences differential 
(arguably discriminatory) treatment occurs with the payment of personal 
property tax in some states. In Virginia, for example, a servicemember 
can be exempted from the personal property tax when buying a new car. 
The spouse, however, cannot be exempted. Thus, a military spouse 
literally pays an extra price for living with and supporting the 
servicemember.
    Response C. If you are referring to taxes a military family is 
contributing, if they own a home, it is their property taxes; if they 
rent the property owner pays taxes the same as any other renter in the 
comunity. If they live on the military installation, fire and police 
are covered as such.
    There are major contributions made by the Federal Government to 
cover the imposition of Federal military bases to the states including 
schools.
    For example, military children living in the United States 
generally attend a local public school and have a portion of their 
education expenses paid by the Federal Government through the 
Department of Education's Impact Aid program. Currently, Impact Aid 
provides $900 million per year in subsidies to approximately 1,400 
local education agencies (LEAs), which enroll 1.2 million eligible 
children.
    Furthermore the very presence of a military installation results in 
huge economic benefits in the state from the Federal Government and 
from the military population who spend locally. For Hawaii, Department 
of Defense expenditures, which include payroll, procurement contracts 
and grants, reached $6.1 billion in FY 2006.
    The state's numbers tell the same story. According to the state of 
Hawaii's Department of Business, Economic Development and Tourism's 
(DBEDT's) 2002 study that examined how military spending circulates in 
the local economy, for every $1 billion in military expenditures, more 
than $1.5 billion of business is created in new business. In addition, 
the military creates more than 18,000 jobs locally and the state and 
local businesses benefit from nearly $1 billion paid in wages to 
military personnel and its civilian workforce can spend locally.
    The more military families, the bigger the installation, the more 
spending. A recent New York Times article, using current census data, 
noted the negative effect of reduced (civilian) relocations due to the 
economic slump. When people move, in or out of a community, they spend 
money, lots of it. Military families spend ``relocation'' dollars 
several times over their civilian counterparts with each move.
    However, the position that a military family is only viewed by the 
state as tax revenue is troubling.
    By accepting the military lifestyle, military families are 
dedicated to service and more often than not, contribute substantially 
to their ``host'' community. They are active in their churches, in 
their children's schools, they shop (and pay sales and use taxes), pay 
rent, or decide to purchase property in their host community. During 
times of deployment, it is true that civic contributions are reduced as 
the servicemember is located in a combat zone while the military spouse 
is usually fully occupied with the task of running a single-parent 
household and working to make ends meet.
    Does a host community not also have an obligation to support the 
servicemember families who have been transplanted to that community? 
First Lady, Michelle Obama, is quoted last week on the topic of what 
the community might consider in regard to military families.
    ``The outreach doesn't need to be a grand gesture, as even the 
smallest act is a signal to the military community that the Nation 
understands the sacrifices its servicemembers and their families are 
making,'' Obama said. And even though she, too, has endured having an 
absent spouse, she said, ``there is no comparison to the extra burden 
on military spouses.''
    Response D. In regard to my personal situation, I offer this 
scenario: military spouses who own property in an income tax-free 
state, yet work in an income tax state due to a military relocation are 
subject to double state taxation as property taxes are much higher to 
offset the lack of income tax. The result is a higher tax burden than 
the servicemember spouse. Again, a military spouse literally pays an 
extra price for living with and supporting the servicemember.

    Question 3. In your testimony your note that under the SCRA, a 
servicemember can declare ``a single `home state', that is a permanent 
state of residency while on active duty for the duration of their 
service.'' Do you agree that there is no impediment under the law from 
a servicemember changing his or her `home state' on more than one 
occasion during the course of the member's career? Is this not in fact 
something that is done with some frequency?
    Response. This question addresses the servicemember's actions as 
they pertain to Sec 511 of the SCRA. Congress has already considered 
this possibility in the current law. The clear implication is that 
Congress believes the right of the majority is more important than this 
speculative scenario. I too do not believe that the good faith of all 
should be denied. It is not common practice in my experience for a 
servicemember to change residency with frequency.
    The impediments or requirements for residency are stated on the 
Department of Defense form 2058 for information to be furnished to 
State authorities and to Members of Congress. This form clearly states 
that ``physical presence in the new State with the simultaneous intent 
of making it your permanent home and abandonment of the old State of 
legal residence/domicile.''
    In addition, ``Such intent must be clearly indicated. Your intent 
to make the new State your permanent home may be indicated by certain 
actions such as: (1) registering to vote; (2) purchasing residential 
property or an unimproved residential lot; (3) titling and registering 
your automobile(s); (4) notifying the State of your previous legal 
residence/domicile of the change in your State of legal residence/
domicile; and (5) preparing a new last will and testament which 
indicates your new State of legal residence/domicile.''

    Question 4. Later in your testimony, in describing S. 475, you 
express the view that the legislation ``allows for a single choice by 
providing to the military spouse the option of aligning with their 
servicemember spouse in having the same home state.''

    A. Do you agree that there is no limit in the proposed bill on the 
number of times a spouse could change his or her home state?
    B. Do you believe that there is something in the legislation that 
would require a spouse to have the same home state as the 
servicemember? Given that many servicemembers and their spouses 
originally came from different home states, what would be the basis for 
assigning a single home state to them at the outset of their marriage 
or at any time during their marriage?

    Response A. This question addresses the servicemember's actions as 
they pertain to Sec 511 of the SCRA. Congress has already considered 
this possibility in the current law. The clear implication is that 
Congress believes the right of the majority is more important than this 
speculative scenario.
    The requirements for residency are stated on the Department of 
Defense form 2058 for information to be furnished to State authorities 
and to Members of Congress. This form clearly states that ``physical 
presence in the new State with the simultaneous intent of making it 
your permanent home and abandonment of the old State of legal 
residence/domicile.''
    In addition, ``Such intent must be clearly indicated. Your intent 
to make the new State your permanent home may be indicated by certain 
actions such as: (1) registering to vote; (2) purchasing residential 
property or an unimproved residential lot; (3) titling and registering 
your automobile(s); (4) notifying the State of your previous legal 
residence/domicile of the change in your State of legal residence/
domicile; and (5) preparing a new last will and testament which 
indicates your new State of legal residence/domicile.''
    Response B. I believe that the military spouse should have the 
choice to align his/her home state with their servicemember spouse. By 
virtue of military spouses' comments and letters, I believe military 
spouses would willingly choose to align his/her home state with their 
servicemember spouse. Simply, the residency complications that existed 
for servicemembers, and addressed in the SCRA, remain for the military 
spouse. By allowing spouses to maintain the same state of residency, 
those complications would be alleviated. This is an option, if a 
military spouse chooses, for whatever reason, he/she does not have 
share the home state of the servicemember.

    Question 5. Given the fact that there could well be a challenge to 
the constitutionality of S. 475 if the bill is enacted, please describe 
what you believe would be a successful response to such a challenge.
    Response. I am unaware on what grounds the constitutionality of 
this act would be challenged.
    As mentioned in the Congressional Research Service brief, the SCRA 
has been deemed constitutional as has Congress' power to amend the 
SCRA. The SCRA coverage has already been extended to military spouses. 
In 2003, the SCRA included protections for military spouses entering 
into contracts (cell phones, leases, utilities, etc.).
    I believe that if the Congressional Research Service were tasked 
with the request to find how amending the SCRA is constitutional and to 
provide examples where the spouse is already protected by provisions of 
the SCAR, there would be little difficulty.
    For example, when Congressional Research Service discussed in other 
testimony: Cathey v. First Republic Bank; it says First Republic Bank 
argued that the Catheys were not entitled to the interest rate 
reduction because the loans were signed by each of the Catheys, as well 
as their corporation, and as such are not covered by the SCRA. The 
court dismissed this argument and stated: ``while it is the serviceman 
who is provided interest rate protection under the [SCRA] and not his 
co-makers, the result is the same.''

    Question 6. I would like to follow up on your response to my 
question during the hearing about voting locally. If I understand your 
reply, the concern is about the ability to vote in some locality but 
not necessarily the locality in which you are living. Is that correct?
    Response. Military spouses risk being disenfranchised by being 
denied voting rights guaranteed by domicile rights and protected under 
law. The issue is a spouse should not be forced to do so because he/she 
complies with military orders.
    Please note that the servicemember votes in the home state 
regardless of how long they have been away; 5, 10 of 15 years. 
``Locality'' for the military is the home state, not the host state 
location in which you are living unless that happens to be the same as 
the home state.
    In regard to my testimony a question occurred which ignored the 
preceding phrase so I would like to respond to the full concept and not 
its partial use. A military spouse who owns property (a home) 
particularly protests not being able to vote in the location she has 
clearly designated as home and in which she has a long-term financial 
interest.

    Question 7.  What impact do you believe a divorce would or should 
have on the ``home of record'' of a military spouse?
    Response. None, state laws prevail.
                                 ______
                                 
                              Attachments
        from the Military Spouses Residency Relief Act Coalition
                                 voting
    As a military spouse, I have made 7 moves to 6 different states in 
10 years. In addition to a new state license and registration, this 
means I have registered to vote in 6 different states. Fortunately, I 
have always established residency with enough time to vote in the 
general elections for Presidential elections. However, the frequent 
moving has me at a disadvantage for local, state, and primary 
elections.
    When I first registered to vote, I did so as a party member, 
specifically to participate in the primary system. As a military 
spouse, I have been unable to do so for two reasons; first, the issue 
of establishing residency with enough time to participate in the 
primary, and second, being unfamiliar with the local primary process, 
which vary from state to state.
    In both local and state elections, instead of having an impact on 
my future, I am voting on issues and persons in an area where chances 
are, I won't be residing again. Instead of understanding the nuances of 
the area politics, I must rely on information from sources I am 
unfamiliar with. Often times I have not voted in the local elections, 
rather than vote for issues and individuals I am unfamiliar with.
    This leaves me unable to exercise my rights as a citizen, to fully 
participate in the democratic process. I would love to think that my 
representatives would work to ensure that all of us who make the 
sacrifices to support our military spouses, who protect the rights of 
all, have our rights protected.

                                   Teresa Russo,
                                           Military Spouse.
                      loss of community connection
    I ask your support for the Military Spouses Residency Relief Act 
which will provide a home state for spouses. I was born in PA, and have 
maintained my residency there throughout my military career. I have 
recently separated from active duty to become a dependent to my active 
duty husband (who is also from PA). While I am affiliating with the 
Reserves, it fascinates me that I will be considered a dependent and 
not be eligible to maintain my PA residency while I am following my 
husband's orders as we move for the third time in three years. We have 
always intended to return to PA, hence our maintaining residency. And 
now the hassle of having to split residency (wow, imagine the tax 
fiascoes with having two spouses with different residency). However, 
this is about parity. My husband can maintain his residency ties, but 
now I cannot. For a decision that I made to stabilize my family (and 
not have dual-active duty deployments), I have to pay a price. I also 
lose any ongoing connection to a community to become politically 
involved. Please support the Military Spouses Residency Relief Act 
which will provide a home state for spouses. This is about a better 
quality-of-life for military families. I want to be more involved with 
my community, present and future. This is a huge step to doing that.

                                   Wendy Elizabeth Schofer,
                                           Military Spouse, 
                                               Pennsylvania.
              property tax and state income tax confusion
    My name is Rikki Winters and I have been a Navy spouse since 2002. 
In those 7 years I have moved 7 times and held 4 jobs; none of which 
used my Electrical Engineering degree. After our fifth move and my 
fourth job I was laid off while my husband was deployed. This was the 
last straw for me so when we moved to Virginia I started my own 
business.
    My husband signed a contract that resulted in our transient 
lifestyle. I support him 100% and am proud of his service. But he is 
also protected from the nightmares of constant moves. He does not have 
to worry about learning new state laws every move. I've received income 
from 4 different states--that is 4 different W-2's with 4 different 
states of residency.
    We absolutely dread going to the DMV. We learned the hard way this 
last year after 3 trips to the DMV that Virginia charges annual 
personal property taxes on vehicles. My husband was expecting another 
deployment so we wanted to have both of our names on both vehicle 
titles. Three months later we receive a bill for our vehicle's Personal 
Property Tax. I called the treasurer at the city of Norfolk and she 
informed me that military members are exempt from the tax but since my 
name was on the title we would have to pay the tax. So, after numerous 
phone calls, faxes, and trips to the DMV we have new titles without my 
name on them. I do not own a vehicle and I never will as long as my 
husband is in the military.
    Taxes are a confusing mess. My husband has residency in one state 
and I have residency in another state. Just this year our tax attorney 
had to redo our taxes because she was confused about both of our states 
of residence. She obviously had not worked with military members 
before. Next year is going to be even more confusing when I have a 
business registered in one state. My husband is a resident in another 
state and I will have been a resident of both Virginia and California 
since we will be moving next month.
    As a military spouse I feel like I am forced into unnecessary 
hardships that could be easily rectified. Please make that job easier 
by supporting the Military Spouses Residency Relief Act.

                                   Rikki Winters,
                                           Navy Spouse, Norfolk, VA.
               property tax with deployment complications
    The M.S.R.R.A. would be a relief to the military member as well as 
their entire family. Most military members and spouses file their taxes 
jointly. This Act would allow the military servicemember and his/her 
``dependent'' to more easily receive the benefits that they were 
granted in the S.C.R.A. For example, while some states do not tax 
personal property such as vehicles, others do. If a civilian spouse or 
family member is listed as an owner on said property, even if a 
military member is also on said property, then taxes are still 
applicable. If only the military member is owner of said property, then 
they are not. This becomes a difficult issue to manage when such 
property is being bought, sold or transferred from various states, 
especially when the servicemember cannot always be present during such 
transactions. The hassles of updating documents (i.e. Powers of 
Attorney) wouldn't be as big of an issue if the proposed Act were law.

                                   Carolyn Duft LeVering,
                                           Navy Spouse, Stafford, VA.
                               employment
    In 2003 my Navy husband received permanent change in service (PCS) 
orders re-assigning our family from San Diego, California to Washington 
D.C. In 2007, after living in Maryland for 4 years, I received a letter 
from the IRS stating I had not paid my California State Taxes for the 
past 4 years and not only do I owe them $2,000 in back taxes, I am now 
being penalized and am facing garnished wages, penalty fines and 
outrageous interest rates on the uncollected amount. It was a shocking 
and terrifying situation. It took over 2 months worth of phone calls to 
California, Maryland, D.C, and the IRS to get the matter straightened 
out. I also work for the government and hold a high level clearance 
which was also in jeopardy. In addition to calling the states involved 
and the IRS I also had to get my employer involved and my Security 
Officer. Even though I was paying state taxes all along, I truly 
believe my military move was too confusing for the 3 states to keep up 
with. More often than not, when a military member is in transit to a 
new duty station, he/she has a 3 month school in-between. This makes it 
almost impossible for the following spouse to keep up with when 
claiming a state of residency.

                                   Hannah Cabucana,
                                           Navy Spouse.
                               education
    I am an Army wife at Fort Bliss in Texas trying to get my masters 
degree in education. I cannot find a program here in the city I live in 
to enroll, nor is there a program in the entire state of Texas I can 
enroll in online! I was shocked to learn this, with Texas being such a 
large state. Of course, the state I lived in for 22 years where my 
husband has his 'home of record' has a multitude of online programs I 
could enroll in if I could only claim this state--Florida--as my home 
of record. Without maintaining my residency, I cannot afford the 
tuition. While I anticipated problems other residency problems: voting 
(being unfamiliar with local politics, I only voted for the president 
and one senator in our recent November elections) and registering my 
car, obtaining a new drivers license and local teaching certification 
(at a cost of over $500 and still being unable to find a teaching job), 
I did not anticipate having issues enrolling in a masters degree due to 
residency.

                                   Katie McClurg,
                                           Army Spouse, Fort Bliss, TX.

    Chairman Akaka. Thank you very much, Ms. Poynter.
    My question is for all of the VSOs. There are a total of 16 
bills on our agenda today. What three bills are most important 
to your organizations. Mr. Jackson?
    Mr. Jackson. Mr. Chairman, I think our testimony focused on 
your Veterans Rehabilitation and Training Improvements. That 
was the most important thing that we wanted to comment on, but 
there are so many really good bills on this agenda.
    Senator Sanders' bill enhancing the Automobile Assistance 
Allowance is good. Senator Burr's bill, Military Spouses 
Residency Relief Act. Senator Ensign's bill on the qualifying 
loss of a dominant hand. All of them are extremely important. 
We just chose to focus on your bill, specifically.
    Senator Akaka. Thank you. Thank you very much.
    Mr. Kelley?
    Mr. Kelley. I am certainly glad I got a chance to go second 
so I could review real quick. Our top three would be S. 728, S. 
263, and Mr. Sanders' Automobile Compensation Bill.
    Senator Akaka. Thank you very much.
    Mr. DePlanque?
    Mr. DePlanque. Thank you, Mr. Chairman.
    It is difficult to rank them in a particular order. At the 
American Legion we tend to consider each bill separately and 
independently of any of the other bills. I would note that we 
have addressed a particular amount of attention to attempting 
to update aspects of the system to recognize the quality-of-
life issues, and it appears that there are a number of pieces 
of legislation that are attempting to do that.
    I would also note that both in the Senate and House we have 
paid particular attention lately to the clarifications of 
Sections 1154 of Title 38 as something that's reflective of 
perhaps changes in the modern battlefield.
    Chairman Akaka. Thank you.
    Mr. Mason, I want to thank you very much for your helpful 
testimony and for the background and historical perspective you 
have shared with us on SCRA. Since you have raised the issue of 
the legality of S. 475, would the Library of Congress be able 
to offer a more detailed analysis of this issue for the record?
    Mr. Mason. Yes, sir. I'll be working with one of our 
constitutional law experts and we will put a written product 
together for the record analyzing the different issues that 
might be in place, sir.
    Chairman Akaka. All right. Thank you very much. We 
appreciate that.
    [The written product from Mr. Mason follows:]
    Written Information for the Record Submitted by R. Chuck Mason, 
  Legislative Attorney, American Law Division, Congressional Research 
                                Service











    Chairman Akaka. Ms. Poynter, your testimony argues that 
``the ability to vote locally is in the best interest of not 
only the voter but of the candidate and political system, as 
well.'' Can you explain how the protection of residency for the 
purposes of voting, which would permit an individual to vote in 
a State where he or she once lived, protects the ability to 
vote locally?
    Ms. Poynter. In this example, a former servicemember--it 
was a two-career, married couple, and the letter is in your 
packet. This particular couple had purchased property and she 
was no longer an active duty servicemember. She was stunned at 
the lack of benefits and protection--shall we say rather than 
benefits--that went with being simply a military spouse, as she 
had been accustomed to the protection under the SSCRA.
    And in her example, which is in your packet, she and her 
husband had purchased property and had a home that they 
considered their ultimate home. He could keep that State 
residency as an active duty servicemember; she was stripped of 
it. And she indicated that that discouraged her from her 
community affiliation and her relationship with what will be 
their retirement home and is the community that they identify 
with and want to stay protected.
    So, in that very specific example that was a very poignant 
situation to her.
    Chairman Akaka. Thank you very much.
    Senator Burr, your questions.
    Senator Burr. Thank you, Mr. Chairman.
    Mr. Mason, I am not a lawyer and I am sure the 
interpretation you gave is probably legally accurate, but let 
me ask you a couple of questions.
    Currently, spouses of servicemembers are already under SCRA 
protection--they extend to those spouses latitude when entering 
into contracts like phone, utility, leases relative to the 
frequency of moves. Hasn't the Government already acknowledged 
through doing that and through providing that benefit that a 
spouse is absolutely vital to the servicemember's ability to 
serve; therefore, raising an Army?
    Mr. Mason. Sir, that is completely valid and we have been 
discussing that within our office while reviewing this. There 
are many aspects of the Servicemember Civil Relief Act that do 
incorporate the spouse and allow for them to have the 
protections such as NB housing and the ability to not evict 
somebody from a house if they fall behind on payments; the 
ability to break a lease on an apartment if the family gets 
transferred.
    Those all are current in the law. We, at this point, based 
on my research, are unaware that they have been legally 
challenged. The aspect that we are looking at here--talking 
specifically about taxation going back to the Dameron case from 
1953--it was a 7-2 decision where the Supreme Court held that 
the Government has the ability to do it, but all of the 
language was specific to the servicemember, sir.
    So the question--we are not saying that it is 
unconstitutional; we are raising the prospect that there could 
be a legal challenge based on the language, sir.
    Senator Burr. Dameron was a challenge to the servicemember 
or the spouse's salary?
    Mr. Mason. No, sir, the servicemember--in 1942 is when 
Congress enacted the prohibition on double taxation. The 
servicemember in question filed a lawsuit because he had to pay 
roughly $21.00 in taxes to the city of Denver, and he felt that 
he, under the protections of the SSCRA at the time, should not 
have to pay taxation. So, they challenged that provision. That 
is when the Supreme Court came down and said that the SSCRA or 
the SCRA now, sir, is a constitutional action on behalf of 
Congress through its power to raise and support the armies. All 
the language, because it was specific to a servicemember, 
listed the fact of the servicemember being in this position and 
having to serve. There wasn't a discussion on family members or 
a spouse at that point.
    Senator Burr. You're exactly right. There wasn't a 
discussion in that case.
    Mr. Mason. No, sir.
    Senator Burr. The fact that the protection does extend to 
spouses for the purposes of entering into contracts and the 
ability to break a contract, one would believe that a spouse de 
facto--because the Government has interpreted it that way--
would, if Congress wanted, have the same provisions, same 
rights, as a servicemember.
    Mr. Mason. Yes, sir. Except there are provisions of the 
SCRA that specifically have been found that the spouse does not 
enjoy the protection on a single--one example would be the 6 
percent cap on prior debts. If it is a debt that is solely 
entered by the spouse, they are not entitled to the 6 percent 
reduction.
    Senator Burr. So the intent of those that wrote this 
protection was that as long as all the property--personal and 
real--is in the servicemember's name, it falls under this 
protection; but if any of it is in the spouse's name, we are 
not going to include it.
    Mr. Mason. Based at the time that it was established, sir, 
and enacted, yes. And that was probably based on the--
    Senator Burr. But to accept that is to accept that there 
was an intent on the part of Members of Congress that wrote 
this to force the property in a family of a servicemember to 
all be listed in the servicemember's name. I don't buy for a 
minute that that was the intent of the legislation. I think 
that, if you look historically at this, the movement of 
servicemembers when this was written was not with the frequency 
that we move servicemembers today. And though the letter of the 
law does not evolve with time, the interpretation of law, I 
think, has to evolve with time. And I think that's one of the 
reasons that the interpretation today is that the contractual 
provisions now extend to spouses where they may not have had to 
extend at the time of the creation of the legislation.
    By the same factor, I would think that, when this was 
originally written, the likelihood was that the spouse did not 
work outside the home. Therefore, spouse's salary was not a 
consideration in the construction of the protection. If one 
were to construct the protection today, it would take into 
account the frequency of moves, the likelihood of contractual 
obligations that would have to be broken to meet the duty of a 
servicemember--the realities of practically every spouse who 
works.
    And I would say, for the purposes of this legislation, the 
intent is to try to live up to what Secretary of the Army, Pete 
Geren said. And I want to quote him. ``The strength of this 
Army depends on the strength of the soldiers and the strength 
of their families. We owe our families a quality-of-life equal 
to the quality of their 
service.''
    If you believe that provisions do evolve with time and 
conditions, then one would look at this and say, for us to 
fulfill what the Secretary of the Army and I think most of us 
would agree is the quality-of-life of families, why would we 
continue to extend the burden that disenfranchises in some 
cases spouses from their right to vote; their ability to claim 
a permanent residency; their ability to plan so that children's 
tuitions might be determined based upon that permanent 
residency and not based upon the lottery of where the 
Department of Defense happens to place them at any given point 
in time?
    I think the one thing that became apparent to me as I began 
to research this is that it is tough enough on the children of 
family members as they grow up in different locations. It is 
even tougher when you realize that they really are nowhere long 
enough to consider that anywhere is home. And typically, when 
you ask somebody that grew up in a military family where they 
are from, they refer to ``I am from a military family,'' which 
means I don't have a home.
    I think the fact is that we are trying to create a place 
that families can call home. And it may be not a place that 
they revisit until the retirement of the servicemember and the 
spouse, but my hope is that, through this small act, which I 
think is appropriate for us to do and I hope every bit 
constitutional, that more and more servicemembers and their 
spouses will have an opportunity to retire in that place versus 
what I think Secretary Geren has expressed--that, in the 
absence of us recognizing that family quality-of-life is 
important, the servicemember and the spouse may no longer be 
together at retirement if, in fact, we don't address the 
quality-of-life of that family.
    Mr. Mason, I appreciate it. Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Burr.
    Senator Sanders, your comments and questions.
    Senator Sanders. First, let me thank all of our panelists 
for being here and thanks for your testimony.
    Mr. Chairman, I just wanted to briefly discuss with the 
panelists two pieces of legislation that I am actively involved 
in.
    Number 1 is an effort to increase the benefit for those 
soldiers who have lost their legs or their arms and to make 
sure that when they come home they will have an automobile that 
they can get around in. When we talk about the quality-of-life 
for our veterans, if somebody is immobile and forced to stay at 
home and can't get around their community, that is certainly a 
diminution of their quality-of-life.
    Historically, in 1946, the VA did the right thing when they 
said for those people coming home from World War II, we are 
going to pay 80 percent of the cost of a new vehicle. And what 
has happened, Mr. Chairman, as you know, over the years the 
price of automobiles has gone up substantially that the benefit 
today is about 40 percent--half of what it was originally 
intended to be.
    So what our bill does is raise in dollars the benefit from 
$11,000--if you want to buy a decent new car today, $11,000 
does not go terribly far--to $22,500. And that, again, gets us 
back to the original intent. I think it will give a lot of 
mobility to a lot of people who deserve that mobility--those 
that were disabled in service to their country.
    I want to thank for their support of this legislation in 
their testimony today: the American Legion; the VFW; and 
AMVETS. In addition, I want to thank the Paralyzed Veterans of 
America and the DAV for their support of this legislation which 
was included as a recommendation in this and previous years' 
Independent Budget. I want to thank all of those who are 
supporting this legislation for their support.
    The other piece of legislation that I wanted to spend a 
moment on, Mr. Chairman, is one that I am working with Senator 
Feingold on; and that deals with outreach. We have discussed 
outreach quite a bit on this Committee, and the bottom-line 
here is that no matter what the VA does in providing services 
to our veterans--and we all hope that those services are as 
strong and good as they can be--they don't mean anything if 
somebody is not accessing the VA system.
    Now, a veteran may come home and for all the right reasons 
say, look, I choose not to participate in VA programs. That's 
fine. But what has concerned me for many years is that a lot of 
veterans do not know what they are entitled to. They could 
reject it, but if they don't know what they are entitled to, 
that's simply not fair.
    And I think I am not telling any stories out of class here 
to suggest that for some years the truth is that the VA did not 
want veterans to know what they were entitled to because they 
save money. Right? If you don't know what the benefit is, I 
don't have to service you. I don't have to spend money. That's 
wrong. That is really wrong. Every veteran should know what he 
or she is entitled to.
    In Vermont, a couple of years ago, we started a strong 
outreach program, which has been quite successful in bringing 
those returning vets from Iraq and Afghanistan, who may have 
PTSD or TBI, into the VA system; and when you're dealing with 
people with PTSD that's a special problem. They may not even be 
aware of their problems; they may be embarrassed about their 
problems. So you've got to make an outreach effort.
    And what our legislation--the bill that I am cosponsoring 
with Senator Feingold--does is, it puts within the VA budget 
funds to reach out to service organizations and other 
organizations to help with outreach. Now, the VA may say, well, 
we are doing a great job on it. They are doing better today 
than they were some years ago, but they are still not doing 
good enough. And sometimes community organizations know the 
veterans in certain rural areas or urban areas better than the 
VA might. That's the simple truth.
    And I would remind the VA--not that we are ever going to go 
back to this policy so long as we are sitting up here--but in 
2003, not so long ago--some of you may remember that the VA 
actually put out a memo forbidding VA medical directors from 
conducting outreach. Do you know that? That was not so long 
ago--2003. Do not do outreach. Do not tell veterans what they 
are entitled to.
    I was in the House at that time and active in getting that 
memo rescinded, but that was where they were back then. We 
don't ever want to be there again. So I think the VA is doing a 
better job with outreach. We want to support that effort, but 
we also want to support the service organizations, other 
organizations in Vermont, and many other states and state 
government agencies that work with veterans. They may need some 
help. But the bottom-line is to let every veteran in America 
know what he or she is entitled to. If they choose not to 
participate in the program, that's their decision, but they 
should know.
    So that's what that is about. And Mr. Chairman, we look 
forward to proceeding on that legislation.
    I would now be delighted if any member of the panel would 
like to comment on either of those pieces of legislation.
    Mr. Kelley. Ray Kelley from AMVETS on your legislation--S. 
315. I couldn't agree more.
    I returned from Iraq a little over 2 years ago, and as 
recently as last week I received a phone call from one of the 
12 people I deployed with asking where do I go? Who do I see? 
What do I qualify for? This is very important.
    Senator Sanders. Thanks, Mr. Kelley. Mr. DePlanque?
    Mr. DePlanque. Thank you, Senator. Ian DePlanque from the 
American Legion.
    I would agree with you on the outreach and how essential it 
is. I will also say, on behalf of the VA, we deal with many 
facets of the VA and many sections of the VA. And in our 
interactions with them recently they have been very encouraging 
in asking us to help with the outreach because they recognize 
that the Veterans Service Organizations, being grassroots, are 
very well distributed in the communities, so that is indicative 
of the fact that they are trying to get the outreach out there. 
I think anything that supports getting veterans to know what 
they are entitled to, what is available to them, is essential.
    Senator Sanders. Thank you very much. I absolutely agree 
with that.
    That's, I think, especially true in a rural State like mine 
where you have people who might be coming home who are way up 
there in a rural area, who local folks--the local VA guy, local 
American Legion commander--may know something and have that 
ability to communicate. It is important.
    Any other thoughts? OK. Well, thank you all very much. 
Thank you, Mr. Chairman.
    Chairman Akaka. Thank you very much, Senator Sanders.
    Again, I want to thank our witnesses for appearing today. 
Your responses will be very helpful to us. For the information 
of all, the Committee's markup is scheduled for May 21, and it 
is my hope that at that time we will move on a number of bills 
that have been presented today.
    I want the witnesses to know that your full statements will 
be entered into the record. For the Administration witnesses, I 
ask that views not submitted here today on a number of bills be 
submitted to the Committee no later than 1 week prior to the 
markup--by May 14.
    Again, I want to say thank you and I look forward to 
continuing to work with you. This hearing is adjourned.
    [Whereupon, at 11:13 a.m., the Committee was adjourned.]
                            A P P E N D I X

                              ----------                              


  Prepared Statement of Hon. Mike Johanns, U.S. Senator from Nebraska
    I am pleased to be here today, and to be working with my colleagues 
on an issue that is truly critical: benefits for those brave Americans 
who have served our country honorably. I would like to welcome Mr. 
Bradley Mayes from the Department of Veterans' Affairs, and hope to 
hear about how the legislation before this Committee can improve the 
allocation of VA benefits.
    We are also fortunate to have with us some representatives of 
Veterans Service Organizations, who usually have the best and most 
timely information on specific challenges facing America's veterans. I 
am thus especially glad that Mr. Jackson, Mr. Kelley, Mr. Mason, Mr. 
DePlanque, and Ms. Poynter will be able to join us for the second 
panel.
    American veterans are part of our great national tradition of 
military service. The benefits they earn can never fully compensate 
them for their sacrifices, but we must still try to ensure that every 
veteran is well cared for by a grateful Nation.
    One of the initiatives I am thus very proud of is S. 746, a bill I 
introduced with Senator Nelson. This legislation directs the VA to 
place a national cemetery in the Sarpy County region, which encompasses 
much of eastern Nebraska. Nebraska's passed veterans deserve a resting 
place commensurate with their contribution to America's safety, and I 
am proud to help get them one. All of our veterans--and particularly 
those who have made the ultimate sacrifice--deserve a final home close 
to their loved ones.
    But our responsibility is not just to those veterans who have left 
us; it extends particularly to those veterans still with us today. 
Military personnel and their families face many challenges, both in the 
course of their service and when they transition to civilian life. One 
of these challenges is the continual relocation of servicemembers to 
new locations in the United States, to say nothing of the deployment 
tempo demands of a Nation at war.
    That is why I am proud to be a cosponsor of S. 475, the Military 
Spouses Residency Relief Act. This bill would allow military spouses 
relocating because of their husband or wife's military orders the 
ability to claim one constant state of domicile. As a civilian 
Nebraskan who moved to Washington to serve his country, I know well the 
endless paperwork involved with moving between states. Bureaucratic red 
tape can require dozens of hours to navigate. I can only imagine how 
frustrating it is for military families, constantly receiving new 
orders, to keep up with the bureaucracy of service. National service is 
rigorous enough: excessive red tape should not make it harder.
    I would like to thank again the witnesses for speaking before us 
today, and hope that with the help of your testimony, we can wrap up 
some of the critical veterans' benefits issues in front of us.
                                 ______
                                 
   Prepared Statement of Hon. Ben Nelson, U.S. Senator from Nebraska
    Mr. Chairman, I would like to thank you for this hearing on 
veterans' benefits and would like to take this opportunity to highlight 
two measures that I have introduced to honor our veterans this 
Congress. I introduced the ``Belated Thank You to the Merchant Marines 
of World War II Act of 2009''--S. 663. In addition, I introduced, 
S. 746, a bill to direct the Secretary of Veterans Affairs to establish 
a national cemetery in the Sarpy County region to serve veterans in 
eastern Nebraska, western Iowa, and northwest Missouri.
    I will first address, S. 663. Mr. Chairman, and Members of the 
Committee, as you well know, World War II United States Merchant 
Mariners bravely served alongside America's military. Inspired by 
patriotism, the Merchant Mariners proudly dedicated themselves to 
supporting the missions and completing their duty to our country, 
without fanfare, and at great risk to their personal safety. These 
brave men volunteered for an essential effort during a time of war, 
which eventually led to our country's victory. Unfortunately, for over 
40 years, our Nation has declined to acknowledge their contributions 
and sacrifices.
    World War II Merchant Mariners suffered a higher casualty rate than 
any of the branches of service while they delivered troops, tanks, 
food, airplanes, fuel and other necessary supplies to every theater of 
the war. Soldiers on the frontlines would not have been able to 
complete their missions if the Merchant Mariners hadn't braved 
dangerous waters with essential supplies. The Merchant Mariners 
provided critical logistical support to the war and their efforts have 
been recognized in the Oxford Companion to World War II as one of the 
most significant contributions made by any nation to victory in World 
War II.
    During every invasion from Normandy to Okinawa, they were there. In 
the most dangerous of waters, in the face of threats and attacks from 
submarines, mines, armed raiders, destroyers, aircraft, and the 
elements, the Merchant Mariners were there.
    Though the numbers of the Merchant Mariners were small, their risk 
of dying during service was extremely high. Enemy forces sank over 800 
Merchant Mariner ships between 1941 and 1944 alone. About 9,300 
Mariners were killed, 11,000 were wounded, and 663 were taken prisoner.
    At the end of the war, one out of every 26 Merchant Mariners 
serving aboard merchant ships in World War II died in the line of duty, 
the highest casualty rate of any branch of the service.
    Merchant Mariners casualties were kept secret during the War to 
keep information about their success from the enemy and to attract and 
keep Mariners at sea. Unfortunately, to this day, more than 60 years 
after the end of World War II, the Merchant Marine remains the 
forgotten service.
    Despite their service in support of the war effort, this country 
has dealt this class of World War II veterans a great disservice. They 
were denied benefits under the 1945 G.I. Bill of Rights--benefits 
granted to all those who equally admirably served in the Army, Navy, 
Marine Corps, Air Force or Coast Guard. Only the U.S. Merchant Marine 
was excluded.
    Upon signing the G.I. Bill on June 22, 1944, President Franklin D. 
Roosevelt said, ``I trust Congress will soon provide similar 
opportunities to members of the Merchant Marine who have risked their 
lives time and time again during war for the welfare of their 
country.''
    In 1988, the Merchant Mariners did finally receive a ``watered down 
bill of rights.'' But some portions of the G.I. Bill have never been 
made available to veterans of the Merchant Marine.
    No education benefits were available to Merchant Mariners. No low-
interest home loans. No lifetime compensation for war-related injuries 
and disabilities. No use of VA hospitals. No priority for local, state, 
and Federal jobs. No Social Security credit for wartime service.
    While it is impossible to make up for more than six decades of 
unpaid benefits, I am proposing a bill that will acknowledge the 
service of the veterans of the Merchant Marine and offer some 
compensation for their service in World War II.
    The Belated Thank You to the Merchant Mariners of World War II Act 
of 2009, will establish a compensation fund to provide benefits to 
crewmembers of the United States Merchant Marines who served on vessels 
working for and operating with the U.S. Government or Armed Forces from 
December 7, 1941 until December 31, 1946. This bill would provide a 
small amount of compensation for those who risked their lives to 
contribute to our success in World War II, only to be forgotten.
    This legislation was introduced in the 110th Congress and received 
the support of 61 Senate co-sponsors. Our efforts during the 110th were 
not without success in Congress. The House passed the legislation 
during the 110th and now is looking to the Senate for passage.
    There is overwhelming, bipartisan support for this legislation. At 
last count on April 27, S. 663 had 20 cosponsors, and more Senators 
continue to be added. The House now has 126 cosponsors.
    Those that fought and lived during World War II have been duly 
labeled as the ``Greatest Generation.'' The 230,000 strong force of 
Merchant Mariners are surely part of the Greatest Generation and we owe 
them a tremendous debt. For those who are still living, we can never 
make up for years lost, but we can address the injustice by recognizing 
their contributions and by passing S. 663 this year.
    I also would also like to address my support for a national 
veteran's cemetery in eastern Nebraska.
    I, along with fellow Nebraska Senator Mike Johanns, introduced 
legislation, S. 746, on March 31, 2009 authorizing the establishment of 
a new national cemetery for eastern Nebraska, western Iowa and 
northwestern Missouri in the region of Sarpy County. The House also 
introduced legislation, H.R. 1163 for this purpose, and it is supported 
by all Nebraska Representatives and an Iowa Representative.
    With its historic support for our military and in recognition for 
its role as the home of Offutt Air Force Base and U.S. Strategic 
Command, I believe Sarpy County is the perfect location for a new 
national veteran's cemetery. Our bill will establish a new national 
cemetery in Sarpy County and ensure that the 172,000 veterans in this 
region will get the recognition they deserve and the honor of a final 
resting place in a national veteran's cemetery.
    Current Veterans Affairs (VA) regulations require a threshold of 
170,000 eligible veterans living within a 75-mile radius of a proposed 
cemetery site to merit the establishment of a new national veteran's 
cemetery. An independent analysis conducted by the Metropolitan Area 
Planning Agency in Omaha estimates the number to be near 172,500, while 
the VA estimate places the number of eligible people closer to 133,000.
    The VA commissioned a study to (1) Assess the adequacy and 
effectiveness of the current policies and procedures that comprise the 
VA Burial Benefits Program; (2) Estimate the type and extent of burial 
needs for the future; (3) Assess the need for or interest in new 
symbolic expressions of remembrance and/or modify the current symbolic 
expressions available; and (4) Assess the need for additional 
performance measures that can be used to measure results with targets 
put in place by VA. The study of the VA Burial Benefits report was 
published in August 2008. The study recommended that between 2010 and 
2015, that a new national cemetery be constructed in Nebraska. The 
commission recommended lowering the threshold to 110,000. Sarpy County, 
by either the independent assessment or the VA assessment, would meet 
this threshold requirement.
    To date, the recommendations of the commission have not been 
accepted by the VA and we encourage the VA to review and adopt the 
recommendations.
    A 75-mile radius may be appropriate in large urban areas with dense 
population but it's an arbitrary regulation that ignores the reality of 
rural communities and states like Nebraska. This bill would remove this 
arbitrary obstacle and provide veterans with the deserved recognition 
of burial in a national cemetery. Without such a cemetery, many would 
forego this honor--even though they are entitled to it.

    Please join me in supporting these important measures to honor our 
veterans.
                                 ______
                                 
 Prepared Statement of John M. McWilliam, Deputy Assistant Secretary, 
  Veterans' Employment and Training Service, U.S. Department of Labor
    Chairman Akaka, Ranking Member Burr, and Members of the Committee: 
Thank you for the opportunity to provide this Statement for the Record 
on pending benefits legislation. Your invitation letter lists several 
bills you would like to review. Of the thirteen bills listed, we will 
restrict our comments to S. 263, the ``Servicemembers Access to Justice 
Act [SAJA] of 2009,'' and defer to the Department of Veterans Affairs 
and other agencies on the other twelve bills listed.
    S. 263 would make a number of significant changes to the 
enforcement and remedies provisions of the Uniformed Services 
Employment and Reemployment Rights Act of 1994 (USERRA). In general, 
the Department supports this effort to strengthen the ability of 
servicemembers to secure their statutory right to be free from 
discrimination and retaliation based on their military service, and 
their right to reclaim their civilian employment upon leaving military 
service.
    My testimony today will focus on several important provisions in 
S. 263, but I also hope that the Department will have the opportunity 
to provide technical assistance to the Committee on these and other 
provisions in the bill.
    Section 2 of the bill would limit the ability of state employers to 
thwart enforcement of their employees' USERRA rights by asserting their 
immunity from individual suits under the 11th Amendment of the U.S. 
Constitution. This provision would do so by effectively conditioning a 
state's receipt or use of Federal financial assistance on its waiving 
immunity to certain USERRA suits--namely USERRA suits brought by 
individuals who are or were employees or who apply for employment or 
reemployment in programs or activities that receive or use Federal aid. 
The Department of Justice has the authority, and has exercised its 
authority, to bring actions against states in Federal district court on 
behalf of individuals in the name of the United States. However, 
individual state employees represented by private counsel or by 
themselves are not able to secure important USERRA protection unless 
their state employers choose to waive sovereign immunity. The 
Department strongly supports this provision, which would remove a 
significant impediment to individuals that seek to hold public 
employers accountable for meeting their USERRA obligations.
    Section 4 provides for enhanced remedies for violations of USERRA. 
This section would establish a minimum award of $10,000 in liquidated 
damages for most USERRA violations, regardless of the actual damages to 
the claimant or the employer's size. It also would permit the award of 
unlimited punitive damages against non-Federal employers of 25 or more 
employees if the violation was committed with malice or reckless 
indifference to the claimant's USERRA rights. The Department supports 
efforts to strengthen USERRA's enforcement remedies and welcomes the 
opportunity to work with the Committee to ensure that those remedies: 
encourage compliance with this important law; provide meaningful and 
prompt relief; can be flexibly applied by the courts or the Merit 
Systems Protection Board so that liabilities are proportionate to 
statutory responsibilities; and do not create disincentives to hiring 
servicemembers.
    Section 6 of the bill would clarify the definition of ``successor 
in interest'' under USERRA. The Department applauds this provision, and 
indeed highlighted the need for such legislative action in its Fiscal 
Year 2007 USERRA Annual Report to Congress. Section 6 closely mirrors 
DOL's USERRA Regulations (20 CFR 1002.35), but deviates from the 
Regulations in a way that might make it more difficult, in some cases, 
to establish that an employer is a successor in interest. In 
particular, SAJA's multi-factor test would consider, among other 
factors, whether an employer used the same plant as its predecessor, 
whereas 20 CFR 1002.35 considers whether the firm used ``the same or 
similar facilities.'' We believe that the broader regulatory definition 
is preferable because it is more likely to identify the true successor 
in interest. We therefore respectfully recommend that the bill be 
revised accordingly.
    Section 7 of the SAJA seeks to clarify that USERRA prohibits wage 
discrimination against members of the Armed Forces. The Department 
strongly supports the prohibition of wage discrimination, but is 
concerned that, as drafted, this provision could be interpreted as 
requiring that wages be paid to a servicemember while he or she is away 
from the workplace performing military service. We do not believe that 
such a result is intended and would welcome the opportunity to work 
with the Congress to craft a narrowly-focused provision that addresses 
only the problem of wage discrimination.
    Section 9 of the legislation would require Federal agencies to 
notify their contractors of their USERRA obligations. The Department 
applauds the inclusion of this provision, which would make clear to 
Federal agencies and their contractors that they share responsibility 
for protecting the USERRA rights of contract employees who work on 
Federal contracts.
    Section 11 of the SAJA directs the Government Accountability Office 
to conduct a study on the effectiveness of the Federal Government's 
USERRA education and outreach program. Over the years, GAO studies have 
provided many important and useful recommendations for improving the 
Federal Government's administration of USERRA. Should this provision be 
enacted into law, the Department will again look forward to helping GAO 
meet its statutory mandate.

    This concludes my statement. Again, the Department looks forward to 
the opportunity to work with the Committee to help ensure that the 
final bill addresses the Congress' intent in the most efficient and 
effective way possible.
                                 ______
                                 
Prepared Statement from Iraq and Afghanistan Veterans of America (IAVA)






                                 ______
                                 
        Prepared Statement of the Paralyzed Veterans of America
    Chairman Akaka, Ranking Member Burr, Members of the Committee: 
Paralyzed Veterans of America (PVA) would like to thank you for the 
opportunity to present our views concerning pending benefits 
legislation. PVA appreciates the effort and cooperation this Committee 
demonstrates as it addresses the problems of today's veterans and the 
veterans of tomorrow.
      s. 263, the ``servicemembers access to justice act of 2009''
    PVA supports S. 263, a bill to amend Title 38, United States Code, 
to improve the enforcement of the Uniformed Services Employment and 
Reemployment Rights Act of 1994 (USERRA). With the continuation of the 
Iraq and Afghanistan conflict, many of our guard and reserve members 
have been called upon to serve on active duty for multiple tours. This 
has caused an increase in problems with employers when the veteran 
returns to his or her civilian employment.
    This bill will reinforce the intentions of Congress when they 
passed the Uniformed Service Employment and Reemployment Rights Act of 
2004. It is unthinkable that some employers have spent large amounts of 
money in the legal system to prevent a reservist, National Guard 
member, or regular military servicemember from 
returning to their job or obtaining employment after performing service 
in the Armed Forces. S. 263 would give these veterans the right to 
bring their case in state or U.S. district court. It would prohibit 
wage discrimination against veterans covered under USERRA and provide 
for punitive damages in the worst cases of 
discrimination.
       s. 315, the ``veterans outreach improvement act of 2009''
    PVA supports S. 315, a bill to amend Title 38, United States Code, 
to improve outreach activities of the Department of Veterans Affairs. 
During the 110th Congress the VA was authorized to use print and 
electronic media to enhance its outreach efforts with the goal of 
preventing suicide among veterans dealing with mental health problems 
related to military service.
    This was an encouraging step forward for the VA to use state-of-
the-art communication methods to educate veterans and the general 
public on the help and benefits available. By requiring separate 
funding for the outreach accounts of the Veterans Health 
Administration, Veterans Benefits Administration, and the National 
Cemetery Administration, Congress will be able to monitor the outreach 
activities of these divisions. This bill authorizes the Secretary to 
award grants to state and local governments, and non-profit community-
based organizations to carry out outreach programs. We believe this 
will help the VA in fulfilling their responsibility to inform veterans 
and their families of the benefits and services available to them. VA 
must ensure that the needs of the men and women who have served and 
sacrificed for this Nation are provided for.
                                 s. 347
    S. 347, a bill to amend Title 38, United States Code, to allow the 
Secretary of Veterans' Affairs to distinguish between the severity or a 
qualifying loss of a dominant hand and a qualifying loss of a non-
dominant hand for the purpose of traumatic injury protection under 
Servicemember's Group Life Insurance. PVA supports this legislation 
that would increase the insurance compensation currently paid for the 
loss of a hand, when a veteran loses their dominant hand.
    When determining compensation for disabilities the VA uses the 
Schedule for Rating Disabilities. This guide makes a clear distinction 
between the loss of a dominant hand (70 percent loss) and the non-
dominant hand (50 percent loss). The Rating Schedule is intended to 
take into consideration not only the impairment of the earnings 
capacity of the disabled veteran, but also the loss of quality-of-life. 
The loss of any limb is a tragic event, but the loss of the dominate 
hand may have a more meaningful impact on the veterans ability to 
function.
 s. 407, the ``veterans' compensation cost-of-living adjustment act of 
                                 2009''
    PVA supports S. 407, the ``Veterans' Compensation Cost-of-Living 
Adjustment Act of 2009.'' This bill will increase the rates of 
compensation for veterans with service-connected disabilities and the 
rates of dependency and indemnity compensation for certain disabled 
veterans. As we have in past years, PVA does not support the practice 
of rounding down to the next lowest dollar.
         s. 475, the ``military spouses residency relief act''
    PVA supports S. 475, a bill to amend the Servicemembers Civil 
Relief Act (SCRA) to guarantee the equity of spouses of military 
personnel with regard to matters of residency. This legislation would 
amend the SCRA to state that a military spouse who moves out of state 
because of the servicemember's military orders would have the same 
option to claim one state of domicile regardless of where they are 
stationed.
    This logical correction in the law will ease the interstate moving 
transition for military families. Both parties in a marriage should be 
able to file taxes together paying to one state, own property together 
claiming the same residence, vote at the same location, and have their 
driver's licenses from the same state. This legislation will help 
establish legal residency when the servicemember relocates.
s. 514, the ``veterans rehabilitation and training improvements act of 
                                 2009''
    PVA supports S. 514, the ``Veterans Rehabilitation and Training 
Improvement Act of 2009.'' This bill will raise the subsistence 
allowance paid to a veteran for each month the veteran participates in 
the VA's vocational rehabilitation program. On occasion veterans may 
drop out of the vocational rehabilitation program to become employed 
full time in order to support themselves and their families. On August 
1, 2009, the new GI Bill will go into effect. This benefit will pay a 
full-time student a monthly allowance for housing which is larger than 
the subsistence allowance paid by the vocational rehabilitation 
program. We anticipate veterans leaving the vocational rehabilitation 
program before accomplishing their goals to enroll in college to 
receive the higher amount of funds for daily living. This bill would 
make the subsistence allowance of the vocational rehabilitation program 
equitable with the new GI Bill benefit.
    PVA fully supports the provision of this proposed legislation that 
would repeal the cap of 2600 participates per-fiscal-year for the 
independent living (IL) program. The IL program is a VR&E program that 
focuses on providing services to those veterans with severe 
disabilities. For many years VR&E has had to abide to a CAP on the 
number of veterans participating in this program. That cap was recently 
increased from 2500 to 2600 case per year during the last Congress. 
However, VR&E is still forced to abide by the arbitrary cap of 2,600 
new cases each year.
    The consequence of this cap is that as VR&E approaches the cap 
limit each year, they must slow down or delay delivery of independent 
living services for new cases until the start of the next fiscal year. 
While VR&E may not bump up against the cap every year, they have in 
some years and at those times veterans with severe disabilities who 
have been determined eligible and entitled to the VR&E program in the 
mid to late summer have had to wait until October to receive full 
services. PVA strongly supports the repeal of the IL case limit 
especially as we anticipate that the continued military efforts 
associated with Operation Iraqi Freedom and Operation Enduring Freedom 
will unfortunately result in greater numbers of servicemembers who 
sustain serious injuries.
 s. 663, the ``belated thank you to the merchant mariners of world war 
                                  ii''
    S. 663 would direct the Secretary of Veterans Affairs to establish 
the Merchant Mariner Equity Compensation Fund to provide benefits to 
certain individuals who served in the United States merchant marine 
during World War II. Although we recognize the sacrifices that these 
brave men made in service to the Nation during World War II and we 
support the intent of this legislation, we have some concerns with the 
proposals it makes. The importance of their sacrifices cannot be 
overstated. While suffering extremely high casualty rates during the 
war, they delivered troops, tanks, food, airplanes, fuel and other 
needed supplies to every theater of the war.
    However, PVA believes that this bill would be very costly to the 
Department of Veterans Affairs (VA). We believe that the money needed 
to provide this new monthly benefit would reduce the ability of the VA 
to continue to provide the wide-ranging scope of benefits that it 
already manages.
    We also do not understand how the amount to be provided as a 
monthly benefit was determined. As it stands, if this legislation was 
enacted, a merchant mariner would be entitled to a payment equal to 
veterans who have a 70 percent compensable service-connected 
disability.
    Although we do not dispute the idea that these individuals should 
receive some type of benefit, we do not believe that the 
recommendations of this legislation are equitable with similar 
programs. We are not certain that this legislation maintains the 
priority that the VA follows for providing compensation benefits.
     s. 691, to establish a national cemetery in southern colorado
    PVA supports this legislation which authorizes the VA to establish 
a national cemetery in southern Colorado as long as there is a clearly 
demonstrated need. According to VA information, there are currently 
only two national cemeteries located in Colorado, neither of which is 
near this proposed area. With the rate that veterans are dying today, 
particularly World War II veterans, it is imperative that the VA be 
able to provide a suitable burial location for these men and women. The 
southern Colorado region would certainly provide an excellent cemetery 
location that is centrally located in the state.
   s. 728, the ``veterans' insurance and benefits enhancement act of 
                                 2009''
    PVA generally supports S. 728. We support section 201 which would 
make the necessary increase in the cost of living increases for 
temporary dependency and indemnity compensation payable for surviving 
spouses with dependent children. We agree with Section 202 which makes 
adjustments in the eligibility of veterans 65 years of age or older for 
service pension for a period of war.
    We support Section 203, which makes necessary adjustments in 
amounts of dependency and indemnity compensation payable to disabled 
surviving spouses and to parents of deceased veterans. PVA also 
supports Section 204, which authorizes the annual increase and 
adjustment in limitation on pension payable to hospitalized veterans.
    Title III, Section 3, acknowledges the raising cost of funerals for 
the eligible veteran. It specifies a payment increase to $900 for the 
funeral expenses. If the veteran dies of a service-connected disability 
the amount of payment would be $2,100 (adjusted from time to time). PVA 
appreciates the increase in this benefit. However, we are concerned 
about the supplemental nature of this benefit change that would tie 
availability of the increased benefits to the appropriations process.
    Title IV addresses one of the critical injuries from the current 
conflict the servicemember who is the victim of severe burns. These 
injuries will result in life-long disabling and disfiguring conditions. 
Section 401 will include service-connected veterans that suffer from 
severe burns as eligible for the automobile allowance. We support this 
section.
    As with the burial benefit increases, we have serious concerns with 
the supplemental nature of the benefit improvements under Section 402. 
While we obviously support the intention of these provisions, placing 
the increase of these benefits into the hands of the appropriations 
process will likely undermine their ethicacy.
   s. 746, to establish a national cemetery in sarpy county, nebraska
    S. 746, a bill to establish a national cemetery in the Sarpy County 
region of Nebraska to serve veterans living in eastern Nebraska, 
western Iowa, and northwest Missouri.
    PVA, at the national level, has no official position on this 
legislation which authorizes the VA to establish a national cemetery in 
the Sarpy County region of Nebraska to serve veterans in eastern 
Nebraska and western Iowa. We would note that the Great Plains Chapter 
of PVA, located in Omaha, Nebraska, does support this proposal. 
According to VA information, there is currently only one national 
cemetery located in Maxwell, Nebraska. With the rate that veterans are 
dying today, particularly World War II veterans, it is imperative that 
the VA be able to provide a suitable burial location for these men and 
women.
        s. 820 the ``veterans mobility enhancement act of 2009''
    PVA supports S. 820, the ``Veterans Mobility Enhancement Act of 
2009.'' The VA provides certain severely disabled veterans and 
servicemembers a grant to help with the purchase of automobile. 
Congress initially designated the amount of the automobile grant to 
cover the full cost of the automobile. Until the 2001 increase in the 
grant to $9,000, the amount of the grant had not been adjusted since 
1988, when it was set at $5,000. Because the grant has not kept pace 
with inflation, the value of the automobile allowance has substantially 
eroded through the years. In 1946 the $1,600 allowance represented 85 
percent of the cost of a new automobile. Today's allowance of $11,000 
represents only 39 percent of the average cost of a new automobile. 
S. 820 will raise the auto allowance to $22,500 to represent 80percent 
of the cost of an automobile. S. 820 also instructs the Secretary to 
increase the dollar amount to equal 80 percent of the average retail 
cost of a new automobile on October 1 of each year.
    This legislation reflects the recommendations of the Independent 
Budget for FY 2010.
                                 s. 842
    PVA supports S. 842, a bill to repeal the sunset of certain 
enhancements of protections of servicemembers relating to mortgages and 
mortgage foreclosures to authorize the Secretary of Veterans Affairs to 
pay mortgage holders unpaid balances on housing loans guaranteed by the 
VA. This legislation would extend the deadline for foreclosure from the 
current 90 days to nine months after the servicemember has returned 
from active duty. It also helps the servicemember on active duty by 
capping the interest on mortgages at six percent. This legislation will 
allow the VA to help the servicemember that may have entered into an 
unaffordable loan offered by a sub prime lender by buying that loan and 
renegotiating the loan payments with the servicmember. This legislation 
will ease some of the financial burden on the individual as they 
transition from civilian life to active duty.
                                 s. 847
    S. 847, a bill to amend Title 38, United States Code, to provide 
that utilization of survivors' and dependent' education assistance 
shall not be subject to the 48-month limitation on the aggregate amount 
of assistance utilizable under multiple veterans and related 
educational assistance programs. Currently under Title 38, United 
States Code, Chapter 35, (Dependents' Educational Assistance Program) 
the individual that participates in the program as an eligible 
dependent child or spouse is limited to 48 months of benefits. If that 
individual earns additional benefits from their active service in the 
military, they are not entitled to educational benefits since they have 
used the maximum 48 months. This will correct the limitation in the 
educational benefits for family members who chose to serve in the 
military.
a bill to modify the compensation period for veterans that are retired 
                  or separated because of a disability
    PVA fully supports this legislation. Currently when a servicemember 
leaves active duty and is discharged because of a service-connected 
disability he or she is faced with an unreasonable delay before 
receiving his or her first compensation check. This delay of benefits 
causes the veteran to be subjected to extreme financial hardships as 
they try to cope with their disabilities and re-enter society's main 
stream. Current law establishes the effective date for original service 
connection as the day after military discharge. The payment date for a 
veteran's first VA compensation payment is the first day of the month 
following the month in which the benefit is effective.
    To better clarify our concern and the solution, we would like to 
provide an example. Sgt. John Smith is medically retired on 6/31/09 
from the Army for a C4 spinal cord injury from sniper bullet. His 
effective date for benefits is 7/1/09. In this example the injury is 
rated at the highest level of VA compensation ($7070 per month) due to 
the veteran requiring skilled care on a daily basis. His effective date 
for Compensation payment is 8/1/09. He would be entitled to his first 
check for $7070 on 9/1/09. The law does not allow the veteran to be 
compensated for the entire month of July in this case.
    The proposed legislation would change the effective date for 
payment to the same date as the effective date for benefits. This 
change is written to only effect payment of benefit following discharge 
from active duty military service.
    If the proposed law change were enacted John Smith would then be 
entitled to benefits on 7/1/09 and the compensation payment would be 
effective on 7/1/09, so he would receive his first check on 8/1/09 
receiving an entire month of benefits ($7070), that he is not now 
entitled to at the most crucial time during transition from military 
life to veteran status.

    PVA would like to thank this Committee for the opportunity to 
express our views relating to these important benefits for veterans. We 
look forward to working with this Committee as they continue addressing 
the issues that effect America's veterans.
                                 ______
                                 
  Prepared Statement of Norbert R. Ryan, Jr., USN (Ret.), President, 
            Military Officers Association of America (MOAA)


  

                                  
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