[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5407-5413]
[From the U.S. Government Publishing Office, www.gpo.gov]




          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. MURKOWSKI:
  S. 2222. A bill to resolve certain conveyances and provide for 
alternative land selections under the Alaska Native Claims Settlement 
Act related to Cape Fox Corporation and Sealaska Corporation, and for 
other purposes; to the Committee on Energy and Natural Resources.
  Mr. MURKOWSKI. Mr. President, I rise today to introduce legislation 
that will address an equity issue for one of Alaska'a rural village 
corporations.
  Cape Fox Corporation is an Alaska Village Corporation organized 
pursuant to the Alaska Native Claims Settlement Act, ANCSA, by the 
Native Village of Saxman, near Ketchikan, AK. As with other ANCSA 
village corporations in Southeast Alaska, Cape Fox was limited to 
selecting 23,040 acres under Section 16 of ANCSA. However, unlike other 
village corporations, Cape Fox was further restricted from selecting 
lands within six miles of the boundary of the home rule City of 
Ketchikan. All other ANCSA corporations were restricted from selecting 
within two miles of such a home rule city.
  The six mile restriction went beyond protecting Ketchikan's watershed 
and damaged Cape Fox by preventing the corporation from selecting 
valuable timber lands, industrial sites, and other commercial property, 
not only in its core township but in surrounding lands far removed from 
Ketchikan and its watershed. As a result of the six mile restriction, 
only the mountainous northeast corner of Cape Fox's core township, 
which is nonproductive and of no economic value, was available for 
selection by the corporation. Under ANCSA, however, Cape Fox was 
required to select this parcel.
  Cape Fox's land selections were further limited by the fact that the 
Annette Island Indian Reservation is within its selection area, and 
those lands were unavailable for ANCSA selection. Cape Fox is the only 
ANCSA village corporation affected by this restriction.
  Clearly, Cape Fox was placed on unequal economic footing relative to 
other village corporations in Southeast Alaska. Despite its best 
efforts during the years since ANCSA was signed into law, Cape Fox has 
been unable to overcome the disadvantage the law built into its land 
selection opportunities by this inequitable treatment.
  To address the inequity, I have introduced the ``Cape Fox Land 
Entitlement Adjustment Act of 2002.'' This bill will address the Cape 
Fox problem by providing three interrelated remedies.
  1. The obligation of Cape Fox to select and seek conveyance of the 
approximately 160 acres of unusable land in the mountainous northeast 
corner of Cape Fox's core township will be annulled.
  2. Cape Fox will be allowed to select and the Secretary of 
Agriculture will be directed to convey 99 acres of timber land adjacent 
to Cape Fox's current holdings on Revilla Island.
  3. Cape Fox and the Secretary of Agriculture will be authorized to 
enter into an equal value exchange of lands in southeast Alaska that 
will be of mutual benefit to the Corporation and the U.S. Forest 
Service. Lands conveyed to Cape Fox in this exchange will not be 
timberlands, but will be associated with a mining property containing 
existing Federal mining claims, some of which are patented. Lands 
anticipated to be returned to Forest Service ownership will be of 
wildlife habitat value and will consolidate Forest Service holdings in 
the George Inlet area of Revilla Island. The Forest Service supports 
the transfer of these lands back to Federal ownership.
  The land exchange provisions of this bill will help rectify the long-
standing inequities associated with restrictions placed on Cape Fox in 
ANCSA. It will help allow this Native village corporation to make the 
transition from its major dependence on timber harvest to a more 
diversified portfolio of income-producing lands.
  The bill also provides for the resolution of a long-standing land 
ownership problem within the Tongass National Forest. The predominant 
private landowner in the region, Sealaska Corporation, holds the 
subsurface estate on several thousand acres of National Forest System 
lands. This split estate poses a management problem which the Forest 
Service has long sought to resolve. Efforts to address this issue go 
back more than a decade. Provisions in the Cape Fox Land Entitlement 
Adjustment Act of 2002 will allow the agency to consolidate its surface 
and subsurface estate and greatly enhance its management effectiveness 
and efficiency in the Tongass National Forest.
  I urge my colleagues to support this important legislation.
                                 ______
                                 
      By Mr. WYDEN (for himself and Mr. Smith of Oregon):
  S. 2223. A bill to provide for the duty-free entry of certain tramway 
cars for use by the city of Portland, Oregon; to the Committee on 
Finance.
  Mr. WYDEN. Mr. President, I rise today to introduce legislation to 
extend an import duty suspension for the Central City Streetcar in the 
City of Portland, OR. The City of Portland purchases the streetcars 
from a manufacturer in the Czech Republic. Previous streetcar shipments 
were duty-free under legislation granting special status to the 
exporting nation, the Czech Republic. The City has ordered two new 
streetcars which will be shipped on May 1, 2002. However, that duty-
free exemption has expired, adding $130,000 to the price of these 
streetcars. This legislation will provide duty-free entry for those two 
streetcars ordered by the City of Portland, thus saving the City of 
Portland $130,000.
  I am pleased to be joined by my colleague from Oregon, Senator Smith, 
in introducing this bipartisan legislation to provide this duty 
suspension for the

[[Page 5408]]

City of Portland's Central City Streetcar. I urge all my colleagues to 
support this legislation.
                                 ______
                                 
      By Mr. ROCKEFELLER:
  S. 2227. A bill to clarify the effective date of the modification of 
treatment for retirement annuity purposes of part-time services before 
April 7, 1986, of certain Department of Veterans Affairs health-care 
professionals; to the Committee on Veterans' Affairs.
  Mr. ROCKEFELLER. Mr. President, I introduce legislation today to fix 
a long-standing inequity.
  Last December, Congress passed the Department of Veterans Affairs 
Health Care Programs Enhancement Act of 2001. Enacted as Public Law 
107-135, this legislation gave VA several tools to respond to the 
looming nurse crisis. In addition, it altered how part-time service 
performed by certain title 38 employees would be considered when 
granting retirement credit.
  Previously, the law required that title 38 employees' part-time 
services prior to April 7, 1986, be prorated when calculating 
retirement annuities, resulting in lower annuities for these employees. 
Section 132 of the VA Health Programs Enhancement Act was intended to 
exempt all previously retired registered nurses, physician assistants, 
and expanded-function dental auxiliaries from this requirement. 
However, the Office of Personnel Management has interpreted this 
provision to only apply to those health care professionals who retire 
after its enactment date.
  The legislation I introduce today would require OPM to comply with 
the original intent of the VA Health Programs Enhancement Act, and 
therefore to recalculate the annuities for these retired health care 
professionals. This clarification would not extend retirement benefits 
retroactively to the date of retirement, but would ensure that 
annuities are calculated fairly from now on for eligible employees who 
retired between April 7, 1986, and January 23, 2002.
  I ask my colleagues to join me in restoring our original legislative 
intent to this issue of fairness for retired VA health care 
professionals, and ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2227

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. EFFECTIVE DATE OF MODIFICATION OF TREATMENT FOR 
                   RETIREMENT ANNUITY PURPOSES OF CERTAIN PART-
                   TIME SERVICE OF CERTAIN DEPARTMENT OF VETERANS 
                   AFFAIRS HEALTH-CARE PROFESSIONALS.

       (a) Effective Date.--The effective date of the amendment 
     made by section 132 of the Department of Veterans Affairs 
     Health Care Programs Enhancement Act of 2001 (Public Law 107-
     135; 115 Stat. 2454) shall be as follows:
       (1) January 23, 2002, in the case of health care 
     professionals referred to in subsection (c) of section 7426 
     of title 38, United States Code (as so amended), who retire 
     on or after that date.
       (2) The date of the enactment of this Act, in the case of 
     health care professionals referred to in such subsection (c) 
     who retired before January 23, 2002, but after April 7, 1986.
       (b) Recomputation of Annuity.--The Office of Personnel 
     Management shall recompute the annuity of each health-care 
     professional described in the first sentence of subsection 
     (c) of section 7426 of title 38, United States Code (as so 
     amended), who retired before January 23, 2002, but after 
     April 7, 1986, in order to take into account the amendment 
     made by section 132 of the Department of Veterans Affairs 
     Health Care Programs Enhancement Act of 2001. Such 
     recomputation shall be effective only with respect to 
     annuities paid after the date of the enactment of this Act, 
     and shall apply beginning the first day of the first month 
     beginning after the date of the enactment of this Act.
                                 ______
                                 

                          By Mr. ROCKEFELLER:

  S. 2228. A bill to amend title 38, United States Code, to authorize 
the Secretary of Veterans Affairs to operate up to 15 centers for 
mental illness research, education, and clinical activities; to the 
Committee on Veterans' Affairs.
  Mr. ROCKEFELLER. Mr. President, I introduce legislation today to 
allow researchers and clinicians in the Department of Veterans Affairs 
to establish up to ten more centers to study and treat mental 
illnesses.
  Historically, as many as one-third of veterans seeking care at VA 
have received mental health treatment, and research suggests that 
serious mental illnesses affect at least one-fifth of veterans who use 
the VA health care system. About 450,000 of the approximately 2.3 
million veterans who receive compensation from VA have service-
connected psychiatric and neurological disorders. These statistics do 
not reflect problems that affect veterans alone: in 1999, the Surgeon 
General of the United States reported that mental disorders account for 
more than 15 percent of the overall burden of disease from all causes, 
slightly more than all forms of cancer. Major depression alone ranked 
second only to heart disease in impact.
  In 1996, Congress authorized VA to establish five centers dedicated 
to mental illness research, education, and clinical activities. These 
Mental Illness Research, Education, and Clinical Centers, called 
``MIRECCs'' by VA, integrate basic and clinical research with a 
training mission that allows VA to translate new findings into improved 
patient care. Research undertaken within these centers has helped to 
increase our fundamental understanding of mental illnesses, and has 
given VA caregivers more and better tools to treat patients with mental 
disorders so they can function more easily within their communities.
  Because they have proved so effective at fostering scientific, 
clinical, and educational improvements in mental health care, I have 
introduced legislation today that would allow VA to expand the number 
of these centers from the five authorized programs to a possible total 
of fifteen. Based on the programs' success, VA researchers have already 
started three more centers, expanding the number of existing programs 
to eight, and have demonstrated their willingness to open more in the 
near future. I urge my colleagues to join me in supporting the 
expansion of this program, which benefits not only veterans but the 
entire mental health care community.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2228

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS TO 
                   OPERATE ADDITIONAL CENTERS FOR MENTAL ILLNESS 
                   RESEARCH, EDUCATION, AND CLINICAL ACTIVITIES.

       Section 7320(b)(3) of title 38, United States Code, is 
     amended by striking ``five centers'' and inserting ``15 
     centers''.
                                 ______
                                 
      By Mr. ROCKEFELLER (by request):
  S. 2229. A bill to amend title 38, United States Code, to authorize a 
cost-of-living increase in rates of disability compensation and 
dependency and indemnity compensation, and to revise the requirement 
for maintaining levels of extended-care services to veterans; to the 
Committee on Veterans' Affairs.
  Mr. ROCKEFELLER. Mr. President, today I introduce legislation 
requested by the Secretary of Veterans Affairs, as a courtesy to the 
Secretary and the Department of Veterans Affairs, VA. Except in unusual 
circumstances, it is my practice to introduce legislation requested by 
the Administration so that such measures will be available for review 
and consideration.
  This ``by-request'' bill contains two sections. The first would 
authorize the Secretary of Veterans Affairs to increase 
administratively the rates of compensation for service-disabled 
veterans, and for the dependent survivors of veterans whose deaths were 
service-related, beginning this December. The rate of increase, as 
requested by VA in its proposed budget for FY 2003, would be the same 
as the cost-of-living adjustment provided under current law to 
veterans' pension and Social Security recipients.

[[Page 5409]]

  The second section of this bill would allow VA to change the way that 
it calculates the number of veterans receiving VA long-term care. In 
1999, Congress passed the Veterans Millennium Health Care Benefits Act, 
which required VA to maintain the level of extended care services 
offered to veterans at the 1998 level. VA has argued that this law, 
based on the average daily census in VA-operated nursing homes, 
unfairly ignores care provided through contracts with private nursing 
homes and by VA-subsidized State nursing homes. The requested bill 
would amend the law to include nursing home care furnished by community 
providers and State veterans homes when determining whether VA has 
maintained extended care services at the mandated 1998 level.
  I ask unanimous consent that the text of the bill and Secretary 
Principi's transmittal letter that accompanied the draft legislation be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 2229

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCES TO TITLE 38, UNITED STATES 
                   CODE.

       (a) Short Title.--This Act may be cited as the ``Veterans 
     Benefits Improvement Act of 2002''.
       (b) References.--Except as otherwise expressly provided, 
     whenever in this Act an amendment or repeal is expressed in 
     terms of an amendment to, or repeal of, a section or other 
     provision, the reference shall be considered to be made to a 
     section or other provision of title 38, United States Code.

        TITLE I--INCREASE IN COMPENSATION RATES AND LIMITATIONS

     SEC. 101. INCREASE IN COMPENSATION RATES AND LIMITATIONS.

       (a) Rate Adjustment.--The Secretary of Veterans Affairs 
     shall, effective on December 1, 2002, increase the dollar 
     amounts in effect for the payment of disability compensation 
     and dependency and indemnity compensation (DIC) by the 
     Secretary, as specified in subsection (b).
       (b) Amounts To Be Increased.--The dollar amounts to be 
     increased pursuant to subsection (a) are the following:
       (1) Compensation.--The dollar amounts in effect under 
     section 1114 of title 38, United States Code.
       (2) Additional compensation for dependents.--The dollar 
     amounts in effect under section 1115(1) of such title.
       (3) Clothing allowance.--The dollar amount in effect under 
     section 1162 of such title.
       (4) New dic rates.--The dollar amounts in effect under 
     paragraphs (1) and (2) of section 1311(a) of such title.
       (5) Old dic rates.--The dollar amounts in effect under 
     paragraph (3) of section 1311(a) of such title.
       (b) Additional dic for surviving spouses with minor 
     children.--The dollar amount in effect under section 1311(b) 
     of such title.
       (7) Additional dic for disability.--The dollar amounts in 
     effect under sections 1311(c) and 1311(d) of such title.
       (8) DIC for dependent children.--The dollar amounts in 
     effect under sections 1313(a) and 1314 of such title.
       (c) Determination of increase.--(1) The increase under 
     subsection (a) shall be made in the dollar amounts specified 
     in subsection (b) as in effect on November 30, 2002.
       (2) Except as provided in paragraph (3), each such amount 
     shall be increased by the same percentage as the percentage 
     by which benefit amounts payable under title II of the Social 
     Security Act (42 U.S.C. 401 et seq.) are increased effective 
     December 1, 2002, as a result of a determination under 
     section 215(i) of such Act (42 U.S.C. 415(i)).
       (3) Each dollar amount increased pursuant to paragraph (2) 
     shall, if not a whole dollar amount, be rounded down to the 
     next lower whole dollar amount.
       (d) Special Rule.--The Secretary may adjust 
     administratively, consistent with the increases made under 
     subsection (a), the rates of disability compensation payable 
     to persons within the purview of section 101 of Public Law 
     85-857 (72 Stat. 1263) who are not in receipt of compensation 
     payable pursuant to chapter 11 of title 38, United States 
     Code.
       (e) Publication Requirement.--At the same time as the 
     matters specified in section 215(i)(2)(D) of the Social 
     Security Act (42 U.S.C. 415(i)(2)(D)) are required to be 
     published by reason of a determination made under section 
     215(i) of such Act during fiscal year 2003, the Secretary 
     shall publish in the Federal Register the amounts specified 
     in subsection (b) as increased under this section.

                        TITLE II--HEALTH MATTERS

     SEC. 201. NURSING HOME STAFFING LEVELS.

       Section 1710B(b) is amended to read as follows:
       ``(b)(1) The Secretary shall ensure that the staffing and 
     level of extended care services, excluding nursing home care, 
     provided by the Secretary nationally in facilities of the 
     Department during any fiscal year is not less than the 
     staffing and level of such services provided nationally in 
     facilities of the Department during fiscal year 1998.
       ``(2) The Secretary shall ensure that the average daily 
     census in nursing homes over which the Secretary has direct 
     jurisdiction, plus the average daily census of veterans 
     placed by the Secretary in community nursing homes pursuant 
     to a contract, plus the average daily census of veterans for 
     which the Secretary pays per diem to States for nursing home 
     care in a State nursing home, is not less in total than in 
     fiscal year 1998.''.
                                  ____



                            The Secretary of Veterans Affairs,

                                       Washington, April 18, 2002.
     Hon. Richard B. Cheney,
     President of the Senate,
     Washington, DC.
       Dear Mr. President: Enclosed is a draft bill containing two 
     very important components of the President's FY 2003 budget 
     request for the Department of Veterans Affairs: legislation 
     to (1) authorize a cost of living increase in rates of 
     disability compensation and dependency and indemnity 
     compensation, and (2) revise the requirement for maintaining 
     levels of extended-care services to veterans. I request that 
     this bill be referred to the appropriate committee for prompt 
     consideration and enactment.
       Section 101 of the draft bill would direct the Secretary of 
     Veterans Affairs to increase administratively the rates of 
     compensation for service-disabled veterans and of dependency 
     and indemnity compensation (DIC) for the survivors of 
     veterans whose deaths are service related, effective December 
     1, 2002. As provided in the President's FY 2003 budget 
     request, the rate of increase would be the same as the cost-
     of-living adjustment (COLA) that will be provided under 
     current law to veterans' pension and Social Security 
     recipients, which is currently estimated to be 1.8 percent.
       We estimate that enactment of this section would cost $279 
     million during FY 2003, $1.66 billion over the period FY 
     2003-2007 and $3.45 billion over the period FY 2003-2012. 
     Although this section is subject to the pay-as-you-go (PAYGO) 
     requirement of the Omnibus Budget Reconciliation Act of 1990 
     (OBRA), the PAYGO effect would be zero because OBRA requires 
     that the full compensation COLA be assumed in the baseline. 
     We believe this proposed COLA is necessary and appropriate in 
     order to protect the benefits of affected veterans and their 
     survivors from the eroding effects of inflation. These worthy 
     beneficiaries deserve no less.
       Section 201 of the draft bill would amend section 1710B(b) 
     of title 38, United States Code, to revise the statutory 
     requirement that the Secretary continue to provide veterans 
     with extended care services at 1998 levels. Current law, 
     established in the 1999 Veterans Millennium and Health Care 
     Benefits Act, requires VA to maintain the staffing and level 
     of extended care services provided by the Department 
     nationally in facilities of the Department at levels not less 
     than the staffing and level of such services provided 
     nationally during FY 1998. We propose to amend the law as it 
     applies to nursing home care to allow VA to also count 
     nursing home care VA procures in the community, and supports 
     in State nursing homes, when determining whether the 
     Department is maintaining its level of effort in providing 
     such care.
       For more than 30 years, VA has provided veterans with 
     nursing home care through contracts with private sector 
     nursing homes and by paying states per diem for nursing home 
     care furnished in State nursing homes. Of the total amount of 
     VA-supported nursing home care in FY 2000, VA furnished 
     approximately thirty-eight percent directly in VA-operated, 
     nursing homes. VA supported approximately twelve percent 
     through contracts with private nursing homes, and fifty 
     percent through care furnished in State nursing homes.
       VA also provides up to sixty-five percent of the cost of 
     construction of State nursing homes. That has encouraged the 
     expansion of the State Home Program to the point that there 
     are currently 108 such homes nationwide. The availability of 
     the State Home Program and the contract program has improved 
     veterans' access to nursing home care, and has provided 
     veterans with greater choice to meet both clinical needs and 
     preferences of placement near family. We believe it is 
     appropriate and these two sources of nursing home care be 
     counted when assessing the effort VA puts into nursing home 
     care.
       Increasing the FY 2002 average daily census in VA nursing 
     homes to 1998 levels would require us to divert to that 
     program large amount of funds VA currently devotes to other 
     health-care purposes, including payments for community 
     nursing-home care, and grants to construct State nursing 
     homes. However, as stated above, the community and State 
     nursing home programs enable VA to offer veterans both choice 
     and access to care closer to loved ones, values that VA does 
     not want to jeopardize. Using other extended care funds to 
     immediately move to achieve 1998 levels could jeopardize

[[Page 5410]]

     the excellent mix of those other services that VA now offers. 
     The Department now provides veterans a balanced program of 
     extended care services that best meets their needs. It would 
     greatly disserve veterans to dramatically shift funding to 
     meet the strictures of the current requirement for provision 
     of care in VA-operated nursing homes, particularly when the 
     cost of contract nursing homes care is significantly less 
     than the cost of providing care in VA facilities.
       Enactment of our proposal would permit us to continue the 
     overall FY 1998 level of effort for this care as measured by 
     average daily census, without the need to divert an estimated 
     $161.2 million by the end of FY 2004 from resources which 
     would otherwise be available to meet other critical health-
     care needs.
       We are advised by the Office of Management and Budget that 
     there is no objection to the transmittal of this draft bill 
     to the Congress and its enactment would be in accord with the 
     program of the President.
           Sincerely yours,
                                              Anthony J. Principi.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Rockefeller):
  S. 2230. A bill to amend title 38, United States Code, to make 
permanent the authority of the Secretary of Veterans Affairs to 
guarantee adjustable rate mortgages, to authorize the guarantee of 
hybrid adjustable rate mortgages, and for other purposes; to the 
Committee on Veterans' Affairs.
  Mr. SPECTER. Mr. President, I have sought recognition today to 
comment briefly on legislation I am introducing which will help many 
veterans achieve the dream of home ownership. The legislation would 
permit the Department of Veterans Affairs, VA, to guarantee adjustable 
rate mortgage, ARM, loans as part of its loan guaranty program. The 
legislation would also give VA the authority to guarantee a relatively 
new type of ARM financing, ``hybrid'' ARM loans. Hybrid ARM's provide a 
fixed rate of interest during the first three to ten years of the loan, 
and an annual interest rate adjustment thereafter. Both conventional 
ARM's and hybrid ARM's would expand the financing options available to 
veterans, options which are currently available under Federal Housing 
Administration, FHA, insured loan programs for non-veterans.
  The VA loan guaranty benefit has helped millions of active duty 
service members and veterans to purchase homes without a down payment. 
VA currently provides a guaranty only on loans applying a fixed rate of 
interest over a thirty year period, so-called ``30-year conventional'' 
loans. While a 30-year conventional loan makes sense for some home 
buyers, it does not provide the flexibility others need given differing 
personal circumstances. ARM loans and hybrid ARM loans provide that 
flexibility.
  Traditional ARM and hybrid ARM loans provide flexibility by offering 
lower rates of interest during an initial period, one year for 
traditional ARM's and three, five, seven, or ten years for hybrid 
ARM's, as compared to 30-year conventional rates. Lower rates translate 
into lower monthly payments, often making a home more affordable and 
permitting home buyers to qualify for loans. In addition, hybrid ARM's 
have another attractive aspect in that they provide the security of a 
lower interest rate for a fixed number of years prior to the annual 
adjustment period. Service members and veterans who know beforehand 
they will be moving out of their homes in a set number of years may 
find hybrid ARM's make financial sense given their circumstances. While 
home buyers must be prudent in choosing to use ARM financing, 
foreclosing the option to veterans, in my estimation, smacks of 
paternalism. ARM loans are insured by FHA; my legislation would simply 
apply to the VA loan guaranty program a principle already embraced by 
FHA and the commercial lending sector: one type of financing does not 
meet all home buyer needs.
  This bill would also extend certain protections to veterans who use 
ARM financing. During an annual interest rate adjustment period, rates 
would not be permitted to increase more than one percent. Further, 
interest rates would not be permitted to exceed more than five 
percentage points above the initial fixed rate. These are standards 
that have evolved in the marketplace over the past 20 years; veterans, 
like other home purchasers, should gain the benefit of these 
protections.
  The VA supports the addition of an ARM option to its loan guaranty 
program. It administered a successful, and popular, ARM pilot program 
in the mid 1990's; the program was so popular that ARM's constituted up 
to 21 percent in 1995, of VA- guaranteed home loans. Unfortunately, the 
program was not reauthorized by Congress. The time has arrived to 
rectify that oversight. I ask my colleagues for their support.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2230

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. AUTHORITY OF SECRETARY OF VETERANS AFFAIRS TO 
                   GUARANTEE ADJUSTABLE RATE MORTGAGES AND HYBRID 
                   ADJUSTABLE RATE MORTGAGES.

       (a) Permanent Authority To Guarantee Adjustable Rate 
     Mortgages.--Subsection (a) of section 3707 of title 38, 
     United States Code, is amended to read as follows:
       ``(a) The Secretary may guarantee adjustable rate mortgages 
     for veterans eligible for housing loan benefits under this 
     chapter.''.
       (b) Authority To Guarantee Hybrid Adjustable Rate 
     Mortgages.--That section is further amended--
       (1) in subsection (b), by striking ``Interest rate 
     adjustment provisions'' and inserting ``Except as provided in 
     subsection (c)(1), interest rate adjustment provisions'';
       (2) by redesignating subsections (c) and (d) as subsections 
     (d) and (e), respectively; and
       (3) by inserting after subsection (b) the following new 
     subsection (c):
       ``(c) Adjustable rate mortgages that may be guaranteed 
     under this section include adjustable rate mortgages 
     (commonly referred to as `hybrid adjustable rate mortgages') 
     having interest rate adjustment provisions that--
       ``(1) are not subject to subsection (b)(1);
       ``(2) specify an initial rate of interest that is fixed for 
     a period of not less than the first three years of the 
     mortgage term;
       ``(3) provide for an initial adjustment in the rate of 
     interest by the mortgagee at the end of the period described 
     in paragraph (2); and
       ``(4) comply in such initial adjustment, and any subsequent 
     adjustment, with paragraphs (2) through (4) of subsection 
     (b).''.
       (c) Implementation of Authority To Guarantee Hybrid 
     Adjustable Rate Mortgages.--The Secretary of Veterans Affairs 
     may exercise the authority under section 3707 of title 38, 
     United States Code, as amended by this section, to guarantee 
     adjustable rate mortgages described in subsection (c) of such 
     section 3707, as so amended, in advance of any rulemaking 
     otherwise required to implement such authority.
                                 ______
                                 
      By Mr. SPECTER (for himself and Mr. Rockefeller):
  S. 2231. A bill to amend title 38, United States Code, to provide an 
incremental increase in amounts of educational assistance for survivors 
and dependents of veterans, and for other purposes; to the Committee on 
Veterans' Affairs.
  Mr. SPECTER. Mr. President, I have sought recognition to comment 
briefly on legislation I have introduced today which would increase 
educational assistance benefits for two highly worthy groups: survivors 
of service members who were killed on active duty or who died after 
service as consequence of service-related disabilities; and immediate 
family members of veterans who survived service but who are living with 
permanent and total disabilities.
  No one can doubt that spouses and children of service-deceased 
members of the armed forces are worthy of our Nation's gratitude. No 
less worthy are those whose veteran-spouse returned from service in a 
profoundly disabled state and, in many cases, later died as a direct 
result of that same disability. It is entirely proper that the Nation 
provide these worthy people with sufficient educational assistance 
benefits to offset the loss of support that would have been provided by 
the veteran but for his or her service-related wounds.
  The legislation I introduce today would increase the rate of monthly 
Survivors' and Dependents' Education Assistance, DEA, benefits from 
$670 to $985. The increase would be phased in over a two-year period, 
and would reflect the same phased-in increase provided to veterans 
eligible for Montgomery GI Bill, MGIB, benefits under

[[Page 5411]]

Public Law 107-103, the recently-enacted ``Veterans Education and 
Benefits Expansion Act of 2001.'' Under my bill, DEA benefits would 
first increase from $670 to $900 per month on October 1, 2002, and to 
$985 per month on October 1, 2003. In addition, the legislation would 
equalize with MGIB benefits the number of months, at 36, an eligible 
person would be allowed to use his or her benefit.
  This legislation would create parity between DEA and MGIB monthly 
benefits as recommended by a recent Department of Veterans Affairs, VA, 
program evaluation. Both programs would provide an aggregate of $35,460 
worth of education benefits. Thus, both veterans and survivors would 
have the resources necessary to meet the average cost of tuition, fees, 
room, and board at four-year, public institutions of higher learning. 
As was stated by VA's Deputy Secretary, Dr. Leo Mackay, in connection 
with a Committee on Veterans Affairs hearing on June 28, 2001, VA 
``believe[s] it is only fair that these benefits should be at the same 
level as those provided to veterans.'' VA estimates that a monthly 
benefit at that level will entice 90% of eligible persons to use the 
benefit.
  In addition to increasing DEA benefits, the legislation I have 
introduced today would provide a $4 million funding increase for State 
Approving Agencies, SAA, State educational program certifying offices 
which are funded by VA grants. These offices protect the integrity of 
VA educational assistance and job-training programs and protect 
veterans and survivors, and, not unimportantly, taxpayers, from 
fraudulent ``providers'' of education and training opportunities. Since 
1989, funding for SAAs has been nearly flat, but SAA responsibilities 
have grown. Most recently, Public Law 107-103 tasked the SAAs with 
veteran and servicemember outreach in each state, and expanded the 
scope of education programs which SAAs must review and approve. My 
legislation would provide an increase, from $14 million to $18 million 
in fiscal year 2003, to address the loss of purchasing power absorbed 
by SAAs over the last decade, and to adequately fund the additional 
responsibilities SAAs have been given.
  I hope there will be unanimous support for this legislation. Our 
troops in Afghanistan and elsewhere need to know that if they die or 
are seriously injured on the battlefield, their loved ones will be 
cared for. This legislation will assure that survivors' needs in the 
critical area of education will be met.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2231

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Survivors' and Dependents' 
     Educational Assistance Adjustment Act of 2002''.

     SEC. 2. INCREMENTAL INCREASE IN RATES OF SURVIVORS' AND 
                   DEPENDENTS' EDUCATIONAL ASSISTANCE.

       (a) Survivors' and Dependents' Educational Assistance.--
     Section 3532 of title 38, United States Code, is amended--
       (1) in subsection (a)--
       (A) in paragraph (1), by striking ``at the monthly rate 
     of'' and all that follows and inserting ``at the monthly rate 
     of--
       ``(A) for months occurring during fiscal year 2003, $900 
     for full-time, $676 for three-quarter-time, or $450 for half-
     time pursuit; and
       ``(B) for months occurring during a subsequent fiscal year, 
     $985 for full-time, $740 for three-quarter-time, or $492 for 
     half-time pursuit.''; and
       (B) in paragraph (2), by striking ``at the rate of'' and 
     all that follows and inserting ``at the rate of the lesser 
     of--
       ``(A) the established charges for tuition and fees that the 
     educational institution involved requires similarly 
     circumstanced nonveterans enrolled in the same program to 
     pay; or
       ``(B)(i) for months occurring during fiscal year 2003, $900 
     per month for a full-time course; or (ii) for months 
     occurring during a subsequent fiscal year, $985 per month for 
     a full-time course.'';
       (2) in subsection (b), by striking ``at the rate of'' and 
     all that follows and inserting ``at the rate of--
       ``(1) for months occurring during fiscal year 2003, $900 
     per month; and
       ``(2) for months occurring during a subsequent fiscal year, 
     $985 per month.''; and
       (3) in subsection (c)(2), by striking ``shall be'' and all 
     that follows and inserting ``shall be--
       ``(A) for months occurring during fiscal year 2003, $727 
     for full-time, $545 for three-quarter-time, or $364 for half-
     time pursuit; and
       ``(B) for months occurring during a subsequent fiscal year, 
     $795 for full-time, $596 for three-quarter-time, or $398 for 
     half-time pursuit.''.
       (b) Correspondence Courses.--Section 3534(b) of that title 
     is amended by striking ``for each $670'' and all that follows 
     and inserting ``for each amount which is paid to the spouse 
     as an educational assistance allowance for such course as 
     follows:
       ``(1) For amounts paid during fiscal year 2003, $900.
       ``(2) For amounts paid during a subsequent fiscal year, 
     $985.''.
       (c) Special Restorative Training.--Section 3542(a) of that 
     title is amended--
       (1) by inserting ``(1)'' after ``(a)'';
       (2) by designating the second sentence as paragraph (2) and 
     indenting such paragraph, as so designated, two ems from the 
     left margin;
       (3) in paragraph (1), as so designated, by striking ``the 
     basic rate of $670 per month.'' and inserting ``the basic 
     rate of--
       ``(A) for months occurring during fiscal year 2003, $900 
     per month; and
       ``(B) for months occurring during a subsequent fiscal year, 
     $985 per month.''; and
       (4) in paragraph (2), as so designated--
       (A) by striking ``$184 per calendar month'' and inserting 
     ``$282 per calendar month for months occurring during fiscal 
     year 2003, or $307 per calendar months for months occurring 
     during a subsequent fiscal year''; and
       (B) by striking ``$184 a month'' and inserting ``$282 a 
     month for months occurring during fiscal year 2003, or $307 a 
     month for months occurring during a subsequent fiscal year''.
       (d) Apprenticeship Training.--Section 3687(b)(2) of that 
     title is amended by striking ``shall be $488 for the first 
     six months'' and all that follows and inserting ``shall be--
       ``(A) $655 for the first six months, $490 for the second 
     six months, $325 for the third six months, and $164 for the 
     fourth and any succeeding six-month period of training, if 
     such six-month period of training begins during fiscal year 
     2003; and
       ``(B) $717 for the first six months, $536 for the second 
     six months, $356 for the third six months, and $179 for the 
     fourth and any succeeding six-month period of training, if 
     such six-month period of training begins during a subsequent 
     fiscal year.''.
       (e) Effective Date.--(1) The amendments made by this 
     section shall take effect as of October 1, 2003, and shall 
     apply with respect to educational assistance allowances 
     payable under chapter 35 and section 3687(b)(2) of title 38, 
     United States Code, for months beginning on or after that 
     date.
       (2) No adjustment in rates of monthly training allowances 
     shall be made under section 3687(d) of title 38, United 
     States Code, for fiscal years 2003 and 2004.

     SEC. 3. MODIFICATION OF DURATION OF EDUCATIONAL ASSISTANCE.

       Section 3511(a)(1) of title 38, United States Code, is 
     amended by striking ``45 months'' and all that follows and 
     inserting ``45 months, or 36 months in the case of a person 
     who first files a claim for educational assistance under this 
     chapter after the date of the enactment of the Survivors' and 
     Dependents' Educational Assistance Adjustment Act of 2002, or 
     to the equivalent thereof in part-time training.''.

     SEC. 4. INCREASE IN AGGREGATE ANNUAL AMOUNT AVAILABLE FOR 
                   STATE APPROVING AGENCIES FOR ADMINISTRATIVE 
                   EXPENSES.

       (a) Increase in Amount.--Section 3674(a)(4) of title 38, 
     United States Code, is amended in the first sentence by 
     striking ``may not exceed $13,000,000'' and all that follows 
     through the end and inserting ``may not exceed 
     $18,000,000.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2002.
                                 ______
                                 
      By Mr. THOMAS (for himself, Mr. Rockefeller, Mr. Jeffords, Mr. 
        Specter, Mrs. Carnahan, Ms. Snowe, and Mr. Cleland):
  S. 2233. A bill to amend title XVIII of the Social Security Act to 
establish a medicare subvention demonstration project for veterans; to 
the Committee on Finance.
  Mr. THOMAS. Mr. President, I am pleased to rise today to introduce 
the Medicare Equity for Veterans Act of 2002 with Senators Rockefeller, 
Jeffords, Specter, Carnahan, Snowe, and Cleland. This legislation, 
known as Medicare Subvention, will require the Centers for Medicare and 
Medicaid Services, (CMS), to reimburse VA facilities for services 
provided to certain Medicare-eligible veterans. These servicemen and 
women have paid into the

[[Page 5412]]

Medicare system over the course of their careers, just as every other 
American has done, but are prohibited from utilizing the program when 
treated at a VA facility. It is only fair that they be allowed to use 
their Medicare coverage in the private sector or at a VA facility.
  The number of veterans enrolled in the VA health system has more than 
doubled since 1996. In many VA facilities, Medicare-eligible veterans, 
called Priority 7 or Category C veterans, compose the largest increase 
in patient caseloads. At the VA facility in Cheyenne, WY, only 131 
Priority 7 veterans were treated in fiscal year 1997. However, in 
fiscal year 2001 the same facility treated over 2,200 Priority 7 
veterans. Clearly, the VA is experiencing substantial growth and even 
more obvious is the fact that veterans want to receive their health 
care services at a VA facility. Unfortunately, funding for the VA 
health care system has not kept pace. In my state, Medicare Subvention 
would expand access to services as most communities are designated 
primary care health professional shortage areas. Private sector 
physicians and other primary care providers are not as readily 
available as they are in other part of the country, which means that 
the VA is sometimes the only option.
  Specifically, the Medicare Equity for Veterans Act of 2002 
establishes a three-year demonstration program at ten VA sites, three 
of which must be in rural areas. The Secretaries of VA and HHS may 
either choose Medicare+Choice or Preferred Provider Option model for 
the sites. These options give the Secretaries flexibility to determine 
which model works best for each particular site--ensuring veterans 
receive quality and timely care.
  The VA can provide Medicare covered services more efficiently and 
cost effectively than the private sector, which could potentially save 
the Medicare program money. Under the Preferred Provider Option, the VA 
would be reimbursed at 95 percent of the comparable private sector rate 
and 100 percent of the Medicare+Choice applicable rate, after excluding 
such targeted private hospital adjustments as Medicare Disproportionate 
Share Hospital payments, Graduate Medical Education, Indirect Medical 
Education and capital-related costs.
  The VA will be responsible for continuing to pay for services 
provided to Medicare-eligible veterans who have been treated prior to 
fiscal year 1998. This ensures a good faith effort on the part of the 
VA, but will also allow the agency to immediately begin billing 
Medicare for services provided to Medicare-eligible veterans after 
fiscal year 1998. Additionally, this bill protects the Medicare Trust 
Fund by capping Medicare payments to the VA at $75 million a year for 
the duration of the three-year demonstration.
  Prior to the end of the demonstration, the Government Accounting 
Office, GAO, must conduct a thorough program evaluation. The GAO report 
ensures the demonstration met its goal of providing quality and cost 
effective care to our nation's veterans. The GAO is further required to 
provide specific recommendations to the Secretaries of VA and HHS on 
how best to expand Medicare Subvention nationwide.
  Veterans deserve quality, efficient and equitable health care 
treatment. Enactment of this legislation is the first step toward 
attaining that goal. I urge all my colleagues to consider cosponsoring 
the Medicare Equity for Veterans Act of 2002.
  Mr. ROCKEFELLER. Mr. President, I am pleased to join with Senators 
Thomas and Jeffords to introduce the Medicare Equity for Veterans Act 
of 2002. This bill will authorize a demonstration project to allow VA 
to bill Medicare for health care services provided to certain dual 
eligible beneficiaries. The legislation, known as VA subvention, is a 
concept that has been discussed over the years by many of us in 
Congress, by veterans service organizations, and by advisory bodies 
studying the VA health care system. Although the VA subvention proposal 
is a small effort compared to the other changes that must be made to 
the Medicare program, it is enormously important to our veterans and 
the health care system they depend upon.
  Until recently, when we looked at the VA health care budget, we 
focused on the declining veteran population and declining demand. We 
are in a totally different predicament today. More and more veterans 
are turning to the VA health care system, and that is a success story. 
More than 38 percent of all veterans are Medicare eligible; 
unfortunately, many of these veterans are seeking VA care because of 
the lack of drug benefits in the Medicare program. An uncertain economy 
and the collapse of many HMOs have also contributed to the rising 
number of veterans turning to VA. While I will continue to push for 
Medicare prescription drug benefits, something must be done to 
alleviate the pressure on the VA health care system. VA simply does not 
have unlimited resources to meet this demand.
  VA now has more than 6 million veterans enrolled in health care 
services. That's more than double the figure in 1996. Not surprisingly, 
access to care has been affected by the high demand for services. It is 
not unusual for some veterans in certain pockets of the country to have 
to wait for more than a year to have their initial appointment with a 
VA primary care physician. Because of concerns about access and quality 
of care, last fall the VA was prepared to cease enrolling new higher 
income veterans, so called Category C or Priority 7 veterans, into the 
VA health care system. Their decision was based simply upon budgetary 
constraints, as VA suffered from a $400 million shortfall. Except for a 
last minute approval of supplemental funding, veterans would have been 
turned away from VA health care services.
  This legislation would allow VA and HHS to either choose a Medi- 
care+Choice or Preferred Provider Option at ten VA sites, three of 
these sites must be in rural areas. Several years ago the Department of 
Defense attempted a Medicare subvention pilot and lost money, primarily 
on the restrictive nature of the capitation model they set up. This 
proposal will give VA the opportunity to look at both the preferred 
provider and Medicare+Choice model, and in the end select the model 
that works best for them.
  For veterans, approval of this veterans subvention would mean the 
infusion of new revenue to their health care system and, thus, greater 
access to care. For the Department of Health and Human Services, a VA 
subvention demonstration project will provide the opportunity to assess 
the effects of coordination on improving efficiency, access, and 
quality of care for dual-eligible beneficiaries. In addition, it would 
also present an opportunity to reduce Medicare expenditures. Under the 
Medicare+Choice option in our legislation, the reimbursable rate will 
be 100 percent of the rate normally paid to a Medicare+Choice provider. 
However, under the Preferred Provider Option, reimbursement rates would 
be 95 percent of otherwise applicable rates. For both options the rates 
would be further discounted by excluding Disproportionate Hospital 
Share adjustments, VA's direct graduate medical education costs, its 
indirect medical education costs, and 67 percent of capital-related 
costs. As a further way to limit exposure to the Trust Fund during the 
three year demonstration portion of this bill, this proposal caps all 
Medicare payments to the VA at $75 million per year. Allowing VA to 
bill Medicare is good for the Federal health care system overall. It's 
a classic ``win-win'' situation.
  VA would also be required to maintain its current level of services 
to Medicare-eligible veterans who have been served prior to 1998, and 
would be effectively limited to reimbursement for care provided to new 
patients since then. In 1998, Congress allowed all veterans to enroll 
for VA care and receive a standard benefits package, which includes 
prescription drugs.
  Prior to the end of the three year demonstration, GAO will do a 
thorough evaluation of the program and submit a report to Congress, 
complete with details on performance measures and justification for 
planned expansion. Based upon the GAO recommendations, VA and HHS will 
jointly determine the

[[Page 5413]]

most appropriate health care delivery models for the expansion of the 
program through the entire VA health care system. GAO will continue to 
evaluate the expansion of the program for an additional six years.
  During the first session of the 106th Congress, Senator Jeffords and 
I successfully pushed a similar proposal through the Senate Finance 
Committee. Indeed, over the last couple years, we have tried to enact 
this proposal several times. Unfortunately, we have continually met 
resistance. Our goal is to overcome this resistance and enact this 
proposal without delay. I believe that without enactment of a Medicare 
subvention program, VA may well choose to bar middle-income veterans 
without a service-connected disability from coming to the VA for care. 
I think we all want to avoid that prospect.
  There are over 33 thousand Medicare eligible veterans enrolled in the 
VA health benefits program in my State of West Virginia. The VA spent 
almost $116 million providing health care to them last year. Though 
this is telling information, I cannot provide my colleagues with the 
truly crucial piece of the story, that is, the number of these 
Medicare-eligible veterans who aren't coming to VA because of long 
waiting lines and lack of adequate resources. This demonstration 
project would encourage these eligible veterans, who have not 
previously received care from the Huntington, Beckley, Martinsburg, and 
Clarksburg VAMCs, to do so.
  Truly, this VA/Medicare proposal is a way to provide quality health 
care to veterans who are eligible for both systems of care, while at 
the same time preserving and protecting the Medicare Trust Fund. Let us 
not delay any longer.
  I wish to remind my colleagues of the burden VA now carries in 
providing health care to Medicare-eligible veterans. Many Senators have 
asked me for a solution to the financial woes of the hospitals in their 
States. Enacting this proposal is part of the answer.
  Veterans deserve the opportunity to come to VA facilities for their 
care and bring their Medicare coverage with them. It makes sense for 
all parties.
  Mr. GRASSLEY. Mr. President, today, Senator Thomas has introduced a 
bill to establish a medicare subvention demonstration project for 
veterans and I would like to take this opportunity to say a few words 
about the issue of medicare subvention for Department of Veterans 
Affairs (VA) health care. I have heard from many Iowa veterans who are 
frustrated that Medicare does not reimburse for medical care provided 
by the VA. While veterans who have a disability connected to military 
service have their health care paid for in whole or in part by the VA, 
veterans who do not have a service connected disability are listed as 
``priority 7'' and are required to pay co-payments for the receipt of 
VA health care. Many of these priority 7 veterans are Medicare 
eligible, yet they cannot use their Medicare benefits to pay for VA 
health care.
  The number of priority 7 veterans enrolled in VA health care has 
increased greatly in recent years, especially in my state of Iowa. This 
is only the tip of the iceberg in terms of the number of veterans 
eligible to enroll in the VA health system as priority 7. However, the 
current VA funding formula does not allocate resources to pay for the 
care of priority 7 veterans. These costs are intended to be recouped by 
billing private insurance or through out-of-pocket co-pays charged to 
the veteran, which in fact fall far short of covering the additional 
costs to the VA system of serving priority 7 veterans. Allowing 
Medicare to reimburse for health care provided in VA facilities would 
help alleviate this funding short-fall in the VA system while giving 
Medicare eligible veterans greater choice and flexibilty in meeting 
their health care needs. Medicare subvention for VA health care would 
be a win-win situation for veterans, which is why I strongly support 
the concept of Medicare subvention for VA health care.
  Questions remain about what effect Medicare subvention for VA health 
care could have on the Medicare trust fund. It is possible that 
Medicare outlays will increase if Medicare begins to pay for health 
care at VA facilities for Medicare eligible veterans currently using 
the VA. However, if veterans who are covered by Medicare begin to use 
the VA in lieu of private health care and the VA is able to provide 
those services at a lower cost, Medicare could actually see savings.
  In the 106th Congress, the Senate Finance Committee reported a bill, 
S. 1928, which included a Medicare subvention demonstration program 
similar to the one introduced by Senator Thomas today. The CBO scored 
the Medicare subvention portion of this bill as costing Medicare $70 
million over five years. This is a matter that should be studied 
further and is an issue that would be closely examined in a 
demonstration program such as the one Senator Thomas has proposed.
  At the end of the day, Medicare subvention for VA health care is a 
good idea. I believe that Senator Thomas is on the right track with his 
proposed Medicare subvention demonstration program and I look forward 
to working with him and other members of the Senate Finance Committee 
to move forward on this important issue.

                          ____________________