[House Prints 112-2]
[From the U.S. Government Publishing Office]



112th 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 2012

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]



  March 18, 2011.--Printed for the use of the Committee on Veterans' 
                Affairs of the House of Representatives



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                     COMMITTEE ON VETERANS' AFFAIRS

                     JEFF MILLER, Florida, Chairman
GUS M. BILIRAKIS, Florida, Vice      BOB FILNER, California, Ranking
    Chairman                         CORRINE BROWN, Florida
CLIFF STEARNS, Florida               SILVESTRE REYES, Texas
DOUG LAMBORN, Colorado               MICHAEL H. MICHAUD, Maine
DAVID P. ROE, Tennessee              LINDA T. SANCHEZ, California
DAN BENISHEK, Michigan               BRUCE L. BRALEY, Iowa
ANN MARIE BUERKLE, New York          JERRY McNERNEY, California
JEFF DEHNAM, California              JOE DONNELLY, Indiana
BILL FLORES, Texas                   TIMOTHY J. WALZ, Minnesota
TIM HUELSKAMP, Kansas                JOHN BARROW, Georgia
BILL JOHNSON, Ohio                   RUSS CARNAHAN, Missouri
JON RUNYAN, New Jersey
MARLIN A. STUTZMAN, Indiana
Vacancy
Vacancy
            Helen W. Tolar, Staff Director and Chief Counsel
                     Committee on Veterans' Affairs

                     U.S. House of Representatives

                  112th Congress--Views and Estimates

                        FY 2012--March 18, 2011

                                ------                                

                          House of Representatives,
                            Committee on Veterans' Affairs,
                                    Washington, DC, March 18, 2011.
Hon. Paul Ryan, Chairman
Hon. Chris Van Hollen, Ranking Democratic Member
Committee on the Budget
U.S. House of Representatives, Washington, DC.
    Dear Chairman Ryan and Ranking Member Van Hollen: Pursuant 
to section 301(d) of the Congressional Budget Act of 1974 and 
House Rule X, clause 4(f), and with the approval of the 
undersigned Members of the Committee on Veterans' Affairs 
(Committee), we write to provide our Views and Estimates on the 
fiscal year (FY) 2012 budget for veterans' programs within the 
Committee's jurisdiction. Our comments will focus on programs 
and services administered by the U.S. Department of Veterans 
Affairs (VA) and the Administration's Fiscal Year 2012 budget 
request for VA.

                            General Comments

    In preparing the Committee Views and Estimates, we are 
mindful of the enormous challenges threatening our Nation's 
security. Deficits and resulting debt of staggering proportions 
have hastened the need for difficult choices to be made across 
Government. As was stated in the final report of the 
President's National Commission on Fiscal Responsibility and 
Reform, ``[t]he problem is real. The solution will be painful. 
There is no easy way out. Everything must be on the table. And 
Washington must lead.''
    We are also mindful of our obligation to those who continue 
to defend America against her enemies. For nearly a decade, we 
have remained a Nation at war, a war fought by less than one 
percent of our citizenry. The demands placed on those serving 
in our Armed Forces--multiple deployments, the stress of 
extended separation from loved ones, the physical and 
psychological wounds of war, and the often painful readjustment 
to civilian life in the midst of economic uncertainty--have 
never been greater. Our Nation's servicemembers continue to do 
what their country asks of them, enduring hardships that few of 
us could fathom. They are the reason this Committee exists; it 
is now our privilege and duty to serve them and all who have 
gone before them.
    These challenges--fulfilling our commitments to veterans 
and getting our fiscal house in order--need not be opposed to 
each other. We must never balance the budget on the backs of 
veterans, but we also cannot allow limited resources to be used 
ineffectively. Veterans are not only beneficiaries of VA's 
health and benefits programs, they are also taxpayers. They 
want meaningful employment for themselves and their loved ones. 
Like all of us, they, too, have a tremendous stake in America's 
economic prosperity, a stake they have invested in up front 
through their honorable service. We believe no constituency is 
better suited to help guide us through these turbulent times.

                      Overall Spending Projections


Discretionary Spending

    The President's fiscal year (FY) 2012 VA budget request for 
discretionary programs is $61.9 billion, including an estimated 
$3.1 billion in estimated medical collections (receipts from 
billing insurance companies and collecting copayments for care 
associated with non-service-related disabilities). Consistent 
with Public Law 111-81, the Administration has also requested a 
$55.832 billion advance appropriation for VA medical care for 
fiscal year 2013, including an estimated $3.291 billion in 
medical collections.
    VA's discretionary budget from FY 2003 through FY 2011 
(assuming enactment of full-year appropriations for remaining 
VA accounts as outlined in H.R. 1) has increased approximately 
115 percent, with annual percentage increases frequently 
exceeding double digits. Thus, given that the President's 
request for FY 2012 represents, roughly, a 3.5 percent annual 
increase, it can certainly be characterized as a more modest 
blueprint than we have seen in recent years. During the 
Committee's hearing in February on VA's budget request, VA 
Secretary Shinseki assured the Committee that the 
Administration's budget request was sufficient to meet VA's 
obligations. The Committee accepts VA's characterization of its 
request but will be carefully monitoring VA's fiscal condition 
over the course of the upcoming fiscal year.
    The more important question is whether the President's 
request is sufficient to meet our obligations to veterans. On 
the whole, we believe it is. We support the President's request 
for overall discretionary spending for FY 2012 and the FY 2013 
advance for medical care, although we do recommend shifting 
resources among certain accounts as we will outline below. We 
also have serious concerns with new accounting mechanisms in 
the President's budget that makes it difficult to adequately 
judge the actual resource needs of VA's health care system. We 
will discuss those concerns below.

Mandatory Spending

    The President requests $70.312 billion for VA mandatory 
spending programs, an increase of 5.5 percent over FY 2011 
levels. VA mandatory spending has increased 105 percent from FY 
2003 through FY 2011, an increase largely attributable to 
growth in the overall disability compensation rolls and rising 
average disability levels, as well as the creation of the Post-
9/11 GI Bill education benefit. The Committee notes that for FY 
2012, 83 percent of the amount requested for mandatory spending 
is attributable to compensation and pension payments.
    Although we must be sensitive to the constituency that VA 
mandatory spending programs serve, we feel compelled to 
highlight that both Republican and Democratic Administrations 
and Congresses have, in the past, joined in calling for 
restraint in the growth of VA entitlement spending in an 
overall effort to reduce Federal budget deficits. In the same 
spirit, and with a sober understanding of the fiscal crisis our 
country is facing, we believe the time is right to look at past 
reconciliation measures reported from the House and Senate 
Veterans' Affairs Committees to serve as guides for any future 
mandatory spending restraint measures the Budget Committee may 
require. In past years, veterans' organizations only supported 
these restraint efforts to the extent they were extraordinarily 
sensitive to the veterans who would be affected by them and 
packaged as part of an overall, concerted effort to control 
entitlement growth across the Federal Government. We believe 
veterans will, as they have in the past, rise to the task if 
such an undertaking is again asked of them.

                         Veterans' Medical Care

    For FY 2012, the President's budget requests $50.851 
billion (exclusive of estimated medical collections) for the 
three VA medical care appropriation accounts. The request is 
$240 million higher than what the Administration requested one 
year ago, when it submitted its FY 2012 advance appropriation 
request for VA medical care, and is the same amount for FY 2012 
VA medical care contained in H.R. 1, legislation passed by the 
House of Representatives on February 19, 2011. The 
Administration also requests an FY 2013 advance appropriation 
of $52.541 billion (exclusive of estimated medical 
collections).
    The Administration's revised request for FY 2012 is 
explained by factoring in a $713 million rescission due to the 
cumulative impact of the statutory freeze on pay raises for 
Federal employees in 2011 and 2012, and a $953 million increase 
attributable to potential increased reliance on the VA health 
care system due to economic employment conditions. Because the 
Administration is not convinced whether the $953 million will, 
in fact, be needed to meet health care needs of the system, it 
has labeled the $953 million as a ``contingency fund,'' i.e., 
to be appropriated, but only released for obligation if events 
dictate.
    The Administration has requested the ability to carry over, 
from one year to the next, money it claims is associated with 
certain management savings. It asserts that, contrary to recent 
budget submissions (which assumed no carryover of unobligated 
balances from one year to the next), the ability to carryover 
savings is critical in a multi-year planning process where one 
year's request builds upon another.
    Finally, the Administration assumes the availability of 
$3.078 billion in medical collections (receipts from copayments 
and insurance billings associated with care provided for non-
service-connected conditions) in FY 2012. This estimate is a 
downward revision of the original FY 2012 advance request 
collections assumption of $3.679 billion. The VA has also 
decreased its collections estimate for FY 2011 by $473 million 
to an amount that is $34 million higher than the amount 
collected in FY 2010.
    We applaud the goals outlined in the President's request. 
Those goals include eliminating veteran homelessness; 
increasing accessibility for veterans whose access to care may 
be limited by geography, disability, or other complications; 
overcoming barriers and other factors associated with health 
care quality for women veterans; implementing the mental health 
strategic plan to provide appropriate mental health services 
system-wide; and preventing suicide among our veterans.
    We are encouraged by VA's intent to increase resources for 
prosthetics by 39 percent. However, we are concerned about the 
ability of VA to meet the needs of the younger and more active 
amputees with the latest technology and provide consistent and 
coordinated care throughout the system. We intend to 
aggressively oversee this program to ensure funds are 
effectively utilized to provide state-of-the-art prosthetic 
care for both recently combat-injured veterans and veteran 
amputees from all eras.
    Family caregivers are often at the core of what sustains 
the treatment and recovery of a wounded, ill, or injured 
servicemember. However, when a family member assumes this role, 
there are many challenges they themselves may face including 
lost income, travel and relocation costs, child care concerns, 
exhaustion, and emotional or psychological stress. Recognizing 
the commitment and struggles of family caregivers, Congress 
enacted Public Law 111-163, the Caregivers and Veterans Omnibus 
Health Services Act. This law requires VA to establish a 
comprehensive program of assistance for family caregivers. We 
are disappointed with VA's delay in implementing this important 
program and the initial implementation plan submitted to 
Congress, which fails to meet Congressional intent. Further, we 
are deeply troubled with the FY 2012 budget submission that 
allocates only $66 million to implement the enhanced programs 
for caregivers under sections 101 through 104 of Public Law 
111-163. The Committee is committed to getting this right for 
veterans and their caregivers and intends to ensure that the 
program is implemented expeditiously, fully meets Congressional 
intent, and is appropriately funded.

Contingency Fund

    Each of the last three budget cycles occurred in the heart 
of the economic recession, but the budget requests and actual 
appropriation levels during that three-year period (FY 2009, FY 
2010, and FY 2011) relied on health care utilization data that 
predated the recession. Unlike the request for FY 2012, the 
budget requests for those years did not incorporate an 
``unemployment economic variable'' when projecting what 
resources would be necessary to sustain the medical care 
system. It is reasonable to assume that if an unanticipated 
surge in demand because of declining economic conditions was to 
occur and have an impact on VA resources, one might have 
expected it to occur already.
    In fiscal years 2009, 2010, and 2011, VA assumed no 
carryover of unobligated balances from one year to the next. 
However, actual medical care carryover from FY 2009 to FY 2010 
was well over $1 billion; actual carryover from FY 2010 to FY 
2011 was nearly $1.5 billion; and there is now an assumed 
carryover of $1.1 billion from FY 2011 to FY 2012. Thus, it is 
reasonable to conclude that even in the absence of current data 
on the effects of the recession on veterans' reliance on VA's 
health care system, VA received sufficient resources to meet 
the health care needs of America's veterans. Not only did VA 
have unanticipated unobligated balances to carry over, it also 
improved on its key quality measures (another indicator of 
whether resources provided were sufficient). Although we are 
sensitive to the abundance of caution the Administration wishes 
to take by requesting a contingency fund in the event it is 
needed, we believe there are other means available to monitor 
and meet the needs of the system that do not require providing 
what amounts to a $953 million advance supplemental.
    We also have institutional concerns regarding the 
feasibility of advocating that an appropriation be provided 
that is expended solely at the discretion of the Executive 
Branch. When Congress appropriates resources, it is with the 
full expectation that those resources be expended. If the 
Executive Branch believes that it has been provided with too 
many resources, then it can request that Congress rescind those 
funds.

Carryover and Management Savings

    In past Administrations' budget submissions, no carryover 
of funds for medical care was assumed for fiscal years 2009, 
2010, and 2011. With this year's request, the Administration 
does assume a carryover from FY 2011 into FY 2012, and from FY 
2012 into FY 2013, but the Administration characterizes the 
carryover as evidence of savings realized from certain 
management actions it has undertaken or will soon undertake.
    Although we agree that carryover of funds from one year to 
the next is a prudent use of taxpayer dollars and must 
absolutely be built into a subsequent year's budget request, we 
disagree with characterizing such carryover as evidence of 
savings achieved due to management actions. To the extent VA is 
able to account for specific savings associated with planned 
management actions, we would expect those savings to already be 
reflected in VA's current resource request. For example, it is 
reasonable to assume that as VA becomes more efficient in 
purchasing goods and services for use in its health care 
system, that those savings will be built into the Enrollee 
Health Care Projection Model VA uses to justify its 
appropriation request. To ask Congress to appropriate the full 
amount VA assumes it can save by being more efficient strikes 
us as antithetical to how a business or family would budget. 
Again, we agree that permitting VA to carry money over into a 
subsequent fiscal year is, and always has been, an important 
aspect of how VA manages its resources effectively. We do not 
agree with VA's new attempt to characterize such carryover as 
evidence of savings. We intend to follow up with the Government 
Accountability Office to determine whether the management 
savings VA claims it can achieve are, in fact, directly or 
indirectly factored into its Enrollee Health Care Projection 
Model forecasting of resource needs.

Medical Collections

    As noted previously, the Administration has revised its 
estimate for FY 2012 medical collections downward, from $3.679 
billion to $3.078 billion. We are concerned with such a large 
re-estimate given that VA's collections efforts have generally 
exceeded original budget estimates. Further, it is our 
understanding that as VA expands the number of Congressionally-
directed Consolidated Patient Accounting Centers nationwide, it 
will become more efficient in its medical collections efforts. 
Notwithstanding all of the above, VA relied on its Enrollee 
Health Care Projection Model estimates of total resource need 
when it revised its collections estimates for FY 2012. We, 
therefore, will accept the revised estimate but keep a watchful 
eye on this critical source of revenue going forward.

Recommendation

    We believe the amounts contained in H.R. 1 for VA medical 
care in FY 2012 are in line with what is required to meet the 
health care needs of the VA system. We also believe those 
amounts will provide a reasonable measure of protection should 
resources be strained by unanticipated demand for care or an 
unexpected shortfall in revenue from collections. We further 
believe that careful monitoring by Congress of VA's health care 
expenditures has been, and will continue to be, accomplished 
via a diligent examination of quarterly reports submitted to 
Congress. These reports look at planned versus actual spend-
through rates, as well as specific quality measures, to ensure 
the needs of the health care system are being met. Should data 
from these quarterly reports suggest additional resources are 
necessary, the Administration and Congress will work together 
to bridge any urgent budgetary gap that may arise.
    It should be noted that adoption of the medical care 
funding levels proposed in H.R. 1 would be tantamount to 
providing nearly all ($713 million out of $953 million) of the 
Administration's proposed contingency fund. We do not believe, 
however, that these funds should be held by the Office of 
Management and Budget as a contingency. Instead, the funds 
should be released to the field for use in providing medical 
care to veterans and to supplement resources for implementation 
of the family caregiver provisions of Public Law 111-163. 
Should the funds not be needed, we would expect it to be 
reflected in carryover of unobligated balances and adjustment 
of appropriation needs going forward or a rescission request 
from the Administration.
    The Committee anticipates that conclusive action will soon 
be taken on the FY 2011 spending bill, which includes FY 2012 
advance appropriations for VA medical care accounts. The 
Committee believes that the difference between this expected 
amount and the Administration's revised request, $240 million, 
should be allocated among other VA accounts to address specific 
needs outlined below.

               Veterans' Medical and Prosthetic Research

    For FY 2012, the Administration requests $509 million for 
medical and prosthetic research, a reduction of $72 million 
from the expected level of funding for FY 2011 under a 
continuing resolution. The VA medical and prosthetic research 
program makes significant contributions to the advancement of 
medicine, defining new standards of care, and improving the 
lives of our veterans and all Americans. The program 
accomplishes this through conducting research focused on 
injuries, illnesses and conditions related to military service 
and by serving as an effective recruitment and retention tool 
for high quality clinician-investigators who care for our 
veterans. With the increasing number of veterans with 
debilitating combat injuries, including post-traumatic stress 
disorder, incurred in the Global War on Terror, this is not the 
time to cut this valuable research program dedicated to 
benefiting the clinical treatment needs of our veterans.
    We recommend an additional $72 million to restore the level 
of funding to FY 2011 levels. However, at the same time, we are 
disturbed by reports that a substantial portion of the medical 
and prosthetic research appropriation for FY 2010 was not spent 
in a timely fashion and was carried over to FY 2011. There are 
more than a sufficient number of worthy research proposals to 
justify full funding of the medical and prosthetic research 
account and we find it unacceptable that research to develop 
potentially life-saving treatments would be held up by 
management failures. It is our understanding that the inability 
to expend all of the research funds in FY 2010 may be 
attributed in part to failures in hiring, contracting and 
information technology (IT) procurement necessary for the 
conduct of VA-funded research projects. We expect VA to 
immediately conduct a review to identify the reason these funds 
were not expended and promptly implement a corrective strategy 
to prevent a future such occurrence.

                         Information Technology

    For FY 2012, the Administration requests $3.161 billion for 
the Office of Information and Technology (OI&T). Although we 
generally support the request, concerns remain in several 
areas. One of these concerns is a lack of a clearly-defined IT 
strategy, including how VA intends to address previously-
identified, current, and future weaknesses in information 
security. We believe that resolving these security issues and 
better defining a long-term IT strategy will not only help VA 
better address the needs of veterans, it will also enable 
better coordination between VA and the Department of Defense in 
transitioning servicemembers to veteran status.
    We are also concerned about a large influx of human capital 
specifically under the control of OI&T without a clear 
definition of what job positions these employees will have or 
what the long-term plan is for them once IT milestones have 
been reached and goals accomplished. The Administration's FY 
2012 budget request supports a staffing level of 7,345 full 
time equivalents (FTE) and another 182 reimbursable FTE under 
OI&T, an increase of 674 FTE, or nearly 10 percent, over FY 
2010 staffing levels. A clearer definition of the job roles, 
titles, and locations of both existing employees as well as the 
significant number of new employees would greatly increase 
transparency and accountability for VA's IT performance and 
accomplishments.
    Lastly, we remain concerned about a lack of cost-benefit 
analyses being provided before VA undertakes major IT projects. 
Given a recent history of several multi-million dollar programs 
being cancelled after a period of time with no result to show 
for the expenditure, a cost-benefit analysis provided in 
advance of undertaking large-scale IT programs would provide 
better stewardship of taxpayer dollars and clearly identify 
intended goals and milestones.

                         Construction Programs

    For FY 2012, the Administration requests a total of $1.271 
billion for VA's four construction accounts: Major Construction 
($590 million); Minor Construction ($550 million); State 
Extended Care Facility Construction Grants ($85 million); and 
State Cemetery Construction Grants ($46 million). The total 
resource request would, assuming amounts for FY 2011 are funded 
at the President's requested level, translate to a reduction of 
$478 million, or 37.6 percent. Further, consistent with the 
requirements of section 905 of Public Law 111-275, the 
Administration proposes to allocate $136 million in major 
construction funding derived from bid savings.
    VA's new Strategic Capital Investment Planning (SCIP) 
process is a 10-year plan designed to identify and prioritize 
specific capital investment options to meet service delivery 
gaps in the areas of safety, security, utilization, access, 
seismic protection, facility condition assessments, parking and 
energy. SCIP projects a 10-year resource need of between $53 
and $65 billion.
    VA's total capital request (including facility leases, 
equipment, and non-recurring maintenance needs not covered 
under the four construction accounts named above) for FY 2012 
is $2.876 billion. At the present rate, it would take 20 years 
to meet the minimum resource need identified in the SCIP 10-
year plan. We are, therefore, concerned that the SCIP plan is 
unrealistic on its face and would like the opportunity to 
engage the Administration on the plan going forward. Given that 
the stated needs of the system are vast, we recommend providing 
resources above the President's request for major and minor 
construction totaling $168 million.

                         General Administration

    The Administration's FY 2012 request for General 
Administration is $48.225 million, a 33.5 percent increase over 
FY 2009 levels. General Administration funding covers certain 
VA support offices, such as the Office of the Secretary, the 
Office of Management, the Office of Policy and Planning, and 
the Office of Congressional and Legislative Affairs, and one 
office (the Board of Veterans' Appeals) providing direct 
services to veterans. For your review, below is a chart of 
expected three-year increases in entities funded under the 
General Administration account. As you will see, growth in 
these central office support functions has been substantial:



----------------------------------------------------------------------------------------------------------------
                                                                                President's FY
             General Administration Accounts                    FY 2009          2012 Request       % Increase
----------------------------------------------------------------------------------------------------------------
Office of the Secretary                                          $  7.146 M         $ 10.104 M           +41.2%
----------------------------------------------------------------------------------------------------------------
Board of Veterans' Appeals                                       $ 68.582 M         $ 78.006 M           +13.7%
----------------------------------------------------------------------------------------------------------------
General Counsel's Office                                         $ 74.343 M         $ 84.073 M          +13.08%
----------------------------------------------------------------------------------------------------------------
Management Office                                                $ 37.546 M         $ 46.222 M           +23.1%
----------------------------------------------------------------------------------------------------------------
Human Resources Office                                           $ 61.901 M         $ 74.343 M           +20.1%
----------------------------------------------------------------------------------------------------------------
Policy and Planning Office                                       $ 14.602 M         $ 28.647 M           +96.2%
----------------------------------------------------------------------------------------------------------------
Security and Preparedness Office                                 $ 12.025 M         $ 19.873 M          +65.26%
----------------------------------------------------------------------------------------------------------------
Public Affairs Office                                            $ 10.005 M         $ 23.981 M            +140%
----------------------------------------------------------------------------------------------------------------
Congressional Affairs                                            $  4.379 M         $  6.585 M          +50.37%
  Office
----------------------------------------------------------------------------------------------------------------
Acquisition & Construction                                       $ 45.243 M         $ 76.391 M          +68.85%
  Office
----------------------------------------------------------------------------------------------------------------
Total General Administration                                       $335.8 M         $448.225 M           +33.5%
----------------------------------------------------------------------------------------------------------------

    Although we do not doubt that many of these support offices 
serve important oversight, planning, and coordination 
functions, and even administer some grant programs providing 
direct assistance to veterans (such as the grant program to 
support the U.S. Paralympic adapted sports program administered 
by the Office of Public and Intergovernmental Affairs), we 
cannot support growth on the order that is proposed in several 
General Administration accounts, especially during a time of 
fiscal austerity. Therefore, we recommend realignment of a 
minimum $17.5 million (excluding any grant program providing 
direct assistance to veterans) out of General Administration to 
support programs where those resources could be more 
effectively used, particularly those providing direct services 
to veterans.

                    Veterans Benefits Administration

    The Administration proposes $2.019 billion for the Veterans 
Benefits Administration, a decrease of $130 million compared 
with the expected full-year FY 2011 appropriation. The decrease 
in spending is largely attributable to an expected reduction of 
staffing for education claims filed under the new, Post-9/11 GI 
Bill. The reduction was anticipated in light of VA's rollout of 
an information technology tool allowing for automated 
processing of Post-9/11 GI Bill claims.

Compensation and Pension Service

    We are deeply concerned about the growing size of the 
backlog of claims for VA disability compensation. Since January 
2009, the backlog of disability claims has grown by 103 
percent, and this budget projects that the average days to 
complete a claim will rise from 165 days in FY 2010 to 230 days 
in FY 2012. These numbers grew despite the nearly 4,000 
additional employees VA has hired since 2007.
    Additionally, VA recently established new regulations to 
make it easier for Vietnam veterans who were exposed to the 
Agent Orange herbicide to receive service-connected 
compensation. This decision has resulted in significant 
increases in workload for disability compensation as a result 
of the regulatory change.
    We believe a multi-faceted approach is necessary for the 
Veterans Benefits Administration to overcome the challenges it 
faces. This approach includes a paradigm shift that involves 
placing a high level of priority on quality of work as well as 
quantity. To do so, VA must place greater emphasis on employee 
training and accountability.
    We have long recognized the need for technological 
improvements to VA's business process, including the 
development of a paperless, rules-based adjudication system. To 
accomplish this goal, VA is requesting $148 million to fund the 
Veterans Benefit Management System. We agree with this request, 
but will be conducting vigorous oversight during the course of 
the fiscal year to ensure VA meets the 2012 deadline for 
implementation.

Vocational Rehabilitation Service

    We also draw attention to the needs of veterans being 
served under the Vocational Rehabilitation and Employment 
(VR&E) program. Unlike other VA benefit programs, VR&E is a 
``high touch'' program that begins with a detailed evaluation 
of the impact of a service-connected disability on a veteran's 
ability to obtain and maintain satisfactory employment. The 
process consists of formal testing and evaluation by 
professional counselors who hold advanced degrees in vocational 
rehabilitation-related fields. Evaluation is followed by 
development and implementation of a rehabilitation plan focused 
on maximizing the veteran's employability. Nearly 90 percent of 
VR&E participants are attending formal training including 
college degree programs.
    The President has requested 1,286 direct FTE to provide 
vocational rehabilitation services, an increase of 129 FTE 
above the FY 2011 VR&E direct FTE level, including support 
staff on board at this time. However, given the caseload 
increase of roughly 10,000, the FTE increase will do little to 
reduce the average caseload from the current 135 to 150 
veterans per counselor. Therefore, we recommend a reallocation 
of $5.5 million from the General Administration account to 
support an additional 50 professional VR&E counselors to 
shorten both the time needed to begin receiving VR&E services 
and to increase the quality of those services.

                    National Cemetery Administration

    For FY 2012, the Administration proposes $251 million for 
the National Cemetery Administration (NCA), which would 
continue flat-line funding for the second straight year. We 
generally concur with the President's request for NCA, but 
recommend an additional $2 million be included to continue the 
National Shrine Commitment at NCA. This additional funding 
would ensure the highest possible standards for all of our 
veterans' final resting places, and would be used for 
infrastructure projects such as irrigation, renovation of 
historic structures, headstone cleansing, and road resurfacing.

                          VA Inspector General

    The Administration proposes a second straight year of flat 
funding for the Office of the Inspector General, proposing $109 
million in funding for FY 2012. The Inspector General's Office 
provides critical oversight of VA's programs and services to 
eliminate waste, fraud and abuse. It also conducts periodic 
reviews of VA health care services to ensure applicable 
processes governing patient safety are being adhered to. In 
light of the need to eliminate wasteful spending, the mission 
of the Inspector General's Office is more important now than 
ever. Therefore, we recommend a $10 million increase in this 
account relative to the President's request.

                               Conclusion

    These views reflect the best judgment of the undersigned 
Members of the Committee as of this date. We have submitted 
additional questions regarding the Administration's budget 
proposal and will conduct a series of oversight hearings in the 
coming months on other facets of the request. If we or the 
Committee staff can provide assistance regarding the views 
contained in this letter, please don't hesitate to contact us.

            Sincerely,

                    Jeff Miller, Chairman; Bob Filner, Ranking 
                            Democratic Member; Doug Lamborn; David P. 
                            Roe; Gus M. Bilirakis; Jeff Denham; Jon 
                            Runyan; Corrine Brown; Silvestre Reyes; 
                            Bruce L. Braley; Dan Benishek; Cliff 
                            Stearns; Russ Carnahan; Timothy J. Walz; 
                            Michael H. Michaud; Joe Donnelly; Jerry 
                            McNerney; Linda T Sanchez; John Barrow; Ann 
                            Marie Buerkle; Bill Johnson; Bill Flores.

                                 
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