House Report 105-833 - Activities of the Committee of Veterans'Affairs

[House Report 105-833]
[From the U.S. Government Publishing Office]

Union Calendar No. 474

105th Congress, 2d Session - - - - - - - - - - - - House Report 105-833
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ACTIVITIES REPORT

of the

COMMITTEE ON VETERANS' AFFAIRS

HOUSE OF REPRESENTATIVES

ONE HUNDRED FIFTH CONGRESS

__________

FIRST SESSION

Convened January 7, 1997

Adjourned November 13, 1997

SECOND SESSION

Convened January 27, 1998

Adjourned December 19, 1998

December 29, 1998--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

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U.S. GOVERNMENT PRINTING OFFICE
*69-006 WASHINGTON : 1998

COMMITTEE ON VETERANS' AFFAIRS

BOB STUMP, Arizona, Chairman

CHRISTOPHER H. SMITH, New Jersey LANE EVANS, Illinois
MICHAEL BILIRAKIS, Florida JOSEPH P. KENNEDY II,
FLOYD SPENCE, South Carolina Massachusetts
TERRY EVERETT, Alabama BOB FILNER, California
STEVE BUYER, Indiana LUIS V. GUTIERREZ, Illinois
JACK QUINN, New York JAMES E. CLYBURN, South Carolina
SPENCER BACHUS, Alabama CORRINE BROWN, Florida
CLIFF STEARNS, Florida MICHAEL F. DOYLE, Pennsylvania
DAN SCHAEFER, Colorado FRANK MASCARA, Pennsylvania
JERRY MORAN, Kansas COLLIN C. PETERSON, Minnesota
JOHN COOKSEY, Louisiana JULIA CARSON, Indiana
ASA HUTCHINSON, Arkansas SILVESTRE REYES, Texas
J.D. HAYWORTH, Arizona VIC SNYDER, Arkansas
HELEN CHENOWETH, Idaho CIRO D. RODRIGUEZ, Texas
RAY LaHOOD, Illinois
BILL REDMOND, New Mexico

Carl D. Commenator, Chief Counsel and Staff Director

__________

SUBCOMMITTEE ON HEALTH

CLIFF STEARNS, Florida, Chairman

CHRISTOPHER H. SMITH, New Jersey LUIS V. GUTIERREZ, Illinois
MICHAEL BILIRAKIS, Florida JOSEPH P. KENNEDY II,
SPENCER BACHUS, Alabama Massachusetts
JERRY MORAN, Kansas CORRINE BROWN, Florida
JOHN COOKSEY, Louisiana MICHAEL F. DOYLE, Pennsylvania
ASA HUTCHINSON, Arkansas COLLIN C. PETERSON, Minnesota
HELEN CHENOWETH, Idaho JULIA CARSON, Indiana
__________

SUBCOMMITTEE ON BENEFITS

JACK QUINN, New York, Chairman

DAN SCHAEFER, Colorado BOB FILNER, California
J.D. HAYWORTH, Arizona FRANK MASCARA, Pennsylvania
RAY LaHOOD, Illinois SILVESTRE REYES, Texas
BILL REDMOND, New Mexico CIRO D. RODRIGUEZ, Texas
__________

SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS

TERRY EVERETT, Alabama, Chairman

BOB STUMP, Arizona JAMES E. CLYBURN, South Carolina
FLOYD SPENCE, South Carolina VIC SNYDER, Arkansas
STEVE BUYER, Indiana FRANK MASCARA, Pennsylvania

(ii)

Committee Staff

Carl D. Commenator, Chief Counsel and Staff Director

Patrick E. Ryan, Deputy Chief Counsel

Kingston E. Smith, General Counsel and Staff Director, Subcommittee on
Oversight and Investigations

Daniel G. Amon, Press Secretary

Jill T. Cochran, Democratic Professional Staff Member

Charles M. Durishin, Democratic Staff Director

Susan C. Edgerton, Democratic Staff Director, Subcommittee on Health

Sally A. Elliott, Staff Assistant, Subcommittee on Benefits

Ralph J. Ibson, Staff Director, Subcommittee on Health

Angela L. Jeansonne, Staff Assistant, Subcommittee on Health

Darryl W. Kehrer, Staff Director, Subcommittee on Benefits

Elizabeth A. Kilker, Democratic Executive Assistant, Subcommittee on
Benefits

Eric J. Klos, Director of Information Services

Alicemary O. Leach, Investigative Counsel, Subcommittee on Oversight
and Investigations

Mary Ellen Mc Carthy, Democratic Professional Staff Member

Sandra K. McClellan, Democratic Executive Assistant, Subcommittee on
Health

Mary Stevens McDermott, Administrative and Financial Assistant

Kristine K. McElroy, Staff Assistant, Subcommittee on Oversight and
Investigations

Paige E. McManus, Professional Staff Member, Subcommittee on Benefits

Jeanne M. McNally, Legislative Coordinator

Thomas A. O'Donnell, Democratic Professional Staff Member

John P. Roerty, Professional Staff Member, Subcommittee on Health

Deborah A. Smith, Democratic Administrative Assistant/Executive
Assistant, Subcommittee Oversight and Investigations

Jeremiah B. Tan, Printing Clerk

Patricia Lee Tippett, Staff Assistant

Arthur K. Wu, Professional Staff Member, Subcommittee on Oversight and
Investigations

(iii)

LETTER OF SUBMITTAL

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House of Representatives,
Committee on Veterans' Affairs,
Washington, DC, December 29, 1998

Hon. Robin H. Carle,
Clerk, House of Representatives,
Washington, D.C.

Dear Ms. Carle: In accordance with Clause 1(d) of Rule XI
of the Rules of the House of Representatives, I submit herewith
the report of the Committee on Veterans' Affairs setting forth
its activities in reviewing and studying the application,
administration, and execution of those laws, the subject matter
of which is within the jurisdiction of our committee.

Bob Stump,
Chairman

FOREWORD

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The 105th Congress saw significant improvements to veterans
benefits for our nation's 25 million veterans. In order to
provide greater assistance to veterans and their families,
programs providing health care, compensation, education,
employment assistance, life insurance, and burial honors were
enhanced during the 105th Congress. In addition, new employee
assistance programs were created. Congress approved funding for
a number of construction projects to renovate and modernize
aging VA facilities that are expected to serve veterans for the
first half of the 21st century.
These enhancements were overshadowed at times by
controversy surrounding the adoption of the Administration's
proposal to stop paying disability compensation to veterans
with diseases related to tobacco use. Controversy also resulted
from the failure of the Senate to take up many of the bills
passed by the House during the second session, and from the
Senate's insistence on including authorizing legislation
pertaining to veterans in the Omnibus Consolidated
Appropriations measure (Public Law 105-277). This occurred
notwithstanding a compromise agreement on this legislation
reached by the House and Senate Committees on Veterans' Affairs
and included as part of the final amendments to H.R. 4110 that
are described below.
During the 105th Congress, proposals were enacted into law
to:

Provide two cost-of-living adjustments,
effective December 1 of 1997 and 1998, for the rates of
veterans' compensation for service-connected disability
and the rates of dependency and indemnity compensation
for survivors of certain disabled veterans.
Authorize the National Academy of Sciences
(NAS) to review and evaluate the available scientific
evidence and determine whether there is scientific
evidence of an association between illnesses
experienced by Gulf War veterans and service in the
Persian Gulf War.
Extend VA's special authority to provide
care to Persian Gulf veterans through December 31,
2001.
Establish authority for VA to provide
priority health care to treat illnesses that may be
attributable to a veteran's service in combat during
any period of war after the Persian Gulf War or during
any other future period of hostilities.
Require VA to enter into an agreement with
the National Academy of Sciences or another appropriate
independent organization to assist in developing a plan
for the establishment of a national center for the
study of war-related illnesses and post-deployment
health issues.
Extend VA's authority to evaluate the health
status of spouses and children of Persian Gulf War
veterans through December 31, 1999, and to provide such
examinations through VA facilities, or under its fee-
basis or other contract arrangements.
Improve access to veterans education
programs by requiring the VA and military service
branches to expand outreach services concerning VA
education program requirements to members of the armed
services.
Improve employment opportunities for persons
in the National Guard and Reserve by clarifying the
enforcement of veterans' employment and reemployment
rights with respect to a State as an employer, and
extending those rights to former members of the
uniformed services and reservists employed abroad by
U.S. companies.
Increase the special pension provided to
persons entered and recorded on the Army, Navy, Air
Force, and Coast Guard Medal of Honor Roll from $400 to
$600 per month.
Extend eligibility for burial in National
Cemeteries and funeral benefits to persons who served
in the Merchant Marine from August 16, 1945, to
December 31, 1946.
Modify the existing State Cemetery Grants
Program to authorize VA to pay up to 100 percent of the
cost of constructing and equipping state veterans'
cemeteries.
Authorize the Secretary of Veterans Affairs
to guarantee loans to provide multifamily transitional
housing for homeless veterans.
Extend the VA's authority to guarantee home
loans for members of the National Guard and Reserve
components to September 30, 2003. The current program
expires in 1999.
Authorize appropriations for fiscal years
1999 and 2000 in the amount of $241.1 million for the
Construction, Major Projects account and $8.5 million
for the Medical Care account for major medical leases.
Authorize VA to carry out an employee-
incentive scholarship program and an education debt
reduction program through December 31, 2001, to assist
in meeting the staffing needs for health professional
positions for which it is difficult to recruit or
retain qualified personnel.
Authorize VA to provide priority health care
for the treatment of cancer of the head or neck to
veterans who can document nasopharyngeal radium
irradiation treatment in service.
Extend VA's authority through December 31,
2001, to counsel and treat veterans for sexual trauma
experienced during military service.

Further, the Veterans Benefits Act of 1998, Title VIII,
H.R. 2400 (Public Law No. 105-178), effective October 1, 1998,
is one of the largest expansions of veterans benefits since the
Persian Gulf War and totals $1.6 billion over five years. It is
projected to assist over 500,000 veterans and their survivors
in the first year. It contains provisions to:

Increase the basic full time GI Bill
education rate by 20 percent from $440 per month to
$528 per month. This increases benefits by $860 million
over 5 years and improves benefits for about 386,300
veterans and active duty service members during the
first year.
Increase education benefits by 20 percent
for spouses and children of those service members
killed on active duty, who die of a service-connected
cause, or are totally service-connected disabled. This
increases benefits by $105 million over five years and
assists over 41,000 dependents in the first year.
Allow all surviving spouses of veterans who
die from a service-connected disability to resume
receiving assistance under the VA's Dependency and
Indemnity Compensation (DIC) program if their
subsequent remarriage ends, thus repealing a 1990
change in law. This increases benefits by $433 million
over 5 years and about 6,000 veterans' survivors are
eligible for reinstatement of DIC benefits.
Increase adaptive housing grants for
severely disabled veterans from $38,000 to $43,000, so
that veterans may purchase a home specially adapted to
their needs or make modifications to their current
residence. This increases benefits by $10 million over
5 years and improves benefits for about 855 veterans in
the first year.
Increase the adaptive automobile allowance
for severely disabled veterans from $5,500 to $8,000 to
help with the rising cost of automobiles. This
increases benefits by $10 million over 5 years and
improves benefits for about 4,300 veterans over that
period.
Increase the monthly pension benefit for
disabled veterans in need of the full time aid and
attendance of another person by $600 per year to assist
the increasing number of low-income veterans who need
alternatives to nursing home care. This increases
benefits by $200 million over 5 years and improves
benefits for about 62,000 veterans in the first year.
Reduce the amount which the VA must recoup
before paying disability benefits to veterans who also
qualified for separation bonuses when separating from
the military between 1991 and 1996. This increases
benefits by $4 million over 5 years and affects about
90,000 veterans who paid taxes on Special Separation
Bonuses.
Adopt the Administration's proposal
restricting the Secretary of Veterans Affairs'
authority to provide compensation or other service-
connected benefits for diseases or disabilities
attributable to a veteran's use of tobacco. Exceptions
can be made for diseases incurred while on active duty
or within one year of separation from active duty. This
specifies that VA may grant benefits to veterans who
may be entitled to a presumption that a disease or
disability is related to other in-service exposures
(such as Agent Orange, radiation, or diseases
associated with being a prisoner of war).

The Committee did not formally consider these provisions,
which were agreed to by the White House and House and Senate
leaders who negotiated the Transportation Equity Act for the
21st Century, H.R. 2400. Because of drafting errors contained
in this bill, provisions in the Internal Revenue Service
Restructuring and Reform Act of 1998, Public Law 105-206,
modified the original section 8202 of the Veterans Benefits Act
of 1998.
The Committee stepped up its oversight and investigative
activities during the 105th Congress by reestablishing the
Subcommittee on Oversight and Investigations. The Committee did
not have such a subcommittee during the 104th Congress, but had
one during the 103rd Congress. In addition to accomplishing
much of its planned agenda despite limited resources, the
subcommittee conducted major investigations on two matters
which arose in 1997--sexual harassment in the VA and burial
waivers at Arlington National Cemetery. The subcommittee also
provided oversight of the VA's first strategic and performance
plans under the requirements of the Government Performance and
Results Act of 1993.
Funding for veterans' programs is always a matter of
particular interest. For fiscal year 1999, the VA-HUD
Appropriations Act of 1999 (Public Law No. 105-276) adds $439
million to amounts requested by the President for the
Department of Veterans Affairs for fiscal year 1999. Total
funding for VA medical care is $17.8 billion, $251 million
above the President's request. This consists of an
appropriation of $17.3 billion and authority to spend
collections projected to total $577 million. VA medical
research is funded at $316 million ($16 million above
Administration), construction of VA facilities is funded at
$317 million ($79 million above Administration), and grants for
state veteran home construction are funded at $90 million ($53
million above Administration). The Veterans Benefits
Administration is funded at $812 million ($6 million above the
President's request and $58 million above last year's level).
All other accounts are funded at the level requested by the
President or slightly higher. The total appropriation is
$42.653 billion.
I wish to thank the Honorable Lane Evans, the Ranking
Minority Member, for his dedication to veterans and his work on
the issues considered by the Committee during the 105th
Congress. Mr. Evans has been a member of the committee since
1985 and is widely regarded as an outstanding veterans'
advocate. He has demonstrated his leadership capacity during
his first Congress as the Ranking Minority member, and
continued the VA Committee's long tradition of dealing with
veterans' issues in a bipartisan manner.
I also greatly appreciate the diligence of all the
subcommittee chairmen and ranking minority members in holding
the many hearings and markups so necessary to the
accomplishment of the Committee's oversight and legislative
agendas for veterans. They are the Honorable Cliff Stearns,
Chairman of the Subcommittee on Health, and the Honorable Luis
Gutierrez, the Subcommittee's Ranking Minority Member; the
Honorable Jack Quinn, Chairman of the Subcommittee on Benefits,
and the Honorable Bob Filner, the Subcommittee's Ranking
Minority Member; and the Honorable Terry Everett, Chairman of
the Subcommittee on Oversight and Investigations, and the
Ranking Minority Member, the Honorable James Clyburn.
The House and Senate Veterans' Affairs Committees have
continued their cooperative relationship during the 105th
Congress, always keeping the needs of our nation's veterans in
the forefront. What differences have arisen were resolved
through a constructive process of compromise which I believe
resulted in the most beneficial legislation possible for
veterans. I particularly acknowledge the leadership of the
Honorable Arlen Specter, Chairman of the Senate Committee.
Also, I extend thanks to the Honorable John D. Rockefeller, the
Ranking Minority Member of the Senate Committee, for his hard
work on our veterans' legislation and I look forward to a
continuation of our efforts on behalf of veterans.
For those members of this Committee who will be leaving
their assignments here at the end of this Congress, I commend
their faithful and dedicated service to veterans. They are:
Honorable James E. Clyburn, Honorable John Cooksey, Honorable
Asa Hutchinson, Honorable Joseph P. Kennedy II, Honorable Ray
La Hood, Honorable Bill Redmond, and Honorable Dan Schaefer.
Finally, I thank the staff of the Committee on Veterans'
Affairs and its Subcommittees for their constancy and attention
to the daily tasks of committee business. Together with our
Committee members and our Senate colleagues, their work on our
legislative and oversight agendas was invaluable to the
Committee's success in reaching its objectives for veterans.

Bob Stump,
Chairman

C O N T E N T S

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Page
Jurisdiction of the House Committee on Veterans' Affairs......... 1
Activities under jurisdiction of the committee as administered
by:
The Department of Veterans Affairs........................... 2
Medical care........................................... 2
Medical research....................................... 3
Compensation and pension............................... 4
Insurance.............................................. 4
National cemeteries.................................... 4
Education.............................................. 5
Home loan assistance................................... 5
Employees.............................................. 6
History of the Department of Veterans Affairs.......... 6
The Department of Labor...................................... 7
The American Battle Monuments Commission..................... 7
Messages from the President and other Executive Branch
communications................................................. 8
Summary of action by the Committee on Veterans' Affairs.......... 20
Hearings and Executive Sessions.................................. 21
Legislation enacted into law:
Public Law 105-67............................................ 27
Public Law 105-98............................................ 27
Public Law 105-111........................................... 31
Public Law 105-114........................................... 32
Public Law 105-116........................................... 35
Public Law 105-368........................................... 36
Activities of the subcommittees:
Subcommittee on Health....................................... 42
Subcommittee on Benefits..................................... 51
Subcommittee on Oversight and Investigations................. 60
Committee web site............................................... 70
Oversight Plan for the 105th Congress............................ 71
Subcommittee on Health....................................... 71
Subcommittee on Benefits..................................... 74
Subcommittee on Oversight and Investigations................. 77
Report on the budget for fiscal year 1998........................ 81
Report on the budget for fiscal year 1999........................ 98
Statistical data--war veterans and dependents.................... 121

Union Calendar No. 474

105th Congress Report
2d Session HOUSE OF REPRESENTATIVES 105-833

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

ACTIVITIES OF THE COMMITTEE ON VETERANS' AFFAIRS FOR THE 105TH CONGRESS

_______

December 29, 1998--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed

_______

Mr. Stump, from the Committee on Veterans' Affairs, pursuant to Clause
1(d) of Rule XI, submitted the following

R E P O R T

Jurisdiction

Rule X of the Rules of the House of Representatives
establishes the standing committees of the House and their
jurisdiction. Under that rule, all bills, resolutions, and
other matters relating to the subjects within the jurisdiction
of any standing committee shall be referred to such committee.
Clause 1(r) of Rule X establishes the jurisdiction of the
Committee on Veterans' Affairs as follows:

(1) Veterans' measures generally.
(2) Cemeteries of the United States in which veterans
of any war or conflict are or may be buried, whether in
the United States or abroad, except cemeteries
administered by the Secretary of the Interior.
(3) Compensation, vocational rehabilitation, and
education of veterans.
(4) Life insurance issued by the government on
account of service in the armed forces.
(5) Pensions of all the wars of the United States,
general and special.
(6) Readjustment of servicemen to civil life.
(7) Soldiers' and sailors' civil relief.
(8) Veterans' hospitals, medical care, and treatment
of veterans.
This committee was established January 2, 1947, as a part
of the Legislative Reorganization Act of 1946 (60 Stat. 812),
and was vested with jurisdiction formerly exercised by the
Committee on World War Veterans' Legislation, Invalid Pensions,
and Pensions. Jurisdiction over veterans' cemeteries
administered by the Department of Defense was transferred from
the Committee on Interior and Insular Affairs on October 20,
1967, by H. Res. 241, 90th Congress.

DEPARTMENT OF VETERANS AFFAIRS

The U.S. Department of Veterans Affairs was established
March 15, 1989, with Cabinet rank, succeeding the Veterans
Administration (VA), and assumed responsibility for the mission
of providing federal benefits to veterans and their dependents.
In its first five-year strategic plan issued September 30,
1997, under the requirements of the Government Performance and
Results Act of 1993, the VA as part of its vision for the
future stated:

The Department will continue to honor, care, and
compensate veterans in recognition of their sacrifices
for America, shifting its emphasis from a process-
focused system to a strategically-driven, performance-
based, outcome-oriented delivery system. VA will
provide seamless service to veterans by integrating
disparate Department activities and functions.
We will foster greater integration and partnerships
with other government and private organizations whose
functions complement our own.

Headed by the Secretary of Veterans Affairs, VA is the
second largest of the 14 cabinet departments. VA nationwide
carries out its mission with health care programs through the
Veterans Health Administration; compensation, pension,
vocational rehabilitation, education assistance, home loan
guaranty and insurance programs through the Veterans Benefits
Administration; and a cemetery program through the National
Cemetery Administration. A Board of Veterans' Appeals provides
final decisions for the Secretary on appeals for entitlement to
VA benefits.
The present veteran population is estimated at more than 25
million, as of July 1, 1997. About 80 of every 100 living
veterans served during defined periods of armed hostilities.
Altogether, more than one-fourth of the nation's population--
approximately 70 million veterans, dependents and survivors of
deceased veterans--is potentially eligible for VA benefits and
services.

Medical Care

The largest and most visible component of the Department of
Veterans Affairs is its health care system. The system grew
from 54 hospitals in 1930, when the Veterans Administration was
established, to 171 today. VA operates at least one medical
center in each of the 48 contiguous states, Puerto Rico, and
the District of Columbia; however, a concerted effort has been
made to move away from the ``bricks and mortar'' approach to
health care. Accordingly, only one new VA hospital--in West
Palm Beach, Florida--has been constructed in the recent past.
Efforts to streamline provision of care and to revise facility
missions, where indicated, have led to consolidation and
``merger'' of a number of medical centers in close proximity to
one another.
In 1997, with 26,200 medical center beds VA treated 634,800
patients in VA hospitals, 47,000 in nursing home care units,
and 23,900 in domiciliary facilities. VA's outpatient clinics
register approximately 35 million visits per year. An estimated
3.3 million individual veterans receive care annually.
VA currently is affiliated with 107 medical schools, 53
dental schools, and 1,200 other schools across the nation. More
than one-half of all practicing physicians in the United States
received part of their professional education in the VA health
care system. Each year, approximately 90,274 health care
professionals receive training in VA medical centers.
Since 1979, VA has operated Vietnam Veteran Outreach
Centers (Vet Centers), which provide readjustment counseling
services to Vietnam-era veterans. With the advent of the
Persian Gulf War, eligibility for Vet Center counseling was
expanded to include those veterans as well as veterans who
served during other periods of armed hostilities following the
Vietnam era--Lebanon, Grenada and Panama. Additionally, Public
Law 104-262 expands eligibility for Vet Center counseling to
combat veterans of conflicts prior to the Vietnam era. However,
Public Law 104-262 also places a deadline on non-theater
Vietnam-era veterans to seek VA readjustment counseling by
January 1, 2000.
Currently, there are 206 Vet Centers nationwide.
Approximately 1.47 million veterans have visited Vet Centers
since the program began. Counseling is provided for a variety
of reasons, including employment problems, marital
difficulties, and post-traumatic stress disorder (PTSD). VA
also conducts a variety of special programs including
compensated work therapy to provide veterans with job skills
and training and rehabilitative residencies to assist homeless
veterans. Both alcohol and drug abuse rehabilitation and PTSD
outreach programs were expanded in recent years.
VA, in operating its health care facilities, benefits from
the contributions of time and energy of volunteers from all
walks of life. More than 106,700 volunteers through VA's
Voluntary Service donate more than 13.4 million hours of
service each year to bring companionship and additional care to
hospitalized veterans.

Medical Research

In concert with operating a nationwide health-care delivery
system, VA carries out an extensive array of research targeted
to the special needs of veterans but relevant as well to
medicine generally. Among its major targets are research into
aging, chronic diseases, mental illness, substance abuse,
sensory loss, and trauma-related illness. Its research programs
are nationally recognized and have made important contributions
in virtually every area of medicine.
VA researchers played key roles in improving artificial
limbs and eradicating tuberculosis, and in developing the
cardiac pacemaker, the CT scanner, and magnetic resonance
imaging, which permits safe removal of brain tumors. The first
kidney transplant in the United States was performed at a VA
medical facility, and VA researchers pioneered the first
successful drug treatments for high blood pressure and
schizophrenia. The ``Seattle Foot'' was created by VA to give
amputees the push-off needed to run and jump, as well as walk.
VA contributions to medical knowledge have won VA scientists
many prestigious awards, including the Nobel Prize.
Recent advances by VA researchers showed that prostate
cancer can now be treated with laser surgery, which is faster,
less painful and more cost-efficient. In treating high blood
pressure, doctors are now able to choose the most beneficial
treatments based on patient characteristics such as age and
race. VA researchers also showed that low doses of the drug
warfarin reduce the risk of stroke by 79 percent with an
accuracy rate of from 80 to 90 percent. Through ``compassionate
use'' drug trials, veterans with AIDS had access to
investigational drugs before they became available to the
public for clinical use.
Early research by VA with animals gives hope that spinal
cord regeneration may be possible after paralysis. Rheumatoid
arthritis, an autoimmune disease, can be genetically cured in
mice; this is the first step toward a treatment in humans. VA
researchers also found the substance responsible for the
breakdown of bones in osteoporosis. In cancer research, VA
researchers are developing new ``suicide genes'' that would
seek out cancerous cells and identify them so that drugs would
affect cancer cells but not healthy ones.
Research topics identified as the result of the Vietnam
experience such as PTSD and the health effects of Agent Orange
exposure are continuing, with new topics relating to the
Persian Gulf War.

Compensation and Pension

More than 2.6 million veterans receive disability
compensation or pension payments for the VA. Some 633,035
widows, children and parents of deceased veterans are being
paid survivor compensation or death pension benefits. VA
disability and death compensation and pension payments were
more than $19 billion for fiscal year 1997.

Insurance

VA operates one of the largest life insurance programs in
the world and the fourth largest in the United States. VA
administers seven life insurance programs under which 2.4
million policies with a value of $23.4 billion remained in
force at the end of fiscal year 1998. In addition, VA
supervises the Servicemembers' Group Life Insurance and
Veterans' Group Life Insurance programs, which provide some
$481 billion in insurance coverage to approximately 2.8 million
veterans and members of the uniformed services. The 1999 GI
life insurance dividend will return almost $752 million to more
than 1.9 million policyholders.

National Cemeteries

Since 1973, when VA assumed responsibility for the National
Cemetery Administration (NCA), 13 new cemeteries have been
established. Today the system is comprised of 115 cemeteries in
39 states and Puerto Rico. Of these 57 have unassigned grave
sites for complete interments (those which include a casket).
Additionally, NCA oversees 34 soldiers' lots, monument sites
and confederate cemeteries.
VA is continuing to actively pursue the development of new
cemeteries in those metropolitan areas that are presently not
served by a national cemetery. The most recent new cemetery is
the Tahoma National Cemetery in the Seattle/Tacoma, Washington,
area which opened in October 1997. In addition, VA is in the
process of developing four other national cemeteries: Saratoga
National Cemetery near Albany New York; Abraham Lincoln
National Cemetery near Chicago, Illinois; Dallas/Fort Worth
National Cemetery to serve veterans in north and central Texas;
and a yet-to-be named cemetery in northeastern Ohio to provide
burial space for the veterans of the Cleveland area. The
opening of these five new VA cemeteries within three years
(1997-2000) would be unprecedented since the Civil War.
Since July 30, 1973, total acreage in the National Cemetery
Administration has increased from 4,139 to the present 13,611.7
acres. Interments are expected to increase from 76,718 in
fiscal year 1998 to more than 111,000 in 2008.
In fiscal year 1998, VA provided 346,034 headstones or
markers to mark the graves of veterans buried in private, state
veterans, military/post, and national cemeteries.

Education

Since 1944, when the first GI Bill became law, more than 20
million beneficiaries have participated in GI Bill education
and training programs. This includes 7.8 million World War II
veterans, 2.3 million Korean War veterans, and 8.2 million post
Korean and Vietnam era veterans, and active duty personnel.
Proportionally, Vietnam era veterans were the greatest
participants in GI Bill training. Approximately 76 percent of
those eligible took training, compared with 50.5 percent for
World War II veterans and 43.4 percent for Korean era veterans.
The All-Volunteer Force Educational Assistance Program
provides benefits for veterans, service personnel and members
of the Selected Reserve who train under the Montgomery GI Bill.
In fiscal year 1998, 294,800 veterans, 15,408 service personnel
and 74,000 reservists received those benefits. Since the
enactment of the Servicemen's Readjustment Act of 1944, the
cost of educational benefits has totaled more than $73 billion.

Home Loan Assistance

VA's loan guarantee program has benefited more than 15
million veterans and their dependents. From this program's
establishment as part of the original GI Bill in 1944 through
the end of fiscal year 1997, VA home loan guarantees totaled
more than $597 billion. In 1998, VA guaranteed 343,954 loans
valued at $37.9 billion and assisted 477 disabled veterans with
grants totaling more than $15.8 million for specially adapted
housing.

Department of Veterans Affairs Employees

As of October 31, 1998, VA had 238,569 employees. Among all
the departments and agencies of the federal government, only
the Department of Defense has a larger work force. Of the total
number of VA employees, 218,730 work in the Veterans Health
Administration, 11,470 are employed in the Veterans Benefits
Administration, 1,325 are within the National Cemetery System,
and 3,404 work in the Veterans Canteen Service. The remaining
3,540 employees are in various staff offices. The Department is
a leader in hiring veterans. Approximately 25 percent of all
employees are veterans.

History of the Department of Veterans Affairs (VA)

1930--The Veterans Administration was created by Executive
Order 5398, signed by President Herbert Hoover on July
21, 1930. At the time, there were 54 hospitals, 4.7
million living veterans, and 31,600 VA employees.
1933--The Board of Veterans' Appeals was established.
1944--On June 22, President Roosevelt Franklin Roosevelt signed
the ``Servicemen's Readjustment Act of 1944'' (Public
Law 346, passed unanimously by the 78th Congress).
1946--The Department of Medicine & Surgery was established,
succeeded in 1989 by the Veterans Health Services and
Research Administration, renamed the Veterans Health
Administration in 1991.
1953--The Department of Veterans Benefits was established,
succeeded in 1989 by the Veterans Benefits
Administration.
1973--The National Cemetery System (except for Arlington
National Cemetery) was transferred by the Army to VA.
1988--Legislation to elevate VA to Cabinet status was signed by
President Ronald Reagan.
1989--On March 15, VA became the 14th Department in the
President's Cabinet.

Secretaries of the Department of Veterans Affairs

Togo D. West, Jr. 1998--present
Jesse Brown 1993--1997
Edward J. Derwinsk 1989-1992

Administrators of the Veterans Administration

Thomas K. Turnage 1986-1989
Harry N. Walters 1982-1986
Robert P. Nimmo 1981-1982
Max Cleland 1977-1981
Richard L. Roudebush 1974-1977
Donald E. Johnson 1969-1974
William J. Driver 1965-1969
John S. Gleason 1961-1964
Sumner G. Whittier 1957-1961
Harvey V. Higley 1953-1957
Carl N. Gray 1948-1953
Omar N. Bradley 1945-1947
Frank T. Hines 1930-1945

DEPARTMENT OF LABOR

Veterans' Employment and Training Service

The Department of Labor (DOL) engages in a variety of
activities to assist veterans obtain a job or the training and
other employment development services they need to become
employable. In accordance with Chapter 41 of title 38, United
States Code, the highest priority is given to disabled veterans
and veterans of the Vietnam era.
The Assistant Secretary for Veterans' Employment and
Training (ASVET) is the principal advisor to the Secretary of
Labor regarding DOL policies and programs to meet the
employment and training needs of veterans, to protect the
reemployment rights of protected individuals in the uniformed
services, and to facilitate the transition of military
servicemembers to the civilian work force. The Office of the
ASVET, through the Veterans' Employment and Training Service
(VETS), administers grants to States and local government
entities primarily to support veterans' employment specialist
staffing, provides reemployment rights complaint investigation
and mediation services, formulates and implements interagency
agreements to ensure the seamless provision of services to
veterans, provides technical assistance and training to
veterans services providers' staff, monitors the performance of
state job service agencies for veterans, conducts pilot
projects to develop and test new approaches to serving
veterans, and conducts pilot projects for veterans' hiring by
public and private sector employers.
The field staff of the VETS is stationed in a nationwide
network of regional, state and area offices. There is at least
one VETS representative in every state and DOL Regional Office
(Boston, New York, Philadelphia, Atlanta, Chicago, Dallas,
Kansas City, Denver, San Francisco, and Seattle). Other than
the regional office staff, most VETS staff are located in state
job service agency offices.
The major activities and programs for veterans, Reservists,
National Guard members, and transitioners conducted by the
Office of the ASVET are: Job Service and One Stop Service
Centers, Disabled Veterans Outreach Program, Transition
Assistance Program, Unemployment Compensation for Ex-
servicemembers, Veterans Affirmative Action, Training Programs
under the Job Training Partnership Act, Reemployment Rights,
Veterans' Preference and Federal Contractor Non-Compliance
Complaints, and National Veterans' Training Institute.

AMERICAN BATTLE MONUMENTS COMMISSION

The American Battle Monuments Commission (ABMC), created by
an Act of Congress in 1923 (36USC121-138B) is a federal agency
responsible for the construction and permanent maintenance of
military cemeteries and memorials on foreign soil, as well as
certain memorials in the United States. Its principal functions
are to commemorate, through the erection and maintenance of
suitable memorial shrines, the sacrifices and achievements of
the American armed forces where they have served since April 6,
1917; to design, construct, operate, and maintain permanent
American military burial grounds and memorials in foreign
countries; to control the design and construction on foreign
soil of U.S. military monuments and markers by other U.S.
citizens and organization, both public and private; and to
encourage U.S. governmental agencies and private individuals
and organizations to maintain adequately the monuments and
markers erected by them on foreign soils. When directed by
Congress, the Commission develops and erects national military
monuments in the United States, such as the Korean War Veterans
Memorial and the World War II Memorial.
In performance of these functions, ABMC administers,
operates and maintains 24 permanent American military cemetery
memorials and 52 monuments, memorials, markers and separate
chapels in fourteen foreign countries, the Commonwealth of the
Northern Mariana Islands, Gibraltar, and four memorials in the
United States.
Interred in the cemeteries are 124,914 U.S. war dead--750
from the Mexican War, 30,921 from World War I, and 93,243 from
World War II. Additionally, 6,573 American veterans and others
are interred in the Mexico City and Corozal cemeteries. The
Mexico City cemetery and those of the World Wars are closed to
future burials except for the remains of U.S. war dead yet to
be found in the battle areas of World Wars I and II. In
addition to burials at the cemeteries overseas, 94,132 U.S.
servicemen and women of the World Wars, Korea, and Vietnam are
commemorated individually by name on the Tablets of the Missing
at cemetery memorials and at three memorials on U.S. soil.
ABMC also provides information and assistance, on request,
to relatives and friends of the war dead interred or
commemorated at its facilities.

MESSAGES FROM THE PRESIDENT AND EXECUTIVE COMMUNICATIONS

A communication from the President of the United States,
transmitting the Administration's 1997 National Drug Control
Strategy, pursuant to 21 U.S.C. 1504.

A communication from the President of the United States,
transmitting the Administration's 1998 National Drug Control
Strategy, pursuant to 21 U.S.C. 1504.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Diseases Associated with Exposure to
Certain Herbicide Agents (Prostate Cancer and Acute and
Subacute Peripheral Neuropathy) (RIN: 2900-AI35) Received
November 12, 1996, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Contract Program for Veterans With
Alcohol and Drug Dependence Disorders (RIN: 2900-AH77) Received
October 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Willful Misconduct (RIN: 2900-AI26)
Received October 31, 1996, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Evidence of Dependents and Age (RIN:
2900-AH51) Received October 30, 1996, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Community Residential Care Program and
Contract Program for Veterans With Alcohol and Drug Dependence
Disorders (RIN: 2900-AH61) Received December 2, 1996, pursuant
to 5 U S.C. 801(a)(1)(A).

A letter from the THE NATIONAL ADJUTANT, THE DISABLED
AMERICAN VETERANS, transmitting the report of the proceedings
of the organization's 75th National Convention, including their
annual audit report of receipts and expenditures as of December
31, 1995--Received in the United States House of
Representatives November 14, 1996, pursuant to 36 U.S.C. 90i
and 44 U.S.C. 1332.

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Miscellaneous Regulations (RIN: 2900-
AI39) Received December 26, 1996, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Appeals Regulations: Notice of Board
of Veterans' Appeals (RIN: 2900-AI59) Received December 27,
1996, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Personnel Management,
transmitting OPM's Fiscal Year 1995 annual report on Veteran's
Employment in the Federal Government, pursuant to 38 U.S.C.
4214(e)(1).

A letter from the THE DIRECTOR, NATIONAL LEGISLATIVE
COMMISSION, THE AMERICAN LEGION, transmitting the proceedings
of the 78th National Convention of the American Legion, held in
Salt Lake City, Utah from September 3, 4, and 5, 1996, as well
as a report on the Organization's activities for the year
preceding the Convention, pursuant to 36 U.S.C. 49.

A letter from the Secretaries of Veterans Affairs and
Defense, transmitting a report on the implementation of the
health resources sharing portion of the ``Department of
Veterans Affairs and Department of Defense Health Resources
Sharing and Emergency Operations Act'' for Fiscal Year 1996,
pursuant to 38 U.S.C. 8111(f).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Delegation of Subpoena Authority and
Description of Means of Service (RIN: 2900-AH00) Received
December 26, 1996, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Adjudication Regulations;
Miscellaneous (RIN: 2900-AI43) Received January 6, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: Limitation on Discount
Points Financed in Connection With Interest Rate Reduction
Refinancing Loans (RIN: 2900-AH90) Received January 21, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Dependency and Income (38 CFR Part 3)
(RIN: 2900-AI47) Received February 5, 1997, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Spouse and Surviving Spouse (38 CFR
Part 3) (RIN: 2900-AI36) Received February 4, 1997, pursuant to
5 U.S.C. 801(a)(1)(A).

A letter from the Director of the Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--VA Homeless Providers Grant and Per
Diem Program Clarification of Per Diem Eligibility (RIN: 2900-
AH89) Received February 10, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Rulemaking Procedures; Public
Participation (38 CFR Part 1) (RIN: 2900-AI33) Received March
5, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Secretary of Veterans Affairs,
transmitting the Fiscal Year 1996 Annual Report of the
Secretary of Veterans Affairs, pursuant to 38 U.S.C. 214,
221(c), and 664.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Upgraded Discharges (RIN: 2900-AI40)
Received March 26, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Increase in Rates
Payable Under the Montgomery GI Bill--Active Duty (RIN: 2900-
AI55) Received March 26, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Reduction of Debt Through the
Performance of Work-Study Services (38 CFR Part 1) (RIN: 2900-
AF29) Received April 7, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Vocational Rehabilitation;
Miscellaneous Changes (38 CFR Part 21) (RIN: 2900-AI29)
Received April 8, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Chief, Regulations Unit, Internal Revenue
Service, transmitting the Department's final rule--Medical:
Nonsubstantive Miscellaneous Changes (38 CFR Part 17) (RIN:
2900-AI37) Received April 8, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Secretary of Veterans Affairs,
transmitting the Department's report entitled ``Veterans
Equitable Resource Allocation System Briefing Booklet'' (March
1997).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Removal of Certain Limitations on Cost
Comparisons Related to Contracting Out of Activities at VA
Health-Care Facilities (RIN: 2900-AI61) Received April 14,
1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Retroactive Payments Due to a
Liberalizing Law or VA Issue (38 CFR Part 3) (RIN: 2900-AI57)
Received April 11, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Secretary of Veterans Affairs,
transmitting a report covering the disposition of cases granted
relief from administrative error, overpayment and forfeiture by
the Administrator in 1996, pursuant to 38 U.S.C. 210(c)(3)(B).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Compensation for Certain Undiagnosed
Illnesses (38 CFR Part 3) (RIN: 2900-AI77) Received April 29,
1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Secretary of Defense, transmitting the
Department's report on small business loans for members
released from reserve service during contingency operations,
pursuant to Public Law 104-201, Section 1234 (110 Stat. 2697).

A letter from the Secretary of Labor, transmitting the
annual report evaluating the Uniformed Services Employment and
Reemployment Rights Act of 1994 (USERRA) for fiscal year 1996,
pursuant to 38 U.S.C. 4332.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation entitled
``Veterans' Compensation Cost-of-Living Adjustment and Benefit
Programs Improvement Act of 1997''.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Guidelines for Furnishing Sensori-
neural Aids (i.e., eyeglasses, contact lenses, hearing aids)
(RIN: 2900-AI60) Received May 29, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Schedule for Rating Disabilities;
Muscle Injuries (RIN: 2900-AE89) Received May 29, 1997,
pursuant to 5 U.S.C. 801 (a)(1)(A).

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend title 38,
United States Code, to make certain improvements in the housing
loan programs for veterans and eligible persons.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend title 38,
United States Code, to permit VA to retain and use, for the
purpose of providing medical care and services to veterans, all
amounts recovered or collected as a result of medical care and
services furnished by VA.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend title 38,
United States Code, to establish a presumption of total
disability for certain individuals for purpose of nonservice-
connected disability pension.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend title 38,
United States Code, to amend provisions of law governing
benefits for certain children of Vietnam veterans who are born
with spina bifida.

A letter from the Secretary of Defense, transmitting the
Department's annual report on Outreach Regarding Persian Gulf
Illnesses.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend sections
2306 and 2403 of title 38, United States Code, to authorize
memorialization of deceased spouses and surviving spouses of
veterans and deceased members of the Armed Forces whose remains
are not available for interment.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans' Benefits Improvements Act of
1996 (RIN: 2900-AI66) Received June 27, 1997, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Submission of
School Catalogs to State Approving Agencies (RIN: 2900-AH97)
Received June 27, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Minimum Income Annuity (RIN: 2900-
AI83) Received July 2, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Servicemen's and Veterans' Group Life
Insurance (RIN: 2900-AI73) July 2, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Approval of
Training by Independent Study, Including Television (RIN: 2900-
AI34) Received July 23, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to provide
flexibility in the order in which the Boards of Veterans'
Appeals hears and considers appeals.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to authorize
provision of care to veterans treated with nasopharyngeal
radium irradiation.

A letter from the Acting Secretary, Department of Veterans
Affairs, transmitting a draft of proposed legislation to remove
a statutory provision requiring a specified number of full-time
equivalent positions in the VA's Office of Inspector General.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Provision of Health Care to Vietnam
Veterans' Children with Spina Bifida (RIN: 2900-AI65) Received
September 25, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Monetary Allowance Under 38 U.S.C.
1805 for a Child Suffering from Spina Bifida Who is a Child of
a Vietnam Veteran (RIN: 2900-AI70) Received September 25, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Provision of Vocational Training and
Rehabilitation to Vietnam Veterans' Children with Spina Bifida
(RIN: 2900-AI72) Received September 25, 1997, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Survivors and Dependents Education:
Extension of Eligibility Period (RIN: 2900-AI45) Received
October 1, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Disinterments from National Cemeteries
(RIN: 2900-AI21) Received October 1, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Appeals Regulations: Remand for
Further Development (RIN: 2900-AI50) Received October 2, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Acting Assistant Secretary, Department of
Labor, transmitting a report concerning Recommendations to
Ensure Compliance by Federal Contractors and Subcontractors,
pursuant to Public Law 104-208, Section 8118 (110 Stat. 3009-
114).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: Requirements for
Interest Rate Reduction Refinancing Loans (RIN: 2900-AI92)
Received October 6. 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: Credit Standards (RIN:
2900-AI16) Received October 10, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Informed Consent for Patient Care
(RIN: 2900-AH72) Received October 10, 1997, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Acting Director, Office of Personnel
Management, transmitting OPM's Fiscal Year 1996 annual report
on Veteran's Employment in the Federal Government, pursuant to
38 U.S.C. 4214(e)(1).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Board of Veterans' Appeals: Rules of
Practice--Death of Appellant During Pendency of Appeal (RIN:
2900-AI86) Received October 21, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans and Reservists Education:
Additional Educational Assistance While Serving in the Selected
Reserve (RIN: 2900-AI79) Received October 23, 1997, pursuant to
5 U.S.C. 801(a)(1)(A).

A letter from the Secretary of Defense, transmitting a
report entitled ``Federally Sponsored Research on Persian Gulf
Veterans' Illness'', pursuant to Public Law 103-337, Section
722(f).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Increase in Rates
Payable Under the Montgomery GI Bill--Active Duty (RIN: 2900-
AI90) Received October 27, 1997, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Miscellaneous Educational Revisions
(RIN: 2900-AI69) Received October 27, 1997, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Grants to States for Construction or
Acquisition of State Home Facilities (RIN: 2900-AI84) Received
November 9, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Approval of
Correspondence Programs or Courses (RIN: 2900-AH91) Received
December 3, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: Electronic Payment of
Funding Fee (RIN: 2900-AH73) Received November 19, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Guidelines for Furnishing Sensori-
neural Aids (RIN: 2900-AI60) Received December 8, 1997,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Schedule for Rating Disabilities; The
Cardiovascular System (RIN: 2900-AE40) Received December 8,
1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: Requirements for
Interest Rate Reduction Refinancing Loans (RIN: 2900-AI92)
Received November 31, 1997, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Active Military Service Certified
Under Section 401 of Public Law 95-202 (RIN: 2900-AI91)
Received January 5, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Administrative Assistant, the Disabled
American Veterans, transmitting the report of the proceedings
of the organization's 76th National Convention, including their
annual audit report of receipts and expenditures as of December
31, 1996, pursuant to 36 U.S.C. 90i and 44 U.S.C. 1332.

A letter from the Secretary of Defense, transmitting a
report on several initiatives for Gulf War veterans, pursuant
to Public Law 103-337, Section 721(h).

A letter from the Director, National Legislative
Commission, The American Legion, transmitting the proceedings
of the 79th National Convention of the American Legion, held in
Orlando, Florida from September 2, 3 and 4, 1997 as well as a
report on the Organization's activities for the year preceding
the Convention, pursuant to 36 U.S.C. 49.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Compensation for Certain Undiagnosed
Illnesses (RIN: 2900-AI77) Received March 4,1998, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Treatment of Research-Related Injuries
to Human Subjects (RIN: 2900-AH68) Received March 4, 1998,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Loan Guaranty: VA-Guaranteed Loans on
the Automatic Basis, Withdrawal of Automatic Processing
Authority, Record Retention Requirements, and Elimination of
Late Reporting Waivers (RIN: 2900-AH23) Received March 10,
1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Assistant Secretary for Health Affairs,
Department of Defense, transmitting an interim response to the
reporting requirement prescribed in section 762 of the National
Defense Authorization Act for Fiscal Year 1998, pursuant to
Public Law 105-85.

A letter from the Secretary of Defense transmitting a
report on the Effectiveness of Medical Research Initiatives
Regarding Gulf War Illness.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Reduction in
Required Reports (RIN: 2900-AI58) Received March 23, 1998,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--VA Acquisition Regulations: Department
Protests (RIN: 2900-AI51) Received March 27, 1998, pursuant to
5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--VA Acquisition Regulations: Commercial
Items (RIN: 2900-AI05) Received April 6, 1998, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Secretary of Defense and Aching Secretary
of Veterans Affairs, transmitting a report on the
implementation on that portion of the law dealing with sharing
of health care resources between the two departments, pursuant
to 38 U.S.C. 8111(f).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Reporting Health Care Professionals to
State Licensing Boards (RIN: 2900-AI78) Received April 28,
1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Adjutant General, the Veterans of Foreign
Wars of the U.S., transmitting proceedings of the 98th National
Convention of the Veterans of Foreign Wars of the United
States, held in Salt Lake City, Utah, August 17-21, 1997,
pursuant to 36 U.S.C. 118 and 44 U.S.C. 1332.

A letter from the Acting Secretary, Department of Veterans
Affairs, transmitting a report covering the disposition of
cases granted relief from administrative error, overpayment and
forfeiture by the Administrator in 1997, pursuant to 38 U.S.C.
210(c)(3)(B).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans' Training: Time Limit for
Submitting Certifications under the Service Members
Occupational Conversion and Training Act (RIN: 2900-AI85)
Received May 8, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Secretary of Labor, transmitting the 1996
Annual Report to Congress, describing employment and training
programs for veterans during program year 1995 and fiscal year
1996.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to authorize a new
tobacco use cessation program, permanently authorize VA to
collect payments from third-party private health insurance
carriers for care VA provides to certain veterans, collect
copayments from certain veterans receiving VA care, verify the
income of certain veterans, and authorize medical care related
construction projects and leases.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Increase in Rates
Payable for Cooperative Training Under the Montgomery GI Bill--
Active Duty (RIN: 2900-AJ10) Received May 19, 1998, pursuant to
5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Veterans Affairs, transmitting the Department's
final rule--Board of Veterans' Appeals: Rules of Practice--
Continuation of Representation Following Death of a Claimant or
Apellant (RIN: 2900-AI87) Received June 17, 1998, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Criteria for Approving Flight Courses
for Educational Assistance Programs (RIN: 2900-AI76) Received
June 17, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans' Education: Effective Date
for Awards of Educational Assistance to Veterans Who Were
Voluntarily Discharged (RIN: 2900-AI88) Received June 17, 1998,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Assistant Secretary for Policy and
Planning, Department of Veterans Affairs, transmitting the
Annual Report of the Secretary of Veterans Affairs for Fiscal
Year 1997, pursuant to 38 U.S.C. 214, 221(c), and 664.

A letter from the Secretary of Veterans Affairs,
transmitting a draft of proposed legislation to amend title 38,
United States Code, to authorize a cost-of-living adjustment in
the rates of disability compensation for veterans with service-
connected disabilities and dependency and indemnity
compensation for survivors of such veterans, to authorize
payment of these benefits at full rates for certain Filipinos
who reside in the United States, to establish a reserve to
fully fund ``H'' policy holders under the National Service Life
Insurance program, and for other purposes.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Veterans Education: Suspension and
Discontinuance of Payments (RIN: 2900-AF85) Received July 2,
1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Schedule for Rating Disabilities: Cold
injuries (RIN: 2900-AI46) Received July 14, 1998, pursuant to 5
U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Payment for Non-VA Physician Services
Associated with Either Outpatient or Inpatient Care Provided at
Non-VA Facilities (RIN: 2900-AH66) Received July 23, 1998,
pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Provision of Drugs and Medicines to
Certain Veterans in State Homes (RIN: 2900-AJ34) Received July
21, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Election of Education Benefits (RIN:
2900-AH88) Received August 21, 1998, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management Department of Veterans Affairs, transmitting the
Department's final rule--Additional Disability or Death Due to
Hospital Care, Medical or Surgical Treatment, Examination, or
Training and Rehabilitation Services (RIN: 2900-AJ04) Received
August 19, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Civilian Health and Medical Program of
the Department of Veterans Affairs (CHAMPVA) (RIN: 2900-AE64)
Received August 21, 1998, pursuant to 5 U.S.C. 801(a)(1)(A).

A letter from the Principal Deputy Assistant Secretary for
Congressional Affairs, Department of Veterans Affairs,
transmitting a draft of proposed legislation to provide a
temporary authority for the use of voluntary separation
incentives by the Department of Veterans Affairs to reduce
employment levels, and for other purposes.

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Claims Based on Exposure to Ionizing
Radiation (Prostate Cancer and Any Other Cancer) (RIN: 2900-
AI00) Received September 21, 1998, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Director, Office of Regulations
Management, Department of Veterans Affairs, transmitting the
Department's final rule--Eligibility Reporting Requirements
(RIN: 2900-AJ09) Received October 8, 1998, pursuant to 5 U.S.C.
801(a)(1)(A).

A letter from the Secretary of Labor, transmitting a report
on the labor market situation for certain disabled veterans and
Vietnam Theater veterans, pursuant to 38 U.S.C. 2010A.

A letter from the Principal Deputy Assistant Secretary For
Congressional Affairs, Department of Veterans Affairs,
transmitting a draft of proposed legislation to provide a
temporary authority for the use of voluntary separation
incentives by the Department of Veterans Affairs to reduce
employment levels, and for other purposes.

SUMMARY OF VETERANS' AFFAIRS COMMITTEE ACTION
BILLS AND RESOLUTIONS REFERRED AND HEARINGS / EXECUTIVE SESSIONS CONDUCTED
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Congress
-------------------------------------------------------------------------------------------------------------------------------------------------------
87th 88th 89th 90th 91st 92d 93d 94th 95th 96th 97th 98th 99th 100th 101st 102d 103d 104th 105th
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Bills and resolutions referred.......... 592 508 791 685 740 693 839 719 709 339 273 229 198 147 194 215 174 128 134
Hearing sessions........................ 45 50 71 46 43 37 44 58 72 84 89 71 76 44 72 67 71 39 56
Meetings and mark-up sessions........... 15 21 32 13 27 21 16 30 26 19 18 16 20 16 26 20 23 19 18
Bills reported.......................... 52 41 47 \8\ 19 34 26 \9\ 14 23 32 11 16 15 17 14 33 21 25 15 15
Bills in House.......................... \1\ 8 \5\ 5 \6\ 4 4 1 4 1 ...... 1 1 1 3 3 1 4 3 11 ...... ......
Pending in Senate committees............ \2\ 13 7 \7\ 12 3 9 7 2 \10\ 9 17 3 6 6 8 9 23 7 11 10 1
Bills on Senate Calendar or in Senate... \3\ 2 ...... 1 ...... ...... ...... ...... ...... 1 1 1 ...... 1 3 1 3 3 ...... ......
Recommitted............................. ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ...... ......
Bills vetoed............................ ...... ...... ...... ...... ...... 2 1 ...... ...... 1 ...... ...... ...... ...... ...... ...... ...... ...... ......
Bills passed over veto.................. ...... ...... ...... ...... ...... ...... 1 ...... ...... 1 ...... ...... ...... ...... ...... ...... ...... ...... ......
Laws enacted............................ \4\ 32 29 30 15 24 15 15 15 13 6 8 8 6 4 8 24 15 6 6
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Including 4 bills enacted as amendment in other legislation; 1 left in House when similar Senate bill returned to Senate; and 1 similar to another bill enacted (Public Law 87-645).
\2\ Includes 2 bills enacted as amendments to other bills.
\3\ Includes 1 bill enacted as amendment to another bill.
\4\ Some laws include the substance of more than 1 bill reported separately. 39 separately reported bills were enacted, 7 as amendments to other legislation.
\5\ Provisions of 3 of these bills were passed by the House as separate bills, and the provisions of 1 bill were included as an amendment to another bill which became public law.
\6\ \7\ One bill in a Senate committee had purpose accomplished administratively; 5 other were enacted as sections of another bill; and portions of 1 bill left in the House were enacted as
part of another bill.
\8\ Includes S.J. Res. 197 making technical correction to law, which was brought to House floor for immediate consideration and passage by unanimous consent.
\9\ The difference in number of bills reported (14) and laws enacted (15) is due to the fact that S. 3705 did not go to the House Committee. However, the subject matter was included in H.R.
12628.
\10\ Includes H.R. 9576 subject matter of which was contained in S. 969, passed in lieu.

HEARINGS AND EXECUTIVE SESSIONS

(All hearings and executive sessions of the Committee are
held in the Committee hearing room, 334 Cannon House Office
Building, unless otherwise designated.)
February 5, 1997. OPEN. 4:00 p.m. Full Committee. Meeting.
Organizational.

February 11, 1997. OPEN. 9:30 a.m. House and Senate
Veterans Affairs Committees. Joint Hearing. Room 345 Cannon
HOB. The 1997 legislative priorities of the Veterans of Foreign
Wars.

February 11, 1997. OPEN. 1:00 p.m. Full Committee. Hearing.
Persian Gulf War Illnesses. (Serial No. 105-1)

February 13, 1997. OPEN. 9:30 a.m. Full Committee. Meeting.
Oversight Plan.

February 13, and February 27, 1997. OPEN. 9:30 a.m. Full
Committee. Hearing. Fiscal Year 1998 Department of Veterans
Affairs Budget. (Serial No. 105-2)

March 6, 1997. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1997 legislative priorities of the Blinded Veterans
Association; Non Commissioned Officers Association; Military
Order of the Purple Heart; The Retired Officers Association;
Paralyzed Veterans of America; and Jewish War Veterans.

March 19, 1997. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1997 legislative priorities of the Disabled American Veterans.

March 20, 1997. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1997 legislative priorities of the Veterans of World War 1;
American Ex-Prisoners of War; AMVETS and Vietnam Veterans of
America.

March 20, 1997. OPEN. 2:30 p.m. Full Committee. Meeting. To
approve Committee's views and estimates for the FY 1998 budget
for submission to the Budget Committee.

March 20, 1997. OPEN. 3:00 p.m. Full Committee. Markup.
H.R. 1090 and H.R. 1092.

April 3, 1997. OPEN. 9:00 a.m. Gainesville VAMC,
Gainesville, Florida. Hearing. Subcommittee on Health. Veterans
Equitable Resource Allocation System (VERA). (Serial No. 105-3)

April 16, 1997. OPEN. 10:00 a.m. Subcommittee on Health and
Subcommittee on Oversight and Investigations. Joint Hearing.
Persian Gulf War Veterans. (Serial No. 105-4)

April 17,1997. OPEN. 9:30 a.m. Subcommittee on Oversight
and Investigations. Hearing. Sexual Harassment in the VA.
(Serial No. 105-5)

May 7, 1997. OPEN. 8:30 a.m. Subcommittee on Benefits.
Hearing. Government Performance and Results Act (GPRA)
Strategies for the Veterans' Employment and Training Service
(VETS). (Serial No. 105-6)

May 8, 1997. OPEN. 9:30 a.m. Subcommittee on Health.
Hearing. H.R. 1362 and Draft Bills Regarding Third Party
Reimbursement and Physicians' Special Pay Provisions. (Serial
No. 105-7)

May 14, 1997. OPEN. 8:30 a.m. Subcommittee on Benefits.
Hearing. Hearing on Operations Within the Compensation and
Pension Service Using GPRA Principles, on the Processing of
Persian Gulf War Claims, and VA's Proposed Legislation To Limit
the Liability for Smoking-Related Illnesses. (Serial No. 105-8)

May 15, 1997. OPEN. 9:30 a.m. Subcommittee on Health.
Markup. H.R. 1362.

May 21, 1997. OPEN. 1:30 p.m. Full Committee. Markup. H.R.
1362, as amended, H.R. 1687, H.J. Res. 75.

May 21, 1997. OPEN. 2:00 p.m. Full Committee. Hearing.
Hearing to Accept the Report of the Veterans' Claims
Adjudication Commission. (Serial No. 105-9)

May 22, 1997. OPEN. 9:30 a.m. Subcommittee on Oversight and
Investigations. Hearing. Safety and Security in the VA. (Serial
No. 105-10)

June 4, 1997. OPEN. 9:30 a.m. Full Committee. Hearing. H.R.
699, Military Voting Rights Act of 1997. (Serial No. 105-11)

June 5, 1997. OPEN. 9:30 a.m. Subcommittee on Benefits.
Hearing. Government Performance and Results Act Strategies for
Both the Veterans Benefits Administration's Education Service
and the Vocational Rehabilitation and Counseling Services.
(Serial No. 105-12)

June 12, 1997. OPEN. 9:30 a.m. Full Committee. Markup.
Budget Reconciliation instructions, H.R. 699.

June 19, 1997. OPEN. 9:30 a.m. Subcommittee on Health.
Hearing. VA's Health Care Treatment for Persian Gulf War
Illnesses. (Serial No. 105-13)

June 26, 1997. OPEN. 9:30 a.m. Subcommittee on Oversight
and Investigations. Hearing 1. VA's Compliance with Year 2000
Requirements. (Serial No. 105-14)

July 9, 1997. OPEN. 10:00 a.m. Full Committee. Hearing. S.
923 and H.R. 2040, To Deny Burial in a Federally Funded
Cemetery and Other Benefits to Veterans Convicted of Certain
Capital Crimes. (Serial No. 105-15)

July 10, 1997 OPEN. 9:30 a.m. Subcommittee on Health.
Hearing. Pharmaceutical Prices, and Draft Legislation on
Homeless Veterans' Programs and Issues Related to Persian Gulf
War Illness. (Serial No. 105-16)

July 16, 1997. OPEN. 9:30 a.m. Subcommittee on Benefits.
Hearing. Pending Legislative Proposals in the Areas of
Education, Training, and Employment. (Serial No. 105-17)

July 17, 1997. OPEN. 9:30 a.m. Subcommittee on Oversight
and Investigations. Hearing. Sexual Harassment in the VA and
H.R. 1703, Department of Veterans' Affairs Employment
Discrimination Prevention Act. (Serial No. 105-18)

July 24, 1997. OPEN. 9:15 a.m. Subcommittee on Health.
Markup. H.R. 2206.

July 24, 1997. OPEN. 9:30 a.m. Subcommittee on Health and
Subcommittee on Oversight and Investigations. Joint Hearing. VA
Consolidation of Medical Facility Management and Services.
(Serial No. 105-19)

July 28, 1997. OPEN. 9:00 a.m. U.S. Federal Court House,
Montgomery, Alabama. Subcommittee on Oversight and
Investigations. Hearing. Planning and Formation of Central
Alabama Veterans Health Care System (CAVHCS). (Serial No. 105-
20)

September 4, 1997. OPEN. 9:30 a.m. Subcommittee on
Benefits. Markup. H.R. 2367.

September 11, 1997. OPEN. 9:30 a.m. Full Committee. Markup.
H.R. 2367, H.R. 2206 and S. 923.

September 18, 1997. OPEN. 9:30 a.m. Subcommittee on
Oversight and Investigations. Hearing. Government Performance
and Results Act (GPRA) Strategies. (Serial No. 105-21)

September 23, 1997. OPEN. 9:30 a.m. House and Senate
Veterans Affairs Committees. Joint Hearing. The 1997
legislative priorities of The American Legion.

September 25, 1997. OPEN. 9:30 a.m. Subcommittee on
Oversight and Investigations. Hearing. Hearing 2 on Year 2000
Computer Compliance in the Department of Veterans Affairs.
(Serial No. 105-22)

September 30,1997. OPEN. 10:30 a.m. Full Committee. Markup.
H.R. 1703 and H.R. 2571.

October 8, 1997. OPEN. 10:00 a.m. Subcommittee on Health.
Hearing. VHA's Risk Management Policy and Performance. (Serial
No. 105-23)

October 16, 1997. OPEN. 9:00 a.m. Chicago, Illinois.
Subcommittee on Oversight and Investigations. Hearing.
Formation of the VA Chicago Health Care System. (Serial No.
105-24)

October 23, 1997. OPEN. 9:30 a.m. Subcommittee on Oversight
and Investigations. Hearing. Mismanagement Issues at the
Charleston, South Carolina and Pittsburgh, Pennsylvania
Veterans Affairs Medical Centers. (Serial No. 105-25)

December 18, 1997. OPEN. 10:00 a.m. Thaddeus J. Dulski
Federal Building. Buffalo, New York. Subcommittee on Benefits.
Hearing. The Veterans' Transitional Housing Opportunities Act
of 1997. (Serial No. 105-26)

January 28, 1998. OPEN. 10:00 a.m. Subcommittee on
Oversight and Investigations. Hearing. Hearing To Examine
Arlington National Cemetery Burial Waivers. (Serial No. 105-27)

February 4 and February 12, 1998. OPEN. 10:00 a.m. Full
Committee. Hearing. Department of Veterans Affairs Budget
Request for Fiscal Year 1999. (Serial No. 105-28)

February 4, 1998. OPEN. 2:00 p.m. Subcommittee on Benefits.
Hearing. Oversight of VA's Vocational Rehabilitation. (Serial
No. 105-29)

February 5, 1998. OPEN. 1:00 p.m. Full Committee. Hearing.
Full Committee Hearing To Receive Updates on Research,
Investigations, and Programs Involving Persian Gulf War
Veterans' Illnesses. (Serial No. 105-30)

February 24, 1998. OPEN. 10:30 a.m. Subcommittee on
Benefits. Hearing. H.R. 3039, the Veterans' Transitional
Housing Opportunities Act of 1997, and H.R. 3211, Enacting
Eligibility Requirements for Burial at Arlington National
Cemetery. (Serial No. 105-31)

February 26,1998. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1998 legislative priorities of the Non Commissioned Officers
Association, Paralyzed Veterans of America, Jewish War
Veterans, Military Order of the Purple Heart and Blinded
Veterans Association.

March 3, 1998. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1998 legislative priorities of the Veterans of Foreign Wars.

March 5, 1998. OPEN. Subcommittee on Benefits. Markup. H.R.
3039, H.R. 3211 and H.R. 3213.

March 11, 1998. OPEN. 1:00 p.m. Full Committee. Markup.
H.R. 3039, H.R. 3211 and H.R. 3213.

March 18, 1998. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1998 legislative priorities of the Disabled American Veterans.

March 18, 1998. OPEN. 12:30 p.m. Full Committee. Meeting.
To approve the Committee's views and estimates of the fiscal
year 1999 budget to be submitted to the Budget Committee.

March 18, 1998. OPEN. 2:00 p.m. Subcommittee on Oversight
and Investigations. Hearing. Department of Veterans Affairs
Participation in the Federal Energy Management Program. (Serial
No. 105-32)

March 19, 1998. OPEN. 9:45 a.m. Subcommittee on Health.
Markup. Fiscal Year 1999 construction authorization.

March 19, 1998. OPEN. 10:00 a.m. Subcommittee on Health.
Hearing. Quality Management at the Veterans Health
Administration. (Serial No. 105-33)

March 25, 1998. OPEN. 9:30 a.m. House and Senate Veterans
Affairs Committees. Joint Hearing. Room 345 Cannon HOB. The
1998 legislative priorities of The Retired Officers
Association, Vietnam Veterans of America, American Ex-POWs and
AMVETS.

March 25, 1998. OPEN. 1:00 p.m. Full Committee. Markup.
H.R. 3603.

March 26, 1998. OPEN. 10:00 a.m. Subcommittee on Benefits.
Hearing. Hearing To Review the Department of Veterans Affairs'
Compliance With the Requirements of the Government Performance
and Results Act. (Serial No. 105-34)

April 23, 1998. OPEN. 9:30 a.m. Subcommittee on Health.
Hearing. Hearing on War-related Illnesses and on the VA's
Sexual Trauma Counseling Program. (Serial No. 105-35)

April 29, 1998. OPEN. 10:00 a.m. Subcommittee on Benefits.
Hearing. Operations within the National Cemetery System (NCS).
(Serial No. 105-36).

May 14, 1998. OPEN. 9:30 a.m. Subcommittee on Oversight and
Investigations. Hearing. Hearing on GAO Report on VA Inspector
General Special Inquiry Regarding Patient Deaths at the VA
Hospital in Columbia, Missouri, and on VA Quality Assurance
Improvement. (Serial No. 105-37)

May 20, 1998. OPEN. 10:00 a.m. Subcommittee on Benefits and
Subcommittee on Government Programs, Committee on Small
Business. Joint Hearing. Government Programs and Oversight of
the Small Business Committee and the Subcommittee on Benefits
of the Committee on Veterans' Affairs. (Serial No. 105-38)

June 4, 1998. OPEN. 1:00 p.m. Subcommittee on Health.
Markup. H.R. 3980, H.R. 2775 and H.R. 3336.

June 10, 1998. OPEN. 2:00 p.m. Subcommittee on Benefits.
Hearing. Operations of the Board of Veterans' Appeals and Court
of Veterans Appeals, and review of H.R. 3212, with Respect To
the Court of Veterans Appeals Retirement Plan. (Serial No. 105-
39)

June 17, 1998. OPEN. 10:00 a.m. Subcommittee on Health.
Hearing. Future Role of the VA Health Care System. (Serial No.
105-40)

June 18, 1998. OPEN. 10:00 a.m. Subcommittee on Benefits.
Hearing. Draft Legislation to Provide a Cost-of-Living
Adjustment in Rates of Compensation Paid to Veterans with
Service-connected Disabilities to make various Improvements in
Education, Housing and Cemetery Programs of the Department of
Veterans Affairs, and for other purposes. (Serial No. 105-41)

June 24, 1998. OPEN. 10:15 a.m. Full Committee. Markup.
H.R. 3980 and H.R. 4110.

June 30, 1998. OPEN. 10:30 a.m. Gold Room, State Capitol,
Boise, Idaho. Subcommittee on Health. Hearing. Review Provision
of Care to Idaho's Veterans. (Serial No. 105-42)

July 16, 1998. OPEN. 10:00 a.m. Subcommittee on Benefits.
Hearing. Standards for Adjudicating Claims presented by
Veterans suffering from Hepatitis C, Cerebral Malaria and
Persian Gulf Illnesses. (Serial No. 105-43)

July 22, 1998. OPEN. 10:00 a.m. Full Committee. Hearing.
Benefits for Filipino Veterans. (Serial No. 105-44)

July 23, 1998. OPEN. 9:30 a.m. Subcommittee on Health.
Hearing. Hearing to Review the Provision of Specialized
Services at the Department of Veterans Affairs and
Rehabilitative Needs of Disabled Veterans. (Serial No. 105-45)

August 5, 1998. OPEN. 10:00 a.m. Full Committee. Hearing.
Garnishment of Benefits paid to Veterans for Child Support and
other Court-ordered Obligations. (Serial No. 105-46)

September 24, 1998. OPEN. 9:30 a.m. Subcommittee on
Oversight and Investigations. Hearing. Year 2000 (Y2K) medical
device issues and their impact on the Department of Veterans
Affairs. (Serial No. 105-47)
LEGISLATION ENACTED INTO LAW

Public Law 105-67

(H.J. RES. 75)

Title: An Act to confer status as an honorary veteran of
the United States Armed Forces on Leslie Townes (Bob) Hope.
Summary: H.J. Res. 75:
1. Extends the gratitude of the American people to
entertainer Leslie Townes (Bob) Hope.
2. Confers upon Bob Hope the status of honorary veteran
for his lasting contribution to American society by
entertaining this nation's troops overseas from World War II
through the Persian Gulf War.
Effective date: Date of enactment
Cost: The Congressional Budget Offices estimates that the
cost of H.J. Res. 75 would have no effect on the federal budget
and would not affect direct spending or receipts. H.J. Res. 75
contains no intergovernmental or private-sector mandates as
defined in the Unfunded Mandates Reform Act of 1995 and would
not affect the budgets of state, local, or tribal governments.
Legislative history
May 21, 1997: H.J. Res. 75 reported favorably by Committee
on Veterans' Affairs.
June 3, 1997: H.J. Res. 75 reported by Committee on
Veterans' Affairs. H.Rept. 105-109.
June 3, 1997: Passed the House under suspension by voice
vote.
June 4, 1997: Referred to the Senate Committee on Veterans'
Affairs.
Sep. 9, 1997: Passed the Senate by unanimous consent.
Oct. 30, 1997: Signed by the President, Public Law 105-67.
------

VETERANS' COMPENSATION COST-OF-LIVING ADJUSTMENT ACT OF 1997

Public Law 105-98

(H.R. 2367, AS AMENDED)

Title: An Act to increase, effective as of December 1,
1997, the rates of compensation for veterans with service-
connected disabilities and the rates of dependency and
indemnity compensation for the survivors of certain disabled
veterans.
Summary: H.R. 2367:
1. Increases, effective December 1, 1997, the rates of
compensation for veterans with service-connected disabilities
and the rates of dependency and indemnity compensation for the
survivors of certain disabled veterans. The rate of increase
would follow Social Security Administration figures.
2. Rounds down, to the next lower dollar amount, all
compensation and DIC benefits when the amount is not a whole
dollar amount.

COMPENSATION AND DIC RATES EFFECTIVE DECEMBER 1, 1997
------------------------------------------------------------------------
Increase (monthly rate)
-------------------------
From To
------------------------------------------------------------------------
Percentage of disability or subsection under which payment
is authorized:
(a) 10 percent.............. $94 $95
(b) 20 percent.............. 179 182
(c) 30 percent.............. 274 279
(d) 40 percent.............. 391 399
(e) 50 percent.............. 558 569
(f) 60 percent.............. 703 717
(g) 70 percent.............. 887 905
(h) 80 percent.............. 1,028 1,049
(i) 90 percent.............. 1,157 1,181
(j) 100 percent............. 1,924 1,964
Higher statutory awards for certain multiple disabilities:
(k) (1) Additional monthly 74 75
payment for anatomical
loss, or loss of use
of, any of the
following: one foot,
one hand, blindness in
one eye (having light
perception only), one
or more creative
organs, both buttocks,
organic aphonia (with
constant inability to
communicate by speech),
deafness of both ears
(having absence of air
and bone conduction)--
for each loss.
(2) Limit for veterans 2,393 2,443
receiving payments
under (a) to (j) above.
(3) Limit for veterans 3,356 3,426
receiving benefits
under (l) to (n) below.
(l) Anatomical loss or loss 2,393 2,443
of use of both feet,
one foot and one hand,
blindness in both eyes
(5/200) visual acuity
or less), permanently
bedridden or so
helpless as to require
aid and attendance.
(m) Anatomical loss or loss 2,639 2,694
of use of both hands,
or of both legs, at a
level preventing
natural knee action
with prosthesis in
place or of 1 arm and 1
leg at a level
preventing natural knee
or elbow action with
prosthesis in place or
blind in both eyes,
either with light
perception only or
rendering veteran so
helpless as to require
aid and attendance.
Percentage of disability or subsection under which payment
is authorized:
(n) Anatomical loss of both 3,003 3,066
eyes or blindness with
no light perception or
loss of use of both
arms at a level
preventing natural
elbow action with
prosthesis in place or
anatomical loss of both
legs so near hip as to
prevent use of
prosthesis, or
anatomical loss of 1
arm and 1 leg so near
shoulder and hip to
prevent use of
prosthesis.
(o) Disability under 3,356 3,426
conditions entitling
veterans to two or more
of the rates provided
in (1) through (n), no
condition being
considered twice in the
determination, or
deafness rated at 60
percent or more
(impairment of either
or both ears service-
connected) in
combination with total
blindness (5/200 visual
acuity or less) or
deafness rated at 40
percent or total
deafness in one ear
(impairment of either
or both ears service-
connected) in
combination with
blindness having light
perception only or
anatomical loss of both
arms so near the
shoulder as to prevent
use of prosthesis.
(p) (1) If disabilities 3,356 3,426
exceed requirements of
any rates prescribed,
Secretary of Veterans
Affairs may allow next
higher rate or an
intermediate rate, but
in no case may
compensation exceed.
(2) Blindness in both 3,356 3,426
eyes (with 5/200 visual
acuity or less)
together with (a)
bilateral deafness
rated at 30 percent or
more disabling
(impairment of either
or both ears service-
connected) next higher
rate is payable, or (b)
service-connected total
deafness of one ear or
service-connected loss
or loss of use of an
extremity the next
intermediate rate is
payable, but in no
event may compensation
exceed.
(3) Blindness with only 3,356 3,426
light perception or
less with bilateral
deafness (hearing
impairment in either
one or both ears is
service-connected)
rated at 10 or 20
percent disabling, the
next intermediate rate
is payable, but in no
event may compensation
exceed.
(4) Anatomical loss or 3,356 3,426
loss of use of three
extremities, the next
higher rate in
paragraphs (l) to (n)
but in no event in
excess of.
(q) [This subsection
repealed by Public Law
90-493.].
(r) (1) If veteran entitled 1,441 1,471
to compensation under
(o) or to the maximum
rate under (p); or at
the rate between
subsections (n) and (o)
and under subsection
(k), and is in need of
regular aid and
attendance, he shall
receive a special
allowance of the amount
indicated at right for
aid and attendance in
addition to such rates.
(2) If the veteran, in 2,145 2,190
addition to need for
regular aid and
attendance is in need
of a higher level of
care, a special
allowance of the amount
indicated at right is
payable in addition to
(o) or (p) rate.
(s) Disability rated as 2,154 2,199
total, plus additional
disability
independently ratable
at 60 percent or over,
or permanently
housebound.
(t) [This subsection
repealed by Public Law
99-576.].
------------------------------------------------------------------------

In addition to basic compensation rates and/or statutory
awards to which the veteran may be entitled, dependency
allowances are payable to veterans who are rated at not less
than 30 percent disabled. The rates which follow are those
payable to veterans while rated totally disabled. If the
veteran is rated 30, 40, 50, 60, 70, 80 or 90 percent disabled,
dependency allowances are payable in an amount bearing the same
ratio to the amount specified below as the degree of disability
bears to total disability. For example, a veteran who is 50
percent disabled receives 50 percent of the amounts which
appear below.

COMPENSATION AND DIC RATES EFFECTIVE DECEMBER 1, 1997--Continued
------------------------------------------------------------------------
Increase (monthly rate)
-------------------------
From To
------------------------------------------------------------------------
If and while veteran is rated totally disabled
and--
Has a spouse.............................. $112 $114
Has a spouse and child.................... 191 195
Has no spouse, 1 child.................... 77 78
For each additional child................. 59 60
For each dependent parent................. 91 92
For each child age 18-22 attending school. 177 180
Has a spouse in nursing home or severely 211 215
disabled.................................
Has disabled, dependent adult child....... 177 180
------------------------------------------------------------------------

Dependency and Indemnity Compensation

The rates of dependency and indemnity compensation payable
with respect to service-related deaths occurring on and after
January 1, 1993, (and payable with respect to any service-
connected death if payments based on a veteran's rank would
result in a lesser payment) would be increased by 2.1 percent,
from $833 to $850 for the base rate, and from $182 to $185 for
the additional amount or ``kicker'' payable if the veteran
suffered from a service-connected disability rated as totally
disabling for a period of at least eight years immediately
preceding death.

The following table reflects increases provided for
surviving spouses of deceased veterans whose service-connected
deaths occurred prior to January 1, 1993, and who are not
receiving dependency and (DIC) payments under the new rate
structure at a higher rate:

------------------------------------------------------------------------
Increase (monthly rate)
Pay grade -------------------------
From To
------------------------------------------------------------------------
E-7........................................... 861 879
E-8........................................... 909 928
E-9........................................... \1\ 949 \1\ 968
W-1........................................... 880 898
W-2........................................... 915 934
W-3........................................... 943 962
W-4........................................... 997 1,017
O-1........................................... 880 898
O-2........................................... 909 928
O-3........................................... 972 992
O-4........................................... 1,028 1,049
O-5........................................... 1,132 1,155
O-6........................................... 1,276 1,302
O-7........................................... 1,378 1,406
O-8........................................... 1,510 1,541
O-9........................................... 1,618 1,651
O-10.......................................... \2\ 1,774 1,811
------------------------------------------------------------------------
\1\ If the veteran served as Sergeant Major of the Army, Senior Enlisted
Advisor of the Navy, Chief Master Sergeant of the Air Force, Sergeant
Major of the Marine Corps, or Master Chief Petty Officer of the Coast
Guard, at the applicable time designated by section 1302 of this
title, the surviving spouse's rate shall be $1,023.
\2\ If the veteran served as Chairman or Vice-Chairman of the Joint
Chiefs of Staff, Chief of Staff of the Army, Chief of Naval
Operations, Chief of Staff of the Air Force, Commandant of the Marine
Corps or Commandant of the Coast Guard, at the applicable time
designated by section 1302 of this title, the surviving spouse's rate
shall be $1,902.

When there is no surviving spouse receiving dependency and
indemnity compensation, payment is made in equal shares to the
children of the deceased veteran. These rates are increased as
follows.

------------------------------------------------------------------------
Increase (monthly rate)
-------------------------
From To
------------------------------------------------------------------------
One child..................................... $354 $361
Two children.................................. 510 520
Three children................................ 662 675
Each additional child......................... 130 132
------------------------------------------------------------------------

Effective date: December 1, 1997
Cost: The bill would have no budgetary effect relative to
the baseline as modified by the Balanced Budget Act of 1997.
The bill would affect direct spending and thus pay-as-you-go
procedures would apply.
Legislative history
Sep. 11, 1997: H.R. 2367 ordered reported by Committee on
Veterans' Affairs.
Oct. 9, 1997: H.R. 2367 reported to the House. H. Rept.
105-320.
Oct. 31, 1997: Passed the House amended by voice vote by
unanimous consent.
Nov. 5, 1997: Passed the Senate by unanimous consent.
Nov. 19, 1997: Signed by the President, Public Law 105-98.
------

Public Law 105-111

(H.R. 1090)

Title: An Act to amend title 38, United States Code, to
allow revision of veterans benefits decisions based on clear
and unmistakable error.
Summary: H.R. 1090:
1. Codifies the existing regulatory authority for appeal
at the regional office on the grounds of clear and unmistakable
error.
2. Makes decisions made by the Board of Veterans' Appeals
subject to revision on the grounds of clear and unmistakable
error.
3. Permits appeal to the Court of Veterans Appeals on the
basis that there was a clear and unmistakable error in any
previous Board decision.
Effective date: Date of enactment
Cost: The Congressional Budget Office estimates that the
cost of H.R. 1090 would raise administrative costs over the
first two or three years after enactment by $1 million to $2
million in total, but in the longer run administrative costs
would rise by less than $500,000 a year. In addition, CBO
estimates that the bill would have a direct spending impact of
less than $500,000 a year through 2002. Because the bill would
raise direct spending, it would be subject to pay-as-you-go
procedures. H.R. 1090 contains no intergovernmental or private-
sector mandates as defined in the Unfunded Mandates Reform Act
of 1995 and would not affect the budgets of state, local, or
tribal governments.
Legislative history
Mar. 20, 1997: H.R. 1090 ordered reported favorably by
Committee on Veterans' Affairs.
Apr. 14, 1997: H.R. 1090 reported by Committee on Veterans'
Affairs. H. Rept. 105-52.
Apr. 16, 1997: Passed the House under suspension by voice
vote.
Apr. 17, 1997: Referred to Senate Committee on Veterans'
Affairs.
Nov. 10, 1997: Passed the Senate by unanimous consent.
Nov. 21, 1997: Signed by the President, Public Law 105-111.

------

VETERANS' BENEFITS ACT OF 1997

Public Law 105-114

(S. 714, AS AMENDED)

Title: An act to amend title 38, United States Code, to
revise, extend, and improve programs for veterans.
Summary: S. 714, as amended:

Title I

1. Directs the Secretary of Veterans Affairs to establish
a new VA employment discrimination complaint resolution system.
2. Establishes a quasi-independent VA Office of Employment
Discrimination Complaint Adjudication which would make final
agency decisions on substantive equal employment opportunity
issues.
3. Requires the Secretary of Veterans Affairs to contract
with a private entity to assess VA's discrimination complaint
resolution system.

Title II

1. Clarifies that a Persian Gulf veteran is eligible for
VA health care by virtue of having a condition associated with
service in the Gulf.
2. Requires VA to create a competitive grant program
under which up to ten VA facilities would establish
demonstration projects to improve care to Persian Gulf veterans
with undiagnosed or difficult to diagnose conditions.
3. Extends VA's authority to provide direct loans to
Native Americans to purchase, construct, renovate, or refinance
homes on trust land through December 31, 2001, and add outreach
and reporting requirements.
4. Codifies into a single section of title 38--and
extends--expiring (and partially overlapping) authorities and
statutory responsibilities to serve homeless veterans under
which VA provides (directly or by contract) halfway houses and
other residential care to homeless, chronically mentally ill
veterans; establish and provide therapeutic transitional
housing for veterans participating in compensated work therapy
programs; provide community-based halfway house care under
contract for veterans suffering from drug and alcohol
dependence; and require VA at the facility level (to the extent
resources permit) to meet the needs of homeless veterans
identified in a community assessment process.
5. Extends, through December 31, 1999, VA's authority to
sell, lease, or donate VA properties to nonprofit organizations
or a State or political subdivision of a State for the purpose
of assisting homeless veterans and their families acquire
shelters.
6. Extends the Homeless Veterans Comprehensive Service
Grant Program, which enables the VA to provide grant support to
public and non-profit agencies and entities to establish
programs to assist homeless veterans, through September 30,
1999.
7. Extends, through December 31, 1999, the Department of
Labor's authority to operate the Homeless Veterans
Reintegration Project (HVRP), which provides grants to
community-based organizations focusing on returning homeless
veterans to the workforce, and authorize $10,000,000 per year.
8. Expands the scope of the report requirement regarding
VA assistance to homeless veterans by requiring an evaluation
of both VA programs and those established under the VA's
Homeless Veterans Comprehensive Service Grant Program.
9. Extends VA's authority to enter into long-term leases
with parties to enhance unused or underused VA property through
December 31, 2001 and repeal the current limitations on the
number of enhanced-use leases which VA may enter under such
authority.
10. Makes permanent the VA's authority to provide
noninstitutional alternatives to nursing home care, such as
hospital-based home care, adult day health care, and community
residential care.
11. Extends the Health Professional Scholarship Program
through December 31, 1998 and requires the VA to report within
six months on the effectiveness of the program and alternative
approaches to recruitment and retention of health
professionals.
12. Requires the VA to develop a national policy with
respect to breast cancer screening for veterans.
13. Requires the President, by March 1, 1998, to submit to
Congress a report on plans, preparations and the capability of
all levels of government to respond nationally to medical
emergencies arising from the terrorist use of weapons of mass
destruction.

Title III

1. Authorizes the following major medical construction
projects:

a) Lseismic corrections at the Department of Veterans
Affairs medical center in Memphis, Tennessee;
b) Lseismic corrections and clinical and other
improvements at the McClellan Hospital at Mather Field,
Sacramento California; and
c) Loutpatient improvements at Mare Island, Vallejo,
California, and Martinez, California.

2. Authorizes major medical facility leases of
information resources management field offices in Birmingham,
AL and Salt Lake City, UT; and satellite outpatient clinics in
Jacksonville, FL; Boston MA; Canton, OH; Portland, OR; and
Tulsa, OK.
3. Authorizes appropriations of $34.6 million for the
Construction, Major Projects account for construction at the
Memphis VAMC and $15.703 million for the Medical Care account
for the major medical leases.
4. Specifies that major construction projects in northern
California authorized in the bill must be carried out using
previously appropriated funds.

Title IV

1. Makes a number of technical and clarifying amendments
improving existing educational programs under chapters 30, 34,
and 36 and a clerical correction to chapter 23 regarding burial
benefits.
2. Clarifies that a veteran discharged or released from
active service due to a disability, without regard to any prior
determination as to the degree of such disability, may be
furnished VA hospital care and medical services.
3. Clarifies that ``category C'' veterans under VA
treatment are eligible for the one-time $1200 home improvement/
structural alteration benefit.
4. Strikes the limitation in current law which restricts
VA transfers and placements into community nursing homes to
veterans receiving inpatient care, and would authorize such
needed placements for any veteran under care in a VA facility.
5. Changes the name of the Wm. Jennings Bryan Dorn
Veterans' Hospital to the ``Wm. Jennings Bryan Dorn Department
of Veterans Affairs Medical Center''.
6. Makes clarifying changes to the definition of
``child'' and ``Vietnam veteran'' as these terms are used in
provisions of current law providing benefits to children of
Vietnam veterans with a birth defect called spina bifida.

Effective date: Upon enactment, except the spina bifida
provision (Section 404), which is effective on October 1, 1997.
Legislative history
Apr. 16, 1997: H.R. 1092 passed the House under suspension
by voice vote.
Oct. 6, 1997: H.R. 1703 passed the House under suspension
by voice vote.
Oct. 6, 1997: H.R. 2206 passed the House amended under
suspension by voice vote.
Oct. 6, 1997: H.R. 2571 passed the House under suspension
by voice vote.
Oct. 7, 1997: S. 986 ordered reported amended by the Senate
Veterans' Affairs Committee.
Oct. 7, 1997: S. 801 ordered reported amended by the Senate
Veterans' Affairs Committee.
Oct. 7, 1997: S. 999 ordered reported by the Senate
Veterans' Affairs Committee.
Oct. 30, 1997: S. 714 reported to the Senate. S. Rpt. 105-
123.
Nov. 5, 1997: S. 714 passed the Senate with an amendment
and an amendment to the Title by unanimous consent.
Nov. 9, 1997: S. 714 passed the House amended under
suspension by voice vote (consists of certain provisions from
H.R. 1092, H.R. 1703, H.R. 2206, H.R. 2571, S. 986, S. 801, and
S. 999)
Nov. 10, 1997: S. 986 reported to the Senate. S. Rpt. 105-
153.
Nov. 10, 1997: Senate agreed to the House amendments by
unanimous consent.
Nov. 21, 1997: Signed by the President, Public Law 105-114.
------

Public Law 105-116

(S. 923, AS AMENDED)

Title: An Act to amend title 38, United States Code, to
prohibit interment or memorialization in certain cemeteries of
persons committing Federal or State capital crimes.
Summary: S. 923, as amended:
1. Denies persons described in paragraph 2 burial or
memorialization in a cemetery under the jurisdiction of the
Department of Veterans Affairs, Arlington National Cemetery, or
any state veterans cemetery for which a state receives a VA
grant on or after date of enactment.
2. Applies to anyone convicted of a federal capital crime
or a state capital crime in which one or more deaths occur.
3. Applies only when VA is notified by the Attorney
General or the appropriate state official of the person's
conviction prior to approval of a request for burial.
4. Authorizes the Secretary of VA, the Secretary of the
Army, and the appropriate state official to administratively
deny burial or memorialization to persons not convicted due to
death or flight to avoid prosecution.
Effective date: Applies to applications for memorialization
or interment made on or after the date of enactment.
Cost: The Congressional Budget Office estimates that S.
923, as amended, would reduce burial costs, but would apply to
only a few people every year. Therefore, reductions in
mandatory spending would be negligible.
Legislative history
June 18, 1997: Senate Committee on Veterans Affairs
discharged by unanimous consent.
June 18, 1997: Passed the Senate amended by vote of 98-0.
June 19, 1997: Referred to the House Committee on Veterans'
Affairs.
Oct. 9, 1997: S. 923 reported to the House amended. H.
Rept. 105-319.
Oct. 31, 1997: Passed the House amended by voice vote by
unanimous consent.
Nov. 10, 1997: Senate agreed to House amendments by
unanimous consent.
Nov. 21, 1997: Signed by the President, Public Law 105-116.
------

VETERANS PROGRAMS ENHANCEMENT ACT OF 1998

Public Law 105-368

(H.R. 4110)

Title: An Act to amend title 38, United States Code, to
improve benefits and services provided to Persian Gulf War
veterans, to provide a cost-of-living adjustment in rates of
compensation paid to veterans with service-connected
disabilities, to enhance programs providing health care,
compensation, education, insurance, and other benefits for
veterans, and for other purposes.
Summary: H.R. 4110, as amended:

Title I - Provisions relating to veterans of Persian Gulf War and
future conflicts

1. Provides for the National Academy of Sciences (NAS) or
similar organization to review and evaluate the available
scientific evidence and determine whether there is scientific
evidence of an association between illnesses experienced by
Gulf War veterans and service in--or exposure to one or more
agents, hazards, medicines, or vaccines during --the Persian
Gulf War.
2. Establishes authority for VA to provide priority
health care to treat illnesses that may be attributable to a
veteran's service in combat during any period of war after the
Persian Gulf War or during any other future period of
hostilities (notwithstanding that there is insufficient medical
evidence to conclude that such illnesses are attributable to
such service).
3. Extends VA's special authority to provide care to
Persian Gulf veterans through December 31, 2001.
4. Requires VA to enter into an agreement with the
National Academy of Sciences or another appropriate independent
organization to assist in developing a plan for the
establishment of a national center for the study of war-related
illnesses and post-deployment health issues.
5. Requires VA to establish a public advisory committee
(to include veterans of the Persian Gulf War) to provide advice
to the Secretaries of Veterans Affairs, Health and Human
Services, and Defense on proposed research studies, research
plans, or research strategies relating to the health of Persian
Gulf veterans.
6. Requires Departments of Veterans Affairs, Health and
Human Services, and Defense to report to Congress by March 1 of
each year the status and results of such research activities,
along with the list of research priorities for the upcoming
year.
7. Requires public availability through the World Wide
Web and elsewhere of the findings of all Persian Gulf research
conducted by or for the Government.
8. Requires VA to enter into an agreement with the
National Academy of Sciences to determine whether there is a
methodology by which VA could determine the efficacy of
treatments provided to Persian Gulf War veterans for illnesses
which may be associated with their Persian Gulf War service.
9. Requires VA and DoD to enter into an agreement with
the National Academy of Sciences to (a) develop a curriculum
(to take account of new research findings relating to care of
veterans with illnesses that may be associated with Persian
Gulf War services) for use in continuing education of VA and
DoD physicians.
10. Extends VA's authority to evaluate the health status
of spouses and children of Persian Gulf War veterans through
December 31, 1999, and to provide such examinations through VA
facilities, or under its fee-basis or other contract
arrangements.

Title II - Education and Employment

1. Changes the way VA calculates the reporting fee paid
to educational institutions that enroll veterans.
2. Makes optional, rather than mandatory, an advance
payment of 40 percent of the amount that veteran-students under
VA's work-study program are eligible to receive for their
veteran-related work. Current law requires the advanced
payment.
3. Allows servicemembers to use college-granted credit
hours for life experiences as a means of meeting eligibility
requirements for their Montgomery GI Bill benefits.
4. Allows veteran-students in flight training to continue
to receive VA educational assistance if they inadvertently fail
to maintain the required flight certificate.
5. Waives the wage increase and minimum salary
requirements for on the job training programs provided by State
and local governments.
6. Requires the VA and military service branches to
expand outreach services concerning VA education program
requirements to members of the armed services.
7. Requires the VA and military service branches to
ensure that separating servicemembers are well informed of the
eligibility requirements for their education benefits.
8. Clarifies the enforcement of veterans' employment and
reemployment rights with respect to a State (as an employer),
under the Uniformed Service Employment and Reemployment Rights
Act.
9. Extends veterans' employment and reemployment rights
to former members of the uniformed services employed overseas
by United States companies.
10. Clarifies Federal employee enforcement of employment
and reemployment rights.

Title III - Compensation, Pension and Insurance

1. Increases the special pension provided to persons
entered and recorded on the Army, Navy, Air Force, and Coast
Guard Medal of Honor Roll from $400 to $600 per month.
2. Provides for the payment of accelerated death benefits
to terminally ill persons under the Servicemembers' Group Life
Insurance and Veterans' Group Life Insurance policies.
3. Directs VA to provide to Congress an assessment of the
effectiveness and adequacy of insurance and benefits programs
for the survivors of veterans with service-connected
disabilities.
4. Authorizes the VA to issue dividends to the holders of
World War II-era National Service Life Insurance (NSLI) series
``H'' policies. All other NSLI policies issue dividends.

Title IV - Memorial Affairs

1. Authorizes VA to furnish a memorial marker for certain
members of the armed forces and spouses whose remains are
unavailable for interment.
2. Extends eligibility for burial in National Cemeteries
and funeral benefits to veterans of the Merchant Marine who
served from August 16, 1945, to December 31, 1946.
3. Redesignates the National Cemetery System (NCS) as the
National Cemetery Administration, and redesignate the Director
of the National Cemetery System as the Under Secretary for
Memorial Affairs.
4. Modifies the existing State Cemetery Grants Program to
authorize VA to pay up to 100 percent of the cost of
constructing and equipping state veterans' cemeteries.

Title V - Court of Veterans Appeals

1. Allows a sitting judge at the Court of Veterans Appeals
nominated for a second term to remain on the bench for up to
one year while awaiting Senate confirmation.
2. Exempts the Court's retirement fund from sequestration
orders.
3. Provides the same adjustments for annuities to the
survivors of deceased Court of Veterans Appeals judges as those
received by Judiciary Survivors' Annuities Fund annuitants.
4. Directs the Court to submit a report on the feasibility
of merging the retirement and survivor annuity plans with other
federal court retirement and survivor annuity programs.
5. Renames the Court of Veterans Appeals the United States
Court of Appeals for Veterans Claims.

Title VI - Housing

1. Authorizes the Secretary of Veterans Affairs to
guarantee loans to provide multifamily transitional housing for
homeless veterans.
2. Requires the Secretary to provide in the budget a
simple, concise, and readily understandable statement that
summarizes the financial activity of each of the housing
programs operated under the Loan Guaranty Revolving Fund and
the Guaranty and Indemnity Fund.
3. Extends the VA's authority to guarantee home loans for
members of the National Guard and Reserve components to
September 30, 2003.
4. Requires the Department of Veterans Affairs to comply
with the requirements of the Competition in Contracting Act and
the Federal Acquisition Regulations for any contract for
services or supplies for properties acquired under the VA
housing program.

Title VII - Construction and Facilities matters

1. Authorizes appropriations for fiscal years 1999 and
2000 in the amount of $241.1 million for the Construction,
Major Projects account and $8.5 million for the Medical Care
account for major medical leases.
2. Authorizes major medical facility projects at the Long
Beach VAMC ($23.2 million); the San Juan VAMC ($50 million);
the Washington, DC VAMC ($28.7 million); the Palo Alto VAMC
($22.4 million); the Cleveland (Wade Park) VAMC ($28.3 million,
of which $7.5 million would come from previously appropriated
funds); the Tucson VAMC ($35 million); the Dallas VAMC ($24.2
million); projects at Auburn and Merced, California ($3 million
from previously appropriated funds); the Lebanon VAMC ($9.5
million); the Tampa VAMC ($46.3 million, of which $20 million
would come from previously appropriated funds); and the Denver
VAMC ($13 million, of which $11.9 million would come from
previously appropriated funds in the Parking Revolving Fund).
3. Authorizes major medical facility leases at satellite
outpatient clinics in Baton Rouge, Louisiana ($1.8 million);
Daytona Beach, Florida ($2.6 million); and Oakland Park,
Florida ($4.1 million).
4. Increases the threshold for treatment of a medical
facility lease as a major medical facility lease (which
requires congressional authorization) from $300,000 to
$600,000.
5. Increases the threshold for treatment of a parking
facility project as a major medical facility project (which
requires congressional authorization) from $3 million to $4
million.
6. Prohibits VA from establishing or collecting parking
fees at any parking facility associated with the Spark M.
Matsunaga VAMC and Regional Office in Honolulu, Hawaii.
7. Requires VA to submit a report to Congress by
September 15, 1999 on the Department's use of its authority to
charge parking fees at VA medical facilities, to include the
results of a survey on the availability of VA-provided
employee-parking, an analysis of ways to provide cost-effective
parking programs, and recommendations on whether and how to
amend current law pertaining to parking fees.
8. Requires VA to submit a report to Congress on a master
plan relating to Department lands at the West Los Angeles VAMC.
9. Designates the Aspinwall, PA VAMC as the ``H. John
Heinz III Department of Veterans Affairs Medical Center''.
10. Designates the Gainesville, FL VAMC as the ``Malcom
Randall Department of Veterans Affairs Medical Center''.
11. Designates the Columbus, OH VA Outpatient Clinic as
the ``Chalmers P. Wylie Veterans Outpatient Clinic''.

Title VIII - Health Professionals Educational Assistance

Scholarship Program

1. Authorizes VA to carry out an employee-incentive
scholarship program through December 31, 2001, to assist in
meeting the staffing needs for health professional positions
for which it is difficult to recruit or retain qualified
personnel.
2. Specifies that to be eligible, individuals must have
been a full-time or part-time Department employee for at least
two years and have an exceptional employment record.
3. Requires that scholarships awarded under the program
would cover payment of tuition and other educational expenses
of up to $10,000 per year for a full-time student participant.
4. Specifies that participants who do not finish the
agreed upon course of study are liable for damages.
Education Debt Reduction Program
1. Authorizes the VA to carry out an education debt
reduction program through December 31, 2001, to assist in the
recruitment of health care professionals for positions that are
difficult to recruit and retain.
2. Specifies that to be eligible, an individual must be a
recently-hired VHA employee (less than six months) serving in a
position for which recruitment or retention is difficult and
still indebted for education or training in that position.
3. Limits assistance to $6,000 for the first year of
participation in the program; $8,000 for the second year; and
$10,000 for the third.

Title IX - Miscellaneous Medical Care and Medical Administration
provisions

1. Authorizes VA to provide priority health care for the
treatment of cancer of the head or neck to veterans who can
document nasopharyngeal radium irradiation treatment in
service.
2. Extends VA's authority to counsel and treat veterans
for sexual trauma through December 31, 2001.
3. Requires VHA to develop and apply job-performance
standards to VA network directors and any other officials
responsible for the allocation and management of resources
relating to the requirement to maintain special disability
programs.
4. Provides ongoing authority to use pension funds above
the $90 monthly limit for certain veterans receiving nursing
home care for operating expenses of VA medical facilities.
5. Requires the VA to submit a report to Congress by
February 1, 1999 and February 1, 2000 assessing the current
system of locality-based pay for nurses.
6. Requires the VA to provide an annual report to Congress
on the Department's activities relating to its preparation for
and participation in a domestic medical response to an attack
involving weapons of mass destruction.
7. Permits the interim appointment of the Under Secretary
for Health for service until July 1, 1999.

Title X - Other matters

1. Requires that, except as specified in law, a facility,
structure, or property (or major part of any facility,
structure or property) of the Department be named for the
geographic area where it is located.
2. Provides reversion rights to attorney positions at the
Board of Veterans' Appeals for civil service attorneys who are
members of the Board of Veterans' Appeals and whose
appointments to the Board are terminated.
3. Affords the Board of Veterans' Appeals flexibility in
scheduling hearings, and in considering and deciding appeals,
so that unintended delays may be avoided.
4. Changes the formula used by Department of Labor's
Veterans Employment and Training Service to determine the
number of Disabled Veterans Outreach Program Specialists
(DVOPS) to reflect the working-age veteran population in each
state.

Title XI - Cost-of-living adjustment

Increases effective December 1, 1998, the rates of
compensation for veterans with service-connected disabilities
and the rates of dependency and indemnity compensation for
survivors of certain disabled veterans.

Effective date:
Date of enactment except for the following:
section 201: Calendar years beginning after December
31, 1998.
section 202: On or after January 1, 1999.
section 203: October 1, 1998.
section 204: October 1, 1998.
section 205: On or after October 1, 1998.
section 206: 180 days after date of enactment.
section 207: Subsection (a) and (b) take effect 120
days after date of enactment, subsection (c) takes
effect on or after January 1, 2000.
section 213: October 13, 1994.
section 302: 90 days after date of enactment.
section 304: 90 days after date of enactment.
Title V: First day of the first month beginning more
than 90 days after the date of enactment.
section 604: After the end of the 60 day period
beginning on the date of enactment.

Cost:

Table 1. Estimated Budgetary Effects of Direct Spending Provisions in H.R. 4110
(Outlays by fiscal year, in millions of dollars)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Section Provision 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------
904 Veterans' Pensions............... 4 2 2 2 0 0 0 0 0 0
201 Reporting Fees Adjustment........ 3 3 3 3 3 3 3 3 3 3
603 Home Loans for Reservists........ 0 -\3 -\3 -\3 -\3 0 0 0 0 0
205 On-the-Job Training Programs..... 2 2 2 2 2 2 2 2 2 2
601 Transitional Housing............. 1 1 1 1 2 2 2 0 0 0
1101 Compensation COLA................ ^a ^a ^a ^a ^a ^a ^a ^a ^a ^a
Total ^b...................... 10 5 5 5 4 7 7 5 5 5
--------------------------------------------------------------------------------------------------------------------------------------------------------
^a The costs of this provisions are already assumed in the CBO baseline, pursuant to section 257 of the Balanced Budget and Emergency Deficit Control
Act; thus, it would have no costs relative to that baseline. Relative to current law, this provision would increase spending by $316 million in 1999
and by $415 million a year thereafter.
^b The act contains several other provisions that would, in aggregate, affect direct spending by less than $500,000 annually.

Legislative history
June 24, 1998: H.R. 4110 ordered reported favorably by the
Committee on Veterans' Affairs.
July 15, 1998: H.R. 4110 reported by the Committee on
Veterans' Affairs. H. Rept. 105-627.
August 3, 1998: Passed the House amended under suspension
by voice vote.
September 30, 1998: Passed the Senate in lieu of S. 2273
with an amendment by unanimous consent.
October 10, 1998: House agreed to Senate amendment with
amendments pursuant to H. Res. 592 (consists of provisions
derived from H.R. 1092, H.R. 3039, H.R. 3212, H.R. 3213, H.R.
3603, H.R. 3980, S. 309, S. 414, S. 730, S. 1822, S. 2273 and
S. 2358).
October 21, 1998: Senate agreed to House amendments to
Senate amendment by unanimous consent.
November 11, 1998: Signed by the President.

ACTIVITIES OF THE SUBCOMMITTEES

Subcommittee on Health

The Subcommittee on Health, renamed from the former
Subcommittee on Hospitals and Health Care after the 104th
Congress, has legislative and oversight jurisdiction over the
Department of Veterans' Affairs' health care programs and the
VA's health care delivery system.

Legislative Activities

First Session

On March 20, 1997, the full Committee held a markup to
consider H.R. 1092, legislation that included a provision to
extend and expand the authority of the Secretary of Veterans
Affairs to enter into enhanced-use leases for Department of
Veterans Affairs property. The enhanced-use leasing program,
which was established during the 102nd Congress, permits the VA
to enter into long-term leases with private and other public
entities to improve unused or underused VA property in a manner
which would, at least in part, contribute to the VA's mission.
It has proven to be effective in fostering public-private
partnerships and in improving underutilized VA property, as
well as in providing another funding stream for VA and its
facilities.
H.R. 1092 proposed to repeal a section in law that limited
the number of enhanced-use leases VA may execute to ten per
year and twenty over the life of the program. The bill also
proposed to extend enhanced-use authority until December 31,
2002. The pertinent provisions of H.R. 1092 were ultimately
enacted except that under the law the authority was extended
only until December 31, 2001. The provision is found in Section
205 of Public Law 105-114.
The subcommittee heard testimony on May 8, 1997, regarding
three legislative proposals: H.R. 1362, VA-Medicare subvention
legislation; draft legislation to permit VA to collect from
third party payers; and draft legislation on physicians'
special pay. Officials from the Congressional Budget Office,
the Department of Veterans Affairs, and the Department of
Health and Human Services--along with officials from most major
veterans service organizations--testified on H.R. 1362.
Dr. Kenneth Kizer, VA's Under Secretary for Health,
expressed support both for H.R. 1362 and draft legislation to
permit the VA to retain money it receives from third party
insurers rather than having to deposit the funds into the
Treasury under then current law. The Committee was instrumental
in ensuring that cost recovery language similar to the draft
bill was included in the Balanced Budget Act.
This hearing represented the first of many times the
Committee met during the 105th Congress to discuss the concept
of ``Medicare subvention,'' an initiative advanced by the
Committee to enable certain Medicare-eligible veterans to
receive Medicare-covered health care benefits through VA (with
the Medicare program reimbursing VA). For the first time,
legislation to advance this initiative was taken up by other
committees with jurisdiction and was adopted by the House. The
course of this legislative action, while falling short of full
passage, gives impetus to this issue as a legislative priority
in the 106th Congress.
Under current law, Medicare may not cover the cost of care
provided by the VA health care system. Legislation marked up on
May 15, 1997 by the Subcommittee on Health and May 21, 1997 by
the full Committee would have overridden that limitation. That
bill, H.R. 1362, would have created a three-year demonstration
project in up to 12 geographically dispersed VA medical centers
allowing the VA to be reimbursed by Medicare for the care of
participating higher income ``category C'' Medicare-eligible
veterans.
H.R. 3828, the Veterans Medicare Access Improvement Act of
1998, jointly developed by Rep. Bill Thomas (R-CA), the
Chairman of the House Ways and Means Subcommittee on Health,
and the Chairman of the VA Committee, was introduced in the
second session. The House ultimately passed the provisions of
that bill. (See Legislative Activities--Second Session.)
After extensive oversight, the Subcommittee on Health on
July 24, 1997, marked up an omnibus bill, H.R. 2206. The
legislation included provisions to extend, consolidate and
strengthen various VA homeless programs, and to improve VA
health care provided to Persian Gulf War veterans. Those
provisions called for VA to provide counseling to Persian Gulf
veterans on the results of registry examinations, establish a
grant program to support the creation of demonstration projects
at up to ten VA facilities to improve care to Persian Gulf
veterans, and clarify that Persian Gulf veterans are eligible
for VA health care for any condition associated with service in
the Gulf.
Also, the bill would have exempted VHA personnel engaged in
patient care activities or research, or supervision of patient
care or research, from an Administration policy to reduce the
number of middle managers in the federal government; clarified
that VA alone could establish, operate and set prices at
canteens and vending machines within VA medical facilities;
authorized VA to permit certain retirement-eligible VA
physicians and dentists to have their ``special pay'' credited
in full, for annuity purposes; and provided that drugs listed
on the Federal Supply Schedule may only be procured from that
schedule by a Federal entity or other entity already provided
for under law.
The full Committee marked up the bill on September 11,
1997, and reported it to the full House on October 2, 1997 (H.
Report 105-293). Because of revised Congressional Budget Office
projections, the physician ``special pay'' provision was
stripped from the bill before it came to the House floor.
Concerns regarding the canteen service provision also resulted
in its being dropped.
The full House passed the bill under suspension of the
rules on October 6, 1997. Major provisions of H.R. 2206--
including the homeless and Persian Gulf provisions--were
included in S. 714, which was signed into law on November 21,
1997 (see summary of Public Law 105-114, p. 32).
On September 30, 1997, the full Committee marked up H.R.
2571, which authorized several VA major medical facility
projects and major medical facility leases. The bill proposed
to authorize projects which would make seismic corrections at
the VAMC in Memphis, TN; seismic corrections and clinical and
other improvements at the McClellan hospital at Mather Field,
Sacramento, CA; and outpatient improvements at Mare Island,
Vallejo, CA, and Martinez, CA. The outpatient projects were
authorized in lieu of construction of an inpatient facility at
Travis Air Force Base planned by the Administration to replace
the Martinez VAMC, which was seismically damaged. Acute
inpatient care beds at Martinez were subsequently closed. (The
General Accounting Office concluded, however, that construction
of such a project at Travis would be ill-advised and that lower
cost alternatives should be explored.)
The bill proposed authorization of major medical facility
leases in Birmingham, AL; Salt Lake City, UT; Jacksonville, FL;
Boston, MA; Canton, OH; Portland, OR; and Tulsa, OK. In all,
H.R. 2571 proposed authorization of appropriations totaling
$34.6 million in the Construction, Major Projects account and
$15.03 million in the Medical Care account for the leases.
H.R. 2571 passed the House by unanimous voice vote on
October 6, 1997. Its provisions were subsequently incorporated
into S. 714, which was signed into law on November 21, 1997
(see summary of Public Law 105-114, p. 33).

Second Session

During the second session of the 105th Congress,
discussions with the Chairman of the House Ways and Means
Subcommittee on Health produced legislation that expanded on
the bill developed and reported by the VA Committee. That
legislation, H.R. 3828, called for Medicare to reimburse VA (1)
under a demonstration project for the care of participating
``category C'' Medicare-eligible veterans and (2) under a
program for the care of certain Medicare-eligible service-
connected and low-income veterans whose closest VA medical
center is geographically remote or inaccessible. While the VA
Committee did not formally take up this legislation, it
overwhelmingly passed the Ways and Means Committee on May 14,
1998.
The language of H.R. 3828 was subsequently incorporated
into H.R. 4567, the Medicare Home Health Care Interim Payment
System Refinement Act of 1998, which passed the House on
October 10, 1998. The Senate stripped the VA-Medicare
subvention provisions of this bill before that body passed it.
On March 19, 1998, the subcommittee marked up draft
legislation to authorize VA major construction projects for FY
1999. Among its provisions, the bill proposed to authorize
projects at VAMCs in Long Beach, CA; San Juan, Puerto Rico;
Washington, DC; Palo Alto (Menlo Park), CA; Cleveland (Wade
Park), OH; Tucson, AZ; Dallas, TX; Auburn and Merced, CA; and
Denver, CO. The bill also included language authorizing major
medical facility leases in Baton Rouge, LA; Daytona Beach, FL;
and Oakland Park, FL. Further, the bill proposed to increase
the threshold for treatment of parking facility projects as
major medical facility projects from $3 million to $4 million.
Introduced as H.R. 3603, the legislation was marked up by
the full Committee on April 1, 1998 and passed the House on May
19, 1998. The provisions of the bill--along with language
authorizing other VA construction projects--was included in
H.R. 4110, which cleared Congress on October 21, 1998 and was
signed into law on November 11, 1998. (See summary of Public
Law 105-368, p. 39.)
On April 23, 1998, the Subcommittee on Health held a
hearing to review draft legislation relating to research on and
treatment of war-related illnesses. Based on that hearing, the
subcommittee chairman introduced H.R. 3980, the Persian Gulf
War Veterans Health Care and Research Act of 1998. This bill
proposed to set the stage for early treatment of war-related
illnesses by authorizing the VA to provide priority health for
such illnesses for veterans of future hostilities. Further, the
bill moved to extend the VA's special authority to treat
Persian Gulf veterans through December 31, 2001, and proposed
to elevate the level of priority for access to VA health care
for Persian Gulf veterans.
The bill also proposed to require VA to establish a
National Center for the Study of War-Related illnesses; require
the VA to work with the National Academy of Sciences toward
improving VA care of Persian Gulf veterans; require the VA to
join with DOD to develop a curriculum to be used by VA and DOD
physicians dealing with new Persian Gulf research findings; and
require the establishment of a Persian Gulf public advisory
committee, to include Persian Gulf veterans, to make
recommendations on research priorities relating to Persian Gulf
illnesses.
The Subcommittee on Health marked up the bill on June 4,
1998. The subcommittee also marked up two bills--H.R. 2775, to
rename the Aspinwall (PA) VAMC after the late Senator H. John
Heinz, and H.R. 3336, to rename the Gainesville (FL) VAMC after
the outgoing director of the facility, Malcom Randall--on the
same day. Subsequently, these two pieces of legislation were
combined into H.R. 3980 and the package was marked up in full
Committee on July 15, 1998. The legislation passed the House on
August 3, 1998. The key elements of this bill--along with other
provisions relating to Persian Gulf veterans--were incorporated
into H.R. 4110, which passed Congress on October 21, 1998 and
was signed into law on November 11, 1998. (See summary of
Public Law 105-368, page 36.)

Oversight Hearings

First Session

On February 11, 1997, the Full Committee held a hearing to
review issues relating to Persian Gulf War veterans, focusing
on the recently released report of the Presidential Advisory
Committee on Gulf War Veterans' Illnesses (PAC). This hearing
represented the first of five conducted in the 105th Congress
dealing with the health of Persian Gulf veterans. Testifying at
the hearing were officials from the PAC; the Institute of
Medicine; the Departments of Veterans Affairs, Defense, and
Health and Human Services; the Veterans of Foreign Wars; The
American Legion; the Disabled American Veterans; and the
National Gulf War Resource Center. Additionally, three Persian
Gulf War veterans testified regarding their experiences in
seeking care from VA.
The PAC report provoked controversy in identifying stress
as a likely, important contributing factor to the broad
spectrum of illnesses being reported by Gulf War veterans. The
PAC's testimony--and subsequent follow-up questions--dispelled
assertions that the report's findings meant that the PAC had
concluded that illnesses experienced by Gulf War veterans had
no physiological basis.
The testimony of the three Gulf War veterans brought into
focus the problem these veterans continue to experience when
seeking care at VA facilities. Too often, those treating Gulf
War vets are dismissive of their symptoms. These witnesses also
testified to access problems they encountered before being
treated.
Subsequently, Health Subcommittee Chairman Stearns
introduced H.R 2206, which among other things included
provisions to improve health care for Persian Gulf veterans and
strengthen the research efforts relating to their illnesses
(see summary of legislative activities, page 43 and Public Law
105-114, page 32).
On April 3, 1997, the Subcommittee on Health conducted a
hearing in Gainesville, Florida to examine the impact of the
Veterans Equitable Resource Allocation (VERA) system on
Florida's veterans. Officials from the VA Department (including
the VISN director and three directors of Florida VA medical
centers); the Florida Department of Veterans Affairs; the
Disabled American Veterans; Veterans of Foreign Wars; The
American Legion; the County Veterans Service Officers
Association; and the Paralyzed Veterans of America testified.
The shift of veterans' population to the South, Southwest
and West has precipitated the need to change the way VA
allocates its health care dollars. Section 429 of Public Law
104-204 required VA to develop a new resource allocation
methodology. Consistent with that law, VERA, which represents
that new methodology, brought more funds to Florida and other
``sun-belt'' states.
The witnesses expressed unanimous support for VERA.
Witnesses contrasted VERA's impact to the funding methodology
in preceding years. In prior years, funding allocations did not
follow veteran migration, and facilities with declining numbers
of patients continued to receive funding based on prior years'
funding levels rather than the number of veterans treated and
the complexity of required services. While there were questions
as to whether VERA went far enough, each witness supported the
concept.
The subcommittee continues to support VERA, but is mindful
of the concerns raised by members of Congress from states
losing funding under the program. It recommends that further
oversight on this issue take place in the 106th Congress.
On April 16, 1997, the Subcommittee on Health and the
Subcommittee on Oversight and Investigations held a joint
hearing to ascertain the degree to which exposures to chemical
warfare agents may have played a part in the illnesses suffered
by Persian Gulf War veterans. In addition to reviewing policy
regarding the handling of intelligence findings and enemy
chemical ordinance, the hearing probed into events that took
place during the Gulf War in Khamisiyah, a remote location in
Iraq where chemical arms had been stored. Despite early DOD
assertions to the contrary, some amount of toxic chemical gas
was released as a result of U.S. Army demolition of the Iraqi
bunker where the munitions were stored. Testifying at the
hearing were officials from the DOD, the Central Intelligence
Agency, the Department of the Army, The American Legion, and
the National Gulf War Resource Center.
The subcommittee's next hearing, on June 19, 1997, focused
on the quality of care Persian Gulf veterans receive from VA.
It was apparent through the testimony of the General Accounting
Office and others that there remains general dissatisfaction
among many Gulf War veterans with the care they receive. GAO
interviewed dozens of veterans on this topic and found that at
some facilities even modest expectations--such as timeliness in
registry examinations and being told the results of their
tests--are not being met. The VA acknowledged that some
veterans were not happy with their care. This hearing further
reinforced the Committee's position that a legislative remedy
was needed to require VA to improve its care of Persian Gulf
veterans. Such provisions were included in H.R. 2206 (see
Legislative Activities, First Session, p. 43). The Committee
recommends continued monitoring in the 106th Congress of the
status of Persian Gulf veterans' illnesses and the care these
veterans receive from the VA. (See Oversight plan, p. 72.)
On July 10, 1997, the subcommittee held a hearing to gather
the views of VA officials and others on the VA pharmacy
program, as well as draft legislation dealing with homeless
veterans and Persian Gulf War veterans (later to become H.R.
2206).
GAO and VA officials were asked to testify on how opening
the VA-administered pharmaceutical federal supply schedule
(FSS) to state and local entities would affect VA
pharmaceutical costs. GAO testified that, while there is no way
to predict the impact on federal drug prices, providing greater
access to that schedule risks significant cost increases for VA
pharmaceutical drugs, as the industry attempts to protect
itself against revenue losses. The VA reported that expanding
access to FSS prices would result in price increases such as it
sustained following implementation of the Medicaid rebate drug
pricing provisions in the Omnibus Budget Reconciliation Act of
1990.
The subcommittee agreed that substantial price increases
were a very real possibility and included a provision in H.R.
2206 to provide that drugs listed on the Federal Supply
Schedule may only be procured from that schedule by a Federal
entity or other entity already provided for under law.
At that hearing, the subcommittee also heard testimony from
the VA, clinicians, and advocates for homeless veterans on the
experience under then-current legislation to assist homeless
veterans. The Subcommittee also took testimony on provisions in
draft legislation to extend and expand those programs. Each of
the witnesses expressed support for these provisions.
Additionally, the VA expressed support for the enactment of the
three provisions in the draft bill dealing with Persian Gulf
War veterans (see summary of Public Law 105-114, p. 32).
On October 6, 1997, the subcommittee held a hearing to
examine VHA's risk management policy and performance as it
related to avoidable patient deaths at several VA facilities.
This hearing explored the adequacy of VA policy, the extent of
adherence to that policy, and means to strengthen policy and
practice. Testifying at the hearing were VA Under Secretary for
Health Kenneth Kizer, three directors at VA facilities where
incidents occurred, an official from the VA Inspector General's
office, and a professor at the Harvard School of Public Health
who has conducted extensive studies on risk management
practices.
Dr. Kizer testified to the effect that the VA is doing more
than private sector providers to ensure patient safety.
Further, he claimed that VA has taken steps to better ensure
that mistakes made -whether resulting in a death or not--would
lead to findings that would prevent similar cases from
occurring, what the VA calls ``lessons learned''. A new, more
comprehensive risk management policy--not in effect when these
incidents occurred--was instituted shortly before the hearing.
VA has also subsequently joined a national patient safety
initiative. Nevertheless, the subcommittee found substantial
evidence of under-reporting of patient safety problems. It also
discovered that for several years Central Office had not
reviewed systemwide patient-incident data, as policy had long
required.
The subcommittee remains committed to ongoing oversight on
quality assurance. In that regard, the Subcommittee convened a
follow-up hearing on this subject on March 19, 1998 (see
Oversight hearings, Second Session, below). Further oversight
on these issues is recommended for the 106th Congress.

Second Session

On February 5, 1998, the full Committee held a follow-up
hearing to determine the progress VA and other federal agencies
have made in conducting Persian Gulf-related research and to
review the findings and recommendations of the Presidential
Advisory Committee on Gulf War Illnesses (PAC). Witnesses at
the hearing included officials from the VA, DOD, Institute of
Medicine, General Accounting Office, and the PAC. This hearing
helped lay the foundation for the development of legislation to
improve VA research on Persian Gulf War illnesses.
On March 19, 1998, the Subcommittee on Health held a
follow-up hearing to re-examine VHA's quality management
practices. Representatives from the VA, the VA's Inspector
General's office, the Institute of Medicine (IOM) and the
Nurses Organization of Veterans Affairs (NOVA) testified.
The hearing probed the extent to which quality management
efforts had improved since the establishment of new policies in
the previous year. Subcommittee Chairman Stearns questioned the
effectiveness of the VA's ``Lessons Learned'' database, which
VA officials cited at the previous hearing as a way for all VA
medical facilities to learn about mistakes and ways to
institute safer practices. He also questioned the results
achieved from VA's creation of boards and committees on quality
management.
Dr. Thomas Garthwaite, VA's Deputy Under Secretary for
Health, responded that the VA had indeed improved, citing the
new risk management policy and a decrease in mortality numbers
at VA facilities. Dr. John Mather, Assistant Inspector General
for Heath Care Inspections, agreed that sound policies had been
established, but identified implementation problems, and
continuing problems with the integrity of data used to make
such assessments.
This issue continues to be of importance to the Committee.
It recommends continued review of quality-management and
patient safety during the 106th Congress.
On April 23, 1998, the subcommittee held a hearing to
gather views on draft legislation regarding war-related
illnesses and health care for Persian Gulf veterans, as well as
to evaluate the VA's sexual trauma counseling program.
Testifying were officials from the VA, DOD, GAO, veterans
service organizations, the Institute of Medicine (IOM) and the
U.S. Navy's Infectious Diseases Department.
These officials generally supported draft legislation
(later introduced as H.R. 3980) to extend the special health
care eligibility for Persian Gulf veterans, to provide those
veterans a higher VA enrollment priority and to give VA the
authority to provide priority care to veterans of future wars,
among other initiatives (see Legislative Activities, Second
Session, p. 45).
With regards to the sexual trauma program, VHA Deputy Under
Secretary Thomas Garthwaite testified that more veterans sought
care at VA facilities for sexual trauma than had previously
been identified. With that in mind, VA had submitted a
legislative proposal to extend the VA's sexual trauma
counseling program through December 31, 2003. Subcommittee
Ranking Member, Luis Gutierrez, had also introduced legislation
(H.R. 2253) to extend and enhance VA's sexual trauma program.
GAO's Stephen Backhus testified to the effectiveness of the
current program. He found that sexual trauma counseling is
available in all VA medical centers and in four facilities as
specialized programs. He found VA has also conducted extensive
outreach to ensure that women veterans are aware of the
program. Mr. Backhus testified to concerns on the part of VA
health care professionals that the growing number of women
veteran seeking care for sexual trauma will outgrow the number
of staff to adequately treat them. The Committee heard
testimony from DOD officials on their efforts to combat issues
in the military that have given rise to sexual trauma in women
veterans. H.R. 4110, as amended, contained a provision to
extend sexual trauma counseling and treatment through December
31, 2001, and was eventually enacted as part of Public Law 105-
368.
On June 17, 1998, the subcommittee conducted a hearing to
examine the future role of the VA health care system. Such
factors as the changes in medical technology and practice
patterns; the aging of VA's infrastructure; and the aging,
migration patterns, and decline of the veteran population,
necessitate serious examination of how best to meet veterans'
future health care needs. In addition to VHA Under Secretary
Kenneth Kizer, those testifying included officials from The
American Legion, the Independent Budget, and the Vietnam
Veterans of America testified, as well as representatives from
GAO, the Association of American Medical Colleges (AAMC), and
Marjorie Quandt, the former executive director of the
Commission on Future Structure of Veterans Health Care.
Testimony varied widely on how VA should best be positioned
to provide health care in the future. Steve Robertson of The
American Legion offered the organization's legislative
recommendation, the ``GI Bill of Health,'' as the best vehicle
for ensuring the VA health care system's continued viability.
Marjorie Quandt testified that by the year 2015, 22 states plus
the District of Columbia would not have sufficient veterans'
population to maintain a VA hospital. She recommended that by
closing unneeded facilities and instituting VA/DOD joint
operations, the VA could maintain its current workload capacity
while freeing up funds to care for its aging population base.
Stephen Backhus of GAO testified that some VA inpatient
capacity is no longer needed and that VA's success in the
future will be based in part on how well it handles its
unneeded infrastructure. Dr. Richard Krugman, representing
AAMC, advised that the VA needs to continue to have a healthy
working relationship with medical colleges, which in many
instances provide an important employment base to VA medical
centers.
In all, the views offered during the hearing provided the
subcommittee with a valuable perspective that will provide a
framework for further review and oversight in the 106th
Congress.
On June 30, 1998, the subcommittee traveled to Boise,
Idaho, for a hearing to review provision of health care to
Idaho's veterans. The hearing reached beyond the scope of VA
care to examine TriCare. For the first time, officials from the
VA, DOD, and TriWest, a subsidiary of TriCare, were in the same
forum to discuss many of the health care access problems
experienced by veterans, military retirees and their families.
The testimony indicated that these three entities had not
communicated effectively with one another, resulting in poor
coordination of the federal resources available to serve DoD
and VA beneficiaries. Chairman Stearns obtained a commitment
from each group to collaborate in serving VA and DoD
beneficiaries.
The subcommittee should continue to work with Rep.
Chenoweth to ensure that care for Idaho's veterans improves and
remains at a high level.
On July 23, 1998, the subcommittee held its final oversight
hearing of the year to review VA's provision of specialized
services, and its compliance with the provision in law
requiring that specialized service capacity be maintained. The
subcommittee heard testimony from VA and GAO officials, as well
as representatives of the major veterans' service organizations
and Congressionally mandated committees dealing specifically
with VA's provision of specialized services.
One of the issues discussed was VA's annual report to
Congress on maintenance of specialized program capacity.
Witnesses called into question the integrity of the reported
data. A PVA survey, for example, identified significantly fewer
spinal cord injury beds at a number of VA facilities than VA
reported.
Both the Department's report and witnesses' testimony
documented the variability in efforts to maintain program
capacity from network to network. The subcommittee heard
testimony that management priorities, rather than budget
pressures alone, contributed significantly to the variability
in network compliance with the requirement to maintain
specialized programs. The Deputy Under Secretary for Health
expressed a commitment to give greater priority to this
statutory obligation, and conceded under questioning that
establishment of pertinent performance measures for network
directors could be a remedial measure. The Committee developed
legislation in the form of an amendment to H.R. 3980 to require
VA to establish such measures.
The Committee should continue to closely monitor these
programs with an eye to ensuring that VA adheres to the law.
Further oversight is recommended on this matter during the
106th Congress.

Subcommittee on Benefits

The Subcommittee on Benefits has jurisdiction over
veterans' matters affecting compensation, pension, insurance,
memorial affairs, education, training, employment and housing.
In addition to overseeing programs administered by the Veterans
Benefits Administration and the National Cemetery System, the
Subcommittee has oversight authority of overseas cemeteries
under the jurisdiction of the American Battle Monuments
Commission. The former Subcommittee on Compensation, Pension,
Insurance and Memorial Affairs was merged with the former
Subcommittee on Education, Training, Employment and Housing to
form the current Subcommittee on Benefits.

LEGISLATIVE ACTIVITIES

First Session

On July 9, 1997, the full committee held a hearing on H.R.
2040 and S. 923, legislation restricting burial rights in
national cemeteries and entitlement to other VA benefits when
an honorably discharged veteran commits serious crimes.
Witnesses included three members of Congress: Honorable Spencer
Bachus, Honorable Ike Skelton, and the Honorable Joe
Knollenberg. In addition, testimony was received from the
Honorable Jerry Bowen, National Cemetery System; Mr. Johnny
Killian, American Law Division, Congressional Research Service;
and Mr. Rick Surratt, representing the views of the Disabled
American Veterans, The American Legion, AMVETS, Blinded
Veterans Association, Jewish War Veterans, Paralyzed Veterans
of America, Veterans of Foreign Wars, and Vietnam Veterans of
America.
VA testified that while the legislation could present some
implementation difficulties, H.R. 2040 would address concerns
regarding the preservation of the sanctity of veterans'
cemeteries. Mr. Killian testified that no constitutional
objection would be warranted by either bill because veterans'
benefits are gratuities that Congress confers and Congress had
the power to curtail eligibility for the programs. The members
of Congress felt very strongly that our tax dollars should not
be used to honor a murderer, for example, who happens to be a
veteran.
On July 16, 1997, the subcommittee held a legislative
hearing to receive testimony on pending education, training and
employment legislative draft proposals and the following bills:
H.R. 166, the Veterans' Job Protection Act; H.R. 167, the
Veterans' Training and Employment Bill of Rights Act; H.R. 759,
providing a 10 percent increase in Montgomery GI Bill benefits
(active duty and dependents); and H.R. 1877, expanding the
Work-Study program for veteran-students.
Honorable G.V. (Sonny) Montgomery, former Chairman of the
House Veterans' Affairs Committee, testified in support of H.R.
759. Honorable Al Borrego, Acting Assistant Secretary of
Veterans' Employment and Training Service, provided testimony
on H.R. 166 and H.R. 167, along with draft legislation amending
the Uniformed Service Employment and Reemployment Rights
Improvement Act of 1997 (USERRA). While the Administration
supported the legislative intentions of H.R. 166 and USERRA,
they offered suggestions on clarifying certain provisions of
each bill to ensure the effectiveness. The Administration
supported H.R. 167. Celia Dollarhide represented the Department
of Veterans Affairs and supported the concepts set forth in
H.R. 759 and H.R. 1877. VA also commented on a draft bill, the
Veterans Education Benefits Act of 1997, with opposition to one
of the seven sections of the bill. The veterans service
organization witnesses, representatives from Non Commissioned
Officers Association, Veterans of Foreign Wars, Disabled
American Veterans, AMVETS, and The American Legion supported
the general intent of all the bills, but offered suggestions
for strengthening the language of the draft proposals on the
basis that they did not offer enough protection to veterans.
On September 4, 1997, the subcommittee marked up H.R. 2367,
the Veterans' Compensation Cost-of-Living Adjustment Act of
1997. H.R. 2367 proposed to provide a cost-of-living
adjustment, effective December 1, 1997, to the rates of
disability compensation and dependency and indemnity
compensation for the survivors of certain disabled veterans.
The bill was reported to the full committee by unanimous voice
vote. On September 11, the bill was favorably reported to the
House by the full committee (see House Report 105-320). The
bill, which became Public Law 105-98, was signed into law on
November 19, 1997.
On September 11, 1997, the full committee marked up S. 923
and ordered it favorably reported to the House with an
amendment in the nature of a substitute (see House Report 105-
319). S. 923, as amended, which became Public Law 105-116, was
signed into law on November 21, 1997.
On December 18, 1997, the subcommittee held a legislative
hearing on H.R. 3039, the Veterans Transitional Housing
Opportunities Act of 1997, in Buffalo, New York. VA Committee
members in attendance were Subcommittee Chairman Jack Quinn and
full committee Ranking Member Lane Evans. Representative John
LaFalce (NY) also attended the hearing.
The witnesses testifying were Paul Angrisano, Vietnam
Veterans of America; Linda Boone, National Coalition for
Homeless Veterans; Martin Bugaj, Department of New York; David
Dollner, New York State Department of Labor; Frank Falkowski,
Western New York Veterans Housing Coalition; Dennis Fink,
Friends of Cazenovia Manor, Inc.; Command Sgt. Maj. Gary
Flaherty, Non Commissioned Officers Association, Richard
Gallagher, Western New York Alcohol and Drug Dependency
Services; James Hartman, New York Veterans Employment and
Training; William Lyons, First National Bank; Peter Mazzerella,
VFW, Department of New York; John Sampson, The American Legion;
Dr. Joan Sulewski, Chairman Jack Quinn's Veterans Advisory
Committee; Mary Lee Sulkowski, Buffalo VA Vets Center. Mr.
Peter Dougherty, Homeless Veterans Programs, represented the
Department of Veterans Affairs.
Most of the witnesses supported the bill and how it would
help increase services to homeless veterans across the nation,
albeit with some questions about the proposed funding
mechanisms. The Administration, however, was not in a position
to give formal views on H.R. 3039 and was in the process of
making a thorough review of the bill.

Second Session

On February 24, 1998, the subcommittee conducted another
legislative hearing on H.R. 3039, the Veterans' Transitional
Housing Assistance Act of 1997, and H.R. 3211, codifying
eligibility requirements for burial at Arlington National
Cemetery. Deputy Assistant Secretary of the Army (Military
Personnel Management and Equal Opportunity Policy) John
McLaurin, accompanied by Mr. Jack Metzler, Superintendent of
Arlington National Cemetery, testified on behalf of the
Secretary of the Army. Mr. Keith Pedigo, Director, Loan
Guaranty Service at the Veterans Benefits Administration,
testified on behalf of the VA. Mr. Raymond Boland, Secretary of
the Wisconsin Department of Veterans Affairs, and Mr. Tom
Cantwell of the Westside Residence Hall, Inc., testified in
support of H.R. 3039. Representatives from various veterans
service organizations shared their views on both bills.
Congressman Jerry Kleczka submitted a statement for the record
praising the subcommittee for addressing the problems at
Arlington, and discussed his bill, H.R. 3145, which, like H.R.
3211, would have ended the waiver process for burials. The
veterans service organizations supported codifying the
eligibility requirements for burial at Arlington and
eliminating waivers for burial. The Army supported setting
forth in law the eligibility criteria for burial. However, they
opposed eliminating eligibility for high ranking government
officials, those with some military experience, who distinguish
themselves in the legislative, judicial or executive offices
they held. Additionally, they did not support limiting the
discretion to grant exceptions in those circumstances that have
historically warranted burial at Arlington.
On March 5, 1998, the subcommittee marked up three bills:
H.R. 3039, the Veterans' Transitional Housing Assistance Act of
1997; H.R. 3211, codifying eligibility requirements for burial
at Arlington National Cemetery; and H.R. 3213, clarifying
enforcement of veterans' employment and reemployment rights. On
February 24, 1998, the subcommittee conducted a legislative
hearing on H.R. 3039 and H.R. 3211. H.R. 3039 and H.R. 3213
were ordered reported favorably to the full committee by
unanimous voice vote. H.R. 3211 was reported favorably to the
full committee with an amendment in the nature of a substitute
by unanimous voice vote.
On March 11, 1998, the full committee met to markup H.R.
3039, H.R. 3211, and H.R. 3213. All three bills were ordered
reported favorably to the House by unanimous voice vote.
On June 18, 1998, the subcommittee conducted a legislative
hearing on an omnibus draft bill providing a cost-of-living
adjustment for service connected disabled veterans and certain
survivors, and making various improvements in education,
housing, and cemetery programs. The bill also included
administrative provisions relating to the Board of Veterans'
Appeals and the Court of Veterans Appeals. For the most part,
representatives from the veterans service organizations--The
American Legion, Veterans of Foreign Wars, Paralyzed Veterans
of American, and Non Commissioned Officers Association--
supported the provisions of the bill. NCOA opposed expanding
the State Cemetery Grants Program and PVA opposed giving
members of the Board the title ``administrative law judge.''
The Department of Veterans Affairs supported many of the
provisions in the bill and chose to defer comment on two other
provisions.
On June 18, 1998, following the legislative hearing, the
subcommittee marked up the draft bill. The bill was ordered
reported favorably by unanimous voice vote to the full
committee.

OVERSIGHT HEARINGS

First Session

On May 7, 1997, the subcommittee held an oversight hearing
on Government Performance and Results Act (GPRA) strategies for
the Veterans' Employment and Training Service (VETS) to help
determine whether VETS was accomplishing what it was designed
to do. Witnesses included Honorable Preston Taylor, Assistant
Secretary of VETS; Carlotta Joyner of the General Accounting
Office; and representatives from the Non Commissioned Officers
Association, the Disabled American Veterans, Veterans of
Foreign Wars, and The American Legion.
The Department of Labor's VETS provided its framework for
complying with the Results Act, which relied heavily on
customer service surveys and vigorous consulting with
stakeholders and service provider partners. The veterans
service organization representatives supported the overall
operations of VETS and their achievements. However, they urged
the Committee to ensure veterans will continue to receive
priority assistance.
On May 14, 1997, the subcommittee conducted an oversight
hearing on operations within the Compensation and Pension
Service using Government Performance and Results Act
principles; the Department's handling of Persian Gulf War
veterans' claims; and VA's draft legislation to limit liability
for compensating and treating veterans with smoking-related
illnesses. Witnesses included Ms. Kristine Moffitt, Director of
VA's Compensation and Pension Service; Mr. Stephen Backhus,
General Accounting Office; and representatives of veterans
service organizations (VSOs).
Ms. Moffitt provided details of VA's plan for implementing
requirements of the Results Act, a business plan that was
integrated and combined with Business Plans from four other
Services into one comprehensive Veterans Benefits
Administration Business Plan. This Business Plan was used as
VA's FY 98 budget request. GAO testified that VBA needed to
identify specific measures that are results-oriented rather
than process-oriented, and suggested that VBA will be
challenged in implementing the Results Act because it has had
difficulties in the past in bringing about program
improvements.
Through hearings, briefings, and discussions, the
Subcommittee continued its oversight of the Department's
implementation of Results Act performance measures.
During the hearing, each of the veterans service
representatives testified that they strongly supported the
expansion of the presumptive period for Persian Gulf War
veterans with undiagnosed illnesses from two to ten years and
many cited improper claim development and inadequate staff to
develop, rate, and adjudicate Persian Gulf War claims. VA
explained it was currently readjudicating 10,736 cases to
ensure that proper weight was being accorded to less
traditional types of evidence and to ensure that information
about the claims was properly entered into the tracking system.
Without having reviewed the VA's proposed legislation to
limit liability for smoking-related illnesses, most of the VSOs
were not in support of the concept.
On May 21, 1997, the full committee conducted a hearing to
receive testimony on the findings and recommendations of the
Veterans' Claims Adjudication Commission. Witnesses included
Mr. William LaVere, a member of the Commission; Dr. Stephen
Lemons, Acting Under Secretary for Benefits; Mr. Milton
Socolar, chairman of National Academy of Public Administration,
a panel reviewing compensation and pension matters; and
representatives from AMVETS, The American Legion, Veterans of
Foreign Wars, Vietnam Veterans of America, and Disabled
American Veterans.
There was substantial agreement with the majority of the
Commission's recommendations by the VA's Strategic Management
Group, however, then-Secretary Jesse Brown noted that
``benefits earned are different from benefits bestowed.'' By
and large, the veterans' service organizations felt the
Commission failed to address the adjudication system as it
currently exists and blamed the veteran for adjudication
problems rather than the system. The Veterans of Foreign Wars
testified that the ``. . . good parts of the report are
overwhelmed by the negative aspects.'' Conversely, the
Commission observed that the current system represents a life-
time driven system of perpetual claims for which there is no
closure. The VA Committee agreed with many of the Commission's
recommendations, and is exploring introducing some legislation
based on the report.
On June 5, 1997, the subcommittee conducted a hearing of
Government Performance Results Act (GPRA) strategies for both
the VA's Education Service and the Vocational Rehabilitation
and Counseling (VR&C) Service. Ms. Celia Dollarhide, VA
Education Service Director, represented the VA. Ms. Cynthia
Fagnoni testified for the General Accounting Office. According
to Ms. Fagnoni, while the Veterans Benefits Administration
(VBA) had established four goals each for the VR&C program and
the Education Service, they were not yet in a position to fully
measure and assess program performance and results. GAO's view
was that VBA needs to develop appropriate measures and cost
data to monitor performance, and integrate its plan with
Federal agencies and other State agencies. Ms. Dollarhide
detailed the Department's goals for improving education and
vocational rehabilitation services, acknowledging that the VA
would continue to work with their stakeholders and this
Committee in developing meaningful outcome measures.

Second Session

On February 4, 1998, the subcommittee held an oversight
hearing on the Department of Veterans Affairs' Vocational
Rehabilitation programs. Witnesses included representatives
from the administration, the veterans' service organizations,
and the vocational rehabilitation community. Ms. Cynthia
Fagnoni of the General Accounting Office testified that with
regard to vocational rehabilitation, VBA focused too much on
sending veterans to training rather than helping them get jobs.
She also referred to GAO's 1996 report on the program. The
veterans' service organizations and the Veterans Advisory
Committee on Rehabilitation testified to their support of the
vocational rehabilitation program, but felt that VA needs to
assure employment outcomes, strengthen employment opportunities
in placement, maintain a strong employment network, and move
away from a training emphasis and toward a job placement
emphasis. Honorable Al Borrego, Assistant Secretary, Veterans'
Employment and Training Service spoke to the joint efforts of
VA and VETS to ensure the further effectiveness of the
vocational rehabilitation program. VA's Under Secretary for
Benefits, Joseph Thompson, acknowledged the concerns expressed
by the witnesses and the need to shift the focus from training
to jobs.
On March 26, 1998, the subcommittee conducted an oversight
hearing on the Government Performance and Results Act (GPRA)
principles for the five business lines at the Veterans Benefits
Administration: compensation and pension, education, vocational
rehabilitation, insurance and loan guaranty. Witnesses included
Mr. Joseph Thompson, Under Secretary for Benefits at VBA, and
Ms. Cynthia Fagnoni of the General Accounting Office. Mr.
Thompson testified to VBA's commitment to implementing GPRA
principles and explained their plan, which is based on
establishing goals and objectives within a corresponding
framework to track progress achieved and to establish clear
accountability. VBA recognized it needed to do much more
strategic planning to form the foundation for all its
operations. GAO testified that while VBA continues to make
progress in setting goals and measuring its programs'
performance, it still had significant challenges in its efforts
to implement GPRA. According to GAO, major deficiency was VBA's
lack of data needed to effectively measure its performance in
several key areas.
On April 29, 1998, the subcommittee held a hearing on
operations within the National Cemetery System and the American
Battle Monuments Commission. In addition, Ms. Carolyn Becraft,
representing the Department of Defense, presented the DoD's
views on military burial honors, including current and future
availability of surplus military weapons and ammunition to
approved organizations for ceremonial purposes. Mr. Stephen
Backhus of the General Accounting Office presented the GAO's
findings (September 1997 report) concerning the National
Cemetery System's ability to accommodate the increasing demand
for burials, and what VA can do to extend the service period of
existing national cemeteries. GAO believed that NCS should
articulate to the Congress and other stakeholders how it planed
to address the estimated workload through 2010, and suggested
NCS identify opportunities to construct columbaria in existing
cemeteries as a means of extending cemetery service periods.
Mr. Roger Rapp, representing VA, discussed the Cemetery
System's strategic plan. Members of the subcommittee and GAO
stated some concerns, because veterans' deaths will peak in the
years 2005 to 2010 while the strategic plan outlines activities
only through 2003. Mr. Rapp also explained the status of four
new cemeteries set to open by the year 2000 and plans for
expanding existing cemeteries. Rep. Filner asked VA to provide
a 10-year ``roadmap'' for the National Cemetery System to be
delivered to the subcommittee by August, 1998. Mr. John
Vitikacs, of The American Legion, testified that in the
Legion's opinion, NCS had not completed the strategic planning
process for future burial options because the current strategy
does not extend practicable burial options to millions of
veterans. General Fred Woerner provided an overview of the
American Battle Monuments Commission's operations, and the
results of the first agency-wide audit of their financial
statements as required by Public Law 104-275. Mr. David Clark,
of the General Accounting Office, shared the results of the
joint GAO/Peat Marwick audit of ABMC, identifying only minor
weaknesses, which were primarily systems-related. The ABMC
received an unqualified opinion on their balance sheet.
On May 20, 1998, the Subcommittee on Benefits conducted a
joint hearing with the Subcommittee on Government Programs and
Oversight of the Committee on Small Business to examine the
performance of the Small Business Administration in providing
financial and entrepreneurial assistance to veterans. Five
witnesses, Dr. Paul Camacho, Mr. Paul Hanley, Mr. Bill Elmore,
Mr. Emil Naschinski, Mr. William Crandell, and Mr. Kenneth
Yancey, Jr., testified to their disappointment with the Office
of Veterans Affairs (OVA) in the Small Business Administration
(SBA). They believed OVA needed increased funding, a direct
line of authority to the administrator, and an accessible
network of current and prospective veteran business owners. Mr.
Clifton Toulson, Jr., testifying on behalf of the SBA,
expressed the department's commitment to the formation and
growth of veteran-owned small businesses and improving its
performance in assisting veterans.
On June 10, 1998, the subcommittee held an oversight
hearing on operations at the Board of Veterans' Appeals and the
Court of Veterans Appeals, and received testimony on H.R. 3212,
a bill to revise the provisions of law relating to the
retirement of judges on the Court, and for other purposes. The
Honorable Frank Nebeker, Chief Judge, testified on behalf of
the Court, the Honorable Richard Standefer testified on behalf
of the Board of Veterans' Appeals, and representatives from the
Disabled American Veterans, Vietnam Veterans of America,
AMVETS, Veterans of Foreign Wars, and the Paralyzed Veterans of
America represented the veterans service organizations. All
witnesses supported the provisions in H.R. 3212. The VSO
representatives' chief complaint about the Board and the Court
was the sharing of information following an appeal of the
Board's decision. Chief Judge Nebeker clarified the process
following an appeal to the Court and said there was no usual
relationship between the government and the Court.
On July 16, 1998, the subcommittee held an oversight
hearing on VA's standards for adjudicating claims presented by
veterans suffering from hepatitis C and cerebral malaria, along
with an update on Persian Gulf War claims adjudication.
Witnesses included representatives from veterans' service
organizations and Mr. Paul Sullivan of the National Gulf War
Resource Center. Dr. Teresa Wright, San Francisco VAMC; Dr.
John Booss, VA Director of Neurology; and Dr. Nils Robert
Varney, Iowa City VAMC, testified on behalf of the VA on
hepatitis C and cerebral malaria. Mr. Robert Epley,
representing the Compensation and Pension Service, discussed
claims processing for these illnesses. The veterans service
organizations all testified that as a result of VA's overly
strict interpretation of Public Law 103-446, many Persian Gulf
veterans were being denied service connection, and that the
regulations need to be rewritten. The VA testified to current
Gulf War statistics, but made little mention on claims
processing, beyond stating a 78 percent denial rate for
undiagnosed illness. Dr. Varney testified about his research on
cerebral malaria in Vietnam veterans, and Dr. Booss disputed
the findings. The VA maintains that the rules and procedures
they currently apply to any claim for service connected are
adequate to determine whether hepatitis C and cerebral malaria
are service connected. VA is, however, working with VHA to
determine whether some changes in law or regulation would be
appropriate in light of the new scientific evidence regarding
hepatitis C, such as the 10 to 30-year latency period.
On July 22, 1998, the full committee held an oversight
hearing on benefits for Filipino veterans. Witnesses included
members of Congress, representatives from the Department of the
Army and the Library of Congress' Congressional Research
Service, and various members of the Filipino veteran community.
Representatives Benjamin Gilman (NY), Randy ``Duke'' Cunningham
(CA), Neil Abercrombie (HI), Patsy Mink (HI), and Nancy Pelosi
(CA) all testified in support of expanding benefits to World
War II Filipino veterans, as did Filipino veteran community
representatives. The veterans' service organization witnesses,
representatives from the Veterans of Foreign Wars, The American
Legion, and Jewish War Veterans of the U.S.A. supported
benefits expansion, though they acknowledged the cost of such a
proposal as significant. Dr. Clayton Laurie, Historian, U.S.
Army Center of Military History reported that his department
had been unable to locate any documents asserting a prior
Congressional promise to provide Filipino veterans VA benefits
equal to U.S. servicemembers. Dr. Dennis Snook, Specialist on
Social Legislation at the Library of Congress provided a
history of veterans benefits for Filipinos, and concluded that
Filipinos were currently receiving what they were intended to
receive under U.S. law.
On August 5, 1998, the full committee conducted an
oversight hearing on the garnishment of benefits paid to
veterans for child support and other court-ordered family
obligations. Witnesses included representatives from the
following organizations: U.S. Marine Corps, American Retirees
Association, Women in Search of Equity for Military and
Divorce, Air Force Sergeants Association, The Retired Officers
Association, Department of Defense, Fleet Reserve Association,
Justice and Equality for the Military Wife, The Retired
Enlisted Association, Non Commissioned Officers Association,
National Military Family Association, Disabled American
Veterans, Department of Veterans Affairs, U.S. Navy, Ex-
Partners of Servicemen/women for Equality, and the American Bar
Association.
Most of the witnesses stated a legal and moral obligation
for every parent to support his or her children and endorsed
efforts to ensure that support is provided. The witnesses'
testimony focused on H.R. 2537, the Former Spouses Protection
Act of 1997. In addition to the veterans service organizations
participating in the hearing, the Women In Search of Equity
organization supported changes to the Uniformed Services Former
Spouses Protection Act. The witnesses that supported military
retirement pay continuing to be treated as property in divorce
proceedings include the American Bar Association, National
Military Family Association, Justice and Equality for the
Military Wife, and Ex-Partners of Servicemen and Women for
Equality. The VA witness stated that there are VA regulations
designed to ensure that there is an equitable division of
veterans' benefits where VA beneficiaries are failing to meet
their parental/marital obligations. The Department of Defense
representative testified to the Department's strong advocacy of
parental child support. DoD could offer no position on H.R.
2537; they testified that they had just begun a comprehensive
review of the Uniformed Services Former Spouses Protection Act
and were required to report their findings and recommendations
to Congress not later than September 30, 1999.

Oversight Activities

Recommendations of Commission on Servicemembers and Veterans Transition
Assistance

Public Law 104-275 established the Commission on
Servicemembers and Veterans Transition Assistance to assess the
adequacy and effectiveness of Federal transition assistance
programs and benefits for servicemembers and veterans.
The Commission was comprised of 12 members who were
appointed by the Committees on Veterans' Affairs of the House
of Representatives and the Senate and by the House National
Security Committee and the Senate Armed Services Committee.
The Commission was chaired by the Honorable Anthony J.
Principi. Its Vice Chairman was the Honorable G. Kim Wincup.
The Commission's panel on veterans' benefits was chaired by
General J. B. Davis (USAF, Ret.); its panel on servicemembers
was chaired by Ronald W. Drach; and its panel on transition
health care issues was chaired by Lieutenant Colonel Renee
Priore (USA, Ret.).
The Committee staff received a preliminary briefing on the
Commission's findings and recommendations on December 1, 1998.
The Commission is expected to transmit its report formally to
the Committee in January 1999. The Commission's report will
contain recommendations on some 31 transition issues in
thematic areas such as education, employment and training
(including servicemember transition assistance programs),
transition health care, economic equity (housing, small
business and other areas), and organizational structure
(primarily involving the Departments of Veterans Affairs and
Defense).
The Committee recommends a full committee hearing in the
106th Congress to receive the Commission's recommendations in
late January, 1999.

Subcommittee on Oversight and Investigations

The Subcommittee on Oversight and Investigations reviews
the benefits and the health care services that the federal
government provides to eligible veterans and family members. It
also oversees the programs and operations of the Department of
Veterans Affairs, as well as those of other federal agencies
that pertain to veterans. In carrying out its responsibilities,
the subcommittee conducts hearings, site visits and
investigations nationwide. It also requests reports from the
General Accounting Office, the Congressional Research Service
and the VA's Office of the Inspector General. The subcommittee
does not have legislative jurisdiction so that its resources
can be solely dedicated to oversight authorized by the full
Committee.

Oversight Activities

First Session

On April 17, 1997, the subcommittee heard testimony on
sexual harassment issues in the VA, particularly at the VA
Medical Center in Fayetteville, NC. Five women who were
employees of that medical center gave sworn testimony about
sexual harassment and personal abuse they had experienced from
the medical center's former director. Representatives of the VA
and the VA's Office of Inspector General testified regarding
the VA's Equal Employment Opportunity program and the
investigation of complaints at Fayetteville. A representative
of the Equal Employment Opportunity Commission testified
regarding government-wide EEO policies and programs and sexual
harassment law. Representatives of the National Managers
Association, the Nurses Organization of Veterans Affairs,
Federally Employed Women, and the American Federation of
Government Employees also presented their views on sexual
harassment issues in the VA and the federal government.
The testimony showed that Directors at field facilities
were the EEO officers for their facilities, even though they
and other senior facility managers could be the subject of
complaints about sexual harassment or other discrimination, or
could effectively condone such unlawful behavior by blocking
action on complaints. The subcommittee concluded that sexual
harassment problems in the VA that had been of concern to the
Committee four years earlier at the Atlanta VA Medical Center
had not been effectively addressed. Subsequent to the hearing,
Chairman Everett and the full Committee Ranking Democratic
Member, Honorable Lane Evans, introduced H.R. 1703, the
Department of Veterans Affairs Employment Discrimination
Prevention Act, to reform the VA's EEO system by making it
independent of local facility management and by establishing an
independent appeals process within the department for decisions
on complaints.
On May 22, 1997, the subcommittee heard testimony on VA
safety and security issues concerning veterans and over 240,000
VA employees. The hearing was prompted by the tragic murder in
February 1996 of a VA physician at the VA Medical Center in
Jackson, MS. This was the second violent assault at the
facility in less than two years. The subcommittee examined VA's
pilot demonstration program to arm its hospital law-enforcement
officers. The physical safety of veterans and VA employees is
paramount, and the subcommittee sought and received assurances
from the VA that the arming of these officers would be
accomplished at a deliberate pace with stringent safeguards.
The subcommittee required the VA to notify the Congress of any
expansion of demonstration sites and of any weapons incidents.
The subcommittee also examined the security of controlled
drugs in VA hospitals. VA pharmacy operations cost more than $1
billion annually. Due to the high value of VA drug inventories
and their theft potential, the subcommittee was concerned about
how the VA has addressed accountability and security problems
that had been previously identified by the VA's IG. The VA
testified that some of the issues had not been totally resolved
because they were software driven, but that current procedures
and policies concerning controlled substances are stringent,
and some are onerous to employees. The VA further stated that
no significant volumes of controlled substances had been
diverted in the last few years, and as the VA changes from
hospital based care to community based clinics, it will
reassess the system and continue to address these issues.
The subcommittee also heard testimony from Mr. John Baffa,
Deputy Assistant Secretary for Security and Law Enforcement,
Veterans Health Administration; Mr. Charles Rinkevich,
Director, Federal Law Enforcement Center (FLETC), Department of
Treasury; Mr. Joseph Wolfinger, Director of Training, Federal
Bureau of Investigation; The American Legion; American
Federation of Government Employees, AFL-CIO; and the Nurses
Organization of Veterans Affairs (NOVA).
Mr. Baffa testified that it was not the VA's intent to arm
VA police nationwide; that the intent was to develop a pilot
program involving five hospitals in five geographical locations
with high crime rates. Mr. Renkevich and Mr. Wolfinger's
testimony highlighted the background and training capabilities
of FLETC: that its mission was conducting basic and advanced
training for the majority of federal government's law
enforcement personnel, and that it had 70 federal agencies
participating in more than 200 different programs. Mr.
Rinkevich further testified, when questioned, that FLETC could
have offered the agency specific training that the VA had
previously testified they needed.
The American Legion testimony supported the VA's pilot
arming program and a full evaluation of the program prior to
any expansion. NOVA's testimony did not support VA's arming of
the VA police. They supported an alternative strategy of staff
education and training along with knowledge of evaluation and
intervention techniques to reduce workplace violence. The
subcommittee had additional concerns about fire safety issues
critical to VA patients and employees. The VA testified that it
still maintains 30 hospital fire stations with an annual
operating budget of over $16.3 million and staffed with 357
firefighters.
The subcommittee should continue to monitor the VA's arming
demonstration. The subcommittee should continue to monitor VA's
continuing efforts to decrease the vulnerability and increase
the security of VA's vast drug inventory. The subcommittee
should also continue to scrutinize the efficiencies of the VA's
fire fighting force and the cost effectiveness of alternatives.
On June 26, 1997, the subcommittee heard testimony on the
VA's efforts to ensure their computer systems would not fail
after 12:00 a.m. on the morning of the year 2000 (Y2K). The
subcommittee received the testimony of Honorable Steve Horn,
Chairman of the Government Reform and Oversight, Subcommittee
on Government Management, Information, and Technology. Chairman
Horn's subcommittee has reviewed the entire federal
government's efforts to insure Y2K compliance and has issued
reports and grades for the efforts of federal agencies.
Chairman Horn gave the VA a ``D'' because the agency did not
have a Y2K plan, did not have Y2K cost estimates, and had only
recently appointed a program manager. Mr. Horn also expressed
concern that the VA had not completed their inventory of local
computer applications, did not have an adequate system for
prioritizing mission critical applications, and did not have
contingency plans for systems failing.
The subcommittee heard testimony from GAO warning that the
3.7 million checks to veterans with service-connected
disabilities could be severely delayed because VA's non-
compliant computer systems could fail. GAO expressed concern
that the VBA's Y2K program management needed to be strengthened
and that an agency level program office needed to be
established to coordinate and manage the agency's full range of
interdependent information system activities. GAO found that VA
had not determined VBA's information system components were Y2K
compliant; that VBA had not developed contingency plans for its
three major business areas to ensure continued operations in
the event of Y2K failures; and that VBA did not have sufficient
information about costs and risks associated with Y2K
compliance activities.
The subcommittee also heard testimony from the Food and
Drug Administration on their efforts to assess the dangers of
Y2K failures for medical devices utilizing embedded chip
technology. The subcommittee was critical of the FDA's lack of
initiative on patient safety issues related to medical devices
that might experience Y2K failures.
The subcommittee also requested that the GAO assess Y2K
vulnerabilities in the Veterans Health Administration. The
subcommittee required the VA to immediately inform the
subcommittee of any missed milestones in their compliance
program.
On July 17, 1997, the subcommittee followed up its hearing
on April 17, 1998 with more general testimony on sexual
harassment issues in the VA and on H.R. 1703. The VA in its
testimony opposed the bill and defended the efficacy of its
``Zero Tolerance'' policy and employee training on sexual
harassment. The VA had opposed almost identical legislation in
1993. However, the bill received expressions of strong
bipartisan support from members of the subcommittee and North
Carolina Senator Lauch Faircloth, who testified that he had
introduced S. 801, a Senate companion bill to H.R. 1703. The VA
Office of the Inspector General's testimony provided an update
of its follow-up on allegations of impropriety by the former
director of Fayetteville. H.R. 1703, as amended, became Public
Law 105-114 on November 21, 1997. (See p. 32.)
The subcommittee recommends that oversight of the VA's new
EEO system continue during the 106th Congress to ensure that
the department's implementation of Public Law 105-114 is
consistent with congressional intent and is effectively
administered.
On July 24, 1997, the subcommittee held a joint hearing
with the Subcommittee on Health on VA's consolidation of
medical facilities, management, and services. Facility
integrations are part of VA's nationwide strategy to
restructure its health care delivery systems in a way similar
to the private sector. The objectives are to improve access,
quality, and particularly the efficiency of care provided to
veterans. In the private sector, the dynamic health care
marketplace has reacted to market challenges and has
increasingly turned to mergers and alliances. The VA has been
slow to transform itself.
Until 1995, VA had not consolidated a facility in some 15
years. Since then, VA has initiated some 19 consolidations
involving 40 VA medical facilities. The joint hearing reviewed
the record of the VA's past efforts on facility integrations
and consolidations, and heard private sector testimony on the
complexity and difficulty of integrating two or more hospitals.
The joint subcommittee also heard testimony on the process by
which VA facility integration was initiated, analyzed, planned,
and carried out. Witness testimony was provided by the GAO; the
Association of American Medical Schools; Dr. Kenneth Kizer,
Under Secretary for Health, Veterans Health Administration
(VHA), Department of Veterans Affairs and other VHA officials;
The American Legion; Adventist HealthCare; and McManis
Associates, Inc.
GAO's testimony focused on the role of facility
integrations in reshaping VA's health care delivery system and
lessons learned that would help enhance VA's process for
planning and implementing ongoing and future facility
integrations. Their testimony included information on VA's 18
integrations at that time. With one exception, they shared some
common characteristics. Most of VA's integration involved
facilities that had complementary missions, such as acute and
mental health care. GAO stated that VA's facility integrations
were critical to VA's overall strategy to enhance the
efficiency and effectiveness of health service delivery to
veterans. According to GAO, VA faced inherent difficulties in
planning and implementing integrations primarily stemming from
the potential adverse impacts on stakeholders such as veterans,
facility and medical school personnel, and members of Congress
who represent these groups. The subcommittee believes it is
imperative for VA to plan and implement integrations to
maximize their benefits and minimize the adverse impacts.
GAO recommended that the VA could achieve better results by
adopting a more comprehensive planning approach, completing
planning before implementing changes, improving the timeliness
and effectiveness of communications with stakeholders, and
using a more independent planning approach.
GAO observed that objective facility integration planning
should be based on independent judgment to be successful, that
many competing interests were at stake in VA's integrations,
that all viable options were not aggressively considered, and
that difficult choices were avoided by focusing only on
marginal changes to the status quo. The subcommittee is
concerned that some integrations may have yielded less than
their full potential benefits to veterans and needlessly
limited savings available for reinvestment.
On July 28, 1997, the subcommittee held a field hearing in
Montgomery, AL, on the planning and formation of the Central
Alabama Veterans Health Care System (CAVHCS). The subcommittee
heard testimony from Mr. Larry Deal, Director, Veterans
Integrated Service Network 7. Mr. Deal's testimony centered on
three points: that the integration would improve quality,
access and cost effectiveness for veteran health care; that it
would improve the long term viability of both Montgomery and
Tuskegee medical centers; and that the integration efforts were
in keeping with Dr. Kizer's strategic ``Vision for Change'' and
``Prescription for Change''.
The GAO in its testimony raised concerns about the
Montgomery and Tuskegee VA medical center integration.
According to GAO, integration decisions were being made
incrementally, service-by-service at varying times throughout
the process; planning and implementation activities frequently
occurred simultaneously without a detailed comprehensive plan;
decisions to centralize administrative services did not
adequately explore options or take into account how future
changes in workload might affect the facilities; VA had not
made decisions on how to integrate a number of other services;
and key questions about the availability of space in Montgomery
remained unanswered. GAO also observed that several service
chief positions were vacant, and GAO's analysis of other
integrations indicated that these positions were key to
comprehensive planning and should have been filled early in the
planning process.
Nationally, GAO's concerns involved stakeholder
participation and buy-in. GAO believed both could be enhanced
if VA provided stakeholders detailed information on all aspects
of the integration before beginning implementation. VA's
differing and conflicting responses to questions about
potential construction and renovation costs needed for the two
facilities caused considerable doubt among stakeholders and GAO
about the sufficiency of planning.
The subcommittee heard testimony from The American Legion,
Vietnam Veterans of America and the Disabled American Veterans.
The veterans' service organizations all concurred that
reorganization was essential, but that the rapidity of the
implementation and lack of stakeholder participation had
resulted in confusion and misunderstanding among the VHA
workforce, veterans and the families affected by the
integration. The veterans service organizations recommended
that the process be slowed down to better understand the long-
term impacts.
The subcommittee requested that VA establish consolidation/
integration guidelines that would include a business plan to
address comprehensive planning, stakeholder participation,
communications, and cost benefits analysis. The subcommittee
concluded that a great deal of revision and communication
needed to occur before the VA moved forward with the
integration of the Montgomery and Tuskegee VA Medical Centers.
A GAO review of VA's integration plan revisions when
completed for Tuskegee and Montgomery was directed on July 28,
1997, by Honorable Jerry Lewis, Chairman, Appropriations
Subcommittee on VA, HUD, and Independent Agencies. The GAO
provided its review to Chairman Lewis in September 1998 and
found that the revised plan conformed to the planning criteria
that such a plan should be able to meet.
The subcommittee recommends additional oversight of this
integration and VA facility integrations generally in the 106th
Congress.
On September 18, 1997, the subcommittee held a hearing on
the VA's implementation of the Government Performance and
Results Act of 1993 (Results Act). Federal departments and
agencies under the Results Act are required to develop and
implement real strategic business plans that resemble those
used in the private sector. These plans should define and
achieve measurable outcomes linked to the specific business
lines of veterans programs and their annual operating budgets.
Ms. Cynthia M. Fagnoni, Associate Director, Health,
Education and Human Services Division, General Accounting
Office, testified that the VA had made significant progress in
its strategic planning, based in part on consultations with
Congress. At the time of the hearing, the VA's plan was not yet
due. Ms. Fagnoni testified that based on the draft reviewed by
GAO, the plan when submitted in final form at the end of
September 1997 would be more complete and better organized to
focus less on process and more on results. She noted, however,
that the VA needed to continue improving its strategic plan to
overcome a lack of results-oriented goals for major programs,
particularly for benefit programs. Dr. Dennis W. Snook of the
Congressional Research Service in his testimony provided the
subcommittee with an expert analysis of the history and intent
of the Results Act.
The VA's representative emphasized the VA's commitment to
strategic planning under the Results Act and acknowledged the
department's lack of formal program evaluations on which to
base true outcome-related performance measures. The department
also outlined the approach they intended to use for program
evaluations while using interim results-oriented goals to the
extent possible. Representatives of the Departments of Defense
and Labor testified on interdepartmental planning and
cooperation in veterans' matters. Representatives from AMVETS,
The American Legion, Veterans of Foreign Wars, and Disabled
American Veterans also testified regarding the importance of
effective strategic planning for the VA.
The subcommittee believes that long-term follow-up is
necessary throughout the 106th Congress for proper oversight of
the VA's Results Act implementation. How well VA plans
strategically over the next several years will have a profound
impact on its ability to effectively and efficiently deliver
the benefits and services Congress has mandated for veterans.
On September 25, 1997, the subcommittee held its second
hearing on the VA's efforts to achieve year 2000 (Y2K) computer
compliance. The previous hearing focused on the efforts within
the Veterans Benefits Administration (VBA). This hearing
addressed both the Y2K compliance efforts of the Veterans
Health Administration (VHA) and department-wide activities. The
subcommittee heard testimony from the GAO, the VA and the FDA
on Y2K implications for medical devices and equipment.
GAO in its testimony recognized that the VA had made
progress, but that much remained to be done to avoid widespread
computer failures. If left uncorrected, the types of possible
problems that would occur included lack of patient scheduling
for hospital treatments, misinterpretation of patient data and
late or inaccurate benefits payments. According to GAO; if the
VA were to avert serious disruption, it would need to address
these issues.
GAO described VA's Y2K challenge in healthcare as enormous
and a patient safety issue. VHA was in the initial stages of
assessing the compliance of its mission critical systems. It
did not plan to complete assessment until January 1998, and
renovations until July 1998. To effectively assess and
renovate, the VA needed to understand how local facilities were
using national applications. GAO stated that the VA did not
know which local facilities had customized national
applications and whether they were also Y2K compliant; that
physical facilities were identified as another area of concern;
and that VHA had not completed an inventory of facilities'
related systems and equipment such as ventilating systems,
security systems and disaster recovery systems. GAO identified
these issues as vital to providing health care services. GAO
noted that the impact of biomedical device failures because of
Y2K had not been determined. GAO stated that the impact of
medical device failures could range from incorrect formatting
of a printout to incorrect operations of the device having a
potential to affect patient care or safety. According to GAO,
in an attempt to precisely determine this impact, VHA sent
letters to manufacturers. Based on the poor response received
from its first letter, VHA sent more detailed letters asking
more specific questions to 1,600 manufacturers on September 9,
1997.
FDA, in its role of protecting the public from unsafe or
ineffective medical devices, was encouraged by this
subcommittee's previous hearing on Y2K to communicate with
manufacturers. FDA stated that it had sent a letter in early
July 1997 to about 13,000 manufacturers. According to FDA, one
response was received to this letter.
While the subcommittee believes the VA has indeed made
significant progress on Y2K compliance, the VA's Y2K situation
should be carefully monitored until the VA achieves full
compliance. Therefore, the subcommittee will continue to
closely follow the VA's efforts to ensure that their computer
systems will be able to provide uninterrupted benefits and
safe, quality health care to our veterans. The subcommittee
believes follow-up hearings are necessary in the 106th Congress
to review the VA's progress.
On October 23, 1997, the subcommittee heard testimony on
mismanagement issues at the Charleston, SC, and Pittsburgh, PA,
VA medical centers (VAMC). Congressional requests for
investigations of complaints about these medical centers
prompted this hearing. The hearing focused on wasteful spending
and mismanagement by certain VHA senior executives, and the
VA's failure to hold the responsible executives accountable.
The VA Inspector General testified that the investigation by
his office of 27 allegations of mismanagement at the Charleston
VAMC substantiated examples of wasteful spending, favoritism,
and non-accountability. The IG testified that the former
director had spent $571,831 renovating a nursing home care unit
and never utilized it for that purpose. The IG testified that
its review also substantiated that the former director
renovated his office suite without the required advance
approval for VA Central Office on renovation costs; that the
former director spent $26,119 for a fish tank for the hospital
lobby; and that the fish tank purchase came at a time when
employees were faced with furloughs and potential budget cuts.
The IG review indicated that the former director hired a
management consultant and inappropriately paid the consultant
$1,200 per day plus expenses for working 4 days per month; that
the medical center paid the consultant $177,867 during fiscal
years 1995 and 1996; that the former director did not
specifically define the consultant's duties; and that the
medical center's consultant contract did not have any specific
work statements or fixed periods of work.
At the Pittsburgh VAMC, the IG found the director
authorized wasteful spending on his government quarters. The IG
concluded that the medical center spent $201,000, which was
$79,000 more than could be properly spent on renovating the
director's quarters. According to the IG investigation, among
the upgraded amenities approved by the director were a new
stove that cost $1,500 more than those in other quarters; a
$439 built-in microwave oven which was expressly prohibited by
VA policy; new cherry wood cabinets, kitchen islands and new
hardwood floors not found in any other facility quarters; a
$2,200 whirlpool bathtub; and $500 lavatory faucets.
The subcommittee should continue oversight of VA's
management practices in the 106th Congress.

Second Session

The subcommittee met on January 28, 1998, to receive
testimony regarding waivers of regulations governing burial at
Arlington National Cemetery (Arlington). In May 1997, the
majority staff of the Committee had been provided anonymous
information that called the waiver process into question. At
the request of the subcommittee Chairman and Ranking Democratic
Member, and the full Committee Ranking Democratic Member, the
General Accounting Office conducted an expedited review of the
waiver process. GAO presented its findings at the hearing, and
outlined policy options concerning possible improvements to the
eligibility process for burial at Arlington. The findings
revealed a flawed waiver process marked by unclear standards
and inconsistent applications of waiver criteria. The hearing
highlighted that Arlington's eligibility criteria, unlike all
other national cemeteries, were defined only by Army
regulations and not by law.
Prior to the hearing, the Department of Defense, Department
of the Army and Arlington National Cemetery provided the
information and documentation requested by the subcommittee
regarding secretarial and presidential waivers. In November
1998, a White House assertion of executive privilege with
respect to two documents relating to the Lawrence waiver was
resolved through an accommodation agreed upon by the White
House and the subcommittee. However, the White House's limited
cooperation and production of documents restricted the ability
of the subcommittee and GAO to review presidential waivers
granted since 1993. Despite these obstacles, the subcommittee
was able to acquire extensive information concerning Arlington
and documentation regarding secretarial and past presidential
waivers since 1967.
The subcommittee heard testimony about the burial waiver
granted by the Secretary of the Army for Ambassador M. Larry
Lawrence's burial at Arlington. The subcommittee investigation
revealed that Ambassador Lawrence had falsely claimed merchant
marine service and a serious wound during World War II. The
Department of State apparently failed to discover the false
claim during Ambassador Lawrence's background check for his
ambassadorial nomination and his top secret security clearance.
At the request of his widow, Ambassador Lawrence's remains were
disinterred from Arlington.
The subcommittee also heard testimony about the burial
waiver granted by President Clinton for Dr. C. Everett Koop,
Surgeon General of the Public Health Service during the Reagan
Administration. The subcommittee investigation revealed that
Dr. Koop had received a burial waiver for Arlington in
violation of Arlington's regulations against reservations for
living persons, and that he was not a veteran of military
service, although he served in the U.S. Public Health Service
as a commissioned officer. He subsequently withdrew any claim
of right to burial at Arlington.
As a result of the hearing, a bipartisan bill, H.R. 3211,
was introduced to reform and codify Arlington burial
eligibility, and to eliminate waivers. The House passed the
measure 408-0. (For further discussion of H.R. 3211, see p.
53.) The Senate did not take up the legislation. The Army
voluntarily has begun to notify the interested congressional
committees when waivers are granted and is reviewing its
Arlington regulations.
The subcommittee recommends that active oversight of
Arlington burial waivers continue to ensure that needed
revisions are made to the Army's regulations on Arlington
because codification of burial eligibility is uncertain. The
subcommittee further recommends that additional investigation
occur in the 106th Congress on the questions remaining
unanswered about White House actions and participation in the
Lawrence and Koop burial waivers. Questions also remain
unanswered about the Department of State's background
investigation for the Lawrence nomination. The Office of the
Inspector General, Department of State, has a review of the
background investigation under way, but it has been delayed
indefinitely due to an active criminal investigation by the
Department of Justice which includes Ambassador Lawrence.

OTHER ACTIVITIES

On June 5, 1997, Chairman Everett requested that the VA
Office of the Inspector General (IG) investigate numerous
allegations received by his office staff of mismanagement and
misconduct at the Tuskegee and Montgomery VA medical centers,
which now form the Central Alabama Veterans Healthcare System.
The IG interviewed more than 35 witnesses under oath and
additionally interviewed approximately 132 individuals of the
VA staff and community. This was the largest IG hospital
investigation ever conducted because of the large number of
allegations received by Mr. Everett and the IG. Of more than
129 allegations, over 50 percent were sustained, the largest
number ever sustained in a IG investigation.
Serious allegations sustained in the IG report released on
September 29, 1998, included the following: the Director
authorized $83,522 more than was allowed for Director's and
Associate Director's quarters renovations and did not obtain
approval for the renovations, including air conditioning
systems with excessive capacity, two toilet flush valves
costing $327 each and basement waterproofing work for the
director's quarters costing $98,630; the Director misused
appropriated funds to have a new icemaker installed on his
personal refrigerator, and the Director and Associate Director
attempted to cover up the incident; the Director improperly
used his government credit card for personal purchases; the
Director interfered with the IG investigation and refused to
provide the IG access to information until directed to do so by
his superiors; the Director and the Associate Director in
violation of federal law engaged in prohibited personnel
practices in the selection of several service chiefs who, as VA
employees, complained to or cooperated with the IG, GAO, and
Mr. Everett; the Associate Director violated federal nepotism
laws and engaged in a prohibited personnel action by advocating
the employment of his son; the Associate Director was
reimbursed $4,392.90 in improperly claimed relocation expenses;
and the medical center's fire alarm system did not work
properly.
Other serious allegations the IG investigation sustained
were: 10 of the 13 Tuskegee medical center staff with
government American Express cards misused them; the medical
center's canteen food service had not received required
sanitation inspections for several years; the nursing staff
took excessive sick leave and management did not monitor such
use (87% of sick leave earned); and weaknesses existed in
procedures for recording overtime in the Tuskegee medical
center nursing service;
The IG report also found inappropriate and inadequate care
to VA patients, including that: clinicians did not ensure
patient meal feedings, tube feedings, and patient weightings
were properly managed or monitored; nursing employees did not
feed some patients who were unable to feed themselves and some
employees were found to have eaten patients' meals; the
Director failed to discipline employees involved in a confirmed
allegation of patient abuse; cardiac monitors in the Intensive
Care unit and Emergency Room were turned off by being
``silenced''; and, eight specific instances of inappropriate
patient care at the Tuskegee and Montgomery medical centers.
VA follow-up on corrections and disciplinary actions is
incomplete. The subcommittee recommends continued oversight of
VA's corrective actions for Tuskegee and Montgomery in the
106th Congress.

COMMITTEE WEB SITE

The Committee's web site (http://www.house.gov/va) is a
source of information on Committee activity and a gateway to
veterans resources. Activity on the site grew from
approximately 18,000 visits during the early months of the
105th Congress to a high of 70,504 visits in October 1998. The
site contains over 1,500 files, with new files being added
weekly.
The site's Home Page has a table of the contents,
highlights of current issues, and a photo gallery, which has
photos of recent hearings. The site includes a search engine
and a Tour of the Site with a web index and links to other
House sites. The site also consists of seven other categories
of information: About the Committee, Veterans' Information,
Issues, Communications, Hearings, Legislation, and the
Democrat's Home Page.
For the 105th Congress, the site includes the text and
summaries of all veterans' legislation that was enacted and the
text of all committee and subcommittee hearings. Whenever
possible, witness statements for each hearing are posted on the
site within two hours after the hearing is concluded. On its
own pages and with its links to other web sites, including the
Department of Veterans Affairs, the Committee's web site
features information for veterans that is both easy to access
and the most comprehensive ever available.
OVERSIGHT PLAN FOR THE 105TH CONGRESS

In accordance with clause 2(d) of Rule X of the House of
Representatives, the Committee on Veterans' Affairs has adopted
by resolution of February 13, 1997, its oversight plan for the
105th Congress.
This oversight plan is directed at those matters which are
most in need of oversight within the next two years. The
Committee is cognizant of the requirement that it conduct
oversight on all significant laws, programs, or agencies within
its jurisdiction at least every ten years. To ensure
coordination and cooperation with other committees having
jurisdiction over the same or related laws, the Committee will
conduct member and staff meetings as necessary with the
Committee on National Security, the Committee on Education and
the Workforce, and the Committee on Government Reform and
Oversight. Additionally, the Committee will explore with these
committees possibilities for conducting joint hearings.
The Committee expects to conduct oversight through a
variety of sources. They will include existing and requested
reports, studies, estimates, investigations and audits by the
Congressional Research Service, the Congressional Budget
Office, the General Accounting Office, and the Offices of the
Inspectors General of the Departments of Veterans Affairs and
Labor. Additional sources of information will be veterans'
service organizations, military associations, other interest
groups and private citizens. A series of joint hearings is
scheduled with the Senate Committee on Veterans' Affairs at
which veterans service organizations and military associations
will present to the committees their national resolutions and
agendas for veterans.
Avenues of oversight will be committee and subcommittee
hearings; field and site visits by members and staff; and
meetings and correspondence with interested parties. While this
oversight plan sets forth the areas in which the Committee
expects to conduct oversight, additional matters may be
incorporated into the Committee's plan as the need arises.

Subcommittee on Health

1. Veterans Health Administration (VHA) Budget. The
operation of the VA health care system, the largest integrated
health care provider in the country, represents the most
visible component of the nation's ongoing commitment to
America's veterans. With a medical care budget of some $17
billion, VA provides about three million veterans care
annually. Through focused analyses and full committee hearings,
VHA spending choices will undergo careful scrutiny. Winter 1997
and winter 1998.

2. Persian Gulf War Illnesses. The full Committee will
address the broad spectrum of issues raised by Persian Gulf War
veterans' continuing to experience illnesses that may have
their cause in service. The subcommittee will maintain
continuing oversight of issues relating to VA care-delivery and
research associated with this problem, and any need for
additional legislation. Spring and summer 1997.

3. Resource Allocation. VA plans to implement a new
resource allocation formula aimed at correcting historic
geographic imbalances and shifting funds so that veterans have
similar access to care regardless of the region of the country
in which they live. The subcommittee, in conjunction with the
Subcommittee on Oversight and Investigations, will review and
analyze the plan and the extent to which it would meet its
stated objectives. Spring 1997.

4. ``Eligibility Reform'' Implementation. The enactment of
an ``eligibility reform'' law (Public Law 104-262) aimed at
eliminating barriers to access to VA outpatient care raises a
series of implementation issues, involving both VA's statutory
construction and its policy choices. Close oversight will
provide opportunities to ascertain whether VA is appropriately
meeting the law's intent and whether there exists a need for
additional legislation. Summer 1997 and summer 1998.

5. Decentralization of VA Health Care System. In
decentralizing medical center management and administration to
facilitate restructuring health care delivery and clinical
programs, VA headquarters has replaced central office direction
of local actions with performance measures and other incentives
for efficient, quality services. However, the subcommittee has
concerns that network directors can take far-reaching actions
without headquarters' approval, and management ``solutions''
can vary from one network to the next, with substantial
inconsistency across the country. The subcommittee will review
the degree to which decentralized decision-making is altering
the national character of the VA health care system, and the
need for any remedial action. Spring 1997.

6. Ambulatory Care Programming. The subcommittee held
hearings during the 104th Congress on VA policies regarding the
establishment of new ``access points'', and initiated
legislation to eliminate barriers to VA provision of routine
ambulatory care. The subcommittee will examine further VA
policies, strategic plans, and progress in shifting a hospital-
based system to a more ambulatory care-based system. Fall 1997.

7. VA Role in Long-term Care. VA expends approximately $1.5
billion to provide veterans long-term care through in-house
programs, community-based care, and State veterans homes.
Several questions exist regarding the relative costs and
quality of the three options and the criteria used to determine
in which of the three a veteran is placed. The Committee will
examine whether the mix of the three should be changed; and
whether the eligibility criteria--under which some veterans get
unlimited, free care from VA; others pay under the State
program, while still others are limited to a six-month
placement for community care--should be changed. The need for
statutory changes in the State home per diem and construction
programs will also be reviewed. Spring 1998.

8. VA Specialized Medical Programs. Public Law 104-262
requires VA to maintain its capacity to provide for the
specialized needs of disabled veterans through such clinical
programs as post-traumatic stress disorder care, prosthetics,
and spinal cord injury care and rehabilitation. Achieving the
goals of this provision during a period of restructuring and
downsizing will require ongoing oversight. Fall 1997 and summer
1998.

9. VA Mental-health Care Programs. VA mental-health
programs are not only vulnerable special disability programs at
risk in the current budget environment, but have historically
been underfunded and reflect widely varying degrees of quality.
A statutorily required evaluative report will provide a vehicle
for oversight of these important programs, and exploration of
remedial avenues. Spring 1998.

10. VA Sexual-trauma Counseling Services. Revelations
regarding sexual abuse at military training facilities and high
rates of sexual harassment experienced by women service-members
highlight the importance of reviewing the adequacy of VA sexual
trauma counseling programs. Such oversight will also consider
the need, if any, for additional legislation to provide needed
counseling and treatment authority. Summer 1997.

11. Women Veterans Health Care. While more than 12 percent
of our Armed Forces are women, VA treatment programs focused
specifically on the needs of these women veterans are
relatively new. The extent to which women veterans use, or fail
to use, VA health care, and the barriers or perceived barriers,
to seeking such care will be examined. In that connection, the
availability and quality of gender-specific care will be
reviewed, to include privacy issues, the availability of
appropriate supplies, and related matters. Fall 1997.

12. Status of VA/DoD Sharing of Health Resources. A hearing
during the 104th Congress demonstrated that opportunities for
greater VA/DoD collaboration have not been fully exploited and,
that despite recognition of the benefits of VA/DoD jointly
providing care in the same facility, such joint ventures have
not necessarily been evenhanded, particularly where VA has not
had operational control of the facility. The subcommittee will
review the extent to which the departments have initiated
changes. Fall 1997.

13. VA Research Program. The VA research program
complements the Department's medical care mission. As a
national research program aimed at improving the medical care
and health of veterans, the program is funded by an
appropriation account which supports medical research, outcomes
and health systems research, and prosthetics research and
development. The subcommittee will review the operations of the
research program; examine the appropriateness of the balance
between VA's basic, applied and outcomes research; and review
VA efforts to enter into research partnerships with non-Federal
entities. Winter 1998.

14. Construction Planning. VA major medical construction
budgets have shrunk substantially in recent years. Given
competing needs within the VA system for construction of
outpatient additions, environmental improvements in decades-old
facilities, and seismic upgrades, the subcommittee will give
heightened scrutiny to the manner in which VA establishes its
construction priorities and associated funding plans. Winter
1998.

15. Medical Marketplace Forces and the VA. The provision of
VA health care takes place in the context of a dynamic medical
``marketplace'', in which changes in other Federal health care
programs, changes in medical practice and technology, and
economic changes have an impact on VA and on demand for VA
care. The subcommittee will study these phenomena and on how VA
has positioned itself to anticipate and respond to such
changes. Spring 1998.

16. Roles of the VHA's Medical Inspector and the VA
Inspector General's Office of Healthcare Inspections. Budget
considerations, organizational accountability, and quality-of-
care concerns highlight the importance of examining what appear
to be overlapping responsibilities in these two offices. The
subcommittee will examine the statutory responsibilities and
operational roles of the respective offices, whether those
statutory provisions and roles continue to reflect best
practices and policies, whether the quality assurance
objectives underlying those laws are being realized, and
whether legislative changes in this area should be considered.
Spring 1998.

17. Performance of Senior Managers. The subcommittee will
study VA practices for identifying and handling poor job
performance on the part of senior VHA executives, and the
extent to which past practices of simply reassigning, rather
than removing, poorly performing managers continues to be a
practice. Summer 1998.

18. Use of Nurse Practitioners and Physician Assistants.
The subcommittee will review how well and how consistently VHA
uses these ``physician-extenders'' in primary care and other
patient care programs. Barriers to greater use of such staff
and the extent to which these staff receive appropriate
supervision will also be examined. Fall 1998.

19. Physician Pay. VA physician pay rewards longevity and
medical specialization. The subcommittee will examine the
continued relevance of these factors in providing ``special
pay'' to physicians, and the merits of revising the pay system
to draw distinctions on the basis of performance measures.
Spring 1998.

Subcommittee on Benefits

1. Veterans Benefits Administration (VBA) Fiscal Year 1998
Budget. Funding for VBA programs and administration comprises
over one half of VA total budget. VBA is responsible for a wide
range of benefits such as disability compensation, pension,
survivors benefits, education benefits, housing and insurance.
A hearing will highlight VBA spending in the areas of
administration and information technology. Winter 1997 and
winter 1998.

2. Veterans Claims Adjudication Commission. The Commission
has released its final report containing findings, conclusions
and recommendations on ways to improve veterans benefits claims
processing. Hearings will review the report and receive
testimony from veterans service organizations, the VA and other
interested parties. Spring 1997.

3. Veterans Employment and Training Service (VETS). The
Department of Labor's Veterans Employment and Training Service
is responsible for administering a state grant program to
provide job placement for veterans. In addition to federal
Directors and Assistant Directors of Veterans Employment and
Training (DVETs and ADVETs) in each state, there are about
3,000 Disabled Veterans Outreach Program Specialists (DVOPS)
and Local Veterans Employment Representatives (LVER) working
for the state employment services funded by this grant program.
The subcommittee will review the funding and operations of VETS
using principles identified in the Government Performance and
Results Act (GPRA) format. Spring 1997 and spring 1998.

4. Compensation and Pension (C&P) Programs. VBA's largest
program administers the service-connected disability
compensation and non service-connected pension programs.
Currently, there are about 2,500,000 veterans receiving
compensation and about 400,000 receiving pension. The veterans
community continues to voice significant concerns about the
quality of claims adjudication and the length of time it takes
to process claims. The subcommittee will review the operations
of the C&P Service, using GPRA principles. Spring 1997 and
spring 1998.

5. Persian Gulf Veterans' Compensation. Public Law 103-446
authorized payment of disability compensation to Persian Gulf
veterans suffering from undiagnosed illnesses. To date, VA's
handling of these claims has been inconsistent and VA is now
reviewing all previously processed claims. The subcommittee
will review processing with an emphasis on determining the
adequacy of VA's efforts and implications for future
legislation. Summer and fall 1997, winter 1998.

6. Vocational Rehabilitation. The subcommittee believes
that vocational rehabilitation should be VA's most important
program for service-disabled veterans. The program provides up
to 48 months of training, education, and rehabilitation at no
cost to the veteran. In addition, enrollees receive a monthly
living stipend. GAO has strongly criticized this program in
several reports, but little seems to have changed in VA's
operating methods. The subcommittee will use GPRA principles
for the hearing and review VA's plans to reorganize the
program. Summer 1997 and summer 1998.

7. Uniformed Services Employment and Re-employment Rights
Act (USERRA). During the 103rd and 104th Congresses, USERRA was
passed to improve a veteran's ability to return to a job held
prior to being called to active duty. The subcommittee is aware
of possible systematic violations of the law by one or more
federal agencies and intends to review this issue. Summer 1997.

8. National Cemetery System (NCS). Today, VA operates 114
national cemeteries, about half of which are open for initial
interments. The remainder are either open only for interment of
second family members or closed to all further interments. NCS
has completed about half of a 10 cemetery expansion program
which began in the mid-1980's. The subcommittee will use GPRA
principles to review the NCS budget and determine whether NCS
is expanding in the most cost-effective manner. Summer 1998.

9. VA Education Programs. Today VA provides education
benefits to nearly 200,000 veterans and dependents or
survivors. The best known of VA's education programs, the
Montgomery GI Bill, provides a monthly basic benefit of $427 to
veterans who complete a three-year period of service and have
their pay reduced by $1200 during the first year of service.
Using GPRA principles, the subcommittee intends to review
program administration and alternative means of leveraging the
existing benefit payment. Summer 1997 and summer 1998.

10. Compensation of Veterans with Dual Diagnoses of Mental
Illness and Substance Abuse. The subcommittee is concerned that
compensation payments act as an enabler to some mentally ill
veterans who are also substance abusers. There is some evidence
that hospitalization rates of these veterans for problems
relating to substance abuse, especially cocaine, is related to
the arrival of compensation payments. The subcommittee intends
to provide an opportunity for a public discussion of the very
complex issues surrounding mentally ill/substance abusing
veterans. Fall 1997.

11. Board of Veterans' Appeals. The Board is the first
forum for a veteran to appeal a VA decision on a claim for
benefits. Prior to the advent of the Court of Veterans Appeals
in 1989, the Board took about six months to decide an appeal.
Today, because of many factors, it now takes about two years.
The subcommittee intends to review Board operations using GPRA
and the recommendations of the Veterans Claims Adjudication
Commission. Fall 1997.

12. Disabled Veterans Outreach Program Specialist and Local
Veterans Employment Representatives (DVOPS and LVER's). The
state grant program operated by DoL's Veterans Employment and
Training Service funds about 3,000 LVERs and DVOPS whose job is
to provide employment services to veterans. These federally-
funded state employees also provide instruction at Transition
Assistance Programs sites for those about to leave active duty.
The subcommittee has asked GAO to evaluate the performance of
this program and expects the report to be issued in the fall of
1997. At that time, the subcommittee will review the GAO's
findings and recommendations. Fall 1997.

13. Homeless Veterans. VA, DoL, and HUD provide funding for
homeless veterans programs. The subcommittee, in conjunction
with the Subcommittee on Health, will review the operation and
funding of VA's homeless grant programs. The subcommittee will
determine whether VA is in compliance with the Sense of
Congress expressed in Public Law 103-446, which supported
funding for homeless veterans' programs more closely
proportional to the population of homeless veterans. The
subcommittee will also examine whether these programs are
accomplishing their goals. Spring 1998.

14. Agent Orange, Ionizing Radiation and Prisoners of War
(POW). VA provides medical treatment and compensation benefits
to veterans suffering from exposure to agent orange and
ionizing radiation, as well as to those veterans who were
POW's. The subcommittee intends to review the problems facing
each of these special category veterans. Summer 1998.

15. Veterans' Benefits in the Year 2000. Technology will
have a major impact on the delivery of veterans benefits. The
subcommittee will examine how technology will improve the
effectiveness of the delivery of benefits. The VA and DoL
benefits programs relating to veterans education and employment
will be of special interest to the subcommittee. Summer 1998.

16. Court of Veterans Appeals. The Court is an executive
branch court empowered to review decisions of the Board of
Veterans' Appeals. The subcommittee will review data on the
Court's operations and the impact on VA claims processing. Fall
1997.

Subcommittee on Oversight and Investigations

1. Exposures to Environmental Hazards during the Persian
Gulf War. The subcommittee will follow up the full Committee
hearing on Persian Gulf War Illnesses held February 11, 1997,
with continuing oversight on the experiences of U.S. military
personnel who served in the Southwest Asia theater. The
Presidential Advisory Committee on Gulf War Veterans' Illnesses
found ``substantial evidence of site-specific, low-level
exposures to chemical warfare agents'', and called for further
investigation of possible chemical or biological warfare agent
exposures. The subcommittee plans to coordinate closely with
the Committee on National Security and its subcommittees on
these and other environmental hazards. Spring 1997.

2. Quality Assurance/Risk Management. The subcommittee will
examine VA's initiatives in developing a departmental quality
assurance/risk management program to monitor adverse outcomes
in a time sensitive manner. The subcommittee is particularly
concerned about suspicious deaths that occurred at the Harry S
Truman Veterans Administration Medical Center (VAMC), Columbia,
MO, and the Northampton VAMC, Northampton, MA. The subcommittee
is also concerned that the Federal Bureau of Investigation
(FBI) still considers their criminal investigation of the 1992
deaths at the Harry S Truman VAMC an open case. The FBI exhumed
the remains of 13 veterans in February and March of 1993 and
contracted for toxicological testing in June 1996. These tests
have not been concluded. Spring and fall 1997.

3. Decision Support System (DSS). DSS is a computer based
system that provides VA managers and clinicians data on
patterns of patient care and patient outcomes. It can be used
to analyze resource utilization and the cost of providing
healthcare services. VA operates the largest federal healthcare
system in the nation, yet lacks a detailed clinical and
financial information system to report the efficiencies and
operating costs of its 173 hospitals. VA expects DSS to expand
to 91 hospitals by February 1997, despite problems identified
by GAO in the implementation testing. The subcommittee will
review VA's development of a business strategy and efforts to
implement DSS. Spring and winter 1997, spring 1998.

4. Procurement of Automated Information Resources Solutions
(PAIRS). The subcommittee will review VA's decision to make
this $875 million contract a 100 percent small business set-
aside. The subcommittee will also study VA's risk assessment in
its decision making process. This critical information
technology procurement is a cornerstone of VA's entire computer
modernization effort with a significant effect on veterans
services. Spring and winter 1997.

5. Veterans Benefits Administration (VBA) Modernization.
VBA is in its eleventh year of implementing its computer
modernization to enhance benefits and services delivery. Only
in the last two years has VBA made real progress in its $300
million effort. The subcommittee will continue oversight of
VBA's reengineering of its business practices and its
initiation of alternative business practices, technology, and
claims processing approaches to enhance the efficiency of VA
benefits operations. Spring and fall 1997, spring and summer
1998.

6. Master Veterans Record (MVR). The subcommittee will
review the VA's efforts to integrate its separate databases and
information systems into a department-wide information sharing
initiative that electronically communicates data between all VA
organizations. The completion of the MVR project would provide
all VA organizations, veterans and their beneficiaries with an
integrated system that furnishes information such as timely
death notifications, changes of address, family status,
representation, appeals, bankruptcy, patient care and burial
locations. Summer and winter 1997.

7. Veterans Health Resource Allocation. The subcommittee,
in conjunction with the Subcommittee on Health, will review and
analyze the Veterans Health Administration's new resource
allocation plan, known as the Veterans Equitable Resource
Allocation System, and the extent to which it would meet its
stated objectives. Spring 1997.

8. Civilian Health and Medical Programs of the Department
of Veterans Affairs (CHAMPVA). Currently, there are
approximately 80,000 CHAMPVA beneficiaries and in 1994, they
generated over 800,000 medical claims. Annual program
expenditures are in excess of $93 million, and claims total
$85.1 million. The subcommittee will review the effectiveness
of program management controls for duplicate claims payments,
eligibility verification, and recovery of fraudulent claims
payments. Fall 1997.

9. Medical Care Cost Recovery (MCCR). VA collects over $500
million per year from third party insurers for medical care
provided to insured veterans. The subcommittee will review the
VA's collection rate success, the adequacy of the billing rates
based on the quantity and cost of care provided to veterans,
and the cost of collections. Spring 1997 and spring 1998.

10. Adopting Medicare Fee Schedules for Fee Basis Care.
Veterans Affairs Inspector General (VAIG) audits estimate that
VA could increase revenues by $33 million by adopting the
Medicare fee schedules for fee basis veteran care. The
subcommittee will review application of these schedules to VA.
Fall 1997.

11. Capital Medical Equipment Backlog. The subcommittee
will review the backlog of capital medical equipment and VA's
acquisition strategy. Fall 1997 and fall 1998.

12. Procurement Management. The subcommittee will review
VA's overall procurement process. The review will include the
efficiencies of the National Acquisition Center (NAC),
initiatives in electronic commerce, centralized acquisitions,
performance-based contracting and acquisition streamlining.
Further, the subcommittee will review instances of vendor
overcharges and contractor fraud, and departmental measures
instituted to deter future incidents. Summer 1997 and summer
1998.

13. Construction Delays. The subcommittee will review GAO
and VAIG findings of weaknesses in VA's construction management
process. VAIG has conducted thirteen audits in the past five
years detailing construction overruns. Spring 1997 and spring
1998.

14. Veterans Affairs Inspector General Activities. The
subcommittee will review the VAIG's five year strategic plan.
The review will include the focus, conduct, and outcomes of the
last four years of audits, investigations, and hot-line and
whistleblower activities. Summer 1997.

15. Food Service. Veterans Health Administration (VHA) is
unusual as a health care delivery system in that it operates
its own food service systems. The subcommittee will review
VHA's food service operations and request a GAO cost-benefit
analysis. Fall 1997 and fall 1998.

16. Administrative Staffing Redundancies in VHA/VBA
Colocations. As VA continues to reengineer its business
processes, the subcommittee will examine possible staffing
redundancies in contracting specialists, payroll/finance
personnel, equal employment opportunity specialists and human
resources personnel. Summer 1997 and summer 1998.

17. Government Performance and Results Act of 1993 (GPRA).
Public Law 103-62 requires the federal government to measure
its performance and report on its results. It was enacted in
July 1993 and will be applied to all federal departments and
agencies. The subcommittee will closely monitor how VA measures
outcomes; how well GPRA performance goals drive daily VA
operations; how performance information is used to improve
effectiveness; what progress is being made to build the
capacity necessary at VA to implement GPRA; and what steps are
being taken to align VA's core business processes to support
mission-related outcomes. Spring, fall, winter 1997 and spring,
fall, winter 1998.

18. Advisory Committee on Minority Veterans. The Advisory
Committee makes assessments of the needs of veterans who are
minority group members and reviews VA programs and activities
designed to meet such needs. The subcommittee will examine the
report and any recommendations of the Advisory Committee to the
Secretary of Veterans Affairs due July 1 of each year. Summer
1997 and summer 1998.

19. Veteran Canteen Service (VCS), General Post Fund, and
Golf Courses. The subcommittee will review the VCS for scope of
missions, federal subsidizations and annual financial
statements. The subcommittee will review utilization of the
General Post Fund in accordance with chapter 83 of title 38 of
United States Code. The subcommittee will also review VHA's
efforts to operate its twenty-two golf courses without
appropriated funds. Fall 1997 and fall 1998.

20. VA Buyout Plan under Public Law 104-208. VA has offered
voluntary separation incentive payments to support strategic
downsizing goals of the department. The subcommittee will
review the VA buyout plan and the success of the following
stated objectives: changing the skill mix of employees;
increasing efficiencies; streamlining operations; converting to
new methods of operations; and enhancing service to veterans.
Spring 1997 and spring 1998.

21. Energy Policy Act of 1992 (EPACT). EPACT authorizes VA
to utilize energy performance contracts to leverage private
sector capital to fund VHA energy plant retrofits and upgrades
at healthcare facilities. The subcommittee will review VA's
efforts to maximize the use of this contracting vehicle to
achieve higher efficiency in energy consumption and reduce the
need for appropriated funds. Spring and Fall 1997 and spring
and fall 1998.

22. VA Safety and Security. The subcommittee will conduct a
comprehensive review of VA safety and security issues to
include law enforcement programs, security of controlled
pharmaceuticals, fire safety programs, and VA's 32 fire
departments. Summer 1997 and summer 1998.

23. Departmental Travel. VA's 1997 estimated travel budget
is $33 million greater than its 1995 travel costs. This
represents a 16 percent increase while the VA continues to
downsize and acquire televideo conferencing capability. The
subcommittee will review VA's conference, training, and other
travel. Spring and winter 1997 and spring and winter 1998.
REPORT TO THE COMMITTEE ON THE BUDGET FROM THE COMMITTEE ON VETERANS'
AFFAIRS ON THE BUDGET PROPOSED FOR FISCAL YEAR 1998, SUBMITTED ON MARCH
20, 1997

Summary Table: Estimates of Committee on Veterans' Affairs For Fiscal Year 1998 Budget
(Net Budget Authortiy--$ in millions)
----------------------------------------------------------------------------------------------------------------
FY 1998 FY 1998
Department of Veterans Affairs FY 1996 FY 1997 Administration Committee Comm. +/-
Request Recommendation Admin.
----------------------------------------------------------------------------------------------------------------
Veterans Benefits Administration:
Compensation and Pension................ 18,604 19,424 19,735 19,735 0
Proposed Legislation ¹.................. 0 0 314 331 17
Readjustment Benefits................... 1,155 1,377 1,366 1,366 0
Proposed Legislation.................... 0 ............ 0 175 175
Housing Programs........................ 211 504 353 353 0
Proposed Legislation ¹.................. 0 0 -\29 0 29
All Others.............................. 44 40 52 52 0
---------------------------------------------------------------------
Subtotal, Veterans Benefits............... 20,014 21,345 21,791 22,012 221

Veterans Health Administration:
Medical Care Appropriation.............. 16,551 17,013 16,959 17,600 641
Proposed Legislation.................... 0 0 591 0 -\591
Subtotal.................................. 16,551 17,013 17,550 17,600 50

Medical and Prosthetic Research......... 257 262 234 262 28
MAMOE................................... 64 61 60 60 0
State Homes and Parking................. 47 60 41 80 39
---------------------------------------------------------------------
Subtotal, Veterans Health................. 16,919 17,396 17,885 18,002 117

Departmental Administration:
Construction, Major Projects............ 136 251 80 200 120
Construction, Minor Projects............ 190 175 166 166 0
Subtotal Construction..................... 326 426 246 366 120

VBA..................................... 633 627 661 678 17
General Administration.................. 213 201 186 186 0
Subtotal GOE.............................. 846 828 847 864 17

National Cemetery System................ 73 77 84 84 0
Office of Inspector General............. 31 31 31 31 0
Grants for State Cemeteries............. 1 1 10 10 0
---------------------------------------------------------------------
Subtotal, Department Administration....... 1,277 1,363 1,218 1,355 137
=====================================================================

Total, DVA adjusted....................... 38,210 40,104 40,894 41,369 475
Trust funds, net........................ 1,098 1,053 1,012 1,012 0
Proprietary receipts, adjustments, and -\719 -\1,822 -\973 -\973 0
intragovernmental transactions.........
=====================================================================

Total, Department of Veterans Affairs..... 38,589 39,335 40,933 41,408 475
----------------------------------------------------------------------------------------------------------------
¹ Proposed Legislation may be considered in the event the Comiittee is instructed to meet budget reconciliation
targets.

The Committee's Views and Estimates of the President's FY 1998 Budget
Request for the Department of Veterans Affairs

Veterans Health Administration

Medical Care

Veterans eligible for VA health care services confront a
delivery system which is in flux. Major policy changes and new
statutory requirements are being implemented through an
organization which is still rapidly evolving. Among the changes
underway:
La shift in the primary locus of care-delivery at
VA medical centers from the hospital ward to the outpatient
clinic, with accompanying closures of hospital wards and
enrollment of patients into primary care programs;

Lreductions in numbers of hospital employees, to
include reducing the number of VA physicians who are
specialists and subspecialists and increasing the number of
primary care physicians;

Linstitution of a new capitation-based method of
allocating medical care funds to its 22 geographic networks to
account for workload projections and relative efficiencies of
care-delivery;

Lsubstantial decentralization of authority to
regional network directors, who are charged to improve the
efficiency of VA facility operations through such means as
administrative consolidations and elimination of duplication in
closely proximate health-care facilities, etc.;

Limplementation of new health-care eligibility
rules, which will require enrollment of veterans as a condition
of their receiving care;

Linstitution of measures to ensure maintenance of
VA's special programs that provide for the specialized
treatment and rehabilitative needs of disabled veterans;

Lan increasing awareness of the need to serve
patients' acute-care needs through more accessible, less costly
means, and the growing reliance on community-based clinics to
serve that end; and

Lthe development of a national formulary for
pharmaceuticals, national contracting for community-based
nursing home care, and similar means of achieving economies of
scale to increase VA purchasing power.

In the midst of these changes, VA's responsiveness to
veterans who turn to its health care facilities is highly
variable:
Laccess to outpatient care has generally improved,
with increased staffing in outpatient clinics and generally
reduced waiting times for primary care and specialty clinic
appointments;

Lyet the increasing numbers of aging veterans who
turn to VA for nursing home care or support to avoid
institutionalization face uncertain access as the Department
gives far greater priority to providing for primary care (the
budget for fiscal year 1998 promises no greater commitment to
the aging veteran: for example, it provides for no increase in
the numbers of veterans who will be served in community nursing
homes).

Lthe closure of inpatient psychiatric bed programs
(with a reduction of an estimated 1,470 staff and some 4,600
fewer patients hospitalized) raises the risk of significant
numbers of veterans who lack support systems getting little or
no effective continuity or management of their care and the
specter of homelessness increasing.

Lcare of Persian Gulf veterans, many of whose
health problems are presumed to have their origin in service,
are nevertheless receiving only superficial attention at some
VA facilities and extensive care at others.

The Committee has encouraged efficiency and innovation in
VA's delivery of health services and is heartened to see such
change in VA planning and operations. Nevertheless, the
proposed budget for fiscal year 1998 would set veterans' health
affairs on an unprecedented, untested course. It would
establish a fiscal policy of holding medical care
appropriations to a level below what the Administration
acknowledges is needed to maintain adequate services and
relying on nonappropriated funds and unspecified new
efficiencies to fill that gap. As proposed, the primary source
of those needed supplementary dollars would be third-party
collections, primarily from health-care insurers.
The proposed new revenues are not only dependent on
legislation, but on projections whose reliability for fiscal
year 1998 and the outyears is uncertain. The Administration
budget projects that gross fiscal year 1998 collections will
total $591 million (net recoveries after deducting the cost of
collection would be $468 million). Yet the unreliability of
that figure is underscored by the gap between last year's
medical care cost recovery budget estimate of $736 million in
total collections for fiscal year 1997 and the current estimate
of only $540 million for that same fiscal year. The Committee's
budget hearings highlighted the increasing difficulties facing
VA in its pursuit of medical care cost recovery. The VA's own
strategic plan for medical care cost recovery notes that
``there is no methodology that can accurately estimate the
`full collection potential' of VA's MCCR program.'' It
acknowledges, however, that several factors pose new and
troublesome challenges. The VA's own plan states:

Assumptions that (1) MCCR recoveries from third party
payers should continue to rise and (2) operating costs
associated with the recovery of this revenue should
diminish as a result of efficiencies ignore two
critical facts facing third party recovery. First VHA
inpatient workload is diminishing, while outpatient
workload is increasing. Second . . . MCCR spends nearly
five times the amount to collect a dollar from
outpatient billing than it spends to collect a dollar
from inpatient billing . . . MCCR must also generate
approximately 20 outpatient bills to produce the
equivalent recovery of a single inpatient bill.

The changing nature of the insurance industry and other
factors beyond VA's control also suggest that prior-year VA
collections successes may no longer be replicated, and indeed
that collections could actually trend lower. The VA faces a
rapidly changing insurance market in which fee-for-service
models, from which VA obtains substantial payments, are giving
way to health maintenance organization and preferred provider
plans, from which VA generally cannot gain recoveries.
Moreover, with the aging of the veteran population, more and
more veterans who have insurance coverage are Medicare-eligible
and have only Medicare-supplemental policies, from which VA
recoveries will be markedly lower because of the limited nature
of that coverage.
VA certainly has the means to improve its own cost-
collection efforts, and the Committee is aware that the
Department has mounted some promising initiatives. The
Committee questions whether improved program administration can
overcome the many uncontrollable factors highlighted above
which will inevitably retard collections' success. The
Committee applauds the concept of VA's retaining third party
revenues and the inherent incentive it provides, while noting
that VA has acknowledged that it lacks any plan at this time
for making that incentive real. With changes in health-delivery
practices and changes in the insurance market, it is clear that
prior-year VA collection trends do not provide a reliable basis
for concluding that outyear collections, that is collections
for fiscal years after fiscal year 1998, will increase. The
budget's outyear projections for medical care cost recovery are
not only optimistic, they lack a solid foundation.
While the outyear plans associated with holding VA medical
care appropriations to a below-fiscal year 1997 funding level
raise profound concerns, the plan for fiscal year 1998 is not
without substantial problems itself. Significantly, the fiscal
year 1998 plan raises, and fails to answer, several important
questions, with serious funding implications:

Lin light of VA's collections for FY 1997 having
fallen almost $200 million short of its earlier projection, how
reliable is the projection that VA would not only reverse that
trend but increase its recoveries by $58 million in fiscal year
1998?

LThis budget provides no funds to cover what a VA
survey reports to be new construction-activation projects for
fiscal year 1998. A VA survey, however, identifies that
networks anticipate that $260 million will be required to
activate construction projects in that fiscal year, to include
some $80 million in recurring operating costs and $180 million
in nonrecurring costs. Those monies must be provided for at the
expense of some other spending. While this budget proposes (at
pp. 2-30) that VA will save more than $180 million through
unidentified ``management efficiencies'', it is clear that the
cost of activations, which are not even identified in the
budget, must be funded through other managerial actions. How
credible is it that VA can wring sufficient savings both to
adequately fund activations as well as to help offset the
anticipated $687 million in uncontrollable cost increases
(i.e., required payroll increase totaling $338 million and
inflation and rate increases of $249 million) identified in the
budget without service to veterans deteriorating?

These unanswered and unanswerable questions place veterans'
health care, and veterans themselves, at risk. This Committee
recommends the adoption of a policy that responsibly minimizes
that risk.
The Committee supports in principle the proposal that the
VA's health care system should be permitted to retain medical-
care cost recoveries. It is appropriate to give VA the
incentive to maximize its recoveries and to make veterans'
health care the beneficiary of collections successes. It is
also appropriate to encourage VA to achieve further economies
through streamlining; elimination of redundancies; ``smart''
procurement policies; consolidations of administrative and
other functions; and, if indicated, consideration of changing
the mission of inefficient facilities. Some of these changes
cannot reasonably be carried out, logistically and otherwise,
in the space of a single fiscal year.
In essence, this budget asserts that the Department will
require $17.55 billion to operate a comprehensive, integrated
health care system providing care to eligible veterans. This
projection is not unreasonable given still available
opportunities for streamlining, consolidation, and other cost-
saving changes in the Veterans Health Administration. In the
Committee's judgment, the absence of any identified funding for
construction activations means either that VA will fail to
operate new ambulatory care expansions and other activations,
or that it will deny care to ``category A'' veterans whom it
has been serving. Neither course is tenable. The Committee
recommends, accordingly, that the spending level for VA care be
set at $17.60 billion, a more reasonable figure.
The VA's budget makes enactment of legislation to permit
retention of third-party collections a critical component of VA
health care funding for fiscal year 1998. This proposed
authority is said to give VA managers new incentives to
increase collections. The Committee is troubled, however, that
the architects of this budget proposal have identified no
mechanism for distributing collection receipts, in whole or in
part, to ensure that their theoretical incentive will actually
be realized. The Department's budget and budget defense have
also failed to allay the Committee's very substantial concerns
regarding the very optimistic collections' target for fiscal
year 1998. With the many dynamic changes underway both in VA
medical care delivery patterns, in the insurance market, and in
an aging veteran population, this Committee finds no
satisfactory basis for projecting that VA's medical care cost
collections will even approach the Administration's fiscal
target, let alone rebound from a downward trend.
Given the risks to our veterans of relying on this wholly
speculative legislative gamble, the Committee recommends that
VA medical care funding needs for fiscal year 1998, an amount
the Committee believes should be set at $17.6 billion, be met
through appropriations.

Medical Research

VA's research budget represents less than 1.5 percent of
the Federal budget devoted to veterans health care. Despite the
relatively limited share of the budget dedicated to research,
VA's research program is a critical element of the VA health
care system.
The conduct of research is not only a specific statutory
mission for VA, but its research provides integral support to
all of VA's clinical care efforts. Opportunities to conduct
research with direct clinical application have historically
provided a powerful incentive to attract and retain exceptional
VA physicians. Successful VA research grant applicants must
commit themselves to serving five-eighths to full-time in VA
medical facilities, with a research focus that will directly
benefit veteran patients.
The research budget is best understood as a dividend-
producing investment. As noted, it yields patient-care
dividends in its key role in the quality of the clinical staff
it brings to VA patient care. But those dividends are magnified
because of an important ``leveraging'' factor. That is, the
investment in VA research provides a capacity through which VA
researchers are able to bring additional research dollars
(through non VA grant support) to advance VA research
initiatives.
Significantly, VA research has an outstanding record of
scientific achievement recognized by independent, blue-ribbon
panels. Its breakthroughs, improvements in care, and advances
in medical and prosthetic technology have benefited not only
veterans, but all Americans.
It is troubling, accordingly, that the fiscal year 1998
budget would reduce the modest level of funding by 10.5 percent
from $262 million to $234 million. Taking inflation into
account, the proposal represents a 15 percent cut in real
support. The proposed cut would come at a time when VA has
already taken important steps to refocus and streamline this
program in accordance with recent recommendations from a
Research Realignment Advisory Committee. At a time that this
program should be moving to foster a new generation of
research-oriented VA clinicians, this is a budget that could
discourage the ``best and the brightest'' from pursuing or
maintaining VA employment.
Reducing the budget by $28 million will not only decrease
the number of meritorious research studies VA can fund, it
would also reduce VA's capacity to compete successfully for
funds from other sources, which currently fund 78 percent of
VA's total research effort.
For these reasons, the Committee recommends for fiscal year
1998 restoration of funding to the fiscal year 1997 level of
$262 million to allow the program to remain near a current
services level.

Major Medical Construction

In carrying out its multi-faceted mission, the VA provides
care and treatment through networks of facilities which range
from small community clinics to complex institutions designed
to serve veterans' specialized health care needs. Much of its
infrastructure consists of older facilities, many of which fail
to meet current expectations of patient privacy, comfort and
efficient medical practice.
Budgets for major VA construction have for years reflected
a competition among the system's diverse needs for construction
dollars from modernization of aging facilities to expansion of
unmet needs for ambulatory care and nursing home care.
The Major Construction budget should receive funding at a
level which would allow the Department to address the most
serious needs, especially projects which improve ambulatory
care capacity, upgrade patient environment, and remedy seismic
problems. It is deeply disturbing, accordingly, that the major
medical construction budget for fiscal year 1998 proposes no
funding for any of the projects authorized by the Congress in
Public Law 104-262 or for any other pending, but as yet
unfunded construction projects. Indeed, only a single project
would win major medical construction funds, and this to
complete seismic corrections initiated in a prior fiscal year.
Given Congress' action in Public Law 104-262 authorizing
appropriations for 16 as yet unfunded or only partially funded
construction projects which remain at the top of VA's most
recent construction prioritization scoring model, the major
medical construction budget for fiscal year 1998 represents a
profound disappointment to this Committee and to the veterans
who rely on VA care. Mindful of competing budget pressures, the
Committee recommends that the highest priority projects
authorized last year receive funding, and recommends a funding
level of $200 million, a $120 million increase above the
Administration's proposal.
In highlighting the role of construction funding in
ensuring the provision of needed care to veterans, the
Committee underscores the importance of adequate funding for
the State home program. This program is a highly regarded,
cost-effective partnership in helping to meet aging veterans'
long-term care needs. In providing construction funding for up
to 65 percent of the cost of construction, VA grant support
helps assure that States can help meet the goal of providing
veterans needed nursing home care and other long-term care. The
States have been reliable partners in this effort, and have
responded admirably to incentives developed by the Congress to
expand their commitment to this program. In accordance with a
statutory priority system for grant funding, many States have
appropriated monies in advance to ensure priority Federal
funding (in ``priority group 1''). At this time, however, the
list of pending, unfunded State home projects (ranked as
``priority group 1'') for which States have already
appropriated their share of construction costs, has swollen to
a total of more than $192 million.
The fiscal year 1998 budget, proposing to cut funding for
this program by $6 million, is an unreasonable response to the
States. The States should be rewarded for their efforts, not
asked to stand in line still longer waiting for sufficient
funds to be appropriated for their projects. To ensure that
States continue to participate in this program, and to avoid
States reassessing whether their Federal partner is indeed
reliable, this program should be adequately funded. The
Committee proposes an appropriation of $80 million for fiscal
year 1998 and strongly encourages VA to request a similar
amount next year to help retire the backlog of projects and
expand needed bed availability for aging veterans.

Veterans Benefits Administration

General Operating Expenses

The General Operating Expenses account funds Full Time
Employee Equivalents (FTEE) and operating expenses for both the
Veterans Benefits Administration (VBA) and VA's Central Office
(headquarters). VBA administers a broad range of non-medical
benefits to veterans, their dependents, and survivors through
60 regional offices or medical and regional office centers.
These programs include compensation and pension, education,
vocational rehabilitation, insurance, and loan guaranty (home
loans). VBA is also responsible for processing applications for
these programs. Headquarters includes the Secretary's staff and
other support VA support staff, and is located in Washington,
DC.
The Department proposes to reduce overall VBA staffing by
543 FTEE in fiscal year 1998. These include 265 FTEE reductions
from four of five VBA lines of business: 100 from compensation
and pension, 20 from education, 45 from vocational
rehabilitation, and 100 from loan guaranty, as well as 128 FTEE
from the Veterans Services Division. With the exception of 100
Loan Guaranty positions, the Committee opposes the reductions
because of the significant work remaining on major technology
programs to improve the automation of VBA functions and the
uncertainties surrounding Business Process Re-engineering
(BPR). The Committee recommends $15 million to restore 293
direct service FTEE for fiscal year 1998 for compensation and
pension, education, vocational rehabilitation and veterans
services.
VA's fiscal year 1998 budget requests $1.4 million for
customer surveys, program evaluations and an activity-based
costing study. The Committee supports these management
initiatives. The budget also requests $7.4 million for
information technology initiatives to continue development of
the new compensation and pension payment system, transferring
the education system to a new computer, and various BPR
initiatives. The Committee supports that request.

Benefit Program Operations

Compensation & Pension Service.--The ability of the VA to
provide timely and quality benefits delivery is heavily
dependent on a combination of proper staffing levels, effective
implementation of computer modernization initiatives, training
and retention incentives, and inter-departmental cooperation
between the various VA agencies and military service
departments. Over the past decade the number of trained
personnel in the adjudication division has declined by
approximately 40 percent with a further 100 FTEE reduction
proposed for 1998. With claims processing still averaging over
130 days, and remand rates from the Board of Veterans' Appeals
(BVA) exceeding 50 percent of the Board's decisions, the
Committee opposes the FTEE reductions in the Compensation &
Pension Service (C&P) proposed in fiscal year 1998.
The VA continues to make progress in the direct acquisition
of service records from the armed forces immediately following
separation. The VA's central records center in St. Louis is
aggressively pursuing advancements in records management and
information handoffs between agencies. Projects such as
automating information requests between the VA Regional
Offices, the National Personnel Records Center and the several
service records centers, automation of the DD-214 discharge
form, and a VA/DoD pilot program to obtain C&P physicals for
servicemembers about to be discharged from active duty are
underway. The Committee fully supports this pilot effort, and
if the data is favorable, will support expansion of the program
throughout the VA and DoD.
VETSNET, the computer modernization project to replace the
VA's current benefits payment system, has been subject to
significant internal and external scrutiny and the Committee
remains concerned about the overall management of the program
and the VA's ability to procure and modernize its benefits
information management system. The year 2000 (Y2K) issue and
its impact on the VA's data processing is especially
troublesome. The General Accounting Office has stated that the
VA has not demonstrated its ability to develop two major
projects simultaneously. While the VA has made progress toward
resolving the VETSNET and the Y2K issues, the Committee
believes the highest resource priority should go to the Y2K
contingency program. The contingency program involves making
the current payment system which exists at the Hines data
facility Y2K compatible, thus able to continue making benefits
payments should the VETSNET effort be delayed. Further, the VA
has not demonstrated an effective mechanism to ensure
modernization will include maximum interface between VBA and
VHA information systems.
VA's telecommunications system continues to impede the
efficient delivery of benefits. The combined blocked and
dropped call rates routinely exceed 70 percent at some sites.
The Committee believes the VA should allocate sufficient
resources to modernizing its phone system with interactive
technologies that have been available for years. These
technologies could have significant impact on customer service
and would free FTEE for more complex claims-related work in all
VBA business lines. Therefore, the Committee recommends $1
million to fund additional automated telecommunications
capabilities. During fiscal year 1996, an average level of
4,032 FTEE adjudicated approximately 2.66 million benefit
claims. During the same year, VBA received 2.6 million claims.
At the end of fiscal year 1996, approximately 342,683 claims
were pending at VBA. The VA projects that the number of claims
pending at the end of fiscal year 1997 will increase to
360,523. In the past year, the VA has reduced the use of
overtime for claims processing and the Committee commends this
action. The Committee expects the Department to accomplish
future reductions in the claims backlog through improvements in
automation, business process re-engineering, increased use of
post-decision hearing officers, statutory and regulatory reform
in the areas of pension simplification, and Montgomery GI Bill
certifications.
To aid in achieving these efficiencies, the Committee also
recommends the VA conduct, within its resources, a pilot
program to procure and demonstrate a fully automated disability
rating system using artificial intelligence and expert systems.
Commercial sources have demonstrated the use of expert systems
to perform some rating functions and the Committee is aware of
two companies whose products are used extensively and
successfully in worker's compensation cases. The Committee
views such a pilot as a major initiative in improving VA claims
processing.
The budget requests $10.2 million for compensation and
pension business process re-engineering initiatives including
computer based training, continued development of the
computerized Claims Processing System, medical examinations,
outreach, continuation of the separation exam pilot program,
and related BPR information technology programs. The Committee
supports the request.
Vocational Rehabilitation and Counseling Program.--The
Vocational Rehabilitation and Counseling Program (VR&C)
provides rehabilitation and counseling services for eligible
veterans, servicemembers, and certain dependents. VR&C's
primary mission is to provide all services and assistance
necessary to enable service-connected disabled veterans to
become employable, obtain and maintain suitable employment, or
to achieve maximum independence in daily living. Additionally,
VR&C is authorized to provide educational and vocational
counseling services to eligible active duty members, veterans,
and dependents. The Committee has previously stated and
reiterates that it cannot understand why the VA does not accord
this program the priority and the resources it clearly
deserves.
Despite changes restricting eligibility for vocational
rehabilitation benefits made in Public Law 104-275, which
overturned the Court of Veterans Appeals decision Davenport v.
Brown, VR&C continues to experience a high volume of
applications for chapter 31 benefits and educational/vocational
counseling. This is due, at least in part, to the routine high
volume of separations from the armed forces and transition
programs designed to fully inform separating servicemembers
about the VA benefits. Aggressive marketing of the benefit by
veterans service organizations (VSO's) through their national
magazines and conferences also contributes to the high demand
for vocational rehabilitation benefits. GAO released a report
on VR&C in 1996 which again criticized the program for falling
short in the number of veterans completing rehabilitation and
the inability to determine the cost of rehabilitating a
veteran. The report also noted the high drop out rates in the
program and the VA's inability to determine the cause(s) of
those high rates. The Committee cannot support additional FTEE
for the vocational rehabilitation program until these
significant management problems are overcome. Also, because
FTEE reductions would further decrease the level of services to
disabled veterans through longer waiting periods and diminished
case management, the Committee does not support the FTEE
reductions proposed in the President's budget.
The Committee strongly suggests that VR&C aggressively
pursue closer cooperation with the Department of Labor's
Veterans Employment and Training Service (VETS) to increase job
placement of rehabilitated veterans. VETS, and other placement
specialists, can provide significant employment services to
vocational rehabilitation graduates. The Committee believes
closer cooperation between VR&C and VETS will increase
employment opportunities for disabled veterans.
Education Service.--VA's Education Service is responsible
for several programs, most notably the Montgomery GI Bill
(MGIB) which provides earned education assistance benefits to
300,000 veterans, active duty, and National Guard and Reserve
personnel annually. In addition, the Service administers
education programs for 43,000 survivors of veterans who are 100
percent disabled, died of a service-connected disability or
were killed on active duty.
The cost of education has increased at over 7 percent per
year since the inception of the Montgomery GI Bill. Today a
veteran with two years of honorable military service receives
$347 per month from the Montgomery GI Bill (MGIB). But the
average annual cost is $9,750 for tuition, room and board,
fees, books and transportation at a public institution. For
private schools, the annual cost is now $20,750. The result is
the Montgomery GI Bill falls short by $6,600 annually for a
public school and $17,600 for a private school.
The President's budget proposes a 10 percent increase in
the Pell Grant program, which would increase the maximum
benefit to 3,000 per year, about $123 less than the MGIB pays
for a nine month school year. Additionally, the current
AmeriCorps education benefit of $4,725 per year for two years
exceeds the earned MGIB basic benefit on a per school year
basis by $1,602. Therefore, the Committee requests an
additional $175 million in fiscal 1998 to improve veterans'
education programs.
Consolidation of education claims processing at four
Regional Processing Offices (RPO) is complete. While fully
supportive of the VA's efforts to streamline education
operations, the Committee remains concerned, however, about the
slow processing of education claims at some RPO's.
Additionally, the Committee is very concerned that the Stage II
imaging project to replace old technology imaging systems is
now one year behind schedule. The Committee recognizes the
significant efficiencies to be gained through automation of the
MGIB monthly certification process. Therefore, the Committee
recommends an additional $1 million for a monthly certification
system using touch tone phones to verify monthly enrollments.
The Committee estimates that postal savings alone will pay for
the system within two years. The Committee also supports the
requested $1.049 million for the electronic data interchange/
electronic funds transfer project.
The Committee rejects the proposed FTEE reductions for the
education service in the President's fiscal year 1998 budget.
Such reductions will only result in a lower level of service to
veterans because automation and business process re-engineering
are not yet mature enough to sufficiently increase
administrative efficiencies.

Board of Veterans' Appeals

The Board of Veterans' Appeals (BVA) continues to
experience significant difficulties meeting the production
levels needed to reduce the backlog of over 60,000 appeals.
Additional resources provided over the past two years are now
beginning to result in increased productivity. In fiscal year
1996, the BVA made nearly 34,000 decisions. Unfortunately, over
14,800 (43.7 percent) of those decisions were remands back to
the regional offices. The BVA predicts that it will produce
41,200 decisions in fiscal year 1997, which will allow its
output to slightly exceed the estimated 38,000 appeals that
will be filed with the Board in fiscal year 1997.
Clearly, production trends are improving at the BVA, but
the BVA's estimate of 504 days required to process a claim in
fiscal year 1997 is unacceptable. It is also clear that, absent
a marked decline in appeals from regional office decisions,
and/or a reduction in administrative requirements, the Board in
its current form and scope of responsibility cannot manage the
workload. The Committee notes that the Veterans Claims
Adjudication Commission (VCAC) made several recommendations
concerning the Board's role in the adjudication system. Given
the potential impact of some VCAC recommendations, the
Committee believes BVA staffing levels should not be changed at
this time.

National Cemetery System

The National Cemetery System (NCS) provides national
shrines honoring those who served in uniform and should be
maintained as places of high honor, dignity and respect.
Congress must consistently fund NCS at a reasonable level.
Funding shortfalls will only exacerbate current staffing
deficiencies and cause additional growth in equipment backlogs
at a time when the number of interments in the National
Cemetery System are projected to increase dramatically due to
an aging veteran population.
Currently, 149 cemeteries and soldiers' lots located in 41
states, the District of Columbia and Puerto Rico comprise the
National Cemetery System (NCS). Since NCS's establishment in
1862, approximately 2.4 million decedents have been interred in
national cemeteries and approximately 6.4 million headstones
and markers have been furnished. Between fiscal years 1995 and
2010, the veteran population will decrease by six million (23
percent). As a result, NCS faces an increasing workload at
least through fiscal year 2008. During these years,
approximately 7.5 million veterans of the World War II
generation will die. In fiscal year 1996, the VA interred
71,786 veterans and family members. In fiscal year 2008, the
number of interments is projected to increase to 104,000. The
VA also expects to process 345,000 gravemarker applications in
fiscal year 1997. NCS must have both human and material
resources to accommodate this increase.
The Committee commends the President's 1998 budget proposal
for a $7.3 million increase in operating funds for the cemetery
system. Also included are funds for 52 additional FTEE to
accommodate increased workloads throughout the system as well
as staffing for a new cemetery in Tahoma, Washington, and
partial staffing for new cemeteries being constructed near
Chicago, Illinois; Dallas, Texas; and Albany, New York. The
Committee expects to see similar increases in the NCS budget
for the next several years to accommodate the new cemetery
activations.
The NCS's workload per FTEE continues to grow. Nationally,
the number of interments is projected to increase to a record
76,875 in fiscal year 1998. Similarly, the number of gravesites
maintained is estimated to reach 2.2 million in fiscal year
1998. If increases in workload are not matched by FTEE
increases, NCS will continue to lose ground relative to overall
system maintenance. This results in a deterioration in the
appearance and overall condition of the entire system and
allows what may be minor maintenance items to become major
repair projects. While FTEE levels have essentially kept pace
with workload increases since 1994, funding shortfalls for
previous years have created a catch-up situation.
The Committee strongly supports the President's request,
especially the additional 52 FTEE to ensure that staffing and
equipment keep up with workload. The National Cemetery System
must maintain its facilities as befitting their status as
national shrines to veterans.

Operating Account

The Committee is pleased that VA is proposing to increase
funding by nearly $1.4 million for maintenance and repair,
grounds maintenance and related supplies. These funds are vital
to preserving the appearance of cemetery grounds.
The National Cemetery System maintains approximately 400
buildings and 100 miles of roads. To help with that
maintenance, VA has an inventory of more than 8,000 pieces of
equipment with an estimated value of $23 million. Through an
extensive maintenance program, this equipment's longevity has
been extended an average of five years beyond its scheduled
replacement date. In many instances, however, it is no longer
economical to maintain the equipment. The budget proposes to
reduce this backlog in obsolete equipment to $6.3 million.

Cemetery Construction

The VA's construction needs for new and existing cemeteries
are addressed through Major and Minor Construction
appropriations. NCS has focused construction planning on
providing new cemeteries in areas of the country with the
greatest unserved veteran population, extending the life of
existing cemeteries through gravesite development, and
repairing and maintaining the infrastructure of the system.
For fiscal year 1998, the President's budget proposes $30.9
million for major cemetery construction, including: $12.6
million for a new cemetery at Cleveland, Ohio; $9.4 million for
expansion of the cemetery at Ft. Sam Houston, Texas; and $9.1
million for gravesite development at the National Memorial
Cemetery of Arizona. The Committee supports these proposals and
notes that activation of these cemeteries in future years will
require significant increases in NCS personnel.
Minor construction projects, which are those costing less
than $3 million, total $16 million for fiscal year 1998, and
the Committee supports that request.

State Cemetery Grants Program

The State Cemetery Grants Program makes grants available to
assist the states in establishing, expanding, and improving
state-owned veterans cemeteries. The State Cemetery Program is
funded at $1 million for fiscal year 1997. Since its
establishment in 1980, $48.3 million has been obligated through
fiscal year 1996. Nearly 100 grants have been awarded to 18
states and Guam since the program's inception.
The Department is proposing to change the funding formula
for grants to construct state veterans cemeteries and to
increase funding to $10 million for fiscal year 1998. Under the
current formula, VA pays 50 percent of the cost to construct a
state cemetery. VA is proposing to increase the Federal share
to 100 percent of construction plus 100 percent of initial
equipment costs. VA believes that this will encourage more
states to participate in the grant program.
The Committee continues to support the state grant program
as a means to increase burial space for veterans.

U.S. Court of Veterans Appeals

The Veterans' Judicial Review Act, Public Law 100-687,
established the U.S. Court of Veterans Appeals as an executive
branch court. The Court is empowered to review decisions of the
Board of Veterans' Appeals and may affirm, vacate, reverse or
remand such decisions as appropriate. The Court has the
authority to decide all relevant questions of law, to interpret
constitutional, statutory, and regulatory provisions, and to
determine the meaning or applicability of the terms of an
action by the Secretary of Veterans Affairs. The Court also has
the authority to compel actions of the Secretary that are found
to have been unlawfully withheld or unreasonably delayed.
The Committee supports the Court's budget request of $9.4
million.

Department of Labor

VETERANS' EMPLOYMENT AND TRAINING SERVICE

Congress has determined that our nation has a
responsibility to meet the employment and training needs of
veterans. To meet those needs, the Secretary of Labor is
required to effectively and vigorously implement policies and
programs which increase opportunities for veterans to obtain
employment, job training, counseling and job placement
services. Such implementation is accomplished through the
Assistant Secretary of Labor for Veterans' Employment and
Training (ASVET). The ASVET is the principal advisor to the
Secretary of Labor with respect to the formulation and
implementation of all departmental policies and procedures
which affect veterans.

Disabled Veterans' Outreach Program

The Disabled Veterans' Outreach Program (DVOP) was
established by Congress to provide intensive employment and
training services to service-connected disabled veterans and
other veterans in need of job search and placement assistance.
DVOPs serve as workshop facilitators for the Transition
Assistance Program (TAP), a 3-day program that provides
transition counseling, job-search training and information,
placement assistance and other information and services to
servicemembers who are within 180 days of separation from
active duty. DVOPs also develop job and job-training
opportunities for veterans through contacts with employers.
Additionally, DVOPs provide assistance to community-based
organizations and grantees who provide services to veterans
under other federal and federally-funded employment and
training programs, such as the Job Training Partnership Act and
the Stewart McKinney Act.
Under section 4103A, title 38, United States Code, the
Secretary of Labor is required to annually make available for
use in each state sufficient funds to support the appointment
of one DVOP specialist per 6,900 veterans residing in the state
who are veterans of the Vietnam era, veterans who entered
active duty as a member of the armed forces after May 7, 1975,
or service-disabled veterans. This formula provides an
indicator of anticipated workload and the number of DVOPs
required to provide an acceptable level of service to veterans
seeking employment assistance. DVOPs are located in employment
service offices and outstation sites such as Department of
Veterans Affairs regional offices and Vet Centers. The
Committee supports full funding at the statutorily-mandated
level of $104.7 million. Full funding will result in an
estimated 44,000 additional job placements for veterans.

Local Veterans' Employment Representatives

The Local Veterans' Employment Representative (LVER)
program was established to functionally supervise the provision
of job counseling, testing, job development, referral and
placement to veterans in local employment services offices.
LVERs participate in TAP workshops and maintain regular contact
with community leaders, employers, labor unions, training
programs and veterans service organizations in order to keep
them advised of eligible veterans available for employment and
training. LVERs also provide labor exchange information to
veterans and promote and monitor participation of veterans in
federally funded employment and training programs. Finally,
LVERs monitor the listing of jobs by federal contractors and
subsequent referrals of qualified veterans to these employment
openings, refer eligible veterans to training, supportive
services, and educational opportunities, and assist, through
automated data processing, in securing and maintaining current
information regarding available employment and training
opportunities.
Section 4104(a)(1), title 38, United States Code, mandates
that the Secretary of Labor make available funding to support
the appointment of at least 1,600 full-time LVERs and the
states' administrative expenses associated with the appointment
of that number of LVERs. The Committee supports full funding at
the statutorily-mandated level of $86.5 million.
VETS also manages the Homeless Veterans Reintegration
Program (HVRP). The program is designed to provide support
services to local agencies targeting homeless veterans with
employment assistance. For the past two years, the President
and the Appropriations Committee have failed to support funding
for the program, while the law creating this program authorizes
$10 million per year. This year the President has proposed $2.5
million for HVRP. The Committee recommends funding HVRP at $7.5
million to increase services to homeless veterans.
The Committee feels strongly that the recommended funding
for HVRP if not otherwise provided should come from the
McKinney Act, (Stewart B. McKinney Homeless Assistance Act,
Public Law 100-77). Public Law 103-446 expressed the sense of
Congress that programs for homeless veterans should receive a
fair share of funding from any federal agency or program
targeting the homeless. Currently, homeless veterans are
estimated to comprise one third of the homeless adult
population, with nearly 250,000 veterans living in the streets.
The McKinney Act is a major source of homeless funds and
programs for homeless veterans should receive a fair portion of
those funds and not be forced to rely on funds intended for
veterans medical care or employment programs.

National Veterans Training Institute

The National Veterans Training Institute (NVTI) is operated
under contract by the University of Colorado at Denver and
provides basic and advanced instruction in veterans employment
programs and services. Because this is the only source of
formal training for federal and state employees for veterans
employment programs, NVTI is vital to the success of those
programs. The President has recommended $2.0 million for fiscal
year 1998 and the Committee fully supports that request.

Proposed Legislation

Cost of Living Adjustment (COLA).--The Committee supports a
cost-of-living adjustment (COLA) for compensation and
Dependency and Indemnity Compensation, and education recipients
based on the COLA calculation for Social Security recipients.

Montgomery GI Bill

The Committee notes that the President's budget contains
education initiatives estimated to cost over $50 billion but
did not recommend additional funds to increase the benefit
level in any education program operated by the Department of
Veterans Affairs. The Committee also notes that inflation in
the cost of education has averaged over 7 percent per year
since the inception of the Montgomery GI Bill. Today, a veteran
who has earned an education benefit through two years of
military service receives $347 per month from the Montgomery GI
Bill, but the average annual cost is $9,750 for tuition, room
and board, fees, books and transportation at a public
institution. For private schools, the annual cost is now
$20,750. Today, the Montgomery GI Bill falls short by $6,600
annually for a public school and $17,600 for a private school.
Therefore, the Committee recommends that the Budget Committee
include improvements to the Montgomery GI Bill and other
education programs provided in return for military service as a
significant part of any education initiatives supported in
fiscal year 1998.

Savings Provisions

The President's budget proposes several savings provisions.
These include a permanent round down of compensation COLAs for
all beneficiaries, limiting monthly pension benefits to $90 for
Medicaid-eligible beneficiaries in nursing homes, the authority
to match income records with the IRS and SSA for pension
beneficiaries, imposition of a .75 percent surcharge on VA home
loans, continuing VA's authority to use the higher ``no bid''
rate in housing loan programs, and continuing the 3 percent fee
for multiple uses of VA home loans made with less than 5
percent down payment. The President's budget proposes to make
permanent several recent budget provisions of current law which
were enacted in prior budget reconciliation acts, and which are
schedule to expire at the end of 1998. The Committee has not
supported making savings provisions permanent in the past and
recommends that the Budget Committee reject that proposal.
The budget also proposes new legislative initiatives that
would repeal restrictions on the collection of loan guaranty
debts, permanently extend loan asset sales enhancement
authority, and increase the funding fee for vendee loans to
2.25 percent.
Projected first year savings for these provisions total
$46.36 million and $3.44 billion over five years.
REPORT TO THE COMMITTEE ON THE BUDGET FROM THE COMMITTEE ON VETERANS'
AFFAIRS ON THE BUDGET PROPOSED FOR FISCAL YEAR 1999, SUBMITTED ON MARCH
24, 1998

Summary Table: Estimates of Committee on Veterans' Affairs For Fiscal Year 1999 Budget2
(Net Budget Authortiy--$ in millions)
----------------------------------------------------------------------------------------------------------------
FY 1999 FY 1999
Department of Veterans Affairs FY 1997 FY 1998 Administration Committee Comm. +/-
Request Recommendation Admin.
----------------------------------------------------------------------------------------------------------------
Veterans Benefits Administration:
Compensation and Pension................ 19,599 20,483 21,857 21,857 0
Proposed Legislation.................... ............ ............ .............. 0 0
COLA.................................... ............ ............ 287 287 0
Tobacco................................. ............ ............ -\400 -\400 0
Readjustment Benefits................... 1,377 1,366 1,175 1,175 0
Proposed Legislation.................... ............ 0 291 400 109
Housing Programs........................ 657 1,036 423 423 0
Proposed Legislation.................... 0 0 -\2 0 2
All Others.............................. 40 52 47 47 0
---------------------------------------------------------------------
Subtotal, Veterans Benefits............... 21,673 22,937 23,678 23,789 111

Veterans Health Administration:
Medical Care Appropriation.............. 17,012 17,057 17,028 17,509 481
Medical Care Collection Fund............ 0 688 677 559 -\118
Proposed Legislation.................... 0 0 87 0 -\87
---------------------------------------------------------------------
Subtotal.................................. 17,012 17,745 17,792 18,068 276

Medical and Prosthetic Research......... 262 272 300 300 0
MAMOE................................... 61 60 60 62 2
State Homes and Parking................. 60 80 37 80 43
---------------------------------------------------------------------
Subtotal, Veterans Health................. 17,395 18,157 18,189 18,510 321

Departmental Administration:
Construction, Major Projects............ 219 209 97 237 140
Construction, Minor Projects............ 175 175 141 175 34
---------------------------------------------------------------------
Subtotal Construction..................... 394 384 238 412 174

VBA..................................... 626 596 651 672 21
General Administration.................. 202 191 199 200 1
---------------------------------------------------------------------
Subtotal GOE.............................. 828 787 850 872 22

National Cemetery System................ 77 84 92 93 1
Office of Inspector General............. 31 31 33 36 3
Grants for State Cemeteries............. 1 10 10 10 0
---------------------------------------------------------------------
Subtotal, Department Administration....... 1,331 1,296 1,223 1,423 200
=====================================================================

Total, DVA adjusted....................... 40,398 42,390 43,090 43,722 632
Trust funds, net........................ 1,067 1,025 968 968 0
Proprietary receipts, adjustments, and -\1,667 -\675 -\685 -\685 ........
intragovernmental transactions.........
=====================================================================

Total, Department of Veterans Affairs..... 39,798 42,740 43,373 44,005 632
----------------------------------------------------------------------------------------------------------------

Introduction

The Veterans Population

Between 1997 and the year 2010, the number of living
veterans is projected to decline from 25.4 million to 20
million, a decline of 21 percent. The largest group of living
veterans by period of service is the Vietnam era population of
8.2 million veterans, followed by the World War II group of 6.7
million veterans. The number of veterans 65 years and over is
expected to peak in the year 2000 at 9.3 million. The number of
veteran deaths will increase each year until a peak of 620,000
deaths is reached in 2008.

----------------------------------------------------------------------------------------------------------------
Projected Number of Participants in VA Programs, FY 1999
-----------------------------------------------------------------------------------------------------------------
Program Participants Program Participants
----------------------------------------------------------------------------------------------------------------
Medical Care: Vocational Rehabilitation:
Unique Patients............................. 3,413,000 Veterans Receiving Services... 52,200
Compensation: Loan Guaranty:
Veterans.................................... 2,361,900 Loans Guaranteed.............. 222,000
Survivors/Children.......................... 307,400 Insurance:
Pension: Administered Policies......... 2,275,800
Veterans.................................... 390,100 Supervised Policies........... 2,465,000
Survivors................................... 283,000 National Cemetery System:
Education: Interments.................... 80,300
Veterans and Servicepersons................. 309,900 Graves Maintained............. 2,322,400
Reservists.................................. 76,400 Headstones and Markers........ 336,500
Survivors/Dependents........................ 43,000
----------------------------------------------------------------------------------------------------------------

Spending for Veterans

In 1950, the veteran population was just over 19 million
and Federal spending for veterans benefits and services
comprised almost 21 percent of the total Federal budget and was
equal to 3.24 percent of the gross domestic product (GDP). In
that same year, veterans benefits made up more than 62 percent
of the category of spending known as ``human resources'', e.g.
spending for education, health, and social security. By 1965,
spending for veterans benefits had declined to less than one
per cent of GDP, and it has been around one half of one percent
since at least 1985.
In the most recently completed fiscal year (1997), spending
for veterans benefits and services had shrunk to 2.5 percent of
total Federal spending, and equaled one-half of one percent
(0.5 percent) of GDP. Veterans benefits comprised only 3.9
percent of Federal spending for human resources in the same
year. Outlays for mandatory veterans benefits (mainly
compensation, pension and education benefits) are projected to
fall from 13.4 percent of all federal mandatory outlays in 1965
to 2.8 percent of such outlays in 1999.
Comparing spending for veterans' health care needs reveals
a similar picture. In 1965, the year in which Medicaid and
Medicare were created, spending for veterans health equaled
roughly 40 percent of total Federal health spending. A decade
later, spending for veterans health was less than 10 percent of
spending on Medicaid and Medicare. In 1997, the $17.1 billion
spent for veterans health was 5.4 percent of Federal spending
on Medicare and other health programs, and this percentage will
continue to decline if present fiscal trends continue.
The Administration's 1999 budget assumes that the federal
government will receive approximately $65.5 billion from
tobacco companies in connection with pending legislation to
approve a tentative settlement agreement between various state
attorneys general and major tobacco companies. Given the
billions of dollars expended each year by the VA to provide
health care and other benefits to veterans suffering from
tobacco-related illnesses, it is the Committee's view that the
VA and the veterans it serves should receive significant
proceeds from any such settlement. The Committee is
disappointed that the Administration's budget fails to directly
provide any settlement proceeds for the VA, and intends to take
necessary action to ensure that VA receives funds from any
tobacco settlement that is approved by the Congress.

PROJECTED SPENDING FOR VETERANS BENEFITS AND SERVICES (FUNCTION 700)
(Budget Authority in billions of dollars)
----------------------------------------------------------------------------------------------------------------
1998 1999 2000 2001 2002 2003 1998-2002
----------------------------------------------------------------------------------------------------------------
Mandatory..................................... 23.8 23.9 24.8 25.6 26.2 27.6 151.9
Discretionary................................. 19.0 18.9 18.9 18.9 18.9 19.6 114.2
-----------------------------------------------------------------
Total....................................... 42.8 42.8 43.7 44.5 45.1 47.2 266.1
=================================================================
----------------------------------------------------------------------------------------------------------------

Effects of the Balanced Budget Act on Spending for Veterans

The table above shows the projected spending levels for
veterans benefits and services under the budget agreement
reached in 1997. The totals shown for discretionary spending do
not include amounts which VA would be authorized to spend for
medical care as a result of keeping receipts which were
previously deposited in the Treasury. CBO estimates these
receipts will range from $542 million in 1998 to $615 million
in 2002. Since spending will equal the amount collected, a
bookkeeping convention excludes these amounts from the total
shown for discretionary spending.
Under the budget agreement, discretionary spending for
veterans benefits and services is projected to remain almost
constant at the 1998 level of $19 billion. Mandatory spending
is projected to rise slightly over the next five years, from
$24 billion in 1998 to $26.5 billion in 2002, an increase of
about 2 percent a year over this period. Overall spending for
veterans benefits and services would rise from $43.1 billion to
$45.4 billion, an annual rate of increase just over one percent
(compared with a projected 2.3 percent annual increase in
overall Federal spending for the same period).

Background and Committee Recommendations

Department of Veterans Affairs

veterans health administration

Medical Care

``Change'' and ``transition'' continue to characterize the
state of the VA health care system. At all levels, the Veterans
Health Administration has undergone major reorganization.
Statutory changes and new policies continue to be implemented,
primarily through VHA's 22 network offices, which to varying
degrees have exercised decentralized authority to make their
mark on the provision of care in their respective geographic
service areas. Among the changes still underway are:

Lreductions in the number of acute care beds
(down 40 percent or some 21,000 beds since September 1994) and
a decline in annual inpatient admissions of some 250,000/year;

Lan accompanying increase of 7.3 million
ambulatory care visits in the last three years;

Lfurther reallocation of medical care funds from
networks of facilities serving a shrinking patient base to
those whose funding had not kept pace with veteran population
growth;

Lredirecting resources--from merging hospitals,
closing hospital wards, and other efforts at improving
productivity--to establish new community-based outpatient
clinics (some 150 have been established);

Limplementation of new health-care eligibility
rules, which will require enrollment of most veterans as a
condition of their receiving care;

Ldevelopment of a national formulary for
pharmaceuticals and other efforts to achieve economies of scale
to increase VA purchasing power;

Lefforts to increase reliance on non-
appropriated funding sources.

With greater efficiencies at VA facilities and accompanying
changes in practice patterns, more emphasis has been placed on
providing veterans have gained increased access to primary
care. These ongoing changes also pose a large challenge for VA
managers at all levels to assure that VA effectively employs
its resources--budgetary and otherwise--to meet the needs and
expectations of a complex patient population.
As the Department wrestles with the complex management
challenges associated with major system changes, VA must also
grapple with a difficult fiscal challenge. No longer is the
VA's congressionally appropriated medical care budget the sole
source of needed revenue to support the health care system.
With the establishment of authority for VA to retain
collections and fees in the new Medical Care Collections Fund
and use those funds to supplement medical care appropriations,
Congress has given VA a powerful new incentive to maximize
collections. It has been clear, however, that the primary
source of those supplementary funds are third-party
collections, primarily from health-care insurers.
The fiscal year 1999 budget is dependent both on the
Department's increasing substantially the revenues generated
through its recovery efforts and on its ability to function
effectively with medical care appropriations which not only do
not increase, but would be $29 million below the 1998
appropriation level. Consistent with the budget agreement
approved by Congress last year, the Administration, in effect,
asks Congress to make two huge leaps of faith in advancing this
budget for VA medical care. First, it asks Congress to believe
that VA will increase its medical care collections more than
$100 million above the 1998 level, a level which the
Congressional Budget Office projects will increase only
slightly in 1999. Even more significantly, it urges Congress to
concur in the blind faith that VA can wring more than $680
million in savings out of its medical care system--by absorbing
fixed cost increases and the impact of inflation--without any
adverse effect on its medical care to veterans. Those savings
would come on top of savings squeezed from the same system in
the prior fiscal year.
As described above, the VA has made dramatic changes in its
health care delivery system. Many of the changes have been
positive. Facilities in close proximity have merged.
Redundancies and unneeded positions have been eliminated.
Underutilized hospital wards have been closed, reliance on
outpatient care has been expanded. In the aggregate, indicators
of quality have improved.
But budget-driven cuts have not been without impact on VA's
patients. Pressures to reduce costs have resulted in:

Lmedical centers cutting valued staff in needed
programs including blind rehabilitation, prosthetics, spinal
cord injury care and similar special programs which Congress in
Public Law 104-262 explicitly required VA to protect;

Lmedical centers closing needed but costly-to-
operate VA nursing home beds or placing restrictions on the
number of nursing home bed days veterans can receive;

Lmedical centers cutting home-health and other
services to veterans; and

Linstances of VA practitioners being required to
cease using expensive medications and to limit the time spent
with any patient to a matter of minutes.

While such situations are not occurring at every VA
facility, they are neither isolated events nor matters of
hearsay. With VA facilities under unyielding pressure both to
cut costs and to increase the numbers of veterans served, it is
apparent that the changes underway are not wholly ``seamless''
or painless to patients who require more than primary care
services. In a system which has decentralized authority to 22
network offices and has eliminated the requirements and much of
the means for national oversight, VA headquarters itself no
longer knows where individual patients are falling through the
cracks created by budget pressures. This Committee finds
increasing evidence, however, that some facilities have already
squeezed out what savings can reasonably be achieved and cannot
keep doing more with less spending power--except at the expense
of the care provided to veterans. With growing signs that the
system cannot sustain ``no growth'' budgets without endangering
needed programs and compromising care or access to needed
services, this Committee rejects the Administration's
overconfident view that veterans can rely on ``anticipated
management efficiencies'' to offset in their entirety increased
costs of such magnitude.
In addition to that concern, the Administration budget
projects that gross fiscal year 1999 collections will total
$677 million, a hefty increase over a current estimate for FY
1998 of $598 million. Such efforts at estimating have proven
unreliable in the past; in fiscal year 1997, VA collections
fell almost $200 million below projection targets. VA officials
have acknowledged that there is no reliable methodology on
which to base collections' projections, and no assurance that
future projections can be achieved.
Under the Administration's budget, the availability of
needed health care dollars are not simply dependent on VA
employees' response to collections' incentives; factors
completely beyond VA's control absolutely limit recovery
potential. In a recent report to this Committee, the General
Accounting Office cited a number of these factors as evidencing
the likelihood that recoveries from private health insurance
will actually decline. They include:

Lthe shift in care from inpatient to outpatient
settings;

Lincreased enrollment in managed-care health-
insurance plans;

Lchanges in how insurers process VA claims; and

Lthe aging and decline of the veteran
population.

The Committee notes that, in contrast to the heady
projections in the Administration's budget, the Congressional
Budget Office baseline projects medical care collections of
only $559 million for fiscal year 1999. In effect, this
Administration asks the Congress to join its wager that VA will
exceed the CBO collections' estimate by $118 million. It is
particularly troubling that this wager accompanies an
Administration budget request for medical care appropriations
which, as discussed above, seeks no funds for uncontrollable
increases in program costs, such as rent costs and mandatory
salary increases, (totaling $419 million) and inflation ($262
million) and blithely looks to unidentified ``management
efficiencies'' as a source for absorbing these costs. With such
a dangerous balancing act ahead, Congress can ill afford to bet
on OMB's collections' targets and risk a more than $100 million
error.

Proposed legislation.--The Administration's FY 99 budget
extends a wholly unprecedented offer to Congress. As proposed
in the budget, if the Congress enacts legislation to authorize
a ``new smoking cessation program for any honorably discharged
veteran who began smoking in the military . . . the
Administration will submit a budget amendment requesting an
appropriation of $87 million for this new activity.'' It is
apparent to the Committee that the Department of Veterans
Affairs did not initiate this request, and would be hard
pressed to defend it as a priority.
The ``smoking cessation'' proposal is ill conceived. It
ignores the existence of authority under current law to provide
such services--as part of the care furnished veterans who
enroll as VA patients. It proposes to spend substantial monies
on a new benefit which, in practice, would have to be made
available to any honorably discharged veteran. The proposal
would draw a distinction, without explanation, between the
honorably discharged veteran and veterans with general
discharges or other than dishonorable discharges, but would be
open to veterans regardless of income. While making large
numbers of veterans eligible for a limited, new benefit, the
proposal is logically flawed in providing no other services for
veterans who have or are presumed to be at risk for smoking-
related illnesses. With VA only beginning to implement a 1996
law reforming the patchwork of law which had previously
governed eligibility for VA health care, this proposal would
reinstate the confusion inherent in a veteran being provided a
service related to smoking but denied other smoking-related
care or preventive services.

Unmet long-term care need.--While the Administration's
budget proposes a new ``medical'' benefit for veterans, it does
little to assure needed availability of care for those both
eligible for, and dependent on, VA care. Specifically, this
budget does little to narrow the gap between the needs of the
aging veteran population and VA's capacity to meet their long-
term care needs. While VA has extended its capacity to provide
relatively low-cost primary care services to its patients, it
has no comparable record of achievement in meeting long-term
care needs--particularly in provision of services aimed at
avoiding institutionalization. To the contrary, VA's Advisory
Committee on the Future of Long-Term Care, in its deliberations
over the past months, has identified VA's level of commitment
to noninstitutional community-based long term care programs as
in need of a dramatic infusion of funds.
Currently, only approximately seven percent of VA long-term
care funding is devoted to noninstitutional long-term care
programming, with almost 93 percent of funds devoted to
provision of nursing home care. The small percentage dedicated
to keeping patients in their homes and communities masks the
reality that there is tremendous variability in expenditures
from network to network. Thus, while a number of networks
allocate some 10 percent of their long-term care budgets to
community-based non-institutional care, several dedicate only
half that much. Given a need for such services among the large
numbers of VA's elderly chronically ill patients, it is
apparent that VA has much catching up to do. The Advisory
Committee, for example, discussed a proposal to triple VA
funding for these programs. VA would need to boost spending by
some $250 million to meet that target. The Committee believes
that the $87 million proposed for smoking cessation programs
would be better spent if those monies were allocated instead as
a first step toward meeting aging and chronically ill veterans'
widespread need for non-institutional services. Such added
funding alone would provide no new services, however, if VA
collections fall significantly below the budget estimates.
In testimony before this Committee, VA has also recognized
a need to provide case-management services for veterans with
complex health problems. Case management services are needed by
a range of VA's patients, from the elderly, chronically ill
veteran to Persian Gulf veterans with complex undiagnosed
illnesses. This budget, however, is not only silent as to
dedicating staff to address this need, it actually proposes a
reduction in VA's health care workforce by 2,600 FTEE. With a
staffing reduction projected to occur at the same time as a
planned increase in patients treated, there is little basis to
believe that medical centers will have sufficient incentive or
capacity to establish new case-manager positions. Yet such
positions are needed to ensure that veterans in greatest need
do not ``fall through the cracks''.
VA's resource allocation system (VERA) does provide its
networks with higher per patient funding for special care
patients, those suffering from such chronic conditions as
schizophrenia and dementia, spinal cord injury, and AIDS, who
are necessarily high intensity users of medical care. The
General Accounting Office's audit of VA's implementation of
VERA makes apparent, however, that there is no system or
uniformity associated with the distribution of those funds by
VA's networks to their VA medical centers. Such variability may
be attributable to the competing pressures for funds within the
networks. For example, networks are required to absorb the
often high recurring and nonrecurring costs of construction
activations. Moreover, there is no requirement on the networks
that such special care funding support in full the needs of
special care patients, and no evidence that they have been so
used. In fact, recent testimony before this Committee suggests
that they are not. Accordingly, the Committee is concerned that
the closure of many inpatient programs and anticipated further
reduction in employment levels will leave many networks without
the capacity to support adequately the growing number of
deinstitutionalized chronically mentally ill veterans and other
chronically ill veterans with little or no community support
mechanisms.
The Committee believes it is important and prudent in the
face of further anticipated deinstitutionalization, that new
monies and accompanying FTEE be targeted to ensure intense
case-management programs for the most complex cases. The
Committee believes this investment could ultimately avoid the
need to reinstitutionalize patients. VA reports that it
provides care to more than 146 thousand ``special care''
patients. Dedicating 980 FTEE to case management support could
ensure closely supervised, coordinated care for some 10 percent
of the most complex of cases within the special care
population.
Accordingly, the Committee recommends an increase above the
amount recommended by the Administration for appropriation to
the medical care account of $481 million, encompassing the
following:

Lthe addition of $118 million to cover the
difference between CBO's projection of medical care collections
in FY 1999 and VA's collections' target;

L$200 million to cover that part of the
projected $681 million health-care cost increases and inflation
which cannot reasonably be absorbed by ``management
efficiencies'' without putting valued veterans' programs and
services at risk;

La reduction of the $87 million proposed for a
smoking cessation program, and the addition of $95 million to
expand community-based non-institutional long term care
services; and

L$68 million to establish case-management
programs at VA medical centers and large clinics.

Such an increase in the medical care appropriation would
reduce the very large risks facing veterans who depend on the
VA health care system while enabling the Department to begin to
expand much needed programs to care for the most vulnerable of
VA's patients.

Medical Research

The $300 million fiscal year 1999 budget for medical and
prosthetic research for the first time in many years recognizes
the real value of this program, and the dangers in reducing
VA's research efforts. The Department has designed well-
developed strategies and performance goals for its research
program which provide confidence that a historically strong
effort will be both focused and provide maximum benefit. The
Committee is pleased that in proposing a substantial increase
over the fiscal year 1998 appropriation, this budget would
allow for new initiatives in areas with particular relevance to
veterans.

Major Medical Construction

As the VA health care system undergoes a significant
transformation from providing care primarily in hospital wards
to offering more outpatient services in an expanding number of
both facility-based and community-based outpatient clinics,
Congress expects VA to continue to rely on its expansive
hospital-based infrastructure as a foundation for its clinical,
education and research activities. Much of that infrastructure
is decades old, and in many cases fails to meet patient care,
safety, and privacy needs.
In recent years, constrained major construction budgets
have resulted in fierce competition for scarce funding among
projects with demonstrable compelling needs. As limited budgets
have delayed approval of long pending initiatives, projects
have undergone repeated scrutiny and reassessment. It is clear
that VA's highest priority projects are well justified and are
limited to addressing the most serious needs--to improve
ambulatory care capacity, to remedy seismic problems, and to
meet current patient care standards and requirements. It is
troubling, that, with the backlog of worthy proposals, the
Administration budget would fund only two major medical
construction projects. While the Committee recognizes the need
for these two projects, it finds very troubling this budget's
failure to request funds for what the Department itself has
identified as its three highest priority projects, ambulatory
care additions to medical centers serving major metropolitan
areas. The three projects, in Cleveland, Tucson, and
Washington, D.C., would provide needed space for ambulatory
treatment now furnished in buildings constructed for much
smaller outpatient workloads 40 or more years ago. Similarly,
the budget would not fund two other highly ranked projects, one
at the Palo Alto, California VA Medical Center which Congress
authorized in Public Law 104-262, and the other at the Dallas,
Texas VA Medical Center.
Mindful of competing budget pressures, the Committee
recommends a funding level of $237 million, a $140 million
increase above the Administration's proposal.
While the Administration's budget clearly does not assign a
priority to major medical construction, it is perplexing that
greater priority is not given to either the minor construction
program or to funding which supports the State home
construction program.

Minor Construction

The minor construction account, funding initiatives of $4
million or less, supports a wide range of needs. Operating in
facilities which are often many decades old, VA requires the
flexibility provided by this account to correct safety
deficiencies; replace utility, heating and cooling systems;
meet patient privacy standards, including those dictated by the
increasing number of women patients; renovate space for
provision of ambulatory care; correct seismic deficiencies;
clean-up environmental contamination and remove asbestos; and
address other needs. Given growing, rather than diminishing,
needs in the Department's huge infrastructure, it is difficult
to understand a proposed cut of $34 million in this account.
Extensive systemwide needs and the absence of any rationale for
the proposed reduction, compel the Committee to recommend
restoration of those monies and full funding at the current
fiscal year level of $175 million.

State Home Construction

This program provides funding for up to 65 percent of the
cost of construction or needed renovation to help assure that
States can assist in meeting veterans' needs for nursing home
and other long term care. The states have been reliable
partners in this effort, and many have appropriated monies in
advance to establish priority for grant funding in accordance
with the governing statutory priority system. At this time,
many states have already appropriated their share of
construction costs (to establish priority #1 level ranking) for
as yet unfunded construction projects, for a total of more than
$112 million.
The fiscal year 1999 budget proposal to cut funding for
this program by $43 million sends a strange signal to the VA'
state partners. In the face of a large backlog of unfunded
projects, it is unreasonable to cut funding by more than half.
Rather than asking states which have put up their share of
funding in advance to wait for outyear appropriations, the
budget should reflect a commitment to eliminate the backlog as
soon as possible. Accordingly, the Committee proposes an
appropriation of $80 million for fiscal year 1999.

Medical Administration and Miscellaneous Operating Expenses (MAMOE)

The MAMOE budget funds the headquarters' operations of the
largest health care system in the country. Congress looks to
VA's headquarters not simply to set policy, but to achieve
results. It expects the Under Secretary for Health to manage
and oversee a system which is marked not only by its size but
by its increasing complexity. The Under Secretary's
headquarters staff would shrink by some 16 FTEE under the
fiscal year 1999 budget. Such a cut would come at a time of
growing concern about inconsistent management of VA programs.
VHA's streamlined headquarters staff is adequate in size to
provide policy guidance within a system which vests network
directors with broad authority for operations and oversight. It
has become increasingly apparent, however, that with the
limited role charted for headquarters, there no longer exists
adequate oversight, or capacity for oversight, of field
activities. Quality management represents perhaps the most
striking example of marked inconsistency throughout the VA
health care system, and one which requires a far more active,
vigilant headquarters' role. In a recent report on quality
management in VHA, the Department Inspector General's Office of
Healthcare Inspections highlighted this concern:

``VHA has many QM policies and processes, which, if
applied consistently and effectively, would assure the
best possible treatment of VHA patients . . . VHA is
challenged with having to ensure the operation of an
effective QM program in what may be one of the largest
and most complex healthcare systems in existence today
. . . [However] VHA's process of devolving management
functions to the lowest management level, and the
emphasis that has been placed on performance measures .
. . has led to a potential inability of top VA managers
to know the status of QM implementation in the field.
OHI believes that this may have occurred because of a
diminution of QM-specific staff at the Headquarters and
VISN levels, and because of the remaining employees'
need to emphasize performance measurement. By
implication, a weakened QM program . . . means that top
managers cannot know definitively that VAMC
practitioners are maintaining an adequate level of
quality in patient care.''

The Committee shares such concerns, and believes that a
reduction in staffing would exacerbate the kinds of problems
the Inspector General has highlighted. Based on these concerns,
the Committee recommends an additional $2 million for this
account to restore proposed staffing cuts and provide
additional staff for quality management oversight.
The Committee recommends 20 additional staff, for a total
of 560 employees for the Medical and Miscellaneous Operating
Expenses account. These additional positions would be assigned
to system-wide quality assurance programs in the Office of
Quality and Performance and other appropriate areas reporting
to the Under Secretary for Health. Such positions should
monitor and enforce compliance of headquarters' quality-
management directives; coordinate and monitor quality assurance
activities, including VA's new Patient Safety Improvement
initiative; and ensure timely access, analysis, and response to
information collected from VHA's automated databases including
clinical indicators of quality. New quality assurance employees
should also be responsible for ensuring appropriate levels of
credentialed, privileged and board-certified staff at each
level of the organization.

VETERANS BENEFITS ADMINISTRATION

Operation of Benefit Programs

The General Operating Expenses account funds full time
employee equivalents (FTEE) and operating expenses for both the
Veterans Benefits Administration (VBA) and VA's Central Office
(headquarters). VBA administers a broad range of non-medical
benefits to veterans, their dependents, and survivors through
57 regional offices or medical and regional office centers.
These programs include compensation and pension, education,
vocational rehabilitation, insurance, and loan guaranty (home
loans). VBA is also responsible for processing applications for
these programs. Headquarters includes the Secretary's staff and
other VA support staff, and is mainly located in Washington,
DC.
The Department proposes to reduce overall VBA staffing by
125 FTEE in fiscal year 1999, largely through reductions in
information technology and support staff positions. The
Committee does not support the proposal. This would be a
decrease of 698 FTEE from the fiscal year 1997 actual
employment level. The Committee recommends an increase of $15
million to support an additional 300 FTEE. These additional
FTEE should be utilized in direct service positions and for
quality review activities described below.
The Committee does not support the proposed reduction of
FTEE because VBA's backlog of claims waiting to be processed is
again increasing, approaching 400,000 claims. The situation is
simply this: the funnel into which all the work is being poured
is too small. The adverse effects of the overflow are a decline
in the quality of work and employee morale. The Administration
and Congress must recognize that benefit programs cannot be
delivered effectively without sufficient well-trained staff.
To illustrate the Committee's concern about the quality of
work being affected by FTEE reductions, VA recently completed
its first Systematic Technical Accuracy Review (STAR). This
review of a national sample of original compensation claims
found that 36 percent of the claims contained at least one
serious error. In that group of claims, errors average over
four per claim. Clearly, this error rate is substantially
higher than VA had ever acknowledged and the Committee highly
commends VBA for its candor and willingness to finally document
what most stakeholders had been saying for years. The Committee
strongly believes this type of quality review must continue and
recommends an additional 10 FTEE and $600,000 to continue this
vital program.

Compensation & Pension Service(C&P).--The ability of the VA
to provide timely and quality benefits delivery is heavily
dependent on a combination of proper staffing levels, effective
implementation of computer modernization initiatives, training
and retention incentives, and inter-departmental cooperation
between the various VA agencies and military service
departments. Over the past decade the number of trained
personnel in the adjudication division has declined by
approximately 40 percent. The Committee commends the Department
for reversing this trend with a 140 FTEE increase proposed for
adjudication services in fiscal year 1999. As mentioned before,
this increase comes largely from redistribution of resources
within the C&P service and its related support staff. The net
gain for the C&P Service following redistribution is seven
FTEE. With processing time still averaging over 130 days for an
original compensation claim, and remand rates from the Board of
Veterans' Appeals (BVA) still approaching 50 percent of the
Board's decisions, the Committee supports the 140 FTEE increase
in the C&P Service proposed in fiscal year 1999. The Committee
also recommends 100 FTEE be added to the C&P Service from the
300 FTEE in overall VBA employment recommended by the
Committee.

Computer Based Training Initiative.--The Committee commends
the VBA for developing an innovative approach to computer based
training in a cooperative adult learning environment. The
initial training module developed for certifying a case to the
BVA has been completed and will be implemented during the
current fiscal year. The development of additional training
modules is expected to reduce the time necessary to train key
VA decision-makers by at least 50 percent. Given the
anticipated savings in cost and improved performance by well-
trained employees, the Committee believes that the development
of additional computer based training materials should be
accelerated and recommends an additional $6,000,000 for this
purpose.

Vocational Rehabilitation and Counseling Program (VR&C).--
The goal of the Vocational Rehabilitation and Counseling
Program is employment of disabled veterans and certain
dependents. To accomplish that goal, VR&C is authorized to
provide all services and assistance necessary to enable
service-connected disabled veterans to become employable,
obtain and maintain suitable employment, or to achieve maximum
independence in daily living. Additionally, VR&C is authorized
to provide educational and vocational counseling services to
eligible active duty members, veterans, and dependents. Last
year, about 9,000 veterans were rehabilitated and VA projects a
slight decline in program participants from 1997 and 1998
levels. Vocational rehabilitation specialists currently carry
an average caseload of about 300 and the small decline in
overall participation will not measurably affect the average.
The General Accounting Office has issued three reports
since 1984 citing significant program management problems, such
as an inability to identify program costs, high drop-out rates,
poor case management and an almost blanket use of college
degree programs for rehabilitation. The Committee expects VR&C
to pursue a more integrated working relationship with the
Veterans' Employment and Training Service and implement several
recent management initiatives until these significant problems
are overcome. While the Committee is supportive of the budget's
additional 12 FTEE for the Vocational Rehabilitation and
Counseling Service, the Committee notes that this is about 26
FTEE below the 1997 actual employment level for the VR&C
Service. The VA estimates that an additional 87 FTEE would be
required to enable VR&C staff to eliminate its backlog of cases
and provide an adequate level of services.

Education Service.--VA's Education Service is responsible
for several programs, most notably the Montgomery GI Bill
(MGIB), which provides earned education assistance benefits to
400,000 veterans, active duty, and National Guard and Reserve
personnel, as well as programs for survivors of veterans who
are 100 percent disabled, died of a service-connected
disability or were killed on active duty.
The Committee rejects the proposed reduction of 25 FTEE for
the Education Service in the President's fiscal year 1999
budget. Such reductions will result in a lower level of service
to veterans because automation and business process
reengineering initiatives are not yet mature enough to
sufficiently increase administrative efficiencies.
The Committee finds it surprising that VA has not
implemented an electronic method of monthly certification of
enrollment, which would eliminate nearly all of the, three
weeks required at a minimum to process monthly education
benefits. The Committee estimates that postal savings alone
will pay for the system within two years. The Committee also
supports the requested $4.5 million for the automation of
education program management.

BOARD OF VETERANS' APPEALS

The Board of Veterans' Appeals (BVA) has made progress
toward meeting the production levels needed to reduce the
backlog of appeals pending. The fiscal year 1996 backlog of
over 60,000 appeals has now been reduced to under 35,000 as a
result of additional resources provided over the past two
years, as well as several management initiatives. In fiscal
year 1997, the BVA made over 43,000 decisions, an increase of
10,000 over the previous year. Unfortunately, 42 percent of
those decisions were remands back to the regional offices,
another example of the quality problems that continue to plague
the Regional Offices.
Clearly, production trends are improving at the BVA and the
Committee notes that BVA total processing time for all
categories of claims was reduced from 1,146 days in fiscal year
1996 to 1,027 days in fiscal year 1997. The Administration has
requested an additional three FTEE to serve as counsel to the
Board members and the Committee supports that request. An
independent consultant retained to study the processes used
internally by the Department to prepare cases appealed to the
United States Court of Veterans Appeals has suggested that the
Board should prepare an appellate record as it reviewed each
case on appeal. The Committee also notes that there is a
substantial backlog of cases where veterans have requested
personal hearings by the Board near their residence. Since
additional staff are needed to address both of these
situations, the Committee is recommending an additional $1
million for the Board's operations in fiscal year 1999.

INSPECTOR GENERAL

Over the past five fiscal years (FY 1993-97), OIG audits
and inquiries identified cost savings and cost avoidance in
excess of $1.6 billion. This represents an average rate of
return of $10 for every $1 spent by the OIG. Despite the
efficiencies which stem from the work of the OIG, there is a
significant amount of important work which the Office of
Inspector General (OIG) cannot accomplish with the resources it
has available today and under the proposed 1999 budget. Present
staffing levels are inadequate to meet present department
needs. Therefore, the Committee recommends an additional $3
million for increased OIG staffing. The increased OIG funding
provided in the Committee's budget represents a sound
investment strategy which will help identify waste, fraud and
abuse within the VA, and save VA money in the process.

NATIONAL CEMETERY SYSTEM

The National Cemetery System (NCS) administers national
shrines honoring those who served in uniform and should be
maintained as places of high honor, dignity and respect.
Currently, 149 cemeteries and soldiers' lots located in 41
states, the District of Columbia and Puerto Rico comprise the
National Cemetery System. Since the first cemeteries for
American soldiers were established in 1862, approximately 2.4
million decedents have been interred in national cemeteries and
approximately 6.4 million headstones and markers have been
furnished.
For fiscal year 1999, the Administration is proposing an
increase of $7.8 million to fund NCS's ever-enlarging
operations. This includes funds for 21 additional FTEE to
accommodate increased workloads throughout the system as well
as staffing for a new cemetery in Tahoma, Washington, and
start-up staffing for new cemeteries being constructed near
Chicago, Illinois; Dallas, Texas; and Albany, New York. The
Committee is in full support of the Administration's request
for an additional $7.8 million, including 21 FTEE, for the
National Cemetery System.
Between fiscal years 1995 and 2010, the veteran population
will decrease by six million (23 percent). As a result, NCS
faces an increasing workload because many families of the
remaining 7.5 million veterans of the World War II generation
will seek burial in a national cemetery. The NCS's workload per
FTEE will continue to grow in all areas of operations. For
example, the total number of gravesites and acreage maintained
will increase every year. The number of headstones and memorial
certificates delivered will also increase. In fiscal year 1997,
the VA interred 73,786 veterans and family members. In fiscal
year 1999, VA expects to inter 80,300 and by the year 2003, the
number of interments is projected to increase to 93,600. The VA
also expects to process 342,000 grave marker applications in
fiscal year 1999. NCS must have both human and material
resources to accommodate these increases. Similarly, the number
of gravesites maintained is estimated to exceed 2.3 million in
fiscal year 1999.

National Cemetery System Operating Account

The Committee is pleased that VA is proposing to increase
funding by $1.5 million for maintenance and repair, grounds
maintenance and related supplies. These funds are vital to
preserving the appearance of the cemeteries. The Committee
recommends an additional $1 million to accelerate the
improvements of the System's appearance.
The National Cemetery System maintains approximately 400
buildings and 100 miles of roads. To help with that
maintenance, VA has an inventory of more than 8,000 pieces of
equipment with an estimated value of $23 million, approximately
$7.2 million of which is past due for replacement.

Cemetery Construction

The VA's construction needs for new and existing cemeteries
are addressed through Major and Minor Construction
appropriations. NCS has focused construction planning on
providing new cemeteries in areas of the country with the
greatest unserved veteran population, extending the life of
existing cemeteries through gravesite development, and
repairing and maintaining the infrastructure of the system. The
Committee notes there are no funds requested for additional new
cemeteries beyond the four scheduled to open through 1999. The
Committee recommends that of the additional funds recommended
for VA construction, $500,000 be used for planning efforts to
identify sites for additional NCS cemeteries.
The Administration's fiscal year 1999 proposal contains $12
million in major construction projects for columbaria at the
Florida and the Ft. Rosecrans, California, National Cemeteries.
The Committee fully supports those proposals.
Minor construction projects, which are those costing less
than $3 million, total $14 million for fiscal year 1999, and
the Committee supports that request.

State Cemetery Grants Program

The State Cemetery Grants Program provides grants to assist
the states in establishing, expanding, and improving state-
owned veterans cemeteries. The State Cemetery Program is funded
at $10 million for fiscal year 1998. Since its establishment in
1980, $57.6 million has been obligated through fiscal year
1997. Nearly 100 grants have been awarded to 25 states, Saipan
and Guam since the program's inception. The Committee supports
sufficient funding to accommodate any state seeking to
participate in the State Grants Program.

Arlington National Cemetery

Arlington National Cemetery is the nation's premier resting
place for veterans. The cemetery is currently the final resting
place for over 250,000 remains. In fiscal year 1999, Arlington
Cemetery officials estimate they will add about 5,600 remains
to that total, and conduct 2,700 non-funeral ceremonies.
The Administration's request is $150,000 below the fiscal
year 1998 appropriation. The Committee does not support that
request and recommends an additional $1 million to support
operations and maintenance at Arlington National Cemetery.

U.S. Court of Veterans Appeals

Department of Labor

VETERANS' EMPLOYMENT AND TRAINING SERVICE

Congress has determined that our nation has a
responsibility to meet the employment and training needs of
veterans. To accomplish those goals, the Assistant Secretary of
Labor for Veterans' Employment and Training (ASVET) is
authorized to implement training and employment programs for
veterans. The ASVET also acts as the principal advisor to the
Secretary of Labor with respect to the formulation and
implementation of all departmental policies and procedures
which affect veterans.
The Committee is aware of the significant changes in the
national labor exchange system. States are changing the way
they deliver employment services and adopting new service
delivery models ranging from devolving state programs to the
county level to privatizing some or all employment functions
and instituting one-stop employment centers.
Since the Veterans' Employment and Training Service (VETS)
and its state-based Disabled Veterans Outreach Program
Specialist (DVOP) and Local Veterans Employment Representative
(LVER) system depends upon the state employment services, VETS
must adopt new strategies to deliver employment services to
veterans. During the next year, the Committee expects the
Department of Labor to provide a plan to evolve the veterans'
employment system to function effectively in the new labor
exchange marketplace.

Disabled Veterans' Outreach Program

Under section 4103A, title 38, United States Code, the
Secretary of Labor is required to annually make available
sufficient funds for use in each state to support the
appointment of one DVOP specialist per 6,900 veterans of the
Vietnam era, veterans who entered active duty as a member of
the armed forces after May 7, 1975, or service-disabled. For
fiscal year 1999, this formula results in 2,082 DVOPS. However,
the Administration's budget provides funds to support only
1,440 DVOP positions, 641 below the Congressionally-mandated
level. Accordingly, the Committee recommends that an additional
$36,065,000, for a total of $116.1 million, be provided for the
DVOP program. The Committee notes that this full funding level
will result in an estimated 50,000 additional veterans placed
in jobs.
The Disabled Veterans' Outreach Program (DVOP) provides
intensive employment and training services to service-connected
disabled veterans and other veterans in need of job search and
placement assistance. DVOPs serve as workshop facilitators for
the Transition Assistance Program (TAP), a 3-day program that
provides transition counseling, job-search training and
information, placement assistance and other information and
services to servicemembers who are within 180 days of
separation from active duty. DVOPs also develop job and job-
training opportunities for veterans through contacts with
employers. Additionally, DVOPs provide assistance to community-
based organizations and grantees who provide services to
veterans under other federal and federally-funded employment
and training programs, such as the Job Training Partnership Act
and the Stewart McKinney Act.

Local Veterans' Employment Representatives

Section 4104(a)(1), title 38, United States Code, mandates
that the Secretary of Labor make available funding to support
the appointment of at least 1,600 full-time LVERs and the
states' administrative expenses associated with the appointment
of that number of LVERs. The Committee supports full funding at
the statutorily-mandated level of $96.7 million for the 1,600
positions, an increase of $19,622,000 over the funding level
proposed in the Administration's budget. VETS estimates that
the additional 300 LVER positions provided by full funding will
result in 50,000 more veterans being placed in jobs.
The Local Veterans' Employment Representative (LVER)
program was established to functionally supervise the provision
of job counseling, testing, job development, referral and
placement to veterans in local employment services offices.
LVERs participate in TAP workshops and maintain regular contact
with community leaders, employers, labor unions, training
programs and veterans service organizations in order to keep
them advised of eligible veterans available for employment and
training. LVERs also provide labor exchange information to
veterans and promote and monitor participation of veterans in
federally funded employment and training programs. Finally,
LVERs monitor the listing of jobs by federal contractors and
subsequent referrals of qualified veterans to these employment
openings, refer eligible veterans to training, supportive
services, and educational opportunities, and assist, through
automated data processing, in securing and maintaining current
information regarding available employment and training
opportunities.
VETS also manages the Homeless Veterans Reintegration
Program (HVRP). The program is designed to provide support
services to local agencies targeting homeless veterans with
employment assistance. For the past two years, the President
and the Appropriations Committee have failed to support funding
for the program, while the law creating this program authorizes
$10 million per year. This year the President has proposed $2.5
million for HVRP. The Committee recommends funding HVRP at the
authorized level of $10 million to increase services to
homeless veterans.

National Veterans Training Institute

Proposed Legislation

Cost of Living Adjustment (COLA).--The Committee supports a
cost-of-living adjustment (COLA) for compensation and
Dependency and Indemnity Compensation, and education recipients
equal to the COLA calculation for Social Security recipients.

Legislative Items Which the VA Committee May Report with Small Direct
Spending Implications

Extend expired authority to allow VA medical center
retention of certain pension benefits payable to veterans who
are being provided nursing home care at VA expense.--Veterans
without dependents who are being provided nursing home care by
the Department and who receive pension benefits have the amount
of their pension reduced to $90 per month after three calendar
months of nursing home care. The VA facility providing the
medical care had the authority to retain amounts of pension
above $90 which would otherwise be paid to the pensioner and to
use those funds for operating expenses. This authority expired
on September 30, 1997. The Committee estimates the first year
cost of reinstating this authority at $2 million and the five
year cost at $11 million.

H.R. 3039, Transitional Housing for Homeless Veterans.--The
bill would authorize VA to guarantee loans made to providers of
transitional housing for homeless veterans. The number of
projects is limited to 15 and the total amount of loans
guaranteed is limited to $100,000,000.
The Committee estimates the first year cost at $1 million
and the five year cost at $7 million.

Increase Auto Allowance and Specially Adapted Housing
Allowance for Severely Disabled Veterans.--VA is authorized to
provide a one-time reimbursement to severely disabled veterans
of $5,500 for the cost of an automobile. This amount has not
changed since 1988, while the cost of a new automobile has
increased to nearly $22,000 in 1997. VA also provides a grant
to offset the cost of purchasing or modifying a home to
accommodate a veterans' disabilities. The current benefit level
of $38,000 was set in 1988.
The Committee estimates the first year cost at $7 million
and the five year cost at $34 million.

H.R. 1877, Extend VA work study authority.--VA authorizes
institutions such as colleges and other government programs to
hire veterans to assist with veterans-related work. The program
pays the higher of the federal or state minimum wage. The
Committee has introduced legislation to broaden the
organizations eligible to apply for work study positions.
The Committee estimates the first year cost at $1 million
and the five year cost at $5 million.

Compensation for Tobacco-Related Illnesses

As part of its fiscal year 1999 request, the Department of
Veterans Affairs submitted a legislative proposal to limit
compensation for tobacco-related illnesses to those who
contract such illnesses on active duty or within the standard
one year presumptive period following service. However, the
Administration only proposes spending about $1.5 billion (9
percent) of the OMB-estimated $16.9 billion in savings to
improve three veterans' benefit programs. The Congressional
Budget Office estimates savings from enacting such legislation
at $10 billion over five years.
VA has begun processing and paying service-connected
disability compensation for tobacco-related illnesses as a
result of a 1997 decision by the VA General Counsel. The
General Counsel's decision held that if a disease or death can
be shown to be a result of nicotine addiction acquired in
military service, service-connected compensation is warranted.
Following that decision, in a May 9, 1997, letter to the
Speaker accompanying the legislative proposal, former VA
Secretary Jesse Brown stated that such payments could cause a
loss of public support, thereby threatening the integrity of
the veterans disability compensation system. The Committee
concurs with former Secretary Brown's concerns about the
integrity of the compensation system. The Committee also
believes that paying compensation to veterans for tobacco-
related illnesses goes beyond the government's responsibility.
There is a significant philosophical difference between
service-connected compensation and other disability programs
such as Social Security or the VA pension program which make no
distinctions based on when a disability or illness occurs or is
first diagnosed. Service-connected compensation, on the other
hand, is based on the presumption that a person would not have
the illness or disability save for some event or circumstance
beyond the person's control. A policy of paying compensation
for tobacco-related illnesses absolves the veteran of personal
responsibility for his or her choices about tobacco use. In the
past, Congress has determined that the individual, not the
federal government, is responsible for illnesses which are
related to the use of alcohol or drugs. Thus, a policy of
paying benefits for illnesses related to the use of tobacco
would be inconsistent with these prior determinations.
The Committee is also very concerned that the projected
annual caseload of 540,000 tobacco-related claims would
overload the adjudication system and lengthen the already-too-
long processing time for all types of claims. VA estimated in
1997 that processing time for an original compensation claim
would increase from 113 days to 312 days.
To reflect the nation's commitment to its veterans, the
Committee will recommend legislation that will use all of the
savings from enacting a limitation on compensation for tobacco-
related illnesses to improve a wide range of programs. These
are programs affecting our most disabled veterans, surviving
dependents, separating service members, unemployed and under-
employed veterans, and those seeking an education or a home.
Although the Committee is still considering a number of
benefit enhancement proposals, the Committee has made it clear
that an increase in the Montgomery GI Bill is warranted and
long overdue. Therefore, to implement a 40 percent increase in
the basic education benefit payment over the next two fiscal
years, the Committee recommends a 20 percent increase in the
Montgomery GI Bill benefit for fiscal year 1999 and a 20
percent increase for fiscal year 2000. This would be the most
significant increase in veterans' education benefits since the
Montgomery GI Bill was enacted in 1985 and would decrease the
gap between the cost of higher education and the level of
benefits due to inflation in education costs.
The cost of education has increased at over seven percent
per year since the inception of the Montgomery GI Bill. Today a
veteran with two years of honorable military service receives a
maximum basic benefit of $3,213 for a nine month school year,
from the Montgomery GI Bill (MGIB). But the average annual cost
in 1996 for tuition, room and board, fees, books and
transportation at a public institution was $10,759, a total
increase of 109 percent since 1987. For private schools, the
annual cost is now $20,003, an increase of 84 percent since
1987.
As a result, the Montgomery GI Bill falls short by $7,546
annually for a public school and $16,790 for a private school.
By way of comparison, the current AmeriCorps education benefit
of $4,725 per year for two years exceeds the earned MGIB basic
benefit on a per school year basis by $1,512. In addition,
persons participating in Americorps are also eligible for
additional benefits such as health care and child care.
Further, GI Bill benefits count as income or resources when
calculating a veterans' eligibility for all other federal
education assistance programs. In stark contrast, AmeriCorps
benefits do not count against other federal education grant and
loan programs. As a result, because of their GI Bill benefits,
veterans are often eligible for less federal financial aid than
their non veteran contemporaries.

Additional and Dissenting Views

``Particularly onerous is a legislative proposal to repeal
the VA's authority to pay compensation to veterans or their
survivors for disabilities related to tobacco use in military
service. The `savings' from denying compensation to those
veterans and their families would then be used to boost
spending for other non-VA programs. Such a proposal is an
irrational reversal of policy. I find it totally unfair and
unjustified to pillage veterans programs . . . ''. Arthur H.
Wilson, National Adjutant, Disabled Veterans of America, DAV
Magazine, March / April, 1998.
On the proposal to enact legislation to significantly
preclude the granting of service-connection for tobacco-related
illnesses, the National Adjutant of the Disabled American
Veterans unquestionably speaks for millions of his fellow
veterans. As a matter of principle, the Administration's
proposal to enact legislation to significantly limit the
granting of service-connection for disabilities related to
initial tobacco use in military service and a resulting
nicotine addiction is rejected.
In defending its proposal, VA has stated that the denial of
service-connected compensation to veterans for smoking related
illnesses resulting from a nicotine addiction developed in
service is needed to preserve the integrity of the VA
compensation system. In fact, the opposite is true. The
integrity of VA's compensation system will be undermined if
Congress were to enact new legislation prohibiting service-
connected compensation for smoking related illnesses.
This is also an issue of equity for veterans. Social
Security programs provide income for individuals with tobacco-
related disabilities. Once a disability is determined to be
chronic (having a long-term effect on an individual's ability
to re-enter the workforce), Social Security Disability
Insurance is provided for disabled workers with an adequate
number of work credits. Supplemental Security Income is a
needs-based program for those disabled persons who have long-
term illnesses and limited income and resources. These programs
do not attempt to base eligibility for those with smoking-
related disorders on a different set of criteria than exists
for other disabilities. Neither should VA base its compensation
for smoking-related compensation on factors other than those it
establishes for others with service-connected disorders.
As noted in the Committee's report, the Administration has
assumed ``savings'' of $17 billion from enactment of this
proposed legislation, but only $1.5 billion of these savings
(or less than ten percent of these resources) are proposed to
be used to enhance veterans benefits and service. Denying
earned benefits to our Nation's veterans is injurious; using
those ``savings'' to enhance non-veteran programs adds insult
to that injury. While estimates of ``savings'' expected from
enactment of the Administration's proposed legislation vary
significantly, if such legislation were to be enacted, all
``savings'' should be used to enhance veterans benefits and
services, as the Committee's report has noted.
The benefit increases for the Montgomery GI Bill education
program and the Survivors' and Dependents' Education program
included in the Administration's budget request for fiscal year
1999 are long overdue, demonstrably needed, and strongly
supported on their own merit. The real value of these programs
has been eroding for years as the costs of education have
soared. The needs of veteran students have been ignored for too
long. However, the Administration's proposed linkage between
the recommended increase in VA educational benefits and the
enactment of controversial legislation to repeal existing
authority to provide compensation for tobacco-related
disabilities should be rejected. Our veteran students have more
than earned their right to meaningful educational assistance
through their service in America's Armed Forces. The education
benefit increases included in the Administration's proposed
budget are the right thing to do. The proposed increases in
veterans' education benefits should be provided by a grateful
Nation with no gimmicks or strings attached.
If Congress were to accept the Administration's artificial
and inappropriate linkage of veterans' education benefits and
veterans' compensation, it will not only be breaking faith with
America's veterans, but also would potentially establish a
frightening precedent. Which existing veterans benefit will
Congress be called on to reduce or repeal next in order to
provide a meritorious increase for another benefit program?
Which veterans or dependents will next be forced to forego
current benefits so the benefits of other veterans can be
enhanced?
In its proposed fiscal year 1999 budget, the Administration
has proposed legislation to pay full disability compensation
benefits to Filipino veterans and their survivors residing in
the United States. Currently, these veterans and survivors
receive benefits at one-half the amount their U.S. counterparts
receive. The Administration's proposal is strongly supported
and recommended.
Finally, for the record, it should be noted that the
increase in VA research funding, which the Committee is pleased
to recommend for next fiscal year, was proposed by the
Administration. In this respect, the Committee should give
credit where credit is due.

Lane Evans
Joseph P. Kennedy II
Bob Filner
Luis Gutierrez
Corrine Brown
Ciro Rodriguez

STATISTICAL DATA--WAR VETERANS AND DEPENDENTS

(As of October 31, 1998)

American Revolution (1775-1784)

Participants.....................................................290,000
Deaths in service..................................................4,000
Last veteran died Apr. 5, 1869..................................Age 109.
Last widow died Nov. 11, 1906....................................Age 92.
Last dependent died Apr. 25, 1911................................Age 90.

War of 1812 (1812-1815)

Participants.....................................................287,000
Deaths in service..................................................2,000
Last veteran died May 13, 1905..................................Age 105.
Last widow died June 28, 1936................................Age unknown
Last dependent died Mar. 12, 1946................................Age 89.

Indian Wars (Approx. 1817-1898)

Participants.....................................................106,000
Deaths in service..................................................1,000
Last veteran died June 18, 1973.................................Age 101.

Veterans and Dependents on Compensation and Pension Rolls

Surviving spouses......................................................1
Children...............................................................1

Mexican War (1846-1848)

Participants......................................................79,000
Deaths in service.................................................13,000
Last veteran died Sept. 3, 1929..................................Age 98.
Last widow died June. 20, 1963...................................Age 89.
Last dependent died Nov. 1, 1962.................................Age 94.

Veterans and Dependents on Compensation and Pension Rolls

Surviving spouses....................................................287
Children..............................................................27
Veterans..............................................................15

Civil War (1861-1865)

(Confederate)

Participants..................................................*1,000,000
Deaths in service...............................................*133,821
Last Confederate veteran died Mar. 16, 1958.....................Age 112.

(Union)

Participants...................................................2,213,000
Deaths in service................................................364,000
Last Union veteran died Aug. 2, 1956............................Age 109.

Veterans and Dependents on Compensation and Pension Rolls

Surviving spouses......................................................2
Children..............................................................15

Spanish-American War (1898-1902)

Participants.....................................................392,000
Deaths in service.................................................11,000
Last veteran died Sept. 10, 1992................................Age 106.

Veterans and Dependents on Compensation and Pension Rolls

Surviving spouses....................................................660
Children.............................................................326

World War I (1917-1918)

Participants...................................................4,744,000
Deaths in service................................................116,000
Living veterans^#........................................4,800

Veterans and Dependents on Compensation and Pension Rolls

Parents................................................................2
Surviving spouses.................................................43,687
Children...........................................................6,899
Veterans.............................................................666

World War II (Sept. 16, 1940-July 25, 1947)

Participants
.............................................^a}16,535,
000
Deaths in service................................................406,000
Living veterans
.........................................^b}c}6,319,000

Veterans and Dependents on Compensation and Pension Rolls

Parents............................................................2,810
Surviving spouses................................................296,009
Children..........................................................20,084
Veterans.........................................................781,616

Korean Conflict (June 27, 1950-Jan. 31, 1955)

Participants
............................................^a}d}6,807,
000
Deaths in service.................................................55,000
Living veterans
.....................................^b}c}e}i}4,179,000

Veterans and Dependents on Compensation and Pension Rolls

Parents............................................................2,305
Surviving spouses.................................................66,536
Children...........................................................4,555
Veterans.........................................................270,794

Vietnam Era (Aug. 5, 1964-May 7, 1975)

Participants...............................................^d
9,200,000
Deaths in service................................................109,000
Living veterans
.....................................^b}e}h}i}8,166,000

Veterans and Dependents on Compensation and Pension Rolls

Parents............................................................7,547
Surviving spouses................................................104,221
Children..........................................................16,106
Veterans.........................................................820,284

Persian Gulf War (Aug. 2, 1990-date)

Participants...............................................^f
3,700,000
Deaths in service..............................................^g
6,526
Living veterans..........................................^h i
2,048,000

Veterans and Dependents on Compensation and Pension Rolls

Parents..............................................................352
Surviving spouses..................................................4,605
Children...........................................................6,796
Veterans.........................................................244,781

America's War Totals Through July 1, 1995

Participants^##
................................^f}41,746,000
Deaths in service
.........................................^g}1,090,200
Living war veterans...........................................19,300,400
Living ex-servicemembers......................................25,188,400

Total Veterans and Dependents on Compensation and Pension Rolls

Parents
......................................................^l}
13,016
Surviving spouses
...........................................^m}516,008
Children
.....................................................^k}
54,809
Veterans
..................................................^j}1,3
36,540

__________

^#}Living veterans does not include World War I veterans with
military service in other eras.
^##}Persons who served in more than one war period are counted
only once.
^*}Authoritative statistics for Confederate forces not
available. Estimated 28,000 Confederate personnel died in Union prisons.
^**}Children connotes a minor or a helpless adult.
^a}Includes 1,476,000 who served in World War II and the
Korean conflict.
^b}Includes 217,000 who served in World War II, the Korean
conflict, and the Vietnam era.
^c}Includes 518,000 who served in both World War II and the
Korean conflict.
^d}Includes 887,000 served in the Korean conflict and the
Vietnam era.
^e}Includes 303,000 who served in both the Korean conflict and
the Vietnam era.
^f}Through end of October 1998.
^g}During fiscal years 1991 through 1995 for Persian Gulf War.
^h}Includes 244,000 who served in both Persian Gulf War and
the Vietnam era.
^i}Includes small number who served in the Persian Gulf War,
Vietnam era, and the Korean conflict.
^j}Includes 513,644 peacetime veterans with service between
January 31, 1955, and August 5, 1964; peacetime veterans with service
beginning after May 7, 1975, and all other peacetime periods; 5 World
War I Retired Emergency Officers and 1 Peacetime Special Act.
^k}Includes 9,024 children of deceased peacetime veterans.
^l}Includes 2,993 parents of deceased peacetime veterans.
^m}Includes 37,185 surviving spouses of deceased peacetime
veterans.

NOTE: Figures on the number of living veterans reflect final 1990 Census
data and include only veterans living in the U.S. Detail may not add to
total due to rounding.
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