    [Senate Hearing 119-189]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 119-189

                     PUTTING VETERANS FIRST: IS THE CURRENT
                   VA DISABILITY SYSTEM KEEPING ITS PROMISE?

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

                                    HEARING

                                   BEFORE THE

                         COMMITTEE ON VETERANS' AFFAIRS
                              UNITED STATES SENATE

                        ONE HUNDRED NINETEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                                OCTOBER 29, 2025

                                   __________

           Printed for the use of the Committee on Veterans' Affairs

    [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]

            Available via the World Wide Web: http://www.govinfo.gov

                                    __________

                       U.S. GOVERNMENT PUBLISHING OFFICE
    61-878 PDF                  WASHINGTON : 2025

    -----------------------------------------------------------------------------------

                     SENATE COMMITTEE ON VETERANS' AFFAIRS

                         Jerry Moran, Kansas, Chairman
    John Boozman, Arkansas               Richard Blumenthal, Connecticut,
    Bill Cassidy, Louisiana                  Ranking Member
    Thom Tillis, North Carolina          Patty Murray, Washington
    Dan Sullivan, Alaska                 Bernard Sanders, Vermont
    Marsha Blackburn, Tennessee          Mazie K. Hirono, Hawaii
    Kevin Cramer, North Dakota           Margaret Wood Hassan, New
    Tommy Tuberville, Alabama                Hampshire
    Jim Banks, Indiana                   Angus S. King, Jr., Maine
    Tim Sheehy, Montana                  Tammy Duckworth, Illinois
                                         Ruben Gallego, Arizona
                                         Elissa Slotkin, Michigan

                         David Shearman, Staff Director
                    Tony McClain, Democratic Staff Director

                               C O N T E N T S

                                  ----------

                                October 29, 2025

                                    SENATORS

                                                                       Page
    Hon. Jerry Moran, Chairman, U.S. Senator from Kansas.............     1
    Hon. Richard Blumenthal, Ranking Member, U.S. Senator from
      Connecticut....................................................     2
    Hon. Tommy Tuberville, U.S. Senator from Alabama.................    14
    Hon. Mazie K. Hirono, U.S. Senator from Hawaii...................    17
    Hon. Marsha Blackburn, U.S. Senator from Tennessee...............    19
    Hon. John Boozman, U.S. Senator from Arkansas....................    20
    Hon. Tim Sheehy, U.S. Senator from Montana.......................    22
    Hon. Tammy Duckworth, U.S. Senator from Illinois.................    24
    Hon. Jim Banks, U.S. Senator from Indiana........................    29

                                   WITNESSES

    Hon. Cheryl Mason, Inspector General, U.S. Department of Veterans
      Affairs........................................................     4

    Jeremy Villanueva, Associate Legislative Director, Paralyzed
      Veterans of America............................................     5

    Jon Retzer, Deputy National Legislative Director, Disabled
      American Veterans..............................................     7

    Ryan Gallucci, Executive Director, Veterans of Foreign Wars of
      the United States..............................................     8

    Daniel M. Gade, Ph.D., Lieutenant Colonel, U.S. Army (Retired)...    10

    Elizabeth H. Curda, Director, Education, Workforce and Income
      Security, Government Accountability Office.....................    12

                                    APPENDIX
                              Prepared Statements

    Hon. Cheryl Mason, Inspector General, U.S. Department of Veterans
      Affairs........................................................    37

    Jeremy Villanueva, Associate Legislative Director, Paralyzed
      Veterans of America............................................    46

    Jon Retzer, Deputy National Legislative Director, Disabled
      American Veterans..............................................    54

    Ryan Gallucci, Executive Director, Veterans of Foreign Wars of
      the United States..............................................    61

    Daniel M. Gade, Ph.D., Lieutenant Colonel, U.S. Army (Retired)...    71

      Attachment--Independence Project Sixth Interim Report..........    75

      Attachment--``Wounding Warriors: How Bad Policy is Making
        Veterans Sicker and Poorer''.................................    83

    Elizabeth H. Curda, Director, Education, Workforce and Income
      Security, Government Accountability Office.....................    93

                            Questions for the Record

    Government Accountability Office response to questions submitted
      by:

      Hon. Bill Cassidy..............................................   109

                           Statements for the Record

    American Federation of Government Employees (AFGE), AFL-CIO......   117

    The American Legion, Martin Callaghan, Veterans Disability Claims
      Specialist.....................................................   131

    Common Defense, John Kamin, Deputy Director for Government
      Relations......................................................   141

    Iraq and Afghanistan Veterans of America (IAVA), Devin Wozniak,
      Zach McIlwain Leadership Fellow................................   148

    National Association of County Veterans Service Officers
      (NACVSO), Andrew Tangen, President.............................   160

    National Organization of Veterans' Advocates, Inc. (NOVA), Diane
      Boyd Rauber, Esq., Executive Director..........................   166

                            PUTTING VETERANS FIRST:
                      IS THE CURRENT VA DISABILITY SYSTEM
                              KEEPING ITS PROMISE?

                                  ----------

                          WEDNESDAY, OCTOBER 29, 2025

                                           U.S. Senate,
                                Committee on Veterans' Affairs,
                                                        Washington, DC.
        The Committee met, pursuant to notice, at 4 p.m., in Room
    SD-G50, Dirksen Senate Office Building, Hon. Jerry Moran,
    Chairman of the Committee, presiding.

        Present: Senators Moran, Boozman, Cassidy, Blackburn,
    Tuberville, Banks, Sheehy, Blumenthal, Hirono, Hassan, King,
    and Duckworth.

                 OPENING STATEMENT OF HON. JERRY MORAN,
                   CHAIRMAN, U.S. SENATOR FROM KANSAS

        Chairman Moran. The Committee will come to order. Good
    afternoon and welcome. It is nice to walk through the halls of
    Dirksen and see kids trick-or-treating, it made me smile, and
    then it made me sad that I wasn't home so I could be with my
    kids, now my grandkids, on this occasion. But we have important
    work here, and I am delighted to have the opportunity to bring
    our Committee together and take a look at disability issues,
    and I thank our witnesses for your presence here today.
        Senator Blumenthal is on his way. We have a 5:00 vote. I am
    going to try to get us started, and that means I should stop
    doing intro and begin the hearing. But I want to say a few
    things first.
        Again, I appreciate the witnesses that are here. We want
    your insight and perspective on this issue, and know it will
    benefit us as legislators, and it will be helpful to veterans
    and their families that we certainly aim to serve. Our nation
    owes those who have served in uniform not only gratitude but a
    steadfast commitment to provide health care, benefits, and
    support they have earned through their service. It is our
    collective duty to make certain we are doing everything
    possible to help veterans to lead successful and fulfilling
    lives after their military service. This obligation forms the
    foundation of this Committee's work and the focus of today's
    hearing.
        The disability claims process is intended to make certain
    that those who have a lasting injury, visible or invisible,
    from their service, receive the care and compensation they
    deserve. Recent articles published by The Washington Post have
    raised concerns and frustration within the veteran community. I
    have heard from numerous veterans and groups who are frustrated
    that these articles have left an impression that the veterans
    are engaging in widespread fraud in the disability claims
    space. The cases of fraud highlighted in these articles do not
    reflect the reality of who veterans are, the vast majority of
    veteran population, or the values veterans embody. Veterans put
    country before self, from their decision to serve, to the oath
    they swore.
        The attention that these stories have received provides us
    with an opportunity to have an important discussion about
    whether this system we have built is serving the needs of
    veterans today and how we can reform it to better serve those
    who it is designed to help.
        We have an obligation to the men and women who have
    injuries or illnesses connected with their service in uniform
    to make certain they are provided the tools and resources they
    need to succeed in life after the military. Our goal today is
    to examine the facts. Is the system ensuring timely, accurate,
    and fair outcomes? Is it empowering veterans to thrive or
    inadvertently creating barriers to their success and
    opportunities after service?
        Today we will hear from the VA Inspector General, Cheryl
    Mason, whose office is responsible for helping to root out
    fraud and abuse in the VA system and who has extensive
    experience in the disability claims system as the former
    Chairwoman of the Board of Veterans Appeals; representatives
    from three of our Nation's largest, most active veterans
    service organizations, who represent various veteran
    constituencies day in and day out in the disability claims
    process; a representative from the Government Accountability
    Office, who has published numerous reports and made numerous
    recommendations on how to improve oversight and management of
    the disability claims process; and Daniel Gade, who is a
    service-connected disabled veteran and a vocal advocate for
    changing the current disability system to better serve veterans
    and support their long-term well-being.
        This is not the first, and will not be the last,
    conversation we have in exploring how to better serve business
    and improve the disability system to compensate veterans for
    their service-connected conditions and help them live lives--
    strong, successful, fulfilling lives, after their military
    service.
        I look forward to the constructive discussion that I
    anticipate will take place here, and we will give Chairman--
    Ranking Member Blumenthal, no promotion intended--Ranking
    Member Blumenthal the opportunity to offer his opening
    statement as soon as he sits down.
        You must have heard me call you Chairman and you
    immediately arrived.
        [Laughter.]

             OPENING STATEMENT OF HON. RICHARD BLUMENTHAL,
             RANKING MEMBER, U.S. SENATOR FROM CONNECTICUT

        Senator Blumenthal. Thank you, Mr. Chairman, and thank you
    to all of our witnesses. We have more than the usual number,
    and we welcome you here. We appreciate your public service as
    veterans and afterwards as advocates of our veterans.
        And today's hearing is really focused on our Nation's
    obligation to the men and women in uniform, and the system we
    use to compensate any of them who become ill or injured due to
    their service. We all know that the system inherited by
    Secretary Collins was not perfect, but it was providing
    historic levels of benefits to toxic-exposed veterans, thanks
    to the bipartisan PACT Act, which all of us on this Committee,
    I think, supported in a very bipartisan way.
        That same system is being dismantled through a series of
    really reckless policies, in my view, that have pushed hard-
    working civil servants who process disability claims to the
    brink of what they can do. In fact, the Administration's
    draconian deferred resignation program, return-to-office
    policy, hiring freeze, arbitrary contract cancellation, and
    other morale-crushing initiatives have driven out more than
    1,800 mission-critical VBA employees. The result has been a
    demoralized VBA workforce who is consistently pushed to
    sacrifice quality for the sake of quantity.
        There simply are not enough people doing these jobs for the
    work to be performed capably at a level that our veterans
    deserve. It has created more work for claims processors, and
    today we are going to hear from our VSO witnesses on how this
    abdication in the name of modernization is impacting the
    veterans you represent. I also want to hear your response to
    those who believe that VA disability compensation is too
    generous--not my view. That is how the system has been
    portrayed by some opponents of the system in past years.
        The articles fail to understand or capture the purpose of
    the benefit. Instead, they cherry-pick anecdotes to wrongly
    claim that disability benefits is fraught with widespread
    fraud. There is, in fact, some wrongdoing and fraud. We need to
    root it out, investigate, and prosecute it, but not abandon a
    system of compensation that is deserved and needed by veterans,
    our heroes who serve and sacrifice for our country.
        I want to say finally that the current VA leadership has
    repeatedly violated the Hatch Act by blurring the lines between
    governance and political campaigning. That is unacceptable. And
    there used to be bipartisan pushback to such behavior, and I
    hope there will be again. Veterans deserve a VA that works for
    them, whether they are Democrats or Republicans, and avoids
    pushing partisan messages. I will continue to fight for the
    improvement and expansion of earned VA benefits, and I
    appreciate all of you here who are advocating for that cause.
    Thank you, Mr. Chairman.
        Chairman Moran. Senator Blumenthal, thank you.
        Testifying on today's witness panel is Hon. Cheryl Mason,
    the VA's Inspector General; Mr. Jeremy Villanueva, Associate
    Legislative Director for Paralyzed Veterans of America; Mr. Jon
    Retzer, Deputy National Legislative Director for Disabled
    American Veterans; Ryan Gallucci, Executive Director for the
    Veterans of Foreign Wars, and I know each and every one of you;
    Retired Colonel Dr. Daniel Gade, who is a retired United States
    Army Lieutenant Colonel; Ms. Elizabeth Curda, who is the
    Director of Education, Whistleblower, and Income Security
    Issues at the Government Accountability Office.
        Thank you all again for being here. Ms. Mason, you are now
    recognized for 5 minutes.

        STATEMENT OF HON. CHERYL MASON, INSPECTOR GENERAL, U.S.
                     DEPARTMENT OF VETERANS AFFAIRS

        Ms. Mason. Thank you, Chairman Moran. Chairman Moran,
    Ranking Member Blumenthal, and Members of this Committee, I am
    pleased to be here today to discuss this important topic.
    Having been on the job as VA IG for just over three months, I
    am impressed by the dedication and significant oversight that
    my OIG team provides to combat fraud, waste, and abuse, and to
    improve the effectiveness and efficiencies of VA programs and
    operations in service to our veterans, their families,
    caregivers, and survivors.
        The veterans who served this country have made sacrifices
    to do so, some with their lives, others through the challenges
    of their individual service. Members of this Committee have led
    efforts in passing legislation to expand benefits for veterans
    over many years, such as the PACT Act. You know how important
    it is for the government to keep its promise to our veterans
    and their families. Most deserve, and have earned, the benefits
    and services the VA provides to them.
        As the daughter and spouse of veterans and someone who has
    made it her lifelong commitment to champion veterans, I find it
    reprehensible for any person or entity to suggest that many
    veterans are hustling or scamming to get benefits. Furthermore,
    using OIG investigative evidence collected over several years
    to make it appear like there is mass fraud by veterans,
    misleads the public and maligns veterans.
        While, yes, there are some bad actor veterans who do commit
    fraud against VA in both benefits and health care, they are few
    in comparison to the 6.9 million veterans and beneficiaries who
    receive VA benefits. Our OIG's investigative metrics indicate
    that approximately 3.7 percent of our active fraud
    investigations are veterans suspected of fraud in VA's
    compensation benefits programs. My special agents'
    investigative portfolios include violent crimes, threats,
    ethics violations, and theft, as well as allegations of fraud
    schemes related to a wide variety of VA programs, comprised of
    education, fiduciary, compensation, loan guarantee, contracts,
    and health care, just to name a few.
        The largest percentage of fraud in VA programs and
    operations is perpetrated against VA and veterans, and my team
    investigates these allegations to the full extent of the law,
    and prosecutes them to the full extent of the law with the help
    of DOJ.
        But VA OIG is not one dimensional. We are here not just to
    stop fraud but also to prevent it. And one of the ways we do so
    is through the collaboration of our accomplished staff in our
    Disability Fraud Workgroup, sharing information and data across
    the organization to ensure that veterans who have earned their
    benefits receive them, and that people who defraud VA programs
    are held accountable. My Office of Audits and Evaluations
    conducts reviews of VA programs and operations, including all
    of VBA's business lines, and makes recommendations for
    improvement.
        These recommendations include ensuring that claims raters
    consistently apply the correct laws and policies; the leaders
    strengthen contracts for better, more accurate medical
    disability exams; monitor and review fiduciaries' actions;
    establish guardrails and procedures for educational programs;
    and test existing automation methods and outcomes. Weakness in
    guidance, application of the law, implementation of policy, and
    lack of controls and oversight increase the probability of
    fraud against VA and our veterans.
        Additionally, OIG provides fraud alerts about potential
    fraudulent actions, from pension poaching to entities offering
    fake documentation and promises and guarantees regarding
    outcomes in VA benefits. We provide training and information on
    how to recognize and report fraud to the OIG.
        As the VA IG, I take my duty to be impartial and
    independent very seriously. Our work at OIG is based on the
    facts and circumstances and evidence of each situation, and as
    IG, I can assure you that VA OIG is committed to fighting fraud
    and recommending efficiencies in VA's management of programs
    and operations. In the past three months, we have increased our
    efforts to work across all directorates so that our subject
    matter experts can be force multipliers and share their
    knowledge to protect the benefits and services that our
    veterans have earned.
        Mr. Chairman, this concludes my statement. I look forward
    to answering the questions the Committee may have and working
    with you, your staff, and this Committee to improve oversight
    of VA and the lives of veterans by ensuring they receive and
    retain the benefits they earned. Thank you.

        [The prepared statement of Ms. Mason appears on page 37 of
    the Appendix.]

        Chairman Moran. Thank you very much. Mr. Villanueva.

    STATEMENT OF JEREMY VILLANUEVA, ASSOCIATE LEGISLATIVE DIRECTOR,
                     PARALYZED VETERANS OF AMERICA

        Mr. Villanueva. Thank you. Chairman Moran, Ranking Member
    Blumenthal, Members of the Committee, I appreciate the
    opportunity to speak with you today on behalf of Paralyzed
    Veterans of America about the importance of VA disability
    compensation to veterans with spinal cord injuries and
    disorders.
        Due to the nature of their injuries and illnesses, our
    members require a wide range of services and benefits,
    including health care, specially adapted housing, adaptive
    equipment for their vehicles, and financial compensation that
    are tailored to their needs.
        It is disgraceful when disabled veterans are portrayed as
    fraudsters and cheats simply for accessing earned benefits. To
    be fair, PVA acknowledges that there are some veterans who
    attempt to defraud the VA. However, these instances are few and
    far between.
        It is a disservice to the sacrifices of the many men and
    women who have served this Nation to suggest that large sums of
    money are being wasted simply because veterans receive earned
    benefits for service-connected conditions. In truth, many
    veterans find it difficult to file even a basic claim for
    disability. This is why PVA has service officers throughout the
    country to help veterans navigate the VA's complex disability
    process.
        We have gone on record numerous times to discuss ways to
    make the disability compensation system less vulnerable to
    fraud and waste while ensuring that veterans are fairly
    compensated for their conditions. Today, I would like to focus
    on two of those ways: insurance C&P exams and reviewing DBQs
    for quality assurance.
        First, VA must ensure proper C&P exams. When a veteran
    files a claim for disability compensation, a thorough
    examination is crucial to an accurate outcome. The alternative
    could mean years of appeals for the veterans to receive their
    earned benefits. We have heard from our service officers, they
    routinely see a lack of expertise in specific medical
    specialties among contracted C&P examiners, which delays the
    adjudication of veterans' claims.
        PVA strongly believes medical examinations for complex
    service-related conditions such as SCI/D and TBI should be
    conducted by VA doctors. Regardless, the VA must ensure that
    any contracted C&P examiners are qualified to conduct necessary
    exams, and any legislative proposals supporting contract exams
    should include such provisions.
        Equally important to the qualifications of the provider is
    an accessible, barrier-free facility to conduct C&P exams. Our
    members have seen exam rooms that are physically inaccessible
    and/or lack overhead patient ceiling lifts, causing members to
    pause and wonder why the VA is sending them to facilities that
    are ill-equipped to accommodate them.
        Another barrier encountered by SCI/D veterans is getting to
    the contract facility. Several of our members have been
    expected to travel more than 100 miles to reach the contracted
    facility, even while the veteran is critically ill. VA and
    third-party vendors' policies regarding these situations need
    to be examined, and greater use of telehealth exams and
    traveling examiners should be made.
        Second, VA must properly review DBQs for quality assurance.
    PVA believes that the VA could improve the quality control
    review of incoming DBQs to help ensure that exams are proper
    and any fraud is caught early in the claims process. Currently,
    VA claims processors have the authority to weigh the value of
    DBQs provided by the veteran if they believe there might be
    fraud. VA has roughly 20 quality analysts who review DBQs from
    VA contractors. However, these examiners only review a sample
    size for contractual compliance. Additionally, they only have
    access to these DBQs once they are uploaded to VBMS, so often
    they are reviewing them after a final decision. These examiners
    should be given greater oversight authority, be allowed to
    review all DBQs that are submitted, and have access to them
    prior to uploading them to VBMS.
        In conclusion, PVA strongly believes that addressing areas
    where VA can be more efficient would benefit veterans and
    ensure the integrity of the benefits system.
        Thank you once again for the opportunity to present our
    views on VA's disability claims process, and we look forward to
    continuing our work with you to ensure that veterans get timely
    access to all the benefits that they have earned and deserve.
    And I would be happy to answer any questions you may have.

        [The prepared statement of Mr. Villanueva appears on page
    46 of the Appendix.]

        Chairman Moran. Jeremy, thank you. Mr. Retzer.

    STATEMENT OF JON RETZER, DEPUTY NATIONAL LEGISLATIVE DIRECTOR,
                       DISABLED AMERICAN VETERANS

        Mr. Retzer. Chairman Moran, Ranking Member Blumenthal, and
    Members of the Committee, thank you for inviting DAV to testify
    today on the VA disability compensation program, its vital role
    in supporting veterans, their families, caregivers, and their
    survivors, and the challenges VA faces in delivering timely and
    accurate decisions.
        Last year alone, DAV assisted over 1.1 million veterans and
    survivors. We filed more than 560,000 claims and took over 3.1
    million actions on their behalf, at no cost. These numbers are
    staggering, but they are not just statistics. They represent
    veterans living with life-altering injuries, chronic illnesses,
    and visible wounds such as PTSD. Many face barriers with
    employment, health care, and activities of daily living. Behind
    every claim is a personal sacrifice and a genuine need.
        Before I turn to recommendations, I must address the recent
    article of The Washington Post that grossly misrepresented
    disabled veterans and the VA disability compensation system.
    The Post claimed veterans are swamping the VA with fraudulent
    or dubious claims. According to the VA Office of Inspector
    General, fewer than 200 fraud convictions occur each year. With
    nearly 3 million claims processed annually, that is a fraud
    rate of 1/100th of 1 percent. The article also labeled
    conditions such as tinnitus, eczema, chronic pain,
    hypertension, diabetes, depression, and even PTSD as dubious.
    These are conditions Congress and VA have long recognized as
    service-connectable conditions.
        Furthermore, The Post mischaracterized the PACT Act--the
    Appeals Modernization Act is a loophole to abuse--when these
    laws exist to deliver long-overdue justice.
        The VA disability adjudication process is legally binding,
    highly regulated, and evidence-based. Service-connection
    generally requires current diagnosed disability, an in-service
    event or exposure, and medical nexus linking the two. However,
    presumptive service-connection has an exception that allows VA
    to grant benefits when scientific and historical evidence shows
    veterans in certain places and locations were exposed. Claims
    undergo a multilayered review by rating specialists and
    compensation and pension examiners to ensure accuracy and
    compliance. Fraud is an exception. It is not systemic.
        Now let me turn to our recommendations.
        First, VA must have resources to maintain claims accuracy
    and timeliness. Backlogs surged from 150,000 in 2022 to over
    400,000 in 2024, due to the PACT Act and also the outreach for
    veterans crisis. Thanks to the increasing staffing, the number
    is now about 135,000. Continued progress depends on sustaining
    VBA funding, strategic use of overtime, and close monitoring of
    staffing needs.
        Second, we must simplify the claims process. Veterans
    should be able to file a claim by telephone. VA claims process
    is well recognized as non-adversarial, and claims processors
    should construe claims to maximize benefits. VA's requirements
    that veterans specify a single benefit on a VA Intent to File
    form can unfairly delay and reduce payments. If a veteran
    checks only one box but later qualifies for another benefit,
    they lose retroactive entitlement. This rule should be removed.
        Third, VBA must optimize technology. Artificial
    intelligence, document digitization, and data mining can
    transform claims processing. But accuracy, oversight, and staff
    support are essential. VBA and its contractors must develop IT
    systems that integrate with accredited veterans service
    organizations for filing claims and appeals. The new Accredited
    Representative Portal was developed without consulting DAV or
    other major accredited veterans service organizations. It is
    advisable that VBA and its contractors seek input and
    collaboration with DAV and other major accredited veterans
    service organizations on future enhancements and new system
    builds to ensure usable, accuracy, and alignment with veterans'
    needs.
        Finally, improve the presumptive-making process for toxic-
    exposed veterans. Expanding research, creating independent
    scientific review processes, and establishing stakeholder
    oversight will help end decades-long wait for toxic-exposed
    veterans. Presumptive rules not only deliver justice, they
    allow VBA to adjudicate large cohorts efficiently, reducing
    delays and appeals.
        Mr. Chairman, the veterans we represent are counting on
    this Committee to ensure the system works for them, not against
    them, to every veteran, so that every veteran has an
    opportunity to have success after their service.
        Thank you, and I am happy to answer any questions.

        [The prepared statement of Mr. Retzer appears on page 54 of
    the Appendix.]

        Chairman Moran. Mr. Gallucci.

      STATEMENT OF RYAN GALLUCCI, EXECUTIVE DIRECTOR, VETERANS OF
                   FOREIGN WARS OF THE UNITED STATES

        Mr. Gallucci. Thank you. Chairman Moran, Ranking Member
    Blumenthal, Members of the Committee, thank you for the
    opportunity to testify on behalf of the VFW.
        When Americans raise their right hand, they sign a binding
    contract to surrender freedoms, obey orders, and if called,
    march into combat. In return, our Nation promises care and
    benefits. That promise is not charity. It is a contract. For
    our enlistees, it is enshrined in DD Form 4.
        Every veteran who served honorably has kept their end of
    that contract, yet lately headlines question whether our
    veterans really deserve it. The Washington Post, The Economist,
    and others have said that benefits are absurdly generous, that
    fraud is rampant, or suggest that a disability industrial
    complex of VSOs profits off the system.
        We have heard it before. In 1930s, when the Economy Act
    slashed benefits at the recommendation of Archibald Roosevelt,
    and in the 1950s, when Omar Bradley chaired a commission that
    tried to strip benefits from the less disabled and questioned
    toxic exposure. We buried those bad ideas then, and it is our
    duty to bury those bad ideas today.
        Fraud exists in large systems--Medicare, Social Security,
    and yes, VA. But it is rare and it is prosecuted when it is
    found. What is not rare are the invisible wounds of war--PTSD,
    traumatic brain injury, chronic pain, or cancers caused by
    toxic exposure. To claim these wounds are embellished or fake
    is either ignorant or cruel. Invisible does not mean imaginary.
        Reporting like The Post's misrepresents key facts. They
    tell readers that more than half a million veterans are
    service-connected for seemingly minor skin conditions, failing
    to note that 76 percent of these veterans are rated at 0
    percent. If you add in 10 percent ratings, which often do not
    affect compensation, that number jumps to nearly 94 percent.
    The dataset does not support rampant exaggeration and fraud.
    Plus The Post conveniently ignores the unique occupational
    hazards of military service and why skin and foot conditions
    are so common. There is a reason it is called ``trench foot.''
        It is easier to claim benefits in 2025, but this is a
    feature, not a flaw. Reforms like the PACT Act leveled the
    playing field for those poisoned by burn pits and other toxins.
    We fought deliberately to improve access because past
    generations suffered in silence. PTSD claims have drastically
    risen in recent years, but it is naive to think PTSD is new.
    Past conflicts labeled it ``soldier's heart'' or ``shell
    shock,'' and it was a condition we tried to hide. Today,
    veterans talk about mental health because it is okay to have
    PTSD, and it is okay to claim your benefits. Because we talk
    about it, veterans are fighting stigma for all Americans.
        The costs may seem jarring, but this is the sobering true
    cost of two wars many households could afford to overlook.
    Disability compensation is the settlement of a debt for the
    social and occupational losses associated with the real and
    persistent hazards of military service. A paycheck does not
    erase a missing limb, and a steady job does not cure a damaged
    lung.
        The all-volunteer force understands that military service
    is dangerous. We choose to serve because service is authentic
    and necessary, and in our contracts the United States committed
    to make us whole when we were ordered to combat or other
    hazardous situations.
        Unfortunately, perverse incentives exist, such as
    concurrent receipt kicking in at 50 percent disability, or
    family care that kicks in at 100 percent. Bad policy can drive
    bad behavior, but Congress should fix the policy and not blame
    the veteran.
        On fraud, let's talk about claim sharks, who often promise
    benefit increases by submitting questionable evidence for a
    hefty and illegal cut of the action. The VFW has led the fight
    against this scourge, not to profit but to support veterans and
    protect the non-adversarial benefit process. The VFW has
    testified before Congress 15 times over the last three years
    raising this alarm. We have had countless conversations with
    the Committee seeking to stop the fleecing of veterans and
    taxpayers. But our calls have gone unheeded, and we are now
    targets of The Washington Post, accusing VSOs of embellishing.
        Our accredited representatives are bound by strict ethics
    regulations in 38 CFR. We tell veterans what they need to know,
    not what they want to hear. And we invited the VA general
    counsel to audit our training in 2021, an offer that still
    stands four years later.
        Its costs VFW and our partners tens of millions of dollars
    each year to provide this service because every veteran
    deserves an honest advocate, not a profiteer. Our veterans did
    not ask what was in the air they breathed or the water they
    drank, and unlike many other public servants, they cannot just
    walk away if they do not want to do it anymore. We serve in
    accordance with the contract we signed, and many now live with
    the illnesses that steal their sleep, breath, and ability to
    work. Suggesting they embellished their suffering for some
    money is insulting.
        The VA system must work better. Simpler forms, improved
    access to exams, and reliable technology. But veterans and
    their VSOs are not the problem. We appear before Congress
    dozens of times every year, asking for some nuanced reforms
    that sometimes come to fruition, other times don't. And as we
    speak, the government shutdown disrupts our work as critical
    deadlines approach. Veterans cannot afford to wait. We must
    reopen the government to avoid unnecessary pain and hardship
    for our defenders.
        Members of the Committee, the all-volunteer force has
    carried this Nation through the last quarter century of war. We
    kept our promise, now the Nation must keep its word. It is time
    for all of us to honor the contract.
        Thank you, and I look forward to answering any questions
    the Committee may have.

        [The prepared statement of Mr. Gallucci appears on page 61
    of the Appendix.]

        Chairman Moran. Thank you. Dr. Gade.

                  STATEMENT OF DANIEL M. GADE, PH.D.,
                LIEUTENANT COLONEL, U.S. ARMY (RETIRED)

        Colonel Gade. Ladies and gentlemen, thank you for the
    opportunity to testify on VA disability compensation system. My
    testimony will differ from most you have heard. I am a member
    of no veterans service organization and have no motive other
    than to help restore the lives and dignity of millions of
    veterans.
        For too long you have been told that the best way to care
    for veterans is to shovel billions of taxpayer dollars into
    their pockets. This approach has resulted in a veteran class
    that is sicker, more marginally employed, and more suicidal
    than ever. By paying veterans to be sick, we create more sick
    veterans, separated from meaningful lives and purpose, and we
    deepen our suicide crisis.
        I developed this perspective through hard experience and
    long study. I was wounded in combat twice, losing my right leg
    and spending a year at Walter Reed. After recovery, I earned a
    master's degree and joined the White House Domestic Policy
    Council, where my previously acquired user-level experience was
    bolstered by my work alongside both the Dole Shalala Commission
    and the Scott Commission.
        I later completed a Ph.D. in public policy, focused on the
    VA claims process, and while teaching at West Point, co-led the
    Independence Project, a randomized control trial demonstrating
    the powerful link between employment and health. In 2021, I
    published, ``Wounding Warriors: How Bad Policy is Making
    Veterans Sicker and Poorer,'' and recently served two years as
    Virginia's Commissioner of Veterans Services.
        The surge in disability claims is not due to combat
    injuries but to a culture that rewards illness. Last year
    alone, over 450,000 new compensation recipients entered the
    system, while total combat-wounded from the Global War on
    Terror (GWOT) numbered around 50,000. Last year, more than
    270,000 veterans began receiving compensation for tinnitus,
    which is 100 times the number of GWOT amputees over a 20 year
    period. Blessedly high survival rates from combat wounds are
    not the cause of the growth. This lie allows advocates to tuck
    every veteran disability claim under the cloak of virtue.
        Instead, the avalanche of claims is driven by non-profits
    and pay-to-play claims companies that encourage veterans to
    selectively exaggerate or falsify symptoms to ``grab all they
    can.'' Aging, genetic, and lifestyle conditions are
    increasingly labeled ``service-connected,'' resulting in tens
    or hundreds of thousands of veterans rated as 100 percent
    disabled who have no true incapacity, or whose incapacity would
    have eventuated regardless of service status.
        I propose two principles of reform. One, meaningful
    employment is powerful medicine. A 2020 paper called
    ``Employment is a critical mental health intervention.''
    Unfortunately, veteran participation in the labor market,
    especially among men in prime working years, is markedly lower
    than their civilian counterparts, and has been steadily
    declining over the past 20 years. Disability compensation
    discourages work by rewarding inactivity; some programs, like
    IU, create a direct barrier to work. Any separation from the
    labor force causes isolation, malaise, and reduced income
    coupled with a demand for ever-higher ``disability'' payments.
        We should shift dollars from paying veterans to be sick
    toward meaningful incentives for gaining and maintaining
    productive employment. Early positive incentives can have a
    long-lasting positive effect, as demonstrated by the
    Independence Project.
        Two, disability compensation is a destructive goal.
    ``Disability'' is a negative word. In Latin, ``dis'' means
    ``not,'' ``opposite of'' or ``apart.'' The disability
    compensation system pulls veterans into a destructive identity
    as ``disabled veteran'' rather than helping create a positive,
    forward-looking life and career. This system is anti-thriving,
    anti-productivity, and ultimately anti-veteran. Further, it
    discourages future generations serving by painting veterans as
    a troubled, problem class.
        The compensation system traps veterans in a disability
    identity, teaching them to chase a 100 percent rating as proof
    of honor or source of validation. Nine of the top 10 conditions
    for newly rated veterans are easily exaggerated or totally
    unverifiable. We need a system that affirms veterans' capacity
    to thrive, not their presumed fragility.
        Here are several steps that would protect the integrity of
    the system. One, treat but do not compensate for non-disabling
    conditions and eliminate conditions caused by genetics, aging,
    or lifestyle from the compensation rolls. Sleep apnea is one
    obvious example; there are hundreds of others.
        Two, require active treatment for compensated mental health
    conditions. If compensation is warranted, so is care.
        Three, extend VA medical eligibility for all service-
    related conditions without tying it to disability ratings,
    removing incentives for false claims.
        The current disability system robs veterans of purpose and
    dignity, trapping them in idleness and despair. Further, the
    isolation brought on by separation from the labor market can
    and does send many veterans into a morass of tragic
    consequences.
        Reform will be difficult--entrenched interests protect the
    status quo--but it is essential. A close look at past changes
    shows that what survives the legislative and rulemaking process
    are usually additions to existing programs or the creation of
    new programs. The VA budget grows inexorably despite the system
    causing immense ongoing harm. Deep structural reform will save
    lives and restore what veterans truly need: meaning, work, and
    hope.
        And to Senator Tuberville I say, ``War Eagle.''

        [The prepared statement of Lieutenant Colonel Gade appears
    on page 71 of the Appendix.]

        Chairman Moran. Ms. Curda.

    STATEMENT OF ELIZABETH H. CURDA, DIRECTOR, EDUCATION, WORKFORCE
         AND INCOME SECURITY, GOVERNMENT ACCOUNTABILITY OFFICE

        Ms. Curda. Good afternoon, Chairman Moran, Ranking Member
    Blumenthal, and Members of the Committee. I am pleased to
    discuss GAO's work on VA's management and modernization of its
    disability compensation program.
        VA has taken various steps to improve this program.
    However, VA is a large, decentralized organization where
    efforts to bring about positive change can face strong
    headwinds.
        As a result of this situation, we put VA's disability
    compensation program on our High-Risk List. This is a list of
    programs GAO considers to be high risk because there is
    significant waste, mismanagement, or a need for broad-based
    transformation. In the case of disability compensation, VA has
    been trying to update and modernize the program for years, with
    limited success.
        Underpinning many of these problems are VA leaders and
    managers not fully leveraging leading practices to manage the
    disability compensation program. These are practices like
    setting goals, developing plans to achieve the goals,
    collecting data, and assessing results. These practices set up
    organizations for success. Here, that means providing accurate
    and equitable decisions on compensation claims for veterans
    with service-connected disabilities.
        To some, talk like this of management practices may seem
    quite dry and technical. However, effective management of the
    disability compensation program can help VA meet veterans'
    needs by providing timely and accurate decisions. It can also
    save taxpayer dollars by reducing mistakes and costly rework.
        My testimony today discusses, first, VA's longstanding
    challenges with managing changes to the disability compensation
    program; second, challenges to ensuring the quality of
    disability compensation decisions; and third, policy approaches
    that disability commissions and others have raised for
    modernizing VA's disability benefits structure.
        For the first area, on managing changes to the program, one
    key example of a longstanding challenge is VA's efforts to
    update its rating schedule. VA continues to rely on outdated
    medical and earnings loss information in the rating schedule to
    determine whether veterans qualify for disability benefits.
    VA's updates of the medical information in the rating schedule
    have been slow. VA is 10 years behind its goal. While VA
    officials have updated many of the body system, several systems
    remain outdated.
        Moreover, the rating schedule has not been comprehensively
    adjusted since its creation in 1945. Past studies found that
    given all the changes in the labor market, veterans were not
    being equitably compensated under this 1940s model.
        For the second area on ensuring the quality of decisions,
    our prior work has identified challenges to VA providing high
    quality disability exams for veterans and training for claims
    processors. These exams and training are key for accurately
    processing veterans' claims and preventing fraud, costly
    delays, and rework.
        For example, we recently made five recommendations to
    strengthen VA's oversight of contracted medical exam quality.
    Our recommendations generally focused on three areas:
    identifying and correcting the most frequent or complex
    problems with contracted exams; incorrect financial incentive
    payments to contractors; and third, a gap in feedback from
    those who perform disability medical exams.
        VA generally agreed with these recommendations. As of
    today, none of the five have been fully implemented.
        In addition, our 2021 report highlighted numerous
    shortfalls in VA's management of its training for new and
    experienced claims processors. To address these shortfalls, we
    made ten recommendations. As of today, four recommendations
    remain open, including ones to enhance VA's planning and
    evaluation of its training program.
        For the final area on program modernization, our prior work
    has identified various policy options proposed by others for
    rethinking VA's existing disability benefits structure. For
    example, our 2012 report examined opportunities and challenges
    of several policy options. These options included things like
    integrating vocational services with cash assistance rather
    than focusing on compensation alone.
        In summary, addressing the longstanding challenges we have
    identified requires sustained leadership over the use of
    leading management practices. Ultimately, this would help
    ensure veterans receive accurate and timely decisions on their
    disability compensation claims while also safeguarding taxpayer
    dollars.
        This concludes my statement, and I am happy to address your
    questions.

        [The prepared statement of Ms. Curda appears on page 93 of
    the Appendix.]

        Chairman Moran. Thank you very much. Senator Tuberville.

                         HON. TOMMY TUBERVILLE,
                       U.S. SENATOR FROM ALABAMA

        Senator Tuberville. Thank you, Mr. Chairman. Thank you for
    your passion. This is a great panel. Thanks for doing this. We
    have spent a lot of time doing things to help our veterans. I
    come from a military family and it has been very passionate to
    me. Right benefits for the right veterans. I think that is what
    our title is here today.
        I would like for anybody to answer this. I do not know who
    to ask this question to. Many will remember that under the
    Veterans Access Choice and Accountability Act of 2014, a
    commission on care was established to develop recommendations
    to improve the VHA. The call for this commission came after a
    scandal at the VHA. Don't each of you think that it is time a
    commission was established to develop recommendations to
    improve the VBA, and don't our veterans deserve a system like
    this with a commission?
        Does anybody want to answer this? Push your button and have
    at it.
        Ms. Mason. I guess I am going to jump in.
        Senator Tuberville. You are first. Go ahead.
        Ms. Mason. Yes. I think a commission would be very well
    placed. I think it is needed to look at the VBA process, like
    it is supposed to do at VHA.
        Senator Tuberville. Anybody else? Go ahead, Ryan.
        Mr. Gallucci. Thank you, Senator. I get nervous about the
    prospect of a commission, and there is a reason why.
        Senator Tuberville. Well, we all do. We all do.
        Mr. Gallucci. I remember with the AIR Commission we, as an
    organization, were a bit of champions of that, and it could not
    make it past the first marker. And now we are seeing the
    repercussions of that. I know we are talking about the Benefits
    Administration, but now with Veterans Health Administration it
    has become glaringly obvious that the infrastructure is in the
    wrong place, and it has resulted in a higher cost for care.
        I would argue that a forum like this is certainly a good
    start to have these discussions. I know that Dr. Gade and I do
    not agree on everything, but there are a few things that he
    said that I know are very--I think we would agree on, as far as
    how we reform the system and incentivizing the right behavior
    by veterans, who are only seeking the benefits that they have
    earned through their service contract.
        Senator Tuberville. Thank you. You know, with the passage
    and fast-tracked implementation of the PACT Act, it has put a
    strain on disability claim processes. How can we simplify that?
    How can we make sure they both work? A lot of money has been
    put into this. Anybody?
        Colonel Gade. Senator, I would like to just briefly point
    out that there are several things in the PACT Act that are not
    only problematic from a sort of overloading the system point of
    view but also problematic from a moral point of view. So here
    is an example.
        The PACT Act makes hypertension a presumptive condition for
    all Vietnam veterans who were exposed to Agent Orange. What is
    not mentioned in the PACT Act, or any of the discussion around
    that, is that when you norm for age, sex, and race, non-
    veterans of those age groups have the same exact hypertension
    rates as veterans do in those age groups. So we are
    compensating for something that is--forgive the expression--
    old, fat people get hypertension. That is going to happen to
    sort of all of us at some point.
        But what the PACT Act did was allowed people to shift the
    responsibility for those lifestyle conditions from themselves
    to the government and blame the government for problems that
    are not the fault of the government, and therefore taxpayers
    are taking a bath on that.
        Senator Tuberville. Thank you. So, anybody, what simple
    changes do we need to make to make sure disability claims go to
    the right people? Go ahead, Ryan.
        Mr. Gallucci. Senator, I would say that we need to speed up
    the science. I think the issue that we see, for example, with
    Karshi-Khanabad in Uzbekistan, there is a stark difference
    between what servicemembers who developed rare cancers and rare
    health care conditions while they were still in active duty,
    gaining those benefits, and then those who, the uniform came
    off but the condition did not develop until 15 months after
    they came off of active duty, and they have been struggling
    ever since.
        I think one of the greatest detriments that we have is the
    time it takes to identify when a toxic exposure has happened
    and then make that veteran whole. I think because of the
    framework set forth in the PACT Act, there needs to be some
    urgency, especially for people like those who served on K2.
        Senator Tuberville. Urgency does not work up here, in the
    Federal Government. I will tell you that. We wish it did.
        Thank you, Mr. Chairman. My time is up.
        Chairman Moran. Senator Blumenthal.
        Senator Blumenthal. Thank you, Mr. Chairman. Thank you all
    for being here and for your testimony.
        Let me ask you, Ms. Curda, as you know substantial numbers
    of VA employees have been cut, and as many as 30,000 will be
    cut. The original number was 83,000. The uproar and reaction to
    Secretary Collins' announcement caused it to be reduced. But
    doesn't that kind of cut in workforce have an impact on the
    quality of work in processing disability claims?
        Ms. Curda. Well, one of the issues on our High-Risk List is
    the ability of VA to process disability claims and manage the
    workloads. As we have been discussing, there have been many
    changes to what is eligible, and that has increased claims
    substantially, and over time VA has had extensive backlogs that
    they have not been able to keep up with. And so they have been
    in kind of a pattern of recently hiring more staff to be able
    to process those claims, and they have most recently been
    somewhat successful in bringing the backlogs down and improving
    timeliness.
        I do not know how many of those people that you mentioned
    were actually processing disability claims. I would expect VA
    to conduct analysis, workforce planning analysis, to see what
    would the cuts to staff in the disability claims processing
    area, what effect would that have on productivity and on these
    backlogs. Because they were making progress, and I do not know
    that these particular cuts are affecting that or not.
        Senator Blumenthal. But basically, if you cut the number of
    people doing the work and the work increases, it is going to
    take longer and possibly be more error prone.
        Ms. Curda. That is a logical conclusion, yes.
        Senator Blumenthal. Thank you. Mr. Gallucci, I was struck
    by your comment that if there are problems in the programs we
    should fix the programs, not blame the veterans. The veterans
    are not the problem, and I am struck by statements from the
    Administration, including the top levels of the Office of
    Management and Budget, Russell Vought, that means testing maybe
    is a reform that should be adopted. He has suggested that the
    Administration should, quote, ``target significant cost savings
    from revising disability rating awards.'' I have not heard the
    Secretary criticize or refute that potential course of action.
    What do you think of it?
        Mr. Gallucci. Senator, the idea to restrict benefits
    payments to service-disabled veterans at a lower percentage,
    that dates back to the Bradley Commission in the 1950s. It was
    a recommendation that came out of there at the time, and there
    was nothing really to substantiate that at the time.
        One of the things that we often talk about is that we are
    talking about social and occupational impairment here and loss
    average earnings potential. And it really should be a dead
    conversation on means testing for a service-connected
    disability. That is a very different rate. I mean, there is
    means testing for pension, but we are talking about service-
    incurred disability. It is a very different scenario. We see
    nothing in Title 38 that would allow for that without a change
    from Congress that we would vocally oppose.
        There is a philosophy there that when you sign that
    contract, and it is the clause in the contract that says, ``you
    will be ordered to deploy to combat or other hazardous
    situations.'' And I worry sometimes we lose the focus on that
    ``other hazardous situations'' point. The Washington Post did
    that in their article, talked about what they presumed to be
    non-service-related conditions or common conditions. And that
    could probably be a whole other hearing, to break down how
    those are service-related because of the unique nature of
    military service. And then when you are talking about those
    lower percentages, the occupational impairment that comes with
    that--time off for medical appointments, underemployment. Those
    are real issues for veterans that face chronic health
    conditions that require consistent care.
        Senator Blumenthal. We do not need a commission to tell us
    that we ought to sustain disability benefits for injured
    veterans, do we?
        Mr. Gallucci. I think it is an obligation of our country to
    honor the enlistment contract, the contract that we all signed,
    and provide the care and benefits that we have earned.
        Senator Blumenthal. Exactly. Just one last question for Mr.
    Retzer. You told me that VSOs have been excluded from the space
    that they have at regional offices. Could you tell the
    Committee about that fact?
        Mr. Retzer. Yes, thank you for that question. Yes,
    unfortunately our national service officers around the country
    who have been co-located within the VA Regional Offices are not
    allowed to conduct normal business to be able to assist the
    veterans. Even though the VA Regional Offices are closed, we
    were only allowed 30 minutes. And an example is in North
    Carolina. We unfortunately went there one morning and we had
    over 180 pieces of mail. And when you look at that, those are
    time-sensitive issues, with the effective dates to file initial
    claims and evidence to support pending claims, and so on. And
    it makes it very difficult for us, even though our team is
    ready to provide services at home, doing telework. We have been
    ready because the pandemic prepared us to do that.
        But what we are seeing is that our service officers,
    unfortunately, now have to deal with the PII, taking the
    information out of the Regional Office and to do that work, and
    be responsible, and they are. But the thing is, it really
    drives a wedge in our process, because within the VA Regional
    Office, we have the capacity of technology and the resources to
    do secure work. And we are very disappointed, and we hope that
    the VA will open back up for all organizations that are
    accredited in there, because this is the first time in any
    shutdown that we are actually not allowed to stay in.
        Senator Blumenthal. Thank you. And I have spoken to others
    about it. I do not know whether that is the experience of other
    VSOs as well. Is that true of VFW, Mr. Gallucci? It is. Okay.
        Mr. Gallucci. Yes. It is the common experience for those of
    us who utilize space in those federal facilities. And this
    morning we were also notified by general counsel that the
    processing of accreditations is not considered an excepted
    activity.
        Senator Blumenthal. I might ask, and I have mentioned it to
    Inspector General Mason, and perhaps she can look into it.
    Thank you all. Thanks Mr. Chairman.
        Chairman Moran. You're welcome. Senator Hirono.

                         HON. MAZIE K. HIRONO,
                        U.S. SENATOR FROM HAWAII

        Senator Hirono. Thank you. I think when you read The
    Washington Post's article, recent article, it really gives the
    impression that the whole system of ratings and disability
    payments and all of that are fraught with peril and fraud. So
    as Mr. Gallucci said, a system as large as that, well, there
    will be fraud.
        So what I would like to ask Inspector General Mason is, a
    system like this, a program like this system is going to have
    fraud, my concern would be that do we have the capacity within
    the VA to investigate fraud? And I am not sure who prosecutes
    the fraud, whether the VA has lawyers that do that, or whether
    that has to go to the Attorney General's Office? But really, I
    would like to know what kind of capacity is in the VA to
    investigate fraud, meaning that has the entity that would, I
    guess it would be your office, Ms. Mason, that would
    investigate fraud?
        Ms. Mason. Yes.
        Senator Hirono. Have you seen reductions in the number of
    people in your office?
        Ms. Mason. Senator Hirono, let me answer that question. It
    is our office that is charged with that duty, to investigate,
    and work with DOJ, primarily the Assistant U.S. Attorneys, as
    well as local law enforcement to go after the fraud, and we do
    that. To go after fraud there does have to be a threshold,
    though, of intent. So there has to be corroborating evidence
    and facts. So our office does that.
        As far as the number of people we have, we do have that, my
    investigators are working.
        Senator Hirono. Excuse me. Why don't we go to--I would like
    to ask the question relating to pre-shutdown. The last IG had
    over 1,000 staff. Is that what you have? Do you have 1,000
    staff people?
        Ms. Mason. Currently we have approximately 1,000 staff
    prior to shutdown. OPM did authorize me, through exemptions, to
    hire 35 additional staff across the OIG, which included two
    investigators. And we were proceeding to do that but the
    shutdown got in the way.
        Senator Hirono. You know, we can end the shutdown if a
    certain party decides to restore health care to the American
    people, but we will not get into that right now.
        So you have the same number of people then that your
    predecessor had, and you have authority to hire 35 more people.
    Do you consider that enough of a staff, enough capacity to deal
    with the millions and millions of veterans that you are dealing
    with? And I do not know how many hundreds of thousands of
    claims that you are being asked to review.
        Ms. Mason. Well, let me clarify that real quick, Senator.
    At the beginning of FY 2025 we had 1,175 people. We lost about
    175 people due to DRP and VERA and normal attrition. We are at
    about 1,000 right now. My budget, as presumed, we think, is
    going to be able to allow me to hire an additional 70 people.
    OPM is giving me authorization for 35. However, we do not
    process the claims. We do not adjudicate the claims. We
    investigate fraud, and we do oversight of VBA. That VBA does
    all the claims actions. But we have the people to do oversight.
        Senator Hirono. Okay. So there is another office within the
    VA that has oversight over the claimants, and you have all
    these people who have to determine ratings and the extent of
    disability, et cetera, that leads to certain amounts being
    paid. So let me ask you this, then. Do you think that you have
    enough capacity to investigate all of the fraud that you think
    is out there?
        Ms. Mason. We do. The majority of our work, Senator, is in
    education and health care and fiduciary fraud, as well as some
    compensation. But as I testified earlier----
        Senator Hirono. So you--I am running out of time--so you
    would take issue with The Washington Post's article----
        Ms. Mason. Absolutely.
        Senator Hirono [continuing]. That indicates there is
    massive fraud going on.
        Ms. Mason. There is no massive fraud going on. I take
    issue, yes.
        Senator Hirono. I want to thank the other people who have
    testified from the VSOs, because you are right there, on the
    ground, and you are dealing with the veterans. And I know from
    the veterans that I hear from that there are delays in getting
    their ratings. There are any number of ways that the system can
    be improved. And we heard from Ms. Curda, from GAO, about a
    number of recommendations that could improve the system, and
    the indications seem to be that the VA has not made the kind of
    changes that were recommended.
        Would those of you who represent VSOs, would you agree that
    these recommendations have not been complied with or met?
    Anybody want to weigh in, briefly, because my time is already
    up?
        Mr. Gallucci. I would agree that oversight and quality
    controls need to be there. When we are talking about fraud or
    questionable claims, I point to one of the examples in The
    Washington Post story, where they talked about a veteran who
    received benefits for an accident related to a DUI. I believe
    that is a quality control thing. And there are things that are
    supposed to be considered willful misconduct that do not
    qualify for benefits. And when something like that is found,
    that VA has the quality controls in place to make sure that
    they are not awarding benefits in a situation that they should
    not.
        Senator Hirono. And do you think they do have those quality
    controls in place?
        Mr. Gallucci. I think they need to improve on those quality
    controls, ma'am, yes.
        Senator Hirono. Thank you.
        Chairman Moran. Senator Blackburn.

                         HON. MARSHA BLACKBURN,
                      U.S. SENATOR FROM TENNESSEE

        Senator Blackburn. Thank you, Mr. Chairman. I have got just
    a couple of questions. But before I start, I do want to correct
    the record. Republicans are not denying health care to anyone.
    There is a discussion over the Biden bonus credits that were
    given during COVID. And our colleagues across the aisle could
    end the shutdown today by voting for a clean CR, which these
    are numbers they have voted for many times----
        Senator Hirono. Mr. Chairman, I was good enough not to get
    into it, and I would ask the same from my colleague.
        Senator Blackburn. And then also I would note that the
    claims backlog that was referenced happened during the last
    administration, and we discussed this at length in hearing
    after hearing, with the fact that workers were working
    remotely, and of course, and Ms. Mason, I want to come to you
    on this. Because the PACT Act implementation caused a lot of
    confusion, and there was the warning of we had a $3 billion
    shortfall, and it was going to require emergency spending. And
    then, of course, we found out later that this was just a
    budgeting boondoggle, and the implementation of the PACT Act,
    the VA systems could not handle it, and there was no shortfall,
    but this frightened a lot of our veterans and their families.
    And the good news is we have got some leadership at the VA now
    that is straightening this out, and we are grateful for that.
        And what I would like to hear from you is what your sense
    of how well the VA leadership is following through on your
    recommendations to tighten oversight and prevent that kind of
    misstep from taking place again.
        Ms. Mason. Senator Blackburn, to answer your question, we
    have done a series of reports in the OIG's office to point out
    the lack of controls and oversight within VBA around
    particularly PACT Act, especially with the fact that they have
    scattered guidance all over the place and their manual is not
    in compliance with the law.
        Right now they tell us they have a plan. We have not seen
    anything. They are partially shut down. They are doing claims.
    We have not seen anything yet, but we are following up, and we
    have further evaluations to look at and audits to do once we
    get back in business.
        Senator Blackburn. Okay. And Mr. Gade, thank you for your
    testimony. And I noted in there that you made a strong case
    that the disability system sometimes will trap veterans. So
    what is the first couple of things that you think Congress
    could change that would help clean this system up?
        Colonel Gade. Yes, ma'am. Thank you for that question. The
    very first thing that I think ought to be changed is how we
    talk about the word ``disability.'' So only in the VA system
    are flat feet a disability. Only in the VA system is tinnitus a
    disability. Because what we have is an over-broad definition of
    the word. If we went to the ACS, American Community Survey,
    definition, or we went to any other publicly available
    definition, like the Social Security disability definition,
    what we would have is the ability then to put more money to
    things that matter, things like employment, things like
    rehabilitation, things like medical care, and less money in
    transfer payments that we know are causing people to be sicker
    and to be trapped in this cycle of malaise. So that is the very
    first thing I would say.
        Senator Blackburn. And Ms. Curda, would you agree with
    that, because you have weighed in some on this system.
        Ms. Curda. Yes. In our testimony we did work some years ago
    where we looked at all the commissions that have looked at
    reform options for the disability system, and summarized those
    positions, the advantages, the disadvantages. I do not know
    that there is a clear one right answer there. It is a policy
    call. There are no changes that do not come without some kind
    of a cost. You know, one way or another, there will be winners,
    there will be losers, there will be costs to administer more
    complex systems. I mean, it has to be looked at very carefully.
        Senator Blackburn. But you had referenced the high-risk
    areas for mismanagement, and that being one of them.
        Ms. Curda. Well, for sure they have not updated the
    schedule for how they decide those compensation levels within
    existing law.
        Senator Blackburn. Excellent. Thank you. Thank you, Mr.
    Chairman.
        Chairman Moran. Senator Boozman.

                           HON. JOHN BOOZMAN,
                       U.S. SENATOR FROM ARKANSAS

        Senator Boozman. Thank you, Senator Moran and Senator
    Blumenthal, for really bringing kind of the who's who of
    experts on this issue. We appreciate you all being here, and
    again, on such an important topic.
        While we have recently seen progress ensuring veterans are
    receiving claims decisions in a timely manner and provided
    adequate benefits that align with their service, there is still
    more work to do. As evidence, I have veterans in my state
    waiting on decisions for years and years, some perishing before
    they can get a final ruling after years of waiting. I am
    confident in the VA's disability system, but that confidence
    comes not without the desire to continue pushing forward to
    best serve our Nation's heroes.
        Mr. Gade, I am interested in the principle, ``meaningful
    employment is a powerful medicine,'' you outlined in your
    testimony. Like you, I believe active participation in the
    workforce and larger society serves as a powerful remedy to
    some of the issues our veterans face.
        What ideas do you have for this Committee and the VA on how
    we could support that principle through the compensation system
    without creating fear or hesitation among veterans about losing
    their benefits?
        Colonel Gade. Thank you, sir. In my written testimony that
    I submitted for the Committee, there is a report of something
    called the Independence Project that I also referred to in my
    oral testimony. The Independence Project was a randomized
    control trial where we took two groups of veterans and we gave
    one certain benefits and we did not give anything to the other.
    We just monitored them. And the veterans who were given the
    incentives up-front to thrive were able to do so, and those
    gains in employment, not only in the percent of them who were
    employed but also in their salaries, and their gains in
    physical and mental health sustained far after the incentive
    payments ended.
        So what you have is the ability right there, the scientific
    basis exists, to put incentives in place to get the kind of
    positive outcomes that we want and to not get the negative
    outcomes that we want.
        Senator Boozman. Very good. Ms. Curda, GAO has laid out the
    need for VA to follow leading management practices when it
    undertakes reforms of the disability compensation program.
    Would you elaborate on the downsides of having to do this?
        Ms. Curda. Sure. Thank you for that question. When we set
    out to look at how they manage reforms at VA, the first
    question we asked was how many initiatives do you have ongoing,
    and they could not tell us. We had to assemble that list. And
    these were significant initiatives. There were 23 of them over
    a three-year period that we looked at. We pulled a sample of
    five of those randomly and compared them to how are they being
    managed for success, and found lots of issues. We made a lot of
    recommendations to improve those initiatives, because they were
    not setting goals, they were not involving key stakeholders,
    they were not monitoring progress.
        In particular, one of them was looking at creating
    specialized teams to evaluate military sexual trauma claims,
    which are very complex and very different from other kinds of
    claims. And we found that across the board they did not have
    clear goals with measurable outcomes. They did not have clear
    leadership oversight. There were recommendations from the IG
    that did not get implemented. They were making changes to how
    things got done, but it was never clear that anything was
    improved as a result of that.
        So that is the kind of thing. It is important to have
    goals. It is important to know where you are headed before you
    start down the path, and that ability then to be able to tell
    the Congress and the public that this investment had a payoff.
        Senator Boozman. So is that a cultural thing or poor
    leadership? With it being so broad in the group that you
    studied, it is like it was a one-off----
        Ms. Curda. I think there is, perhaps, a culture. There are
    lots of fires to put out all the time at VA, and there is a
    culture of, oh, let's put together a tiger team and fix this
    right away and be in a hurry. And I think sometimes they do not
    have a good system in place to ensure that when they get
    started they have that kind of good plan in place. And that was
    one of our high priority recommendations for the Secretary is,
    put in place a policy that if you are going to start a major
    reform initiative, that it have these elements in place before
    you start so that you will know where they are headed.
        Senator Boozman. Thank you, Mr. Chairman.
        Chairman Moran. Senator Sheehy.

                            HON. TIM SHEEHY,
                       U.S. SENATOR FROM MONTANA

        Senator Sheehy. Thank you, Chairman. Thank you all for
    being here today. As a fellow combat veteran of multiple tours,
    married to a combat veteran, I take these issues very
    seriously. And I want to echo some comments made from our VFW
    partners about some poisonous and disgusting rhetoric from The
    Washington Post recently, that accused our veteran community
    and our broader veterans service organization community of
    fraud, of taking advantage of the American people. When this
    group of people, this body of veterans, raised their hands and
    swore an oath to defend this country, the system is not
    perfect. There is no question, the VA is not perfect, veterans
    are not perfect, and there is fraud, no doubt.
        But the byline of that rhetoric should not be attacking the
    people that chose to defend this Nation. It should be an
    internal examination of how we do things better in this
    government and how we make the VA focused on veteran outcomes
    and patient outcomes and not process. We have been lost in the
    bureaucracy for too long in the VA, and it is about time we
    have a customer service-oriented organization that is focused
    on optimal outcomes for veterans.
        Outcomes for veterans. ``Veterans not victims'' is my
    favorite saying. We are not victims. We do not come back sorry,
    asking for handouts. We come back wanting a new mission in
    life, and wanting to be empowered to continue to serve our
    country, in law enforcement, in government service, even as
    entrepreneurs. We want our veterans to come home and be
    empowered, not treated like victims. But sometimes they need
    that help to do so.
        And I would welcome your thoughts, specifically, I think,
    Dr. Cade, related to, specifically, how does our incentive
    system within disability claims, how does our incentive system
    within the transition process, are we incentivizing veterans to
    succeed at the end of that process or instead are we driving
    them into a cul-de-sac of dependence? Because ultimately we
    want to help them as a bridge to another successful chapter in
    life. We do not want them to be professional veterans when they
    are done. We want them to be done and be proud of their
    service, but then open a new chapter for their life and succeed
    there.
        Colonel Gade. Sir, thanks for that question. When I went
    through the Transition Assistance Program when I was leaving
    the military, we spent about half a day on employment stuff and
    about a day and a half on how to file disability claims. And
    the proverbial little old lady in tennis shoes stood up there
    and said, ``Claim everything you can. It is free money. All
    you've got to do is go get it. And if you have these conditions
    you get this, but if you look at a DBQ carefully,'' and she
    like stomped on the floor and said, ``If you look at the DBQ
    carefully, you can see that if you have these conditions you
    can get to 70 percent, and if you have these conditions you can
    get to 100 percent.'' And so it was right there in front of
    people that all you have to do is exaggerate and you can get
    paid more.
        That is not actually my main problem. My main problem is
    what happens then. Because if a veteran is separated from the
    labor market, they do not work anymore, they are sitting at
    home, they are sitting on the couch, their wife is going to
    work, if it is a male veteran, the children are going to
    school, and what happens when those people come back home is
    the veteran is still sitting there. And that is a life of
    disempowerment, not empowerment. And men get so much identity
    from their work that we ought to be putting all of our effort
    into positive, meaningful, gainful employment and get away from
    saying to everybody, ``Hey, get everything you can from the
    government. All you've got to do is fill out this little form
    and we'll give you disability payments.'' Thank you.
        Senator Sheehy. That is exactly right, and disability is
    too often times confused, that if you are able to work you do
    not deserve that disability. And the truth is that disability
    is a recognition that you are going to carry that injury, that
    condition for the rest of your life, and you can never heal
    from that because of what you did for this country.
        What do we think about alternatives to how the disability
    system is currently structured? And this is open to anybody.
    How can we better structure this so that after our veterans
    leave, take the uniform off, we are incentivizing them to find
    new careers and succeed in those careers, but still recognizing
    they have conditions they have to live with?
        Colonel Gade. Sir, if I may really quick, the way that we
    talk about disability is different than any other program talks
    about disability. The bar is much lower. The conditions are
    much broader. If--and I am not making this proposal
    necessarily--but if we were to take the people 60 percent and
    below in 2024 Annual Benefits Report, and we were to say, you
    know what, those are conditions that we are going to treat for,
    but we are not going to compensate for those because they are
    not a disability by any other definition of the word, what you
    would do is you would save $20 billion a year that you could
    then put toward meaningful job programs. You could put it
    toward internships and externships and education and even
    higher benefits for the triple amputee and the person with a
    traumatic brain injury.
        There is a way to do this that is smart and that
    incentivizes the right things, and that is what I am just
    begging folks to focus on.
        Senator Sheehy. We are at the end of my 5 minutes. I am
    sorry, but did you want to wrap up quick?
        Mr. Retzer. Yes, Senator. I just wanted to say it is very
    important that we understand, yes, we know about the injuries
    and illnesses. But the thing is we have questions with regards
    to integration and to rehabilitation. And then there is
    compensation. We need to understand that it is complementary.
    And we need to ensure that when we look at the VA's ability of
    it, that VA's integrated care links the issues really, that is
    health care, vocational programs, and education. That is the
    struggle that we are having here, and so VA needs to continue
    to expand programs like the Veteran Readiness and Employment
    (VR&E) system while they ensure that the veterans are getting
    their compensation. As you said, they have earned these
    benefits. So we want to make sure that they strengthen the
    partnerships that are out there to employees and workforces to
    ensure that they are hiring and recruiting veterans, and really
    emphasize that there is a difference between the integration
    back into employment versus compensation.
        Senator Sheehy. Well, thank you for being here. We are at
    the end of our Nation's longest war, and we may potentially be
    seeing the start of another war soon. So the work you are doing
    is going to be absolutely critical. Veterans not victims.
    Outcomes over process. Patients over bureaucracy. Thank you.
        Chairman Moran. Senator Sheehy, thank you. Senator
    Duckworth.

                         HON. TAMMY DUCKWORTH,
                       U.S. SENATOR FROM ILLINOIS

        Senator Duckworth. Thank you, Mr. Chairman. I have to say I
    must express disappointment in the decision to convene a
    legislative hearing that amplifies The Washington Post
    misleading and flawed attack against the VA disability benefits
    system, especially by inviting a witness who supports those
    sentiments. And adding insult to injury, this effort to falsely
    depict our Nation's disabled veterans as a group of dishonest
    fraudsters and cheaters originates from a paper that is owned
    by a multi-billionaire whose net worth exceed, by tens of
    billions of dollars, the total amount that the U.S. Government
    spends on disability compensation to over 6 million disabled
    veterans in any given year.
        Look, nobody is denying the unfortunate reality that a
    small number of veterans exists who will dishonor their own
    service and that of their fellow veterans by defrauding the VA.
    These individuals can and should be prosecuted to the fullest
    extent of the law. If we want to enhance deterrence we should
    strengthen enforcement resources to increase the rates of
    criminal investigations, prosecutions, and convictions of these
    fraudsters.
        The mistake we must avoid is allowing a minority of
    criminals to dictate the redesign of the VA disability benefits
    system into a bureaucratic black box that is more frustrating
    and less fair and will leave more veterans waiting and dying,
    waiting to get their benefits that they have earned.
        Since we met many years ago at Walter Reed, I have been
    disappointed, Colonel Gade, in watching your journey. You and I
    were there together. We suffered together. We recovered
    together. But I have to say, I have been disappointed in
    watching your journey to becoming one of the leading critics of
    the entire concept of disability compensation for disabled
    veterans. And I do feel that you believe that you are simply
    offering our fellow disabled veterans some tough love that
    everyone else is too afraid to give, to inspire them to achieve
    the success that you have been so very fortunate to earn.
        However, your rhetoric, particularly in downplaying the
    severity of the reality of the invisible wounds of war runs the
    real risk of doing more harm than good. Portraying disabled
    veterans as a group of takers who will happily never work again
    for $3,100 per month is incredibly condescending and
    disrespectful to these heroic Americans.
        Disabled veterans, like any American, want to work for more
    than just money. They are driven by a sense of mission,
    purpose, and meaning. And your characterization of disabled
    veterans who accept disability compensation as being moochers
    who are trapped by the system, advances a very damaging
    stereotype that shames many veterans into foregoing VA benefits
    at a cost to themselves and their loved ones.
        So there is an irony that the VA is being accused of being
    too generous, too trusting, and too focused on enhancing
    efficiency for disabled veterans by a paper whose owner is
    famous for accumulating a vast fortune by adopting a core
    management principle, obsessive customer focus.
        So my question for the VSO leaders on the panel is simple.
    Do our disabled veterans deserve worse treatment from the
    United States Government?
        Mr. Villanueva. No, they don't.
        Mr. Retzer. No, they do not.
        Senator Duckworth. Should Congress require VA to presume
    that every disabled veteran applying for benefits is guilty of
    fraud?
        Mr. Villanueva. They should not because they are not.
        Senator Duckworth. Should VA force every disabled veteran
    to fight through copious amounts of paperwork and push through
    layer upon layer of cold, harsh bureaucracy to prove, beyond a
    reasonable doubt, to obtain what are often quite modest
    disability compensation benefits?
        Mr. Retzer. Senator, no.
        Senator Duckworth. We must never forget that Congress and
    VA have worked hard for many decades to end an unacceptable
    status quo where the VA benefit system was hostile, combative,
    and stunningly inefficient. My larger fear is that our
    Committee, indulging in efforts to demonize the VA disability
    benefit system, will lead us to creating harmful guardrails
    that reduce improper payments, but at the cost of scores of
    eligible disabled veterans giving up and abandoning efforts to
    secure the benefits they earned when they served our country in
    uniform.
        Would any of the witnesses testifying on behalf of VSOs
    like to elaborate on that threat and why criticism of VA trying
    to instill a culture that seeks ``let's get to yes'' is
    preferable to a culture that seeks to ``get to no'' ?
        Mr. Gallucci. Senator, I will happily take that question,
    if I may. As I said in my remarks and in our submission for the
    record, we have deliberately worked to make it easier for
    veterans to access the benefits that they have earned. Those of
    us who have worn the uniform have seen it, where peers of our
    struggle for the care for the diseases or the health conditions
    that they are suffering with.
        In addition to Karshi-Khanabad, our organization is
    advocating for air crews. Congress just passed a study to make
    sure that air crews, and signed into law, that we study their
    toxic exposures. There is a group of veterans, submariners, in
    the Veterans of Foreign Wars who are speaking very vocally
    about the unique challenges of submarine service and the
    exposures that they have.
        Now make no mistake, we all knew that military service was
    dangerous, but as we have focused on, when we say ``honor the
    contract,'' it was in our enlistment contracts. It is in there,
    required to order--ordered to serve in combat or other
    hazardous situations, and then entitled to receive pay
    allowances and other benefits as provided by law in regulation.
        So to have a discussion where it is portraying veterans
    accessing that system as if we are somehow exploiting
    loopholes, and it is an honor system, look, it is trying to pit
    veterans against Americans, other Americans. And it is
    something that we should not tolerate, especially when such a
    small percentage of the population volunteered for that
    dangerous job that has occupational hazards that others can
    just walk away from.
        Senator Duckworth. The data is clear. It is not just data
    coming from the VA but from other not-for-profits that the vast
    majority of veterans' claims of benefits are truthful and
    accurate, not that they are fraudulent and false. And I think
    we need to keep that in mind.
        Thank you, Mr. Chairman.
        Chairman Moran. Senator Duckworth, thank you. I thank all
    of our witnesses, and I would just highlight for the Committee,
    and perhaps for my own satisfaction, there is no doubt about
    the controversy that arises from this Washington Post article.
    But I have great faith in the witnesses that we have here, the
    veterans who have talked to us, the information that we
    received, to suggest that this Committee is capable of hearing
    from veterans and responding to the thought that is expressed
    in The Washington Post article. I also have sufficient faith in
    the colleagues here, many who have served, some who have served
    and earned disability, that we have the capability as Members
    of this Committee to sort out and have the opportunity also to
    hear from somebody who has a different point of view, so that
    we can come to a conclusion, probably more than one,
    conclusions over time about how we improve the system, and we
    make certain that veterans who served and those who are
    disabled by that service receive the compensation, as well as
    care, that they are entitled to.
        So I am pleased we have had this hearing, are having this
    hearing, and I think it has value as we try to sort out how we
    make things sufficiently better for those who served our
    country.
        I want to ask a couple of questions and then a vote has
    been called and we will bring this hearing to a conclusion.
    First of all, Ms. Mason, Senator Blackburn asked you about
    inspector general's report. Are there any particular reports
    that are pending on this topic of disability that you would
    like to highlight that would be important for the VA to come
    into compliance or explain why they are not pursuing the
    inspector general's recommendations?
        Ms. Mason. Well, we have about 30.
        Chairman Moran. All of them equal importance and all of
    them on this topic?
        Ms. Mason. All of them equal importance. But I think we
    have two or three particularly that are pending on disability
    issues. But we have some audit work that we are getting ready
    to start, primarily around quality review, and around
    automation, particularly in concerns we have around whether the
    right information is in the automation system.
        And then, again, to the reports we have already discussed
    today on PACT Act and a couple of the other areas in
    disability, our fraud teams and our audit teams work very
    closely together. So where they see gaps on either side they
    trade information, and the fraud teams goes and investigates
    and the audit team does their audit work.
        So we do have some others teed up. We only have a couple of
    reports, though, that are pending, and they are primarily on
    the quality aspect as well as the application of overall
    disability review.
        Chairman Moran. In your previous life and previous work at
    the Department of Veterans Affairs, anything that you learned
    in that capacity that would be important for us to hear today?
        Ms. Mason. Well, Chairman Moran, you know, in my current
    seat I look at everything through the eyes of the IG. But what
    I can tell you in looking at those through the eyes of IG, I
    can look back over the 30 years, from starting as a young
    attorney in 1990, going forward to my time as judge and
    chairman, where I can see many of the things that VA put in
    place, that the Congress has put in place, and I see the
    impacts and effects of that on our veterans. And what I see is
    the lack of controls and the lack of oversight within all of
    VA, but for this hearing, particularly in VBA, in areas from
    compensation to education to pension to fiduciary. We can go
    down the whole list.
        Chairman Moran. I want to highlight, at least from my view,
    a great level of respect for the role of the inspector general,
    the role of the Government Accountability Office, in this
    Committee and this Congress, being able to do its work. I am
    developing a good working relationship with you, Ms. Mason, and
    I had a really good working relationship with your predecessor.
    And my view is that the efforts by both of these agencies are
    hugely valuable to the well-being of veterans that we all try
    to serve.
        Ms. Mason. And we do talk to each other often, Chairman
    Moran, both you and I and Ms. Curda and her team.
        Chairman Moran. Thank you both.
        Mr. Gallucci, you did something just a moment ago that I
    was going to ask you to do. I wanted to know what a member of
    the service believes when they enlist, their contract is, with
    the United States Government, with the Department of Veterans
    Affairs, with the American people, with our country, with our
    government. When someone raises their hand and takes the oath
    and enters the service, what is it that they expect in return?
        Mr. Gallucci. To put it in the simplest terms, that if we
    are going to live up to these other requirements to obey all
    lawful orders, subject to the military justice system, serving
    in combat and other hazardous situations, that we will be taken
    care of if something goes wrong on the government's time and on
    the government's dime.
        I point, in The Washington Post story, and we have talked
    about this a lot, about them talking about toenail fungus,
    right. That was in there designed to really bait people into
    thinking, well, that is common. That happens to a lot of
    Americans. You go to a gym, you get athlete's foot, you treat
    it with some Tinactin. I don't know.
        But the issue is we are talking about military service,
    especially ground forces, Army, Marine Corps, that focus so
    heavily on foot health and hygiene. Because when I was deployed
    to Iraq, OIF-1, living out of a Humvee for the first couple of
    months, personal hygiene was sparse and difficult. And I talked
    to a veteran before coming into this hearing who has dealt with
    a systemic fungal infection since he served in the Marine
    Corps. This is very real. It is an occupational hazard. It may
    sound odd to someone who has never served, a reader of The
    Washington Post or a reporter who never raised their right
    hand. But this is why it is service-connected. A veteran who is
    on a medication that causes liver damage because it started out
    as a foot fungal infection--it started as toenail fungus--yes,
    that is service-connected. It is related to service, and it is
    a clear occupational hazard of military service.
        Chairman Moran. Thank you. And do those individuals, they
    recognize, know that at the moment they enlist and raise their
    right hand?
        Mr. Gallucci. You do not know all of them, but I will tell
    you this--we know the military is dangerous, right. It is a
    job, as our Secretary of War says, is to destroy our enemies. I
    mean, we know it is dangerous going in, but we believe that
    with the contract that we signed, if something goes wrong that
    we will be taken care of.
        Chairman Moran. Dr. Gade raised this topic of work, and I
    certainly share a view that work is important to the well-being
    of every human being. It is the way we earn a living and get
    satisfaction, hopefully, from what we do. I always think it is
    something that is within us that gives us purpose in life,
    soul, a sense of meaning and value.
        What is it that we can do? Dr. Gade indicates that there is
    seemingly a disincentive from the disability system to work.
    But aside from that suggestion, that connection, there are a
    lot of things that the Department of Veterans Affairs is
    entrusted to do and should be doing to help veterans find
    meaningful employment. And I know, I mean I saw, where a group
    of Fort Riley soldiers who were about to end their time in the
    military service spent time in Wichita, Kansas, at the aviation
    and aircraft companies, learning about opportunities for their
    future.
        There is a significant demand for the skill set and
    integrity, the moral values of a soldier, of a member of our
    military. There is demand for that work. And yet we may not be
    taking sufficient advantage of the opportunity that a person
    who is leaving military service can provide value to a company.
    We have got a program in Kansas to interest soldiers as they
    depart in agriculture, to become farmers. There is a demand for
    those kinds of employment opportunities. What are we missing in
    trying to make certain that work is honored, aside from the
    suggestions of Dr. Gade? Mr. Villanueva?
        Mr. Villanueva. Thank you, Mr. Chairman.
        Chairman Moran. I was worried you were being ignored until
    Senator Duckworth captured you.
        Mr. Villanueva. No, I appreciate it. There are a lot of
    good panelists here, and I definitely do not want to step on
    anybody's toes when it comes to how much we all agree with each
    other. But the one thing I think everybody on this panel can
    agree with is that every veteran who wants to work and is
    inhibited by a disability, that they have every incentive and
    opportunity to get to work.
        And again, I guess I have to be 100 percent for all the
    hearings I ever testify at, to bring up VR&E, but VR&E should
    definitely be pushed, more so than most any other program that
    they have out there for veterans who want to get back out to
    work. And that includes doing things like removing delimiting
    dates. That goes for education by the VA to all veterans to
    say, hey, especially those who are being medically discharged
    or medically retired, to push that program, and to say if you
    want to get back out to work, it is available to you. And we
    have been on record about this.
        So we would love to work with yourself, your office, the
    rest of the Members of the Committee to see how we can do that.
        Chairman Moran. Remind me. Are there opportunities that are
    presented to veterans who have a disability beyond the normal
    programs to provide education, workforce training to veterans
    generally?
        Mr. Villanueva. There are. But again, I mean, not a lot of
    the veterans who, when they leave the service, know that there
    is a disability with them. It comes up years and years later.
    Myself, I went out and, despite some of my disabilities, I
    decided to take up blue-collar work for the first five years
    post-service, and it caught up to me. Only after that time did
    I ever find out, or ever attempt to use my GI Bill, and never
    once, until many years later, did I even hear about VR&E. So
    again, this should be pushed by the VA.
        Chairman Moran. Thank you. I look forward to working with
    you and PVA. Senator Banks.

                            HON. JIM BANKS,
                       U.S. SENATOR FROM INDIANA

        Senator Banks. Thank you, Mr. Chairman. Ms. Curda, the VA
    disability claims process is dysfunctional and antiquated, no
    doubt. An initial claim decision takes about 100 days, on
    average, but appeals stretch on for years. My office worked on
    one case, for example, a claim that took eight years to be
    decided.
        How are VA's efforts to improve that process coming along?
        Ms. Curda. Well, as I mentioned earlier, one of our issues
    that places VA on the High-Risk List is their challenges with
    managing their workloads, and that includes appeals. You know,
    this has been going on for decades, where various surges come
    along on the initial claims side. Veterans who are denied
    appeal those claims. That creates additional pressure on the
    appeals side. And when veterans choose to go before a judge,
    that is the longest amount of time that a veteran will
    experience. There are other choices, but that one, in
    particular, can take a really long time. And currently, VA is
    not meeting its timeliness goals for various appeals options,
    they are exceeding them.
        I think what they are doing is, we have been engaging with
    them on this high-risk issue for a number of years now, and
    most recently they have developed a better ability to predict
    their workloads through more sophisticated modeling. That is
    certainly true on the initial claims side. I think they are
    trying to kind of do a little bit more on the appeals side, to
    be able to better predict what is coming in. And when you can
    predict, you can plan, and you can get the resources that you
    need to get the work done.
        So they are moving along. They still are somewhat lacking
    in their, I think, capacity to really fix the problems. But we
    were close to moving up their rating in the high-risk issue
    last year, and then that budget issue came along and we had to
    kind of rethink that. But they have made progress in terms of
    just their ability to plan for workloads, so that when things
    change--and they will change--they are in a position to address
    them.
        Senator Banks. The key tool in the claims process, the VA
    rating schedule for disabilities, was created in the 1940s.
    Some elements of the schedule have never been updated. The VA
    has been trying to update it for years. Which conditions and
    body parts rating schedules are the most outdated, and what
    problems does that cause, Ms. Curda?
        Ms. Curda. Sure. I would say the issue is that they have
    not all been comprehensively updated. There have been small
    changes over the years, here and there, but they have not taken
    a comprehensive look at--there are 15 body systems. All the
    conditions are organized in different body systems. Of the 15,
    they have updated, comprehensively, 11 of them, and there are
    still four that remain, and they are in various states of
    regulatory development. The four that are remaining are mental
    disorders, respiratory illnesses, ear and auditory issues, and
    neurological conditions.
        The problem that creates, and I think you can see a little
    bit of this in The Washington Post article, where you might see
    inequities, or there might appear to be an inequity in how
    different conditions are compensated. I think, in particular,
    when this was studied, mental conditions have been--because if
    you think about in the 1940s, people had not even heard of
    PTSD. So that may be compensated differently than, say, someone
    with an amputation. So it is thinking through what that level
    of compensation should be.
        The other issue is earnings loss. That is the medical side
    I was talking about. The earnings part of it has never been
    comprehensively updated, so that is another component of this.
        Senator Banks. I want to move on. Colonel Gade, good to see
    you. I am glad the OIG investigates disability compensation
    fraud, but the examples in The Washington Post article are not
    subtle. They are glaring. A Vietnam veteran who pretended to be
    blind for 29 years while he continued to drive. A bodybuilder
    who pretended to walk with a cane and wore a diaper. A veteran
    who claimed paralyzing anxiety and an inability to work while
    he was running a bar in Costa Rica. A VA claims representative
    who claimed to be homebound and bilked the agency out of
    benefits for five years while he was working there.
        These fraud cases should not take years to crack, and it
    makes me wonder how widespread that problem really is. How
    prevalent do you think outright disability compensation fraud
    really is?
        Colonel Gade. Sir, I think outright disability fraud is
    actually quite rare, as Ms. Mason pointed out earlier. A bigger
    problem is the problem of lax oversight and easily exaggerated
    conditions and no follow-up.
        I went on Reddit yesterday and I typed in, ``How do I get a
    100 percent disability? I only have 10 percent now,'' which is
    false. So here is what Reddit said: ``Go to your C&P exam with
    a DBQ that you filled out yourself. Look up what you will
    qualify for, 100 percent, and check the boxes, and write the
    explanations that apply to you. Submit that to your examiner at
    the beginning of the appointment and have a copy in front of
    you. Throughout the exam, answer the questions based on the
    answers you gave on the DBQ.''
        So it is widespread that people know that the DBQ exists.
    They know that if they claim this severity, they get this
    disability. If they claim this severity, they get this. And if
    they claim this, then they get this. It is widespread
    knowledge. So that is a kind of quiet thing that The Washington
    Post article never even discussed.
        Senator Banks. Got it. Thank you. My time has expired.
        Chairman Moran. Let me see if anyone, before we conclude
    this hearing, does anybody have the sense that they wanted to
    say something that they did not get the chance to say, or
    correct anything that you said that you wish you had not have
    said?
        Ms. Mason. Chairman, I would like to jump in here real
    quick.
        Chairman Moran. Please.
        Ms. Mason. The VA OIG looks at pretty much everything, from
    soup to nuts, from fraud as well as the oversight, as we have
    discussed today. But one particular area that I think Senator
    Banks just touched on, and Colonel Gade touched on, are the
    DBQs. And let me be clear, the DBQs are a problem both publicly
    and internally. Because of the lack of controls, and we have
    specific reports to this as to issues, that VBA is not
    following up on within their internal contracts and their DBQs,
    they are the pot calling the kettle black. So there are issues
    with public-facing DBQs. There have been since they were
    engaged and brought forward. And those continue, both
    internally and externally.
        So our recommendation is that we look at and recommend that
    the Committee consider looking at all DBQs and setting some
    standards at your level. Thank you.
        Chairman Moran. Thank you. Anyone else? Mr. Gade?
        Colonel Gade. And, Senator, just briefly, and I am sorry
    that she departed earlier, Senator Duckworth and I were in the
    hospital together. She was wounded two months before I was. And
    so I wish that we had been able to have that conversation that
    she directed to me in a two-way direction, but unfortunately I
    had to sit here.
        What I believe about mental health reform is that the
    system should better address invisible wounds like PTSD, but
    without incentivizing long-term disability. PTSD is curable.
    PTSD is possible to recover from and lead a full and thriving
    life. But a veteran who is labeled 100 percent, permanent and
    total, before the efforts have been made to get better, is one
    whose life is made worse by that system. And that has been my
    argument for the last 20 years, and will be my argument until
    my dying day. And I am sorry that Senator Duckworth missed
    that.
        Chairman Moran. Anyone else? I did not expect anyone to
    take advantage of my suggestion. You cannot allow me to miss my
    vote.
        Mr. Villanueva. I will make this quick, Mr. Chairman. The
    most worrying thing about The Washington Post article, and as a
    person, like many people who are on this panel today, we
    remember the history. And the history goes back a ways. But
    when you look at the Civil War pension program that these folks
    came back to, after a while the articles in the news and the
    public opinion shifted away from that it is the government's
    fault that is making it too hard and they put a glaring light
    on the veterans and the doctors and the lawyers, and they
    scrapped the program. And as we all know, it went from that to
    the Spanish-American War pension program, which preceded the
    bonus marches of the 1930s. And we are less than a half mile
    away from where thousands of veterans camped out for days, and
    some of them lost their lives for their benefits.
        Now, as we move forward, and this discussion moves forward,
    we should always keep that in mind, so that it never, ever
    happens again. If there is a program that can be improved, that
    is here already, we should all work together to make those
    improvements.
        Chairman Moran. Thank you. It is a good place to end the
    hearing. Thank you.
        I want to again thank you. Each member of the Committee now
    has 5 legislative days to submit any written statements or
    questions for the record. Any Senator who would like to submit
    a question for the record to today's--I did not say that quite
    right. Let's do it over.
        Each member has 5 legislative days in which to submit
    statements or questions for the record. Any Senator who would
    like to submit a question for the record for today's witnesses,
    please do so in a timely manner. Likewise, I ask our witnesses
    to respond to any questions for the record following today's
    hearing in a timely manner as well.
        And with that this hearing is adjourned.
        [Whereupon, at 5:43 p.m., the hearing was adjourned.]

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