[House Prints 110-2]
[From the U.S. Government Publishing Office]



110th Congress 
 1st Session          HOUSE COMMITTEE PRINT NO. 2
_______________________________________________________________________

                                     

 
                                 REPORT

                                 to the

                        COMMITTEE ON THE BUDGET

                                from the

                     COMMITTEE ON VETERANS' AFFAIRS

                SUBMITTED PURSUANT TO SECTION 301 OF THE

                    CONGRESSIONAL BUDGET ACT OF 1974

                                 on the

                  BUDGET PROPOSED FOR FISCAL YEAR 2008



[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


   March 1, 2007.--Printed for the use of the Committee on Veterans' 
                Affairs of the House of Representatives

                              ______

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                     COMMITTEE ON VETERANS' AFFAIRS

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























                     DEMOCRAT LETTER OF TRANSMITTAL

                                ------                                

                          House of Representatives,
                            Committee on Veterans' Affairs,
                                     Washington, DC, March 1, 2007.
Hon. John Spratt,
Chairman, Committee on the Budget,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: Pursuant to section 301(d) of the 
Congressional Budget Act of 1974, clause 4(f) of rule X of the 
Rules of the House of Representatives, and Rule 7 of the Rules 
of the Committee on Veterans' Affairs, the Committee on 
Veterans' Affairs hereby submits its views and estimates, along 
with Additional Views and Estimates with regard to programs and 
matters within the jurisdiction of the Committee to be set 
forth in the concurrent resolution on the budget for fiscal 
year 2008. The Minority will be submitting Additional and 
Dissenting Views under separate cover.
    Caring for our veterans is an ongoing cost of war, and a 
continuing cost of our national defense. As a Congress, and a 
nation, we must fulfill our obligations to the men and women 
who have served. We hope that you will carefully consider these 
Committee views and estimates. We have a lot of work ahead of 
us if we are to keep our promises to veterans. Working 
together, we can make sure that our veterans are not forgotten, 
and that we meet our obligations to them as a nation.
            Sincerely,
                    Bob Filner, Chairman; Corrine Brown, Vic Snyder, 
                            Michael H. Michaud, Stephanie Herseth, 
                            Harry E. Mitchell, John J. Hall, Phil Hare, 
                            Michael F. Doyle, Shelley Berkley, John T. 
                            Salazar, Ciro Rodriguez, Joe Donnelly, 
                            Jerry McNerney, Zachary T. Space, Timothy 
                            J. Walz.













                     Committee on Veterans' Affairs

                     U.S. House of Representatives

                             110th Congress

                          Views and Estimates

                             March 1, 2007

                   SECTION 1--DISCRETIONARY ACCOUNTS

                     DEPARTMENT OF VETERANS AFFAIRS

    The Committee \1\ is recommending a total of $41.028 
billion for discretionary accounts for the Department of 
Veterans Affairs (VA). This recommendation is $4.562 billion, 
or 12.5 percent, above FY 2007 levels, and $1.611 billion above 
the Administration's FY 2008 request. This recommendation 
includes an increase in appropriated dollars for VA medical 
care of $3.254 billion over FY 2007, and $1.310 billion above 
the Administration's request. The Committee believes these 
additional resources are necessary if we are to provide 
adequate funding for veterans' health care.
---------------------------------------------------------------------------
    \1\ While the Views and Estimates reflect a consensus effort, the 
Committee wishes to note that not all Members of the Committee 
necessarily agree with every aspect of the report. Accordingly, the 
Committee reserves its flexibility to determine program needs and 
recognizes the potential for funding changes as the Committee and 
Congress work their will through the legislative process.
---------------------------------------------------------------------------

                            VA Medical Care

    We are recommending a total of $35.512 billion in 
appropriated dollars for the three accounts comprising VA 
medical care (Medical Services, Medical Administration, and 
Medical Facilities). This amount is $1.310 billion above the 
Administration's FY 2008 budget request of $34.202 billion, and 
is a 10.1 percent increase over the FY 2007 \2\ levels, 
compared to the Administration's increase of 6 percent over FY 
2007 levels. This recommended level is less than the $36.348 
billion (which represents a 12.7 percent increase over FY 2007 
levels) recommended by the Independent Budget, co-authored by 
AMVETS, Disabled American Veterans, Paralyzed Veterans of 
America, and the Veterans of Foreign Wars. The Committee is 
recommending a total for the Veterans Health Administration 
(VHA) (which includes Medical Care accounts and Medical and 
Prosthetic Research) of $35.992 billion, $3.320 billion over FY 
2007 levels and $1.379 billion above the Administration's FY 
2008 request.
---------------------------------------------------------------------------
    \2\ Amounts for FY 2007 are from P.L. 110-5, H.J. Res. 20, a joint 
resolution making further continuing appropriations for the fiscal year 
2007, and for other purposes. This measure was signed into law on 
February 15, 2007.
---------------------------------------------------------------------------
    This recommended increase would better enable the VA to 
meet high-priority needs in the coming fiscal year. These 
increases would provide additional dollars for increased 
patient workload, including estimated increases due to 
servicemembers returning from Iraq and Afghanistan, mental 
health, long-term care, homeless programs, prosthetics, and 
Traumatic Brain Injury (TBI) and Polytrauma Centers, which care 
for our most grievously wounded veterans. The Committee's 
medical care recommendation also includes additional funding 
for the VA to begin to address urgent non-recurring maintenance 
needs at VA facilities.

                            Medical Services

----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008         Recommendation
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation        vs. Request
----------------------------------------------------------------------------------------------------------------
25,512,000,000..................     27,167,671,000      28,979,000,000      28,407,975,000      +1,240,304,000
----------------------------------------------------------------------------------------------------------------

    The Medical Services appropriation provides for medical 
services of eligible veterans and beneficiaries in VA medical 
centers, outpatient clinic facilities, contract hospitals, 
State homes, and outpatient programs on a fee basis.
    The Medical Services account comprises the majority of 
funding for VA health care--nearly 80 percent of the total of 
the three accounts that make up ``VA medical care.'' The 
Committee is recommending a total increase in appropriated 
dollars, above the Administration's request, of $1.240 billion.


                           workload increases


    The Committee is concerned that the Administration may have 
once again underestimated the total number of unique patients 
it expects to see in FY 2008. Over the five-year period from FY 
2002 through FY 2007, the VA saw an average annual increase in 
unique patients of 4 percent, or approximately 203,000 
additional patients per year.
    The VA's FY 2008 budget request estimates a total of 
5,819,176 total unique patients, a 134,030 increase above FY 
2007 estimates of 5,685,146. This estimate is 2.4 percent above 
the FY 2007 level. Out of the 134,030 increase in patients, the 
VA estimates that 54,037 are attributable to an increase in 
Operation Enduring freedom and Operation Iraqi Freedom (OEF/
OIF) veterans.
    The Committee is recommending increased funding to care for 
an additional 25,000 OEF/OIF veterans. In the FY 2007 VA budget 
submission, the VA estimated that it would see 110,566 OEF/OIF 
veterans in FY 2006 and 109,191 in FY 2007. In the current 
submission, the VA now estimates 155,272 for FY 2006 and 
209,308 for FY 2007. The Committee believes it is prudent to 
provide additional resources to account for increased OEF/OIF 
demand in case the Administration's estimates prove as 
divergent in the coming year as these estimates have been in 
the past.
    The Committee has also requested additional funds to fully 
fund the level of the average annual increase the VA has 
experienced over the last five years (FY 2002-FY 2007). We note 
that we have estimated costs separately for our estimate of an 
additional 25,000 OEF/OIF veterans (which are a component of 
the overall increase of 70,000 additional patients). The 
committee has also included resources for an additional 30,000 
patients (for a total overall increase including OEF/OIF 
veterans of 100,000), recognizing the inherent volatility of 
these estimates and the cost of health care, for a total 
recommended increase for additional workload of $534 million.
    The Committee notes that a possible reason for the VA 
estimating a lower increase in workload may be attributable to 
the Administration's proposal to increase the pharmacy 
copayment from $8 to $15 for priority 7 and 8 veterans. The 
Administration's proposal to institute an annual enrollment fee 
would, if enacted, begin in FY 2009.
    The Committee recommends an additional $534 million to 
account for increased workload and to bring the VA's estimates 
up to the average increase over the past five years.
      Increase attributable to additional demand from 
OEF/OIF veterans--$71 million
      Increase attributable to overall health care 
demand--$463 million


                           priority programs


Mental Health
    VA Secretary R. James Nicholson testified before the 
Committee regarding the VA's FY 2008 budget request on February 
8, 2007, and stated:
          The President's request includes nearly $3 billion to 
        continue our effort to improve access to mental health 
        services across the country. These funds will help 
        ensure VA provides standardized and equitable access 
        throughout the Nation to a full continuum of care for 
        veterans with mental health disorders. The resources 
        will support both inpatient and outpatient psychiatric 
        treatment programs as well as psychiatric residential 
        rehabilitation treatment services. We estimate that 
        about 80 percent of the funding for mental health will 
        be for the treatment of seriously mentally ill 
        veterans, including those suffering from post-traumatic 
        stress disorder (PTSD).
    Colonel Charles W. Hoge, M.D., stated in testimony before 
the Subcommittee on Health on September 28, 2006 ``[t]here are 
now robust data from different sources that indicate that 
approximately 10-15% of Soldiers develop PTSD after deployment 
to Iraq and another 10% have significant symptoms of PTSD, 
depression, or anxiety and may benefit from care. Alcohol 
misuse and relationship problems add to these rates. Conditions 
often overlap.''
    An article in the Miami Herald, Combat Stress Takes its 
Toll, But VA's Response Falls Short, from February 11, 2007, 
calls into question VA's response to the mental health crisis 
it faces, finding that mental health care is ``wildly 
inconsistent from state to state'' and that the ``lack of 
adequate psychiatric care strikes hard in the western and rural 
states that have supplied a disproportionate share of the 
soldiers in the wars of Iraq and Afghanistan[.]''
    Not only is the VA facing a surge in mental health needs 
due to servicemembers returning from Iraq and Afghanistan, but 
soldiers from previous conflicts are seeking more mental health 
treatment.
    The Committee believes that the VA needs additional 
resources in this area, and believes that the VA should fully 
allocate resources dedicated to mental health. The Committee is 
recommending a $125 million increase to address increasing 
demand, as well as an additional $13 million for VA's Vet 
Centers. The VA currently operates 207 Vet Centers, community-
based counseling centers that provide readjustment counseling 
and outreach services to all veterans who served in any combat 
zone. Vet Center services are also available for family members 
for military related issues. The Committee's recommendation for 
Vet Centers would provide for $125 million for Vet Centers, and 
enable the hiring of 100 veterans to provide outreach services, 
as mandated by P.L. 109-461.
    VA's ability to treat veterans with substance abuse 
problems has continued to diminish. It has been reported that 
many veterans who suffer from mental illness also suffer from 
substance abuse. Also, early reports suggest that alcohol 
misuse will have a profound impact on the reintegration efforts 
of returning OEF/OIF veterans. The VA needs to be able to 
handle not only the increase, but the veterans of past wars who 
are on VA waiting lists to get into a substance abuse program.
    The Committee recommends an additional $148 million for 
mental health, to enhance capacity to meet the needs of new 
veterans and veterans from previous conflicts who bear the 
psychological wounds of war.
     Increase to address the increasing demand on VA's 
mental health services--$125 million
     Increase funding for Vet Centers--$13 million
     Increase VA's capacity to provide substance abuse 
treatment--$10 million

Long-Term Care

    The Administration is in violation of its statutory 
responsibility to maintain FY 1998 levels for the Average Daily 
Census (ADC) for VA nursing home care, as mandated by P.L. 106-
117, the Veterans Millennium Health Care and Benefits Act. The 
VA's FY 2008 budget submission requests resources to support an 
estimated 11,000 ADC, an amount 2,391 below the 1998 figure.
    The non-institutional programs are indeed a necessary part 
of VA's care continuum, but we should hold to the 1998 
recommendations of the Federal Advisory Committee on the Future 
of VA Long-Term Care that VA should maintain its bed capacity, 
increase capacity in the state homes and double or triple 
capacity in its non-institutional long-term care settings. 
While telemedicine and home care are important components of 
long-term care, telemedicine cannot help a veteran to get out 
of bed or take a shower. Home care may not be suitable for many 
severely disabled veterans who need 24-hour care for complex 
medical and psychiatric conditions.
    The Committee estimates that it would cost $567 million to 
bring the VA up to compliance with P.L. 106-117. We recommend 
increasing the VA's capacity to provide additional ADC in 
nursing home care over the next three years. We believe that 
this will enable veterans who need nursing home care to receive 
it and enable this Committee to better analyze the VA's 
argument that these nursing home beds are unnecessary. We 
therefore recommend an increase of $189 million to enable the 
VA to add an additional 800 ADC to its budget request of 11,000 
and to begin to meet its statutory obligations.
    While increasing the funding for VA to meet the statutory 
requirements of VA operated nursing home care, we also 
recommend that VA develop a long-term plan to meet the extended 
care needs of its patient population. VA projects that in FY 
2008, the demand for VA-sponsored institutional care will be 
nearly 87,000 ADC. Neither VA, nor Congress, can ignore the 
urgent and increasing needs consequent to the exponential 
growth in the population of veterans who are frail and aging.
     Increase for VA long-term care--$189 million

Prosthetics

    We recommend providing an additional five percent increase 
above the Administration's request for prosthetics. We remain 
very concerned that we are not providing the necessary 
resources to fund this area, especially in light of the 
increased needs of our servicemembers returning from Iraq and 
Afghanistan.
     Increase for prosthetics--$62 million

Homeless Veterans

    VA is the largest single provider of direct service to 
homeless veterans, reaching 100,000 or 25 percent of the 
homeless veterans a year through their various programs. Like 
their non-veteran counterparts, veterans are at high risk of 
homelessness due to extremely low or no livable income, extreme 
shortage of affordable housing, and lack of access to health 
care. But these factors combined with their military service 
put them at even greater risk of homelessness.
    Last Congress, P.L. 109-461, the Veterans Benefits, Health 
Care, and Information Technology Act of 2006, increased the 
authorization level for the VA's homeless grant and per diem 
program to $130 million. The VA estimates that it will spend 
$107 million in FY 2008. The Committee recommends that an 
additional $23 million be made available to fund this program.
     Increase in VA's grant and per diem program--$23 
million

TBI/Polytrauma

    VHA Directive 2005-024, Polytrauma Rehabilitation Centers, 
dated June 8, 2005, states that:
          While serving in Operations Iraqi and Enduring 
        Freedom, military service members are sustaining 
        multiple severe injuries as a result of explosions and 
        blasts. Improvised explosive devices, blasts, landmines 
        and fragments account for 65 percent of combat 
        injuries. Congress recognized this newly emerging 
        pattern of military injuries with the passage of Public 
        Law 108-422, Section 302, and Public Law 108-447.
          Of these injured military personnel, 60-62 percent 
        have some degree of traumatic brain injury (TBI). 
        Operating under a national Memorandum of Agreement with 
        the Department of Defense (DOD), the four current 
        Department of Veterans Affairs (VA) TBI Lead 
        Rehabilitation Centers have provided rehabilitation 
        care to the majority of the severely combat injured 
        personnel requiring inpatient rehabilitation. 
        Consequently, they have developed the necessary 
        expertise to provide the coordinated interdisciplinary 
        care required. This experience has demonstrated that 
        treatment of brain injury sequelae needs to occur 
        before or in conjunction with rehabilitation of other 
        disabling conditions.
          Recognizing the specialized clinical care needs of 
        Polytrauma patients, VA has established four Polytrauma 
        Rehabilitation Centers (PRCs). The mission of the PRCs 
        is to provide comprehensive inpatient rehabilitation 
        services for individuals with complex cognitive, 
        physical and mental health sequelae of severe and 
        disabling trauma and provide support to their families. 
        Intensive clinical and social work case management 
        services are essential to coordinate the complex 
        components of care for polytrauma patients and their 
        families. Coordination of rehabilitation services must 
        occur seamlessly as the patient moves from acute 
        hospitalization through acute rehabilitation and 
        ultimately back to his or her home community.
    The Committee notes that TBI is considered by many to be 
the signature injury of this war. We must ensure that the VA 
has the resources it needs to begin tackling the issues 
surrounding TBI, as well as the resources it needs for VA 
Polytrauma centers to treat our most grievously wounded 
veterans.
     Increase funding for TBI/Polytrauma--$285 million

                         OTHER AREAS OF CONCERN

Priority 8 Veterans

    The Committee believes that all veterans should have access 
to VA health care. In January, 2003, the Administration banned 
the enrollment of new Priority 8 veterans. The VA currently 
estimates that lifting this ban would result in approximately 
1.6 million veterans seeking health care at a cost of $1.7 
billion. The Independent Budget estimates a total expenditure 
of $366 million, but the Independent Budget's calculation uses 
a utilization rate and subtracts out estimated collections. 
Last year, in the Democratic Views and Estimates, the estimate 
was $341 million, which included subtracting estimated 
collections. The Committee will explore ways to re-open access 
to all veterans.
    We note that the authority of the Administration to deny 
enrollment to an entire class of veterans was never meant to 
extend ad infinitum, but was provided to the VA as a management 
tool in order for it to address unexpected shortfalls that 
might arise during the course of the year. Finally, we note 
that these veterans are not necessarily ``high income'' 
veterans, as they are often described by some. These veterans, 
who may be combat-decorated, can make as little as $27,000 per 
year and be categorized as Priority 8 veterans and be shut out 
of the system.

Recruitment and Retention of Health Care Professionals

    Over the past few years, VA has received accolades for the 
quality of health care it provides as an institution. To 
maintain that quality, it is essential that VA develop and 
execute an effective recruitment and retention program for 
highly qualified medical personnel.
    Through the VA's affiliations with 107 medical schools and 
over 1,200 educational institutions, VA trains over 76,000 
medical and associated health students, residents and fellows.
    The Committee believes that it is essential that the VA 
address recruitment and retention issues in order to ensure 
that veterans receive quality health care not only today, but 
in the coming years.

Efficiencies

    The VA, in its FY 2008 budget submission, claims it will 
achieve ``clinical and pharmacy cost avoidance.'' The VA does 
not provide any estimates as to the totals of these ``cost 
avoidances.''
    The VA's FY 2007 budget submission, estimated a base level 
of ``efficiencies'' of $884 million for FY 2006, and estimated 
additional ``efficiencies'' of $197 million ($107 million in 
clinical efficiencies and $90 million in pharmaceutical 
efficiencies) for a total level of ``efficiencies'' of $1.1 
billion. The GAO last year found that the VA was unable to 
document previous claims of ``efficiencies.'' The VA's clinical 
and pharmacy ``efficiencies'' language from the FY 2007 budget 
submission is remarkably similar to the language on ``cost 
avoidance'' in the FY 2008 budget submission.
    The Committee is concerned that the VA is still relying on 
``efficiencies'' without providing cost estimates for the level 
of ``efficiencies'' it is relying upon, nor justifications 
demonstrating that it is achieving ``efficiencies'' it has 
claimed to achieve.

                         Medical Administration


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
3,177,000,000...................      3,442,000,000       3,378,067,000       3,442,000,000                   0
----------------------------------------------------------------------------------------------------------------

    The Medical Administration appropriation provides funds for 
the expenses of management and administration of the VA health 
care system. Included under this heading are provisions for 
costs associated with operation of VA medical centers, other 
facilities, and VHA headquarters, plus the costs of VISN 
offices and facility director offices, chief of staff 
operations, quality of care oversight, all information 
technology hardware and software, legal services, billing and 
coding activities, and procurement.
    The Committee is proposing the same level of funding for 
Medical Administration as requested by the VA.

                           Medical Facilities


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
3,569,000,000...................      3,592,000,000       3,991,152,000       3,661,974,000         +69,974,000
----------------------------------------------------------------------------------------------------------------

    The Medical Facilities appropriation provides funds for the 
operation and maintenance of the VA health care system's vast 
capital infrastructure. Included under this heading are 
provisions for costs associated with utilities, engineering, 
capital planning, leases, laundry and food services, 
groundskeeping, garbage, housekeeping, facility repair, and 
property disposition and acquisition.
    The Committee is recommending an additional $70 million in 
order to provide for a 25 percent increase for non-recurring 
maintenance.
     Provide additional resources to equal a 25 percent 
increase for Non-Recurring Maintenance obligations over FY 2007 
level--$70 million
    The Committee notes that the VA's FY 2008 request transfers 
$400 million and 5,689 FTE for Food Services from this account 
to the Medical Services account. The Committee hopes that this 
transfer does not obfuscate the resource requirements of either 
the Medical Facilities or Medical Services accounts, and will 
be monitoring these accounts to ensure that adequate resources 
are in place to meet the needs of veterans.

                    Medical and Prosthetic Research


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008         Recommendation
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation        vs. Request
----------------------------------------------------------------------------------------------------------------
413,700,000.....................        411,000,000         480,000,000         480,000,000         +69,000,000
----------------------------------------------------------------------------------------------------------------

    This account includes medical, rehabilitative and health 
services research. Medical research is an important aspect of 
the Department's programs, providing complete medical and 
hospital services for veterans. The prosthetic research program 
is also essential in the development and testing of prosthetic, 
orthopedic and sensory aids for the purpose of improving the 
care and rehabilitation of eligible disabled veterans, 
including amputees, paraplegics and the blind. The health 
service research program provides unique opportunities to 
improve the effectiveness and efficiency of the health care 
delivery system. In addition, budgetary resources from a number 
of areas including appropriations from the medical care 
accounts; reimbursements from the Department of Defense; and 
grants from the National Institutes of Health, private 
proprietary sources, and voluntary agencies provide support for 
the Department's researchers. The Committee recommends $480 
million, an increase of $69 million above the Administration's 
FY 2008 request of $411 million. The Administration is seeking 
a $2.7 million cut below the FY 2007 level.
    The Committee recommends $2.7 million to restore the 
Administration's proposed cut in its FY 2008 request. The 
Committee also recommends $15.3 million to account for the 
effects of biomedical inflation on VA research. The Biomedical 
Research and Development Price Index, which was developed by 
the Department of Commerce's Bureau of Economic Analysis for 
use by the National Institutes for Health (NIH) estimates a 3.7 
percent increase to account for inflation. By restoring funds 
cut from the FY 2007 level and by more accurately projecting 
the impact of inflation on VA's research dollars we signal a 
strong commitment to VA's research program and achieve 
stability for ongoing projects.
    The Committee also recommends $3.5 million to restore 
proposed cuts to VA's Centers of Excellence. The Administration 
proposes $45.8 million in obligations for these Centers, down 
from a level of $49.3 million for FY 2007.
    The Committee also recommends an additional $47.5 million 
in order for VA research to advance its efforts in areas such 
as deployment health, genetic medicine, and chronic disease 
management.
    Deployment health includes prospective research to get 
baseline information on the health status of military personnel 
being deployed in combat zones. Research funding is needed to 
collect pre-deployment health information to assist researchers 
and clinicians in better assessing the health needs of 
returning personnel. Deployment health is also responsive to 
conflict-related conditions faced by returning military from 
Iraq and Afghanistan. Such health needs currently include TBI, 
PTSD, and injuries related to multiple-blast wounds.
    Research into genetic medicine recognizes the need to 
unlock the potential of applying genetics to improving 
individual patient care and systems of care for veterans. 
Funding is needed to understand the genetic composition of 
individual veterans and how unique genetic profiles need to 
change the way health care is provided. For example, genetic 
information could help prevent adverse drug reactions known to 
happen with individuals with unique genetic profiles. 
Additionally, veterans with known genetic predisposition to 
certain diseases could be monitored before diseases develop, 
placed on preventative therapy where it exists, be closely 
monitored and provided earlier intervention when appropriate. 
Not only does genetic medicine have the ability to improve 
individual patient care, it has the potential to improve 
systems of care for our veterans.
    Veterans of all ages and theaters of conflict suffer from 
long-term chronic diseases. These diseases include mental 
health disorders, lung diseases, diabetes, and heart 
conditions. Research is needed to both improve clinical tools 
to treat and cure these chronic diseases but also to research 
how systems of care can improve both individual patient care 
and care of the veterans' population.
    The Committee notes that the VA's expectation of receiving 
additional federal dollars outside of monies appropriated in 
this account may not be realized with the Administration's 
proposed flat FY 2008 budget request for the National 
Institutes of Health (NIH). This makes increased appropriated 
dollars in the Medical and Prosthetic Research account even 
more vital to this important program. There was a concerted 
effort to double the research budget of the NIH. The Committee 
would like to see a similar effort undertaken for VA research.
    The Committee recommendation of $480 million, an increase 
of $69 million above the Administration's request, is comprised 
of the following increases:
          Restore the proposed cuts from the FY 2007 
        level--$2.7 million
          Provide a 3.7 percent increase to account for 
        estimates of biomedical research inflation--$15.3 
        million
          Restore proposed cuts to VA's Centers of 
        Excellence--$3.5 million
          Provide additional resources for VA research 
        to address high priority projects--$47.5 million

                       General Operating Expenses


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008         Recommendation
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation        vs. Request
----------------------------------------------------------------------------------------------------------------
1,480,764,000...................      1,471,837,000       2,233,841,000       1,668,925,000            +197,088
----------------------------------------------------------------------------------------------------------------

    The General Operating Expenses appropriation provides for 
the administration of all VA non-medical benefits and support 
functions for the entire VA. The account is subdivided into two 
activities; the Veterans Benefits Administration (VBA) and 
General Administration.

                    VETERANS BENEFITS ADMINISTRATION

    VBA consists of five programs: Disability Compensation, 
Pensions and Burial; Education; Housing; Vocational 
Rehabilitation and Employment; and Insurance.

Compensation and pension service

    VA provides service-connected compensation to veterans with 
disabilities incurred or aggravated during military service, 
dependency and indemnity compensation (DIC) to surviving 
spouses, children and low-income dependent parents of veterans, 
pension benefits to elderly and disabled low-income wartime 
veterans, death pension to the surviving spouses and children 
of wartime veterans and benefits to certain children of 
veterans who were disabled by spina bifida or other congenital 
conditions related to their parent's military service.

Education service

    VA provides education assistance to servicemembers, 
veterans, and certain eligible survivors and dependents in 
exchange for military service. VA education assistance, 
popularly known as the Montgomery GI Bill, is used by the Armed 
Forces as a recruiting and retention tool, as well as a 
readjustment benefit for servicemembers seeking to achieve 
educational and vocational goals in the civilian workforce.

Housing (Loan Guaranty Service)

    VA assists veterans and servicemembers to purchase and 
retain homes in recognition of their service to the Nation. 
VA's partial guarantee on loans made by private lenders enables 
veterans and servicemembers to purchase homes with little or no 
down payment, thereby making home ownership affordable to many 
veterans.

Vocational Rehabilitation and Employment (VR&E)

    VR&E provides employment services and assistance to enable 
veterans with service-connected disabilities to obtain suitable 
employment and, to the maximum extent possible, achieve 
independence in daily living.

Insurance

    The Insurance Program provides servicemembers and their 
families with universally available life insurance, as well as 
traumatic injury protection insurance. It also provides for the 
conversion to a renewable term insurance policy after a 
servicemember's separation from service and provides life 
insurance to veterans who have lost the ability to purchase 
commercial insurance at standard (healthy) rates due to lost or 
impaired insurability resulting from military service.
    The Administration's request would provide resources for 
13,065 FTE (9,559 in Disability Compensation, Pensions and 
Burial; 894 in Education; 893 in Housing; 1,260 in Vocational 
Rehabilitation and Employment, and 459 in Insurance).

                         GENERAL ADMINISTRATION

    General Administration funds the Office of the Secretary, 
six Assistant Secretaries, the Board of Veterans' appeals, and 
the Office of the General Counsel.

                             RECOMMENDATION

    The Administration's request for the GOE account is 
comprised of $1,198,294,000 for VBA, an increase of $30.4 
million over the FY 2007 level, and $273,543,000 for General 
Administration, a decrease of $39.4 million from the FY 2007 
level.
    The Committee is recommending $1.628 billion for this 
account, an increase of $156 million over the Administration's 
FY 2008 request. This increase would restore the proposed cuts 
to the General Administration component of GOE, while adding an 
additional 1,370 FTE, in line with the recommendation of the 
Independent Budget for FTE, in order for the VA to begin to 
address its enormous claims backlog. The Committee notes that 
funding for the Board of Contract Appeals, effective January 7, 
2007, was transferred to the General Services Administration 
(GSA) as part of a government-wide plan to consolidate contract 
appeals within GSA. The Committee has restored proposed cuts in 
General Administration, but believes that any resources not 
fully needed by the VA for this activity should be made 
available to VBA in order to address the claims backlog.
    As of February 17, 2007, the total number of compensation 
and pension claims pending at the VA was 626,429, an increase 
of 5,107 from the previous week (Source: VA Monday Morning 
Workload Report, February 17, 2007). The number of pending 
claims last year at this same time was 573,597 (Source: VA 
Monday Morning Workload Report, February 18, 2006). The 
Administration's request provides for 8,320 ``direct labor 
FTE'' and an ``output per FTE'' of 101. The VA also estimates 
that it will receive the same number of claims in FY 2008 as it 
projects it will receive in FY 2007. Based on the VA's 
estimates, an additional 1,000 FTE should decrease the claims 
backlog in FY 2008 by 100,000 claims. The Committee recommends 
that an adequate number of FTE be added to the VBA Education 
Services Program to ensure that timely and accurate service 
claims processing is provided at the educational services 
Regional Processing Centers.
     Provide for an additional 1,370 FTE to begin to 
address claims backlog--$153 million
     Restore proposed cuts in General Administration 
from FY 2007 level--$44 million

                     Information Technology Systems


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
1,213,820,000...................      1,859,217,000       1,340,098,000       1,832,517,000         -26,700,000
----------------------------------------------------------------------------------------------------------------

    The Information Technology Systems account was first 
instituted in the FY 2006 VA appropriations bill (P.L. 109-
114). The VA is undergoing a significant change in its 
information technology (IT) activities, consolidating all IT 
staffing and budgetary resources under a Chief Information 
Officer. The VA's FY 2008 request reflects staff transfers for 
maintenance and operations but does not include costs for 
development employees, who are expected to be transferred at a 
later date. Of the request, $1.3 billion is non-pay, and $555 
million is pay. The VA's base request represents an increase of 
$90 million over the FY 2007 level--the additional monies are 
attributable to the transfer of $555 million and 5,529 FTE into 
the IT account.
    The Committee is recommending $26.7 million less than the 
Administration's request. We are recommending decreases in 
funding for the Financial and Logistics Integrated Technology 
Enterprise (FLITE) program, and Compensation and Pension 
Maintenance and Operations program.
    The VA requested $35 million for FLITE. The Committee 
believes that $20 million is sufficient for this program for FY 
2008. The FLITE program is the successor to the VA's Core FLS 
program. In an article last year, a spokesman for 
Pricewaterhouse Coopers, which was hired by the VA after the VA 
had spent $342 million on Core FLS, stated that ``business 
standardization is the first step. IT comes later.'' ``VA plans 
CoreFLS Successor,'' Government Computer News, March 2, 2006. 
The Committee believes that there is much the VA must 
accomplish first before it should be spending $35 million on 
this program.
    The Committee is also recommending a decrease of $11.7 
million for the VA's Compensation and Pension Maintenance and 
Operations activities. The VA is seeking an increase from $6 
million, the FY 2007 level; to $31.7 million, a total increase 
of $25.7 million. The Committee believes that this increase is 
sought without sufficient supporting documentation and is 
therefore recommending a FY 2008 level of $20 million, an 
increase of $14 million above FY 2007 levels and a decrease of 
$11.7 million below the FY 2008 requested level.
     Decrease in funding for FLITE and Maintenance and 
Operations funding--$26.7 million

                    National Cemetery Administration


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
160,733,000.....................        166,809,000         217,910,000         166,809,000                   0
----------------------------------------------------------------------------------------------------------------

    The National Cemetery Administration was established in 
accordance with the National Cemeteries Act of 1973. It has a 
fourfold mission: to provide for the interment in any national 
cemetery with available grave space the remains of eligible 
deceased servicepersons and discharged veterans, together with 
their spouses and certain dependents, and to permanently 
maintain their graves; to mark graves of eligible persons in 
national and private cemeteries; to administer the grant 
program for aid to States in establishing, expanding, or 
improving State veterans' cemeteries; and to administer the 
Presidential Memorial Certificate Program. This appropriation 
provides for the operation and maintenance of 125 national 
cemeteries and 33 other cemeterial installations in 39 states, 
the District of Columbia, and Puerto Rico.
    The Administration's requested level for FY 2008 of $167 
million represents a 3.8 percent increase over the FY 2007 
level of $161 million.
    The Committee concurs with the Administration's request.

                      Office of Inspector General


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
69,500,000......................         72,599,000          73,233,000          84,445,000         +11,846,000
----------------------------------------------------------------------------------------------------------------

    The Office of Inspector General was established by the 
Inspector General Act of 1978 and is responsible for the audit, 
investigation and inspection of all Department of Veterans 
Affairs programs and operations. The overall operational 
objective is to focus available resources on areas which would 
help improve services to veterans and their beneficiaries, 
assist managers of Department programs to operate economically 
in accomplishing program goals, and prevent and deter recurring 
and potential fraud, waste and inefficiencies.
    In testimony before the Subcommittee on Oversight and 
Investigations on February 15, 2007, the VA Inspector General 
George J. Opfer stated that from FY 2001-2006: OIG delivered a 
return on investment of $31 for every dollar invested in OIG 
operations. We produced $11.6 billion in monetary benefits from 
recommended better use of funds, savings, costs avoidances, 
recoveries, questioned costs, restitutions, and civil 
judgments. We issued 1,169 audit and inspection reports with 
6,601 recommendations to improve services to veterans and to 
improve the economy and efficiency of VA programs, operations, 
and facilities. Almost 90 percent of these recommendations have 
been implemented by VA to date.
    The Administration has requested $72.6 million for FY 2008, 
an increase of $3.1 million above FY 2007 levels. The VA's 
request assumes a total FTE level of 470, 13 fewer than FY 
2007. The Committee recommends $84.4 million for FY 2008, an 
increase of $11.8 million, or 21.5 percent over FY 2007 levels 
and $11.8 million, or 16.3 percent, above the VA's FY 2008 
request.
    The Committee believes that as the OIG is being expected to 
do more, and the economic benefit of investment in the OIG has 
been clearly demonstrated, that an increase in FTE is 
necessary. The Committee recommends restoring the proposed cut 
in FTE and adding an additional 87 FTE, to provide for a total 
FTE of 570.
     Increase to restore proposed FTE cut of 13--$1.5 
million
     Provide for an additional 87 FTE--$10.3 million

                      Construction, Major Projects


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
399,000,000.....................        727,400,000       1,602,000,000         727,400,000                   0
----------------------------------------------------------------------------------------------------------------

    The Construction, Major Projects, appropriation provides 
for constructing, altering, extending, and improving any VA 
facility, including planning, architectural and engineering 
services, assessments, and site acquisition, where the 
estimated cost of a project is $10 million, or where funds for 
a project were made available in a previous appropriation under 
Construction, Major Projects.
    For FY 2008, the Administration is requesting $727.4 
million, an increase of $328.4 million, or 82.3 percent, over 
FY 2007 levels. This recommendation includes $560 million for 
VHA-related construction and $167.4 million for National 
Cemetery Administration (NCA).
    The NCA portion of the request seeks funds for Phase 1 
Development for cemeteries in the Columbia/Greenville-area; 
Sarasota-area; Jacksonville-area; Southeastern Pennsylvania-
area; Birmingham-area; and Bakersfield-area. The request also 
seeks funding for Gravesite Development for the Ft. Sam Houston 
National Cemetery and the Advance Planning Fund.
    The VHA-related construction request, totaling $560 
million, seeks funding for the following projects:
Pittsburgh, PA--Consolidation of Campuses
     Total Estimated Cost--$248 million; Funded through 
FY 2006--$102.5 million; FY 2008 Request--$40 million
Denver, CO--New Medical Center Facility
     Total Estimated Cost--$646 million; Funded through 
FY 2006--$55 million; FY 2008 Request--$61.3 million
Orlando, FL--New Medical Facility, Land Acquisition
     Total Estimated Cost--$553.9 million; Funded 
through FY 2006--$25 million; FY 2008 Request--$35 million
Las Vegas, NV--New Medical Center Facility
     Total Estimated Cost--$600.4 million; Funded 
through FY 2006--$259 million; FY 2008 Request--$341.4 million
Syracuse, NY--Spinal Cord Injury (SCI) Center
     Total Estimated Cost--$77.7 million; Funded 
through FY 2006--$53.9 million; FY 2008 Request--$23.8 million
Lee County FL--Outpatient Clinic
     Total Estimated Cost--$109.4 million; Funded 
through FY 2006--$10.5 million; FY 2008 Request--$9.9 million
    The Additional $48.6 million is for various components of 
the Major Construction account, such as the Advanced Planning 
Fund, Claims Analysis, Asbestos, Hazardous Waste Abatement, and 
other activities.

                      Construction, Minor Projects


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
198,937,000.....................        233,396,000         541,000,000         248,396,000         +15,000,000
----------------------------------------------------------------------------------------------------------------

    The Construction, Minor Projects, appropriation provides 
for constructing, altering, extending, and improving any VA 
facilities, including planning, assessment of needs, 
architectural and engineering services, site acquisition and 
disposition, where the estimated cost of a project is less than 
$10 million, with a minor improvement component costing 
$500,000 or more.
    The Administration has requested $233.4 million, an 
increase of $34.5 million, or 17.3 percent, over FY 2007 
levels.
    The Committee notes that the VA's 5-Year Capital Plan 2007-
2012, submitted as part of the Administration's FY 2008 budget 
request, lists over 1,200 ``FY 2008-2012 Potential Department-
wide Minor Construction Projects.'' The Committee hopes that 
the VA is prioritizing these projects and is seeking sufficient 
funding to meet these needs and other needs that arise and can 
be best addressed through the Minor Construction account.
    The Committee is recommending an additional $15 million 
above the VA's FY 2008 request to provide funding to upgrade 
and modernize research facilities. The Subcommittee on Health, 
in a hearing on the VHA's FY 2008 budget request held on 
February 14, 2007, received testimony from the Friends of VA 
Medical Care and Health Research (FOVA). FOVA recommended ``an 
annual appropriation of $45 million in the minor construction 
budget dedicated to renovating existing research 
facilities[.]'' The Committee notes that the FY 2007 VA 
appropriations bill as passed by the House of Representatives 
included $12 million in the minor construction account ``to be 
used solely for a program of upgrade and modernization of 
research facilities to ensure they maintain or attain state-of-
the-art status.'' H.Rept. 109-464, to accompany H.R. 5385, the 
Military Quality of Life and Veterans Affairs and Related 
Agencies Appropriations Bill, at 64. The Committee on 
Appropriations directed the VA to conduct a comprehensive 
review of its research facilities and to report to Congress by 
March 1, 2007. The VA has indicated that this review may take 
three years to complete.
     Increase to upgrade and modernize research 
facilities--$15 million

       Grants for Construction of State Extended Care Facilities


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
85,000,000......................         85,000,000         150,000,000         120,000,000         +35,000,000
----------------------------------------------------------------------------------------------------------------

    This program provides grants to assist States to construct 
State home facilities, for furnishing domiciliary or nursing 
home care to veterans, and to expand, remodel or alter existing 
buildings for furnishing domiciliary, nursing home or hospital 
care to veterans in State homes. A grant may not exceed 65 
percent of the total cost of the project.
    State homes play an important role in VA's long-term care 
strategy by filling the gap of available beds for elderly and 
sick veterans who need them. In FY 2006, there were 80 priority 
group 1 projects for a total of $420 million. Priority group 1 
projects are those projects that already have the State funding 
to start construction. In FY 2007, VA's priority group 1 
projects totaled $491 million with 22 of the top 23 needing 
life safety corrections.
     Increase for Construction of State Extended Care 
Facilities--$35 million

          Grants for Construction of State Veterans Cemeteries


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008       Recommendation vs.
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation          Request
----------------------------------------------------------------------------------------------------------------
32,000,000......................         32,000,000          37,000,000          32,000,000                   0
----------------------------------------------------------------------------------------------------------------

    This program provides grants to states for 100 percent of 
the cost for the establishment, expansion or improvement of 
state cemeteries. The states are responsible for on-going 
maintenance. State cemeteries provide a last resting place for 
veterans who live in areas not reasonably served by a national 
cemetery.

                          DEPARTMENT OF LABOR


                    Veterans Employment and Training


  DEPARTMENT OF LABOR--VETERANS EMPLOYMENT AND TRAINING SERVICE (VETS)

    The Assistant Secretary for VETS serves as the principal 
advisor to the Secretary of Labor on all policies and 
procedures affecting veterans' employment matters. VETS 
furnishes employment and training services to servicemembers 
and veterans through a variety of programs, including providing 
grants to States, public entities and non-profit organizations, 
including faith-based organizations, to assist veterans seeking 
employment. VETS also investigates complaints filed under 
veterans' preference and re-employment laws. Specifically, VETS 
administers the following programs: DVOP/LVER state grant 
program; Transition Assistance Program; Veterans' Preference 
and Uniformed Services Employment and Reemployment Rights Act 
(USERRA); Homeless Veterans' Reintegration Program (HVRP); 
Veterans Workforce Investment Program (VWIP); Federal 
Contractor Program; and the National Veterans' Training 
Institute (NVTI). The Administration requested a total of 
$228.1 million in FY 2008 to support the staffing and grant-
making ability of VETS. This is a $5.1 million, or 2.3 percent, 
increase over FY 2007. For FY 2008, the Committee recommends an 
increase of $5 million for VETS, for a total of $233.1 million. 
This recommended level would provide an additional $3 million 
for HVRP, bringing that program up to $26.6 million; $1 million 
for NVTI; and $1 million for additional FTE, including one 
additional FTE in each of the six regional offices to address 
complaints and investigations arising under USERRA.

                             OTHER AGENCIES


                  American Battle Monuments Commission


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008         Recommendation
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation        vs. Request
----------------------------------------------------------------------------------------------------------------
41,988,000......................         53,300,000                 N/A          53,300,000                  0
----------------------------------------------------------------------------------------------------------------
Includes appropriation for salaries and expenses, and foreign currency fluctuations.

    The American Battle Monuments Commission (ABMC) is 
responsible for the administration, operation and maintenance 
of cemetery and war memorials to commemorate the achievements 
and sacrifices of the American Armed Forces where they have 
served since April 6, 1917. In performing these functions, the 
Commission maintains 24 permanent American military cemetery 
memorials and 31 monuments, memorials, markers and offices in 
15 foreign countries, the Commonwealth of the Northern Mariana 
Islands, and the British dependency of Gibraltar. In addition, 
six memorials are located in the United States: the East Coast 
Memorial in New York; the West Coast Memorial, the Presidio in 
San Francisco; the Honolulu Memorial in the National Memorial 
Cemetery of the Pacific in Honolulu, Hawaii; and, the American 
Expeditionary Forces Memorial and the World War II and Korean 
War Veterans Memorials in Washington, D.C.
    The ABMC is seeking a total of $53.3 million for FY 2008, 
consisting of $42.1 million for salaries and expenses, and 
$11.2 million for costs associated with foreign currency 
fluctuations.

               U.S. Court of Appeals for Veterans Claims


----------------------------------------------------------------------------------------------------------------
                                                          Independent           FY 2008         Recommendation
        FY 2007  Enacted           FY 2008  Request         Budget          Recommendation        vs. Request
----------------------------------------------------------------------------------------------------------------
20,100,000......................         21,217,000                 N/A          21,217,000                   0
----------------------------------------------------------------------------------------------------------------

    The Veterans' Judicial Review Act, P.L. 100-687, 
established the U.S. Court of Appeals for Veterans Claims. The 
Court has exclusive jurisdiction to review decisions of the 
Board of Veterans' Appeals. The court, one of four Article I 
courts in the federal judicial system, may affirm, vacate, 
reverse, or remand decisions of the Board of Veterans' Appeals. 
Out of the total denials from the Board in FY 2006 of 18,107, 
the Court received 3,729 filings, or 21 percent of the number 
of total denials from the Board.
    The Court's request for FY 2008 includes $1,120,000 for the 
Pro Bono Representation Program. This program is administered 
by the Legal Services Corporation. The Court includes the 
Program's FY 2008 request as an appendix to its submission, and 
applauds the ``Program's high success in providing, along with 
others, counsel to reduce the percentage of unrepresented 
appellants before the Court. Since 1997, the percentage 
unrepresented appellants at the decision point of their appeals 
has dropped from 48-percent in FY 1997 to 24-percent or less in 
FY 2006.''

                     SECTION 2--MANDATORY ACCOUNTS


 FULL EQUITY FOR WORLD WAR II FILIPINO VETERANS WHO SERVED IN THE U.S. 
                                  ARMY

    Many World War II Filipino veterans, who served and fought 
alongside American servicemembers during World War II, do not 
receive veterans' benefits. Shortly after the war, Congress 
passed the Rescission Acts which stripped away many veterans' 
benefits for Filipino service members who served in the U.S. 
Army. For the past 60 years, Congress has taken a piece-meal 
approach to restoring these benefits.
    We recommend an additional $900 million be included to 
complete the last step of the process of restoring these 
veterans' benefits.
     Increase for Filipino World War II veterans who 
served in the U.S. Army--$900 million

                 BELATED THANK YOU TO MERCHANT MARINERS

    World War II Merchant Mariners suffered the highest 
casualty rate of any of the branches of service while they 
delivered troops, tanks, food, airplanes, fuel and other needed 
supplies to every theater of the war. Despite their efforts 
during the war, Merchant Mariners were not covered by the 
original G.I. Bill of Rights. No legislation to benefit 
merchant seamen was passed by Congress until 1988 when the 
Seaman Acts of 1988 finally granted them a ``watered down'' 
G.I. Bill of Rights. To make up for lost benefits and 
opportunities, we recommend an additional $400 million be 
included in the budget resolution to permit Merchant Mariners, 
and their surviving spouses, to receive a monthly benefit of 
$1,000.
     Increase for Merchant Mariners--$400 million

                         OTHER AREAS OF CONCERN

    There are several mandatory veterans' programs where there 
is room for improvement. These are programs that provide 
monetary assistance to disabled veterans and their families.

Compensation and pension benefits

            Dependency and Indemnity Compensation (DIC) for survivors 
                    with dependent children under 18
    DIC is a monthly benefit paid to eligible survivors of a 
military service member who died while on active duty, a 
veteran whose death resulted from a service-related injury or 
disease, or a veteran whose death resulted from a non service-
related injury or disease, and who was receiving, or was 
entitled to receive, VA Compensation for service-connected 
disability that was rated as totally disabling for at least 10 
years immediately before death, or since the veteran's release 
from active duty and for at least five years immediately 
preceding death, or for at least one year before death if the 
veteran was a former prisoner of war who died after September 
30, 1999.
    In May of 2001, the Program Evaluation of Benefits for 
Survivors of Veterans with Service-connected Disabilities 
recommended that surviving spouses with dependent children 
receive an additional amount per month for the first five years 
after the veterans' death. Public Law 108-422 provided an 
increase, but only for the first two years of eligibility.
            Pension and death pension benefits for veterans and 
                    surviving spouses and children
    Veterans who have honorably served the Nation during a 
period of war and who have reached age 65 or who are under age 
65 and are totally and permanently disabled as the result of 
nonservice-connected disabilities are eligible to receive a 
pension benefit if they meet certain income criteria. Surviving 
spouses and children of such wartime veterans, including adult 
disabled children are eligible for a death pension. According 
to a 2004 evaluation of VA's pension program, the pension 
program is not meeting Congressional intent because it is not 
allowing veterans and their survivors to live in dignity.

Insurance

            Base premiums for Service-Disabled Veterans Life Insurance 
                    (SDVI) on current actuarial tables
    The SDVI program provides life insurance to veterans with 
service-connected disabilities who apply within two years of 
being service-connected and who would be insurable but for 
their service-connected disabilities. At the time the SDVI 
program began, premium rates were based on the then current 
(1941) actuarial tables used by commercial life insurance 
companies. Although commercial life insurance tables have been 
updated several times since 1941 (most recently in 2001), 
service-connected disabled veterans, including those injured in 
Afghanistan and Iraq are subjected to premiums approximately 
three times higher than the original program intended because 
the actuarial tables are more than 60 years out of date.
    In May of 2001, the Program Evaluation of Benefits for 
Survivors of Veterans with Service-connected Disabilities 
recommended that veterans' premiums should be based on current 
mortality rates.
            SDVI maximum insurance
    In May of 2001, the Program Evaluation of Benefits for 
Survivors of Veterans with Service-connected Disabilities 
recommended that SDVI coverage limits should be increased. The 
basic amount of SDVI available has not been increased from 
$10,000 since 1951.
            Veterans Mortgage Life Insurance (VMLI)
    VMLI is a type of mortgage life insurance available only to 
those veterans disabled enough by a service-connected 
disability to qualify for a specially adapted housing grant. 
Today, VMLI covers only about 55 percent of the mortgages of 
these veterans. The mortgage coverage has been the same since 
1992.

Readjustment benefits

            Total Force GI Bill
    The Montgomery GI Bill (MGIB), implemented over 20 years 
ago, was a landmark piece of legislation that provided 
education and training benefits to many veterans. The time has 
come to update, modernize, and provide greater flexibility 
within the VA's educational assistance programs. For GI Bill 
education benefits to remain a relevant recruitment, retention, 
as well as readjustment benefit, we must ensure that VA's 
education and training programs reflect the manner in which 
individuals earn and learn in the 21st Century.
    Congress, other than providing benefit increases, has not 
significantly modified administrative or process provisions of 
the GI Bill since 1985. Due to advances in technology, 
recognition of the lifetime learning concept, dynamic workforce 
changes, and ever-increasing demands on military recruiting 
efforts, Congress should review the current veterans' education 
system and make necessary changes to provide servicemembers, 
veterans and their families relevant education and training 
benefits that meet their educational and vocational goals for 
success.
    The Committee plans, on a bipartisan basis, to explore a 
number of options to improve and modernize the GI Bill. The 
VA's Advisory Committee on Education and the Partnership for 
Veterans Education--a group made up of traditional veterans and 
military service organizations, as well as higher education 
advocates all have endorsed a proposal termed the ``Total Force 
GI Bill.'' The proposal has three features: one, a clearer 
alignment of education benefit rates according to service 
rendered; two, establishment of a readjustment element to 
reservists' MGIB benefits earned during activation for a 
contingency operation (presently, activated reservists eligible 
for the new 'Chapter 1607' MGIB can only retain unused 
entitlement by remaining in the Selected Reserve--there is no 
portability of benefits after completion of a Selected-Reserve 
service contract; three, to achieve the first and second 
objectives and to ensure future correlation of active duty, 
veterans, and National Guard and Reserve benefits in an 
equitable and proportional manner, Chapters 1606 and 1607 in 
Title 10 and Chapter 30 in Title 38 need to be reorganized 
together under Title 38.
            State Approving Agencies/Montgomery GI Bill
    State Approving Agencies (SAA) have partnered with the VA 
in the administration of veterans educational and training 
programs for nearly 60 years. Through the program approval and 
supervision process, they ensure that money spent on the 
Montgomery GI Bill is money well spent. Moreover, SAA provide 
critical assistance in reducing the opportunities for fraud, 
waste and abuse throughout the system. For FY 2006 and 2007 the 
VA's Education Service was allocated $19 million from the 
Readjustment Benefits Account to enter into contracts with SAA 
for purposes of approving courses of education under the 
Montgomery GI Bill and other related activities. Per section 
301 of P.L. 107-330 at the end of fiscal year 2007, the SAA 
funding will decrease to $13 million. The Committee believes 
that Congress must find a way to restore this proposed cut to 
this activity.

                            SECTION 3--CHART


                                                         Department of Veterans Affairs--FY 2008--Discretionary Accounts--March 1, 2007
                                                                                         (in thousands)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                FY 2008                                 FY 2008                                               FY 2008  Committee
                       Account                              FY 2007           President's      FY 2008  Request       Independent     FY 2008  Committee  FY 2008  Committee     vs.  FY 2008
                                                                                Request          vs.  FY 2007           Budget           Recommendation       vs. FY 2007           Request
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Medical Services....................................         25,512,000          27,167,671           1,655,671          28,979,220          28,407,975           2,895,975           1,240,304
Medical Administration..............................          3,177,000           3,442,000             265,000           3,378,067           3,442,000             265,000                   0
Medical Facilities..................................          3,569,000           3,592,000              23,000           3,991,152           3,661,794              92,794              69,794
                                                     -------------------------------------------------------------------------------------------------------------------------------------------
    Total, Medical Care.............................         32,258,000          34,201,671           1,943,671          36,348,439          35,511,769           3,253,769           1,310,098
Medical and Prosthetic Research.....................            413,700             411,000              -2,700             480,000             480,000              66,300              69,000
================================================================================================================================================================================================
    Total, Veterans Health Administration...........         32,671,700          34,612,671           1,940,971          36,828,439          35,991,769           3,320,069           1,379,098
General Operating Expenses..........................          1,480,764           1,471,837              -8,927           2,233,841           1,668,925             188,161             197,088
Information Technology Systems......................          1,213,820           1,859,217             645,397           1,340,098           1,832,517             618,697             -26,700
National Cemetery Administration....................            160,733             166,809               6,076             218,335             166,809               6,076                   0
Office of Inspector General.........................             69,500              72,599               3,099              73,233              84,445              14,945              11,846
Construction, Major Projects........................            399,000             727,400             328,400           1,602,000             727,400             328,400                   0
Construction, Minor Projects........................            198,937             233,396              34,459             541,000             248,396              49,459              15,000
Grants for Construction of State Extended Care                   85,000              85,000                   0             150,000             120,000              35,000              35,000
 Facilities.........................................
Grants for Construction of State Veterans Cemeteries             32,000              32,000                   0              37,000              32,000                   0                   0
================================================================================================================================================================================================
    Total Departmental Administration...............          3,639,754           4,648,258           1,008,504           6,195,507           4,880,492           1,240,738             232,234
================================================================================================================================================================================================
Other Discretionary.................................            154,548             155,572               1,024             158,629             155,572               1,024                   0
    Total Discretionary.............................         36,466,002          39,416,501           2,950,499          43,182,575          41,027,833           4,561,831           1,611,332
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


                    REPUBLICAN LETTER OF TRANSMITTAL

                                ------                                

                          House of Representatives,
                            Committee on Veterans' Affairs,
                                     Washington, DC, March 1, 2007.
Hon. John Spratt,
Chairman, Committee on the Budget
House of Representatives, Washington, DC.
    Dear Mr. Chairman: Pursuant to the Congressional Budget Act 
of 1974 and House Rule X, clause 4(f), I herewith submit to the 
Committee on the Budget the Views and Estimates of the 
Republican Members of the Committee on Veterans' Affairs 
regarding the Administration's FY 2008 budget request for 
veterans' programs.
    In recommending record discretionary funding for veterans' 
health care and benefits, the Republican Budget Views and 
Estimates reflects our enduring priorities: to care for 
veterans who have service-connected disabilities, those with 
special needs, and the indigent; to ensure a seamless 
transition from military service to the care of the Department 
of Veterans Affairs (VA); and to provide veterans every 
opportunity to live full, healthy lives.
    Reflecting the cost of war, Republican Members recommend 
funding that honors our returning servicemembers with truly 
seamless transition from the military to quality VA health care 
and benefits. Our recommendations further increase access to VA 
health care and preserve the high quality of care for which VA 
has justly become the envy of the medical community. Funding 
recommended by Republican Members will resource VA to slash the 
backlog in disability claims with a progressive blend of 
personnel increases, leveraged technology, and an energized 
network of intergovernmental collaboration.
    The Republican views and estimates take into consideration 
information provided to the Committee in February 2007 during 
hearings on the budget at which written and oral testimony was 
provided by the Secretary of Veterans Affairs, the national 
leadership of some veterans' service organizations (VSOs), and 
other authorities.
    These views and estimates consider insights gathered in the 
109th Congress, during which the Committee enhanced input from 
VSOs and military service organizations (MSOs) by holding 
hearings during development of the views and estimates and 
boosting the number of these groups which testified. In 
February 2006, 19 of these organizations testified on the 
budget, and in September 2006, 20 testified in a fiscal-year 
review. Many of these views retain their validity. Contending 
with the Majority's decision to restrict the hearing process 
and curtail the opportunity for veterans' groups to testify 
early in the budget cycle, the Republican views and estimates 
continue to implement insights of last year.
    In developing these views and estimates, we commend the 
President and the Secretary of Veterans Affairs for sending to 
the Congress a strong request. The Administration's FY 2008 
budget submission reflects the priorities of a nation at war 
and the commitment of Americans to care for their veterans. The 
President has proposed substantial increases in the budgets of 
agencies focused on fighting the war on terror, the Department 
of Defense and the Department of Homeland Security. Consistent 
with his focus, the Department of Veterans Affairs, with its 
mission of caring for those who have borne the battle, again 
this year received a substantial increase. Much of the rest of 
government received very modest, if any, augmentation.
    Medical services funding recommended within this Budget 
Views and Estimates strengthens our ability to respond directly 
to the needs of servicemembers returning from the global war on 
terror. Many of these warriors have suffered traumatic brain 
injury and other grievous and complex injuries requiring the 
most advanced treatments and rehabilitation. Veterans and the 
families at their side will see dramatic increases in medical 
care accounts, mental health care, and funding for polytrauma 
care. Republicans recommend increases in research, prosthetics, 
sensory aids, and blind rehabilitation. As we expand current 
access to quality health care and long-term care, our 
recommendations will dramatically improve VA's future ability 
to care for veterans with aggressive construction spending on 
the kind of medical facilities that veterans need, where they 
need them.
    Sports at all levels of skill provide the opportunity for 
service-disabled veterans to accelerate their rehabilitation 
and improve their overall lives. In 2005, VA joined with the 
U.S. Olympic Committee to provide increased opportunities for 
service-disabled veterans to participate in sports and we 
recommend funding to defray the program's modest expenses.
    The backlog of disability compensation and pension claims 
continues to climb. It is now well past 600,000, with another 
137,000 appeals awaiting decision. Just since the beginning of 
February 2007, nearly 10,000 claims have been added to the 
backlog. Each claim is a veteran waiting for the government to 
act, and possibly dying before that happens. We recommend 
funding 1,000 additional full-time employee equivalents over 
the Administration's request, 600 for compensation and pension 
adjudication, and 400 for education and veterans' 
rehabilitation and employment programs. We would also increase 
hiring for the Board of Veterans' Appeals above the 
Administration's request.
    Additional hiring is only part of the solution to improving 
quality, accuracy, and timeliness in claims processing. 
Republican Members recommend funds for mobile claims offices, 
training and performance support systems, and skills 
certification and improved processes. Innovations such as 
rules-based technology could help speed accurate decision 
making, as will closer partnerships with municipal, county and 
state veterans offices and veterans groups; our recommendations 
include funding for pilot projects in these areas.
    Our young men and women returning from military service are 
a national treasure. During the 109th Congress, the Committee 
determined the need to modernize the Montgomery GI Bill for 
both active duty and reserve component servicemembers. 
Consequently, we propose additional mandatory spending to 
improve these education and training benefits, which have 
proven since 1944 to be one of our nation's greatest 
investments.
    The nation lost some 688,000 veterans in 2006, with similar 
numbers projected for the near future, most from our ``Greatest 
Generation.'' More than 1,600 veterans pass from us each day, 
most of whom served during World War II and the Korean War. To 
assure our veterans a final resting place in a national shrine, 
the Republican Membership recommends additional funds for 
operations, maintenance and minor construction of National 
Cemeteries, and for an accelerated expansion of some existing 
cemeteries which are near or at capacity.
    The cause of America's veterans has long been a bipartisan 
cause calling forth the best efforts within the community of 
legislators. The Republican Membership looks forward to working 
with the Committee's Majority Members and the Budget Committee 
on this salutary basis as we develop a FY 2008 veterans' budget 
that continues to honor this nation's commitment to those who 
have borne the battle and to their families.
            Sincerely,
                    Steve Buyer, Ranking Republican Member; Cliff 
                            Stearns, Committee Member; Dan Burton, 
                            Committee Member; Jerry Moran, Committee 
                            Member; Richard H. Baker, Committee Member; 
                            Henry E. Brown, Jr., Committee Member; Jeff 
                            Miller, Ranking Republican Member, 
                            Subcommittee on Health; John Boozman, 
                            Ranking Republican Member, Subcommittee on 
                            Economic Opportunity; Ginny Brown-Waite, 
                            Ranking Republician Member, Subcommittee on 
                            Oversight & Investigations; Michael R. 
                            Turner, Committee Member; Brian P. Bilbray, 
                            Committee Member; Doug Lamborn, 
                            Subcommittee on Disability Assistance and 
                            Memorial Affairs; Gus M. Bilirakis, 
                            Committee Member.

               REPUBLICAN VIEWS AND ESTIMATES FOR FY 2008

                             March 1, 2007

                                OVERVIEW

    For veterans healthcare and program costs in FY 2008, the 
Republican Members of the Committee on Veterans' Affairs 
recommend $1.411 billion above the Administration's request for 
discretionary spending in FY 2008. In addition, we recommend 
$1.5 billion for a legislative initiative to modernize GI Bill 
education and training benefits for servicemembers of the 
Reserves and National Guard.

                    Veterans Benefits Administration

                           MANDATORY FUNDING

    The Veterans Benefits Administration (VBA) administers a 
broad range of non-medical benefits to veterans, their 
dependents, and survivors through 57 regional offices. These 
programs include disability compensation, non service-connected 
pension, education, vocational rehabilitation, burial, 
insurance, and home loan guaranty.
    The Republican Members support the Administration's FY 2008 
budget request of $45 billion in mandatory funding for 
veterans' programs, a 6.6 percent increase over the enacted 
level for FY 2007.

                         DISCRETIONARY FUNDING

    With the exception of the recommendations noted below, the 
Republican Members support the Administration's FY 2008 request 
of $1.2 billion in discretionary funding for the management of 
the benefits programs--disability compensation, pension, 
education, vocational rehabilitation and employment, housing, 
burial, and life insurance.
    Disability Compensation--The Administration requests $941 
million in budget authority to fund the discretionary portion 
of the Disability Compensation, Pension, and Burial programs, 
including administrative expenses of 9,559 Full Time Equivalent 
Employees (FTEE), an overall increase of 114 FTEE over FY 2007. 
This accounts for a transfer of 334 FTEE to VA Office of 
Information and Technology (OI&T), a loss of 9 FTEE in 
Management Direction and Support, and a gain of 457 FTEE for 
Compensation and Pension (claims adjudicators).
    For FY 2008, VBA projects the same number of claims it 
received in FY 2007: 800,000. The backlog of compensation and 
disability claims has grown since February 2006 by more than 
52,000 to a total of 626,429 on February 17, 2007. This backlog 
has grown by some 9,742 claims just since the beginning of 
February 2007.
    The Administration estimates the backlog of pending rating 
related compensation and pension claims will decrease to 
330,000 from the current 401,700 and the average days to 
complete such a claim from 177 to 145 by the end of FY 2008. 
The evidence from early 2007, however, does not support that 
estimate. We recommend 1,000 additional FTEE over the 
Administration's request, for a cost of $109,375,000. Of this 
1,000 FTEE, we recommend 600 FTEE for direct compensation for 
Compensation and Pension over the Administration's request of 
457 FTEE, at a cost of approximately $65,400,000. The remainder 
of this additional 1,000 FTEE would serve in Education and 
Vocational Rehabilitation.
    The Republican Members recognize that additional direct 
compensation FTEE will not improve quality, accuracy, and 
timeliness in claims processing without corresponding increases 
in training resources. Therefore, we recommend an additional 
$400,000 for Training and Performance Support Systems and an 
additional $400,000 for Skills Certification
    The Department has spent more than $600 million over the 
past decade in an attempt to automate the compensation and 
pension claims processing system. This complicated paper-driven 
process is more than 25 years old. With the growing demands on 
the system, VBA needs to reexamine its Business Process 
Reengineering (BPR) focus to implement changes necessary in the 
field. The Republican Members recommend $25 million for BPR to 
reengineer and streamline the claims process and implement 
major business process changes.
    Pilot Program for Rules Based Adjudication System--The 
Republican Members recommend $5 million for a pilot program to 
develop a rules-based adjudication system for compensation and 
pension programs. This could reduce the backlog by allowing a 
computer to accurately adjudicate simple claims, allowing human 
adjudicators to work on more complex cases at a faster rate.
    Intergovernmental Partnerships--The Republican Members also 
recommend $6 million for a pilot program to explore the 
feasibility of intergovernmental partnerships in the 
development of compensation and pension claims between VA and 
municipal, county and state veterans departments and service 
officers, as well as veterans' and military service 
organizations. We recommend the pilot occur in three states: 
New York, Missouri, and Wyoming, or other states with varied 
veteran demographics. This expanded pilot would build on 
findings from the 2002 intergovernmental pilot conducted 
between VA's Buffalo, NY, regional office and the New York 
State Division of Veterans Affairs.
    Education Service--VBA estimates a workload increase of 
over 16,000 education claims, but the Administration requests 
only 14 additional direct support FTEE. As of February 17, 
2007, the backlog of education claims was 76,000, and average 
processing times for original and supplemental claims were 40 
and 17 days respectively, with targets of 35 and 15 days. While 
this is an improvement over the previous year, it is 
insufficient to meet the needs of veterans.
    The loss of experienced staff from retirements, increased 
workloads, and the pending backlog of claims convince us that 
an additional 100 FTE are needed for the Education Service with 
a projected discretionary cost of $7.8 million.
    Vocational Rehabilitation and Employment--The 
Administration requests an additional 39 direct service FTEE 
for the Vocational Rehabilitation & Education program. We 
applaud the Department's efforts to realign functions and 
duties to allow counseling and employment staff to concentrate 
on increasing rehabilitation rates. However, we believe current 
average caseload, which now exceeds 130 per counselor 
nationally, should be about 100 per counselor to provide 
appropriate levels of service. Therefore, we recommend $28.5 
million to fund an additional 300 professional level FTEE.
    VA-USOC Military Paralympic Program--Competition at elite 
levels of athletic events requires significant dedication to 
training, especially for service-disabled athletes. Therefore, 
we believe it is appropriate for VA to defray expenses for 
service-disabled athletes participating at elite levels in the 
program. We estimate the cost at $1 million per year.
    The Department recently announced an expanded agreement 
with the U.S. Olympic Committee (USOC) to promote participation 
in athletics by service-connected disabled veterans. This 
includes competition at elite levels culminating in the USOC 
Paralympic Program. The Republican Members recommend an 
additional $2 million to offset administrative and other costs 
for this program.
    Mobile Claims Offices--The Republican Members are aware 
that access to Regional Offices can be difficult for many 
veterans. We recommend $2 million for a pilot program on Mobile 
Claims Offices. VBA staff members in mobile offices helping 
veterans with their claims could speed up the claims process by 
improving communication and access for veterans.

                       BOARD OF VETERANS' APPEALS

    The Administration requests $58.5 million to support 468 
FTEE for the Board of Veterans' Appeals (BVA), an increase of 
$2.5 million and 31 FTEE over FY 2007. The Republican Members 
recommend an additional $4,055,000 to this request to support 
an additional 32 FTEE for a total BVA staffing of 500 FTEE. The 
BVA provides independent reviews of VA regional office 
decisions and makes the final administrative decision on behalf 
of the Secretary of Veterans Affairs. While BVA has made 
improvements, it continues to experience difficulties meeting 
the production levels needed to reduce the backlog of over 
137,000 appeals. The average time to decide an appeal is now 
over 400 days. We believe that additional staff is necessary if 
BVA is to provide timely and accurate decisions to veterans and 
their families.

                    NATIONAL CEMETERY ADMINISTRATION

    National Shrine Commitment--The Administration requests 
$362.3 million in discretionary funding for the National 
Cemetery Administration (NCA). This includes $166.8 million for 
operations and maintenance of VA's national cemeteries and 
1,582 FTEE, an increase of $7 million and decrease of 7 FTEE 
over the FY 2007 Administration request. Additionally, the 
Administration requests $24.4 million in minor construction to 
address cemetery infrastructure improvements.
    Cemetery Operations and Maintenance--The Republican Members 
recommend an additional $9 million to the Administration's 
request of $166.8 million NCA operations and maintenance, and 
an additional $5 million for minor construction.
    Gravesite Expansion--Additionally, the Republican Members 
recommend an additional $60 million to accelerate VA's five-
year strategic plan to fund National Cemetery gravesite 
expansion. The nation lost some 688,000 veterans in 2006, with 
similar projections for the near future, most from our 
``Greatest Generation.'' The Republican Membership believes 
accelerated expansions are an appropriate response to assure 
veterans a final resting place in a national shrine. Expansions 
funded in FY 2008 would include National Cemeteries in 
Calverton, NY, Houston, TX, Dayton, OH, and Phoenix, AZ.
    Alternative for Headstones--The Republican Members 
recommend $100,000 for VA to offer a bronze V as an alternative 
to a headstone to mark the graves of veterans whose graves are 
marked by a non-VA marker.

                     Veterans Health Administration

    For FY 2008, the Administration requests $34.2 billion in 
appropriations for discretionary spending on veterans' medical 
care, an increase of $1.943 billion or 6 percent over the FY 
2007 appropriated level.
    Medical Services--The Administration requests $27.2 billion 
for medical services. We recommend an $850.2 million increase 
above the Administration's request as follows:
          Medical Patient Workload--We recommend a $100 million 
        increase to provide timely and accessible high-quality 
        health care to core constituency veterans--the service-
        connected disabled, injured and indigent;
          Operation Iraqi Freedom and Operation Enduring 
        Freedom (OIF/OEF)--We recommend a $100 million increase 
        to provide medical care to military personnel who 
        served in OIF/OEF;
          Prosthetic and Sensory Aids--We recommend a $65 
        million increase to cover the increased costs of 
        providing, repairing and replacing prosthetics and 
        sensory aids;
          Polytrauma System of Care--We recommend a $50 million 
        increase to enhance specialized treatment in VA's 
        polytrauma rehabilitation centers for servicemembers 
        and veterans with traumatic brain injuries;
          Mental Health--We recommend a $200 million increase 
        to continue implementation of mental health initiatives 
        begun in 2005 to address deficiencies and gaps in 
        services. While this amount is substantial, last 
        September, the Government Accountability Office (GAO) 
        reported that VA had not used all of the mental health 
        funds Congress allocated. We expect better performance 
        in VA's use of these resources to meet the emerging 
        demand for mental health services, especially post 
        traumatic stress disorder (PTSD). VA must plan for and 
        fund those programs that have been identified as 
        particularly relevant to the needs and requirements of 
        our servicemembers;
          Case Management--We recommend $10 million to hire 100 
        new social workers to provide case management at 
        military treatment facilities.
          Blind Rehabilitation Services--We recommend a $25 
        million increase to increase the number of Blind 
        Rehabilitation Outpatient Specialists at VA facilities 
        as required by Public Law 109-461 and enhance access 
        and quality of services for blinded veterans.
          Dental Care--We recommend a $100 million increase to 
        provide dental care for the increasing number of 
        returning veterans from OIF/OEF. Many OIF/OEF active 
        duty, Guard, and Reserve servicemembers are returning 
        with serious dental problems, and are not receiving 
        corrective dental care prior to separation from active 
        duty. VA is then obligated to treat these separated 
        servicemembers, often through costly contract care.
          Medical Care Collections Fund (MCCF)--We recommend a 
        $60 million increase in medical services as we remain 
        concerned that VA cannot meet its estimated collections 
        goal.
          Emergency Preparedness--We recommend a $60 million 
        increase to fulfill VA's fourth mission 
        responsibilities. We remain committed to achieve the 
        readiness necessary by supporting emergency 
        preparedness activities.
          Long-term care--We recommend an $80.2 million 
        increase to support increased demand for long-term care 
        services.
    Medical Administration--The Administration requests $3.4 
billion for medical administration, and we concur with this 
request.
    Medical Facilities--We recommend an $80 million increase 
above the Administration's request for necessary costs 
associated with operating and maintaining VA's health care 
system infrastructure.
    Medical and Prosthetic Research--The Administration 
requests $411 million in appropriations for medical and 
prosthetic research, a decrease of $2.7 million below the FY 
2007 appropriated level. We place a high premium on conducting 
research into injuries and illnesses related to military 
service that benefit the clinical treatment needs of veterans. 
While the Department intends to place additional reliance on 
outside federal grants to realize a net gain in research 
funding, we recommend a $51 million increase above the 
Administration's request. This increase includes an additional 
$20 million for research to promote the successful 
rehabilitation, psychological adjustment and reintegration of 
veterans who suffer with traumatic brain injuries.
    Legislative Proposals--The Administration includes 
proposals for three legislative initiatives. These proposals 
would: (1) allow VA to establish a tiered annual enrollment fee 
for priority groups 7 and 8 veterans based on family income; 
(2) increase pharmacy co-payments for priority groups 7 and 8 
veteran from $8 to $15 dollars; and (3) eliminate the practice 
of offsetting or reducing VA first-party co-payment debts with 
collection recoveries from third-party health plans. These 
legislative requests differ from those proposed in the past, in 
that they do not reduce the Administration's request for 
discretionary medical care appropriations. The additional 
revenue would be classified as mandatory receipts to the 
Treasury and would not be retained in VA for veterans' health 
care programs. The Republican Members reject these legislative 
proposals.
    VHA Major Construction Projects--The Administration 
requests $560 million for VHA major construction projects. We 
recommend a $231.12 million increase above the Administration's 
request. Of this amount, we recommend $164 million to continue 
projects that were partially funded and VA did not request 
additional funding for in FY 2008; $30.32 million for the 
advanced planning fund for advancing several of the FY 2008 
prioritized major construction projects; and $36.8 million to 
carry out section 804 of Public Law 109-461 for the design of a 
co-located joint-use medical facility in Charleston, South 
Carolina.
    Grants for Construction of State Extended Care Facilities--
The Administration requests $85 million in appropriations for 
grants for the construction of state extended care facilities, 
the same amount as the FY 2007 appropriated level. The 
partnership between the federal government and States is a 
long-standing and honored tradition of cost sharing. We 
recommend a $35 million increase above the Administration's 
request.

                  OFFICE OF INFORMATION AND TECHNOLOGY

    The Republican Members concur with the administration's 
request for $1.86 billion for the Office of Information and 
Technology (OI&T). However, we recommend reallocation of 
funding amounts to individual accounts or programs within the 
budget for OI&T due to poor performance or failures, as 
follows:
          Reduced funding: We recommend reducing funding in the 
        amount of $20 million to the Financial and Logistics 
        Integrated Technology Enterprise (FLITE), due to poor 
        performance.
          Reduced funding: In the amount of $20 million to the 
        Compensation & Pension Maintenance and Operations fund 
        that was to be allocated to VETSNET.
          Additional funding: In the amount of $20 million to 
        the Office of the Inspector General for Information 
        Security Risk Assessment for Forensic Analysis.
          Additional funding: In the amount of $10 million for 
        Cyber Security.
          Additional funding: In the amount of $10 million for 
        the Office of Information and Technology Oversight and 
        Compliance Office.
          Additional funding: In the amount of $1 million to 
        accelerated development of The Expert Education System.
    We note that as part of the VA centralization of its IT 
accounts and personnel under the auspices of the Chief 
Information Officer, an additional $555 million for FY 2007 has 
been reallocated in pay transfers from other accounts to 
support 5,529 FTE for operations and maintenance activities 
that were previously included in other accounts throughout the 
Department.

                    OFFICE OF THE INSPECTOR GENERAL

    The VA Office of Inspector General (OIG) is responsible for 
the audit, investigation, and inspection of all VA programs and 
operations. For FY 2008, the Administration requests $72.6 
million and 445 Full Time Equivalent Employees (FTEE) to 
support the activities of the OIG. This compares with the FY 
2007 request of $69.5 million for administrative expenses and 
458 FTEE. However, this FY 2008 funding level would result in a 
reduction of 40 FTEE from current staffing levels. Major 
audits, reviews and investigations would have to be cancelled 
should this reduction in staffing occur. During FY 2006, OIG 
identified over $900 million in monetary benefits, for a return 
of $12 for every dollar expended on OIG oversight. The 
Republican Members of the Committee recommend adding $4.153 
million to the FY 2008 funding request, in order to provide for 
a total of 558 FTEE.

  U.S. DEPARTMENT OF LABOR--VETERANS' EMPLOYMENT AND TRAINING SERVICE

    The Administration has increased the request for all 
programs administered by the Veterans Employment and Training 
Service with the exception of the Veterans Workforce 
Integration Program. We support the increased funding levels 
and recommend three additional increases, as follows:
    National Veterans Training Institute--In Public Law 109-
461, Congress mandated several changes in the state grant 
program that will require greater training capacity at the 
National Veterans Training Institute in Denver, CO. We 
recommend an additional $1 million to fund NVTI operations.
    USERRA Training and Enforcement--The Veterans Employment 
and Training Service has primary responsibility for enforcing 
veterans' employment and reemployment rights under USERRA. VETS 
federal staff located in each of the six regions are 
responsible for administration and training VETS staff located 
in each state. With the high operational tempo of members of 
the Selected Reserve, case loads are climbing and additional 
resources are required to ensure timely resolution of USERRA-
related cases. Therefore, we recommend an additional $1 million 
to fund six additional professional investigators.
    Homeless Veterans Reintegration Program--This program has 
been cited by GAO and others as an effective model employment 
program for homeless veterans. The Administration has requested 
an additional $2 million for the program. Because we are 
concerned about the apparent increase in homeless veterans from 
the first Gulf War and current conflicts in the global War on 
Terror, we recommend an additional $3 million above the 
President's request to enable VETS to expand the number of 
grantees serving homeless veterans while maintaining quality 
standards for grantee performance.

                          PROPOSED LEGISLATION

    GI Bill--During the 109th Congress, the Economic 
Opportunity Subcommittee conducted a series of hearing and site 
visits to determine the need to modernize the Montgomery GI 
Bill for both active duty and members of the Selected Reserve. 
MGIB benefit levels for active duty members have not nearly 
kept pace with the increasing cost of higher education, and 
extensive utilization of the Reserve Components in the Global 
War on Terror justifies increases in the basic levels of their 
benefits. Therefore, we propose an additional $1.5 billion in 
mandatory spending to improve education benefits. This includes 
indexing the basic payment at 100% of the Department of 
Education average four year public school cost.

                     ADDITIONAL VIEWS AND ESTIMATES

                         HONORABLE STEVE BUYER

    The Administration's requested FY 2008 budget for veterans' 
programs includes legislative proposals to change the 
Department of Veterans Affairs (VA) fee structure for health 
care. The proposals for certain fees and co-payments are more 
fully described in the Republican Views and Estimates for FY 
2008. According to the legislative proposals, the revenue 
generated by these fees and co-payments would be mandatory 
receipts to be deposited in the U.S. Treasury, rather than 
retained by the VA for the benefit of veterans. I strongly 
believe that any revenue generated from enrollment fees and co-
payments should be retained by the VA for its veterans 
programs.
    The Administration's proposal includes fees, copayments 
related to enrollment of category 7 and 8 veterans in medical 
care. The Administration proposed a tiered enrollment fee based 
on income. The fees would range from $250 per year for a 
veteran with an income of $50,000 to $750 per year for a 
veteran with an income of $100,000 or greater. Copayments for 
pharmaceuticals would rise from the current $8 to a new level 
of $15 per 30-day supply. VA would also be authorized to 
discontinue the current practice of offsetting or reducing a 
patient's first party co-payment debt from funds received from 
third-party insurance for non service-connected treatment. I 
support these initiatives that would generate $355.2 million in 
the first year and $4.866 billion over 10 years, if the 
revenues generated were retained by the VA.
    The first priority should be to improve the GI Bill 
education and training benefits for members of the National 
Guard and Reserves. These dedicated men and women are bulwarks 
in the Global War on Terror who are serving shoulder to 
shoulder with their active duty counterparts in Iraq, 
Afghanistan and wherever they are needed. However, their GI 
Bill education and training benefits are significantly less. 
They should have greater parity with the active duty forces in 
these benefits. The application of the revenues from the 
Administration's proposed fees and copayments to GI Bill 
increases for the Reserve Components would be a fitting way to 
recognize their service to our Nation.

                                  
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