[Senate Report 111-81]
[From the U.S. Government Publishing Office]


111th Congress                                                   Report
                                 SENATE
 1st Session                                                     111-81

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



 
 LEGISLATIVE AND OVERSIGHT ACTIVITIES DURING THE 110TH CONGRESS BY THE 
                 SENATE COMMITTEE ON VETERANS' AFFAIRS

                                _______
                                

               September 25, 2009.--Ordered to be printed

                                _______
                                

          Mr. Akaka, from the Committee on Veterans' Affairs,
                        submitted the following

                              R E P O R T

    Pursuant to paragraph 8 of rule XXVI of the Standing Rules 
of the Senate, the Committee on Veterans' Affairs (hereinafter 
``Committee'') submits its report on legislative and oversight 
activities during the 110th Congress.

                        I. HEARINGS AND MEETINGS

A. First Session (2007)
    During the First Session of the 110th Congress, the 
Committee held 36 hearings, including seven field hearings. At 
those events, the Committee heard testimony from 230 witnesses.
    Three hearings (May 9, May 23, and October 24) focused 
exclusively on legislation pending before the Committee. 
Testimony offered at those hearings covered 52 bills.
    The Committee held nine business meetings. The 
organizational meeting was held on January 9. On June 27, five 
measures were reported out of Committee and on November 14, 
four measures were reported out of Committee. The Committee 
held six meetings to discharge nominations.
    Of primary focus to the Committee this session was 
cooperation and collaboration between the Department of Defense 
(hereinafter ``DOD'') and the Department of Veterans Affairs 
(hereinafter ``VA'') to serve the needs of returning 
servicemembers. To that end, the Committee held seven hearings 
on this topic, including one joint hearing with the Senate 
Armed Services Committee. These hearings were held on January 
23, March 27, April 12 (with the Senate Armed Services 
Committee), June 13, July 31, August 28 (field hearing in 
Georgia), and October 17. Hearings focused on all issues 
related to the seamless transition of returning servicemembers, 
and those from the National Guard and Reserves, including: 
outreach; benefits delivery; health care, including care for 
Traumatic Brain Injuries and Post Traumatic Stress Disorder 
(hereinafter ``PTSD''); and development of a bidirectional 
electronic medical records system.
    The Committee held five joint hearings with the House 
Committee on Veterans' Affairs in order to receive legislative 
presentations from the Veterans Service Organizations. These 
hearings were held on February 27, March 6, March 8, March 29, 
and September 20.
    The Committee also focused much of its oversight and 
legislative work this session on the mental health needs of 
veterans, holding four such hearings in 2007, including: April 
25, May 23, August 17 (field hearing in Washington), and 
October 24.
    The Committee held seven field hearings during the First 
Session. These hearings were held on May 29 in New 
Philadelphia, OH; July 21 in Great Falls, MT; August 17 in 
Tacoma, WA; August 21 in Honolulu, HI; August 23 in Maui, HI; 
August 27 in Kona-Kailua, HI; and August 28 in Augusta, GA. The 
field hearing in Washington focused exclusively on mental 
health issues. The field hearing in Georgia focused on DOD/VA 
cooperation and collaboration. The remaining five hearings 
focused on a broad range of issues facing veterans, including 
care for returning members of the National Guard and Reserves 
who reside in rural or underserved areas.

B. Second Session (2008)
    During the Second Session of the 110th Congress, the 
Committee held 21 hearings, including one field hearing. At 
those events, the Committee heard testimony from 105 witnesses.
    Two hearings (May 7 and May 21) focused exclusively on 
legislation pending before the Committee. Testimony offered at 
those hearings covered 45 bills.
    The Committee held three business meetings. On June 26, the 
Committee reported four pieces of legislation. The Committee 
held two other meetings to discharge nominations.
    The Committee continued its focus on DOD/VA efforts to work 
in concert to serve the needs of returning servicemembers, 
holding three additional hearings on March 11, April 23, and 
September 24.
    The Committee also held five joint hearings with the House 
Committee on Veterans' Affairs in order to receive legislative 
presentations from the Veterans Service Organizations. Two such 
hearings were held on March 4, and the remainder were held on 
March 6, April 3, and September 11.
    The Committee also spent a great deal of time this session 
focusing on compensation and the claims process, holding five 
hearings on this topic, including: January 24, February 5, 
February 27, May 7, and July 9. (One additional hearing on this 
topic was held in the first session on March 7, 2007.)
C. List of Hearings and Meetings Held in the 110th Congress
    (1) Tuesday, January 9, 2007
    Organizational Meeting
    (2) Tuesday, January 23, 2007
    Oversight Hearing: DOD/VA Collaboration and Cooperation to 
Meet the Needs of Returning Servicemembers
    (3) Tuesday, February 13, 2007
    Hearing on the FY 2008 Budget for Veterans' Programs
    (4) Tuesday, February 27, 2007
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of the Disabled American 
Veterans
    (5) Tuesday, March 6, 2007
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of the Veterans of Foreign 
Wars of the United States
    (6) Wednesday, March 7, 2007
    Oversight hearing: VA Claims Adjudication Process
    (7) Thursday, March 8, 2007
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentations of the Paralyzed Veterans 
of America, Jewish War Veterans of the USA, Blinded Veterans 
Association, Vietnam Veterans of America, Air Force Sergeants 
Association, and Non Commissioned Officers Association
    (8) Tuesday, March 27, 2007
    Oversight hearing: VA/DOD Cooperation and Collaboration to 
Meet the Health Care Needs of Returning Servicemembers
    (9) Thursday, March 29, 2007
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentations of AMVETS, American Ex-
Prisoners of War, Military Order of the Purple Heart, Gold Star 
Wives of America, Fleet Reserve Association, Retired Enlisted 
Association, Military Officers Association of America, and 
National Association of State Directors of Veterans Affairs
    (10) Wednesday, April 11, 2007
    Hearing on the Filipino Veterans Equity Act of 2007
    (11) Thursday, April 12, 2007
    Joint Hearing with the Senate Armed Services Committee on 
Departments of Defense and Veterans Affairs disability rating 
systems and the transition of servicemembers from the 
Department of Defense to the Department of Veterans Affairs
    (12) Wednesday, April 18, 2007
    Meeting: The Committee met to vote on the nomination of 
Thomas Harvey to be Assistant Secretary of Veterans Affairs for 
Congressional Affairs, Department of Veterans Affairs. Mr. 
Harvey was first nominated to this position on June 26, 2006; a 
hearing was held on his nomination on July 27, 2006; and his 
nomination was reported favorably by the Committee on July 31, 
2006, but the 109th Congress ended without Senate action on his 
nomination. He was renominated by The White House on January 9, 
2007; the Committee again reported his nomination favorably; 
and he was confirmed by the Senate on May 25, 2007.
    (13) Wednesday, April 25, 2007
    Oversight Hearing: Mental Health Issues
    (14) Wednesday, May 9, 2007
    Legislative Hearing: Pending Benefits Legislation:

          S.22, Post-9/11 Veterans Educational Assistance Act 
        of 2007
          S.117, Lane Evans Veterans Health and Benefits 
        Improvement Act of 2007
          S.168, a bill to direct the Secretary of Veterans 
        Affairs to establish a national cemetery in the Pikes 
        Peak region of Colorado
          S.225, a bill to expand eligibility for retroactive 
        benefits from traumatic injury protection coverage 
        under Servicemembers' Group Life Insurance
          S.423, Veterans' Compensation Cost-of-Living 
        Adjustment Act of 2007
          S.526, VET Act (Veterans Employment and Training Act 
        of 2007)
          S.643, Disabled Veterans Insurance Act of 2007
          S.698, Veterans' Survivors Education Enhancement Act 
        of 2007
          S.847, a bill to extend the period of time during 
        which a veteran's multiple sclerosis is to be 
        considered incurred in, or aggravated by, military 
        service during a period of war
          S.848, Prisoner of War Benefits Act of 2007
          S.961, Belated Thank You to the Merchant Mariners of 
        World War II Act of 2007
          S.1096, Veterans' Housing Benefits Enhancement Act of 
        2007
          S.1163, Blinded Veterans Paired Organ Act of 2007
          S.1215, a bill to raise the cap on funds for State 
        Approving Agencies, to update various reporting 
        requirements, and for other purposes
          S.1261, Montgomery GI Bill for Life Act of 2007
          S.1265, a bill to expand eligibility for Veterans' 
        Mortgage Life Insurance to include members of the Armed 
        Forces receiving specially adapted housing assistance 
        from the Department of Veterans Affairs
          S.1266, Veterans' Dignified Burial Assistance Act of 
        2007
          S.1289, Veterans' Justice Assurance Act of 2007
          S.1290, a bill to provide additional discretion to 
        the Secretary of Veterans Affairs in contracting with 
        State Approving Agencies, and for other purposes
          S.1293, Veterans' Education and Vocational Benefits 
        Enhancement Act of 2007
          S.1313, Servicemembers' Cellular Phone Contract 
        Fairness Act of 2007
          S.1314, Veterans Outreach Improvement Act of 2007
          S.1315, Disabled Veterans Insurance Improvement Act 
        of 2007
          S.1326, Comprehensive Veterans Benefits Improvements 
        Act of 2007
          S.1334, a bill to make permanent authority to furnish 
        government headstones and markers for graves of 
        veterans at private cemeteries, and for other purposes
          S.1569, Veterans Advocacy Act of 2007

    (15) Wednesday, May 16, 2007
    Hearing: Nomination of Dr. Michael J. Kussman to be Under 
Secretary for Health of the Department of Veterans Affairs
    (16) Tuesday, May 22, 2007
    Meeting: The Committee met to vote on the nomination of Dr. 
Michael J. Kussman to be Under Secretary for Health of the 
Department of Veterans Affairs. A hearing on Dr. Kussman's 
nomination was held on May 16, 2007; his nomination was 
reported favorably by the Committee on May 22, 2007; and he was 
confirmed by the Senate on May 25, 2007.
    (17) Wednesday, May 23, 2007
    Legislative Hearing: Pending Health Care Legislation:

          S.117, Lane Evans Veterans Health and Benefits 
        Improvement Act of 2007
          S.383, a bill to extend the period of eligibility for 
        health care for combat service in the Persian Gulf War 
        or future hostilities from two years to five years 
        after discharge or release
          S.472, a bill to authorize a major medical facility 
        project for the Department of Veterans Affairs at 
        Denver, Colorado
          S.479, Joshua Omvig Veterans Suicide Prevention Act
          S.610, a bill to clarify the effective date of the 
        modification of treatment for retirement annuity 
        purposes of part-time service before April 7, 1986, of 
        certain Department of Veterans Affairs health care 
        professionals
          S.692, VA Hospital Quality Report Card Act of 2007
          S.815, Veterans Health Care Empowerment Act of 2007
          S.874, Services to Prevent Homelessness Act of 2007
          S.882, a bill to require a pilot program on the 
        facilitation of the transition of members of the Armed 
        Forces to receipt of veterans health care benefits upon 
        completion of military service, and for other purposes
          S.994, Disabled Veterans Fairness Act
          S.1026, a bill to designate the Department of 
        Veterans Affairs Medical Center in Augusta, GA, as the 
        ``Charlie Norwood Department of Veterans Affairs 
        Medical Center''
          S.1043, a bill to require the Secretary of Veterans 
        Affairs to submit a report to Congress on proposed 
        changes to the use of the West Los Angeles Department 
        of Veterans Affairs Medical Center, California
          S.1147, Honor Our Commitment to Veterans Act
          S.1205, a bill to require a pilot program on 
        assisting veterans service organizations and other 
        veterans groups in developing and promoting peer 
        support programs that facilitate community 
        reintegration of veterans returning from active duty, 
        and for other purposes
          S.1233, Veterans Traumatic Brain Injury and Health 
        Programs Improvement Act of 2007
          S.1326, Comprehensive Veterans Benefits Improvements 
        Act of 2007
          S.1384, a bill to repeal authority for adjustments to 
        per diem payments to homeless veterans service centers 
        for receipt of other sources of income, to extend 
        authorities for certain programs to benefit homeless 
        veterans, and for other purposes
          S.1392, a bill to increase the authorization for the 
        major medical facility project to consolidate the 
        medical centers of the Department of Veterans Affairs 
        at the University Drive and H. John Heinz III 
        divisions, Pittsburgh, PA
          S.1396, a bill to authorize a major medical facility 
        project to modernize inpatient wards at the Department 
        of Veterans Affairs Medical Center in Atlanta, GA
          S.1441, State Veterans Home Modernization Act of 2007

    (18) Tuesday, May 29, 2007
    Field Hearing: Issues Facing Veterans in the Rural Areas of 
Appalachia. New Philadelphia, OH
    (19) Wednesday, June 13, 2007
    Oversight Hearing: VA, DOD and DOL Collaboration and 
Cooperation to Meet the Employment Needs of Returning 
Servicemembers
    (20) Wednesday, June 27, 2007
    Meeting: The Committee marked-up and reported five measures 
out of Committee:

     S.423, the Veterans' Compensation Cost-of-Living 
Adjustment Act of 2007, which increases 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.
     S.479, the Joshua Omvig Veterans' Suicide 
Prevention Act, which directs the Secretary of Veterans Affairs 
to develop and implement a comprehensive program to reduce the 
incidence of suicide among veterans.
     S.1163, the Blinded Veterans Paired Organ Act of 
2007, which improves compensation for veterans in certain cases 
of impairment of vision involving both eyes, and to provide for 
the use of the National Directory of New Hires for income 
verification purposes.
     S.1233, the Veterans' Traumatic Brain Injury and 
Health Programs Improvement Act of 2007, which improves 
programs in the areas of Traumatic Brain Injury and mental 
health, to enhance travel reimbursement for certain qualifying 
veterans, to expand outreach and access to care for rural and 
homeless veterans, to authorize funds for the construction and 
modernization of facilities, and for other purposes.
     S.1315, the Veterans' Benefits Enhancement Act of 
2007, which enhances insurance and specially adapted housing 
benefits for disabled veterans, expands benefits for Filipino 
veterans who served under U.S. command during World War II, and 
for other purposes.

    (21) Wednesday, June 27, 2007
    Hearing: Nomination of Charles L. Hopkins to be an 
Assistant Secretary of Veterans Affairs (Operations, 
Preparedness, Security, and Law Enforcement), Department of 
Veterans Affairs
    (22) Saturday, July 21, 2007
    Field Hearing: Addressing the Needs of Veterans in Rural 
Areas. Great Falls, MT
    (23) Tuesday, July 24, 2007
    Meeting: The Committee met to vote on the nomination of 
Charles L. Hopkins to be an Assistant Secretary of Veterans 
Affairs (Operations, Preparedness, Security, and Law 
Enforcement), Department of Veterans Affairs. A hearing on Mr. 
Hopkins' nomination was held on June 27, 2007; his nomination 
was reported favorably by the Committee on July 24, 2007; he 
was confirmed by the Senate on August 1, 2007.
    (24) Wednesday, July 25, 2007
    Oversight Hearing: VA Health Care Funding Issues
    (25) Tuesday, July 31, 2007
    Oversight Hearing: VA and DOD Collaboration and Cooperation 
and the Education Needs of Returning Servicemembers
    (26) Friday, August 17, 2007
    Field Hearing: Mental Health Care Needs of Veterans in the 
State of Washington. Tacoma, WA
    (27) Tuesday, August 21, 2007
    Field Hearing: Health Care and Benefits for Veterans in 
Hawaii. Honolulu, HI
    (28) Thursday, August 23, 2007
    Field Hearing: Health Care for Veterans on Maui. Maui, HI
    (29) Monday, August 27, 2007
    Field Hearing: Access to VA Health Care and Benefits in 
Kona and Outreach to the Guard and Reserve in Hawaii. Kona-
Kailua, HI
    (30) Tuesday, August 28, 2007
    Field Hearing: VA and DOD Collaboration and Cooperation to 
Care for Wounded Soldiers Returning from Afghanistan and Iraq 
(OEF/OIF). Augusta, GA
    (31) Wednesday, September 19, 2007
    Oversight Hearing: The Current State of Affairs for 
Information Technology with VA
    (32) Thursday, September 20, 2007
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of The American Legion
    (33) Tuesday, September 25, 2007
    Oversight Hearing: Research and Treatment for Gulf War 
Illnesses
    (34) Thursday, September 27, 2007
    Hearing: Nomination of Paul J. Hutter to be General 
Counsel, Department of Veterans Affairs
    (35) Tuesday, October 2, 2007
    Meeting: The Committee met to vote on the nomination of 
Paul J. Hutter, to be General Counsel, Department of Veterans 
Affairs. A hearing on Mr. Hutter's nomination was held on 
September 27, 2007; his nomination was reported favorably by 
the Committee on October 2, 2007; and he was confirmed by the 
Senate on October 4, 2007.
    (36) Wednesday, October 17, 2007
    Oversight Hearing: VA and DOD Collaboration: Report of the 
President's Commission on Care for America's Returning Wounded 
Warriors; Report of the Veterans' Disability Benefits 
Commission; and other related reports
    (37) Wednesday, October 24, 2007
    Legislative Hearing: Pending Legislation:

          S.38, Veterans' Mental Health Outreach and Access Act 
        of 2007
          S.2004, a bill to establish epilepsy centers of 
        excellence in the Veterans Health Administration of the 
        Department of Veterans Affairs, and for other purposes
          S.2142, Veterans Emergency Care Fairness Act of 2008
          S.2160, Veterans Pain Care Act of 2007
          S.2162, Mental Health Improvements Act of 2007

    (38) Wednesday, October 31, 2007
    Oversight Hearing: Uniformed Services Employment and 
Reemployment Rights Act (USERRA)
    (39) Tuesday, November 6, 2007
    Oversight Hearing: Hiring Practices and Quality Control in 
VA Medical Facilities
    (40) Wednesday, November 7, 2007
    Oversight Hearing: Performance and Structure of the United 
States Court of Appeals for Veterans Claims
    (41) Wednesday, November 14, 2007
    Meeting: The Committee marked-up and passed four measures 
out of Committee:

     S.2004, to establish epilepsy centers of 
excellence in the Veterans Health Administration of the 
Department of Veterans Affairs, and for other purposes.
     S.2142, Veterans Emergency Care Fairness Act of 
2007, to require the Secretary of Veterans Affairs to reimburse 
veterans receiving emergency treatment in non-Department of 
Veterans Affairs facilities for such treatment until such 
veterans are transferred to Department facilities, and for 
other purposes.
     S.2160, Veterans Pain Care Act of 2007, which 
establishes a pain care initiative in health care facilities of 
the Department of Veterans Affairs, and for other purposes.
     S.2162, Mental Health Improvements Act of 2007, 
which improves the treatment and services provided by the 
Department of Veterans Affairs to veterans with Post Traumatic 
Stress Disorder and substance use disorders and for other 
purposes.

    (42) Wednesday, November 14, 2007
    Hearing: Nomination of Michael W. Hager to be Assistant 
Secretary of Veterans Affairs (Human Resources and Management), 
Department of Veterans Affairs
    (43) Friday, November 16, 2007
    Meeting: The Committee met to vote on the nomination of 
Michael W. Hager to be Assistant Secretary of Veterans Affairs 
(Human Resources and Management), Department of Veterans 
Affairs. A hearing on Mr. Hager's nomination was held on 
November 14, 2007; his nomination was reported favorably by the 
Committee on November 16, 2007; and he was confirmed by the 
Senate on November 16, 2007.
    (44) Wednesday, December 5, 2007
    Hearing: Nomination of LTG James B. Peake (Ret.), M.D., to 
be Secretary of Veterans Affairs
    (45) Thursday, December 13, 2007
    Meeting: The Committee met to vote on the nomination of LTG 
James B. Peake (Ret.), M.D., to be Secretary of Veterans 
Affairs. A hearing was held on Dr. Peake's nomination on 
December 5, 2007; his nomination was reported favorably on a 
unanimously roll call vote on December 13, 2007; and he was 
confirmed by the Senate on December 14, 2007.
    (46) Thursday, January 24, 2008
    Oversight Hearing: Review of the Veterans' Disability 
Compensation: Report of the Veterans' Disability Benefits 
Commission
    (47) Tuesday, February 5, 2008
    Oversight Hearing: Review of Veterans' Disability 
Compensation: Rehabilitating Veterans
    (48) Wednesday, February 13, 2008
    Oversight Hearing: The FY 2009 Budget for Veterans' 
Programs
    (49) Wednesday, February 27, 2008
    Oversight Hearing: Review of Veterans' Disability 
Compensation: Expert Work on PTSD and Other Issues
    (50) Tuesday, March 4, 2008
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of the Veterans of Foreign 
Wars of the United States
    (51) Tuesday, March 4, 2008
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of the Disabled American 
Veterans
    (52) Thursday, March 6, 2008
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentations of the American Ex-
Prisoners of War, Paralyzed Veterans of America, Jewish War 
Veterans of the USA, Blinded Veterans Association, Vietnam 
Veterans of America, Non Commissioned Officers Association, and 
Air Force Sergeants Association
    (53) Tuesday, March 11, 2008
    Oversight Hearing: Caring for the Families of Wounded 
Warriors
    (54) Thursday, April 3, 2008
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentations of AMVETS, Military Order 
of the Purple Heart, Gold Star Wives of America, Fleet Reserve 
Association, The Retired Enlisted Association, Military 
Officers Association of America, and National Association of 
State Directors of Veterans Affairs
    (55) Wednesday, April 9, 2008
    Oversight Hearing: Making the VA the Workplace of Choice 
for Health Care Providers
    (56) Wednesday, April 23, 2008
    Oversight Hearing: Update on VA and DOD Cooperation and 
Collaboration
    (57) Wednesday, May 7, 2008
    Legislative Hearing: Pending Benefits Legislation:

          S.22, Post-9/11 Veterans Educational Assistance Act 
        of 2007
          S.161, Veterans' Disability Compensation Automatic 
        COLA Act
          S.961, Belated Thank You to the Merchant Mariners of 
        World War II Act of 2007
          S.1718, VETS Act (Veterans Education Tuition Support 
        Act)
          S.2090, a bill to protect privacy and security 
        concerns in court records
          S.2091, a bill to increase the number of the court's 
        active judges
          S.2138, Department of Veterans Affairs Reorganization 
        Act of 2007
          S.2139, National Guard and Reserve Educational 
        Benefits Fairness Act of 2007
          S.2309, Compensation for Combat Veterans Act
          S.2471, USERRA Enforcement Improvement Act of 2007
          S.2550, Combat Veterans Debt Elimination Act of 2008
          S.2617, Veterans' Compensation Cost-of-Living 
        Adjustment Act of 2008
          S.2674, America's Wounded Warriors Act
          S.2683, a bill to modify certain authorities relating 
        to educational assistance benefits for veterans, and 
        for other purposes
          S.2701, a bill to direct the Secretary of Veterans 
        Affairs to establish a national cemetery in the eastern 
        Nebraska region to serve veterans in the eastern 
        Nebraska and western Iowa regions
          S.2737, Veterans' Rating Schedule Review Act
          S.2768, a bill to provide a temporary increase in the 
        maximum loan guaranty amount for certain housing loans 
        guaranteed by the Secretary of Veterans Affairs
          S.2825, Veterans' Compensation Equity Act of 2008
          S.2864, Training and Rehabilitation for Disabled 
        Veterans Enhancement Act of 2008
          S.2889, Veterans Health Care Act of 2008
          S.2934, a bill to direct the Secretary of Veterans 
        Affairs to provide a plot allowance for spouses and 
        children of certain veterans who are buried in State 
        cemeteries
          S.2938, Enhancement of Recruitment, Retention, and 
        Readjustment Through Education Act of 2008
          S.2946, a bill to make stillborns insurable 
        dependents for purposes of the Servicemembers' Group 
        Life Insurance program
          S.2951, a bill to require reports on the progress of 
        the Secretary of Veterans Affairs in addressing causes 
        for variances in compensation payments for veterans for 
        service-connected disabilities
          S.2961, a bill to enhance the refinancing of home 
        loans by veterans
          S.2965, a bill to require a report on the inclusion 
        of severe and acute Post Traumatic Stress Disorder 
        among the conditions covered by traumatic injury 
        protection coverage under Servicemembers' Group Life 
        Insurance.
          S.2981, Disabled Veterans Home Ownership Preservation 
        Act of 2008
          S.2984, Veterans' Benefits Enhancement Act of 2008

    (58) Wednesday, May 21, 2008
    Legislative Hearing: Pending Health Care Legislation:

          S.2273, Enhanced Opportunities for Formerly Homeless 
        Veterans Residing in Permanent Housing Act of 2007
          S.2377, Veterans Health Care Quality Improvement Act
          S.2383, a bill to require a pilot program on the 
        mobile provision of care and services for veterans in 
        rural areas by the Department of Veterans Affairs, and 
        for other purposes
          S.2573, Veterans Mental Health Treatment First Act
          S.2639, Assured Funding for Veterans Health Care Act
          S.2796, a bill to require a pilot program on the use 
        of community-based organizations to ensure that 
        veterans receive the care and benefits they need, and 
        for other purposes
          S.2797, a bill to authorize major medical facility 
        projects and major medical facility leases for the 
        Department of Veterans Affairs for fiscal year 2009, 
        and for other purposes
          S.2799, Women Veterans Health Care Improvement Act of 
        2008
          S.2824, a bill to improve the collective bargaining 
        rights and procedures for review of adverse actions of 
        certain employees of the Department of Veterans 
        Affairs, and for other purposes
          S.2889, Veterans Health Care Act of 2008
          S.2899, Veterans Suicide Study Act
          S.2921, Caring for Wounded Warriors Act of 2008
          S.2926, Veterans Nonprofit Research and Education 
        Corporations Enhancement Act of 2008
          S.2937, a bill to provide permanent treatment 
        authority for participants in Department of Defense 
        chemical and biological testing conducted by Deseret 
        Test Center and an expanded study of the health impact 
        of Project Shipboard Hazard and Defense, and for other 
        purposes
          S.2963, a bill to improve and enhance the mental 
        health care benefits available to members of the Armed 
        Forces and veterans, to enhance counseling and other 
        benefits available to survivors of members of the Armed 
        Forces and veterans, and for other purposes
          S.2969, Veterans' Medical Personnel Recruitment and 
        Retention Act
          S.2984, Veterans' Benefits Enhancement Act of 2008

    (59) Wednesday, June 4, 2008
    Oversight Hearing: Systemic Indifference to Invisible 
Wounds
    (60) Thursday, June 26, 2008
    Meeting: Markup of Pending Legislation:

     S.2969, (Committee Print) Veterans' Health Care 
Authorization Act of 2008, a bill to enhance the capacity of 
the Department of Veterans Affairs to recruit and retain nurses 
and other critical health care professionals, and for other 
purposes
     S.3023, (Committee Print) Veterans' Benefits 
Improvement Act of 2008, a bill to enhance compensation and 
pension, housing, labor and education, insurance, and for other 
purposes
     S.3339, to provide technical corrections to S.22, 
the Post-9/11 Veterans Educational Assistance Act of 2007
     S.2617, (Committee Print) Veterans' Compensation 
Cost-of-Living Adjustment Act of 2008, to increase, effective 
as of December 1, 2008, 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

    (61) Thursday, June 26, 2008
    Hearing: Nomination of Christine Hill to be Assistant 
Secretary of Veterans Affairs (Congressional Affairs), 
Department of Veterans Affairs
    (62) Thursday, July 3, 2008
    Field Hearing: Caring for America's Aging Veterans. Tupelo, 
MS
    (63) Wednesday, July 9, 2008
    Oversight Hearing: Review of Veterans' Disability 
Compensation: Undue Delay in Claims Processing
    (64) Wednesday, July 9, 2008
    Meeting: The Committee met to vote on the nomination of 
Christine Hill to be Assistant Secretary of Veterans Affairs 
(Congressional Affairs), Department of Veterans Affairs. Ms. 
Hill's nomination was received by the Senate on April 23, 2008. 
A hearing was held on her nomination on June 26, 2008, and the 
Committee reported Ms. Hill's nomination on July 9, 2008. Her 
nomination was confirmed by the Senate on October 2, 2008.
    (65) Wednesday, July 23, 2008
    Oversight Hearing: VA's Response to the Needs of Returning 
Guard and Reserve Members
    (66) Thursday, September 11, 2008
    Joint Hearing with the House Committee on Veterans' Affairs 
to hear the legislative presentation of The American Legion
    (67) Wednesday, September 17, 2008
    Hearing: Nomination of Patrick W. Dunne to be Under 
Secretary for Benefits of the Department of Veterans Affairs
    (68) Tuesday, September 23, 2008
    Meeting: The Committee met to vote on the nomination of 
Patrick W. Dunne to be Under Secretary for Benefits, Department 
of Veterans Affairs. Mr. Dunne's nomination was received by the 
Senate on July 30, 2008. A hearing on his nomination was held 
on September 17, 2008, and the Committee reported Mr. Dunne's 
nomination on September 23, 2008. His nomination was confirmed 
by the Senate on October 2, 2008.
    (69) Wednesday, September 24, 2008
    Oversight Hearing: Cooperation and Collaboration by VA and 
DOD on Information Technology Efforts

                            II. LEGISLATION

A. First Session (2007)
    In the First Session, the Committee met in open session on 
June 27 and November 14 and ordered reported nine pieces of 
legislation to the full Senate:

    1. S.423, Veterans' Compensation Cost-of-Living Adjustment 
Act of 2007
    To increase 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. This measure was introduced in the Senate on January 
29, 2007, and the Committee ordered it favorably reported on 
June 27, 2007. S. Report 110-135 was filed on July 24, 2007. 
The House passed companion legislation H.R.1284 on March 21, 
2007, and the Senate passed it on October 18, 2007. The bill 
was signed on November 5, 2007, as Public Law 110-111.

    2. S.479, Joshua Omvig Veterans Suicide Prevention Act
    Directs the Secretary of Veterans Affairs to develop and 
implement a comprehensive program to reduce the incidence of 
suicide among veterans. This measure was introduced in the 
Senate on February 1, 2007, and the Committee ordered it 
favorably reported on June 27, 2007. S. Report 110-132 was 
filed on July 23, 2007. An amendment in the nature of a 
substitute to companion bill H.R.327 was passed by the Senate 
on September 27, 2007, and passed the House on October 23, 
2007. It was signed on November 5, 2007, as Public Law 110-110.

    3. S.1163, Blinded Veterans Paired Organ Act of 2007
    Improves compensation for veterans in certain cases of 
impairment of vision involving both eyes, and provides for the 
use of the National Directory of New Hires for income 
verification purposes. The measure was introduced in the Senate 
on April 19, 2007, and the Committee ordered it favorably 
reported on June 27, 2007. S. Report 110-143 was filed August 
3, 2007.
    On November 2, 2007, the Senate took up S.1163 and included 
it in H.R.797, which passed the Senate. The House took action 
on H.R.797 on December 11, 2007. On December 17, 2007, the 
Senate agreed to the House amendments (text and title). It was 
signed on December 26, 2007, as Public Law 110-157.

    4. S.1233, Veterans Traumatic Brain Injury and Health 
Programs Improvement Act of 2007
    Improves programs in the areas of Traumatic Brain Injury 
and mental health and for other purposes. This legislation 
would extend the automatic window of eligibility for VA care 
from two to five years and improve the capacity of VA to care 
for veterans with Traumatic Brain Injuries. It would also 
improve access to VA dental care and recognize the importance 
of the National Guard and Reserve in VA's outreach programs. 
The measure was introduced in the Senate on April 26, 2007, and 
the Committee ordered it favorably reported with supplemental 
views on June 27, 2007. S. Report 110-147 was filed on August 
29, 2007. These provisions and all others related to the 
seamless transition of servicemembers from S.1233 were included 
in the National Defense Authorization Act of 2007, Public Law 
110-181.

    5. S.1315, Veterans' Benefits Enhancement Act of 2007
    Increases insurance and specially adapted housing benefits 
for disabled veterans, expands benefits for Filipino veterans 
who served under U.S. command during World War II, and other 
purposes. The measure was introduced in the Senate on May 7, 
2007, and the Committee ordered it favorably reported on June 
27, 2007; and reported it August 29, 2007, as S. Report 110-
148. The legislation passed the Senate with an amendment and an 
amendment to the title on April 24, 2008, and passed the House 
with an amendment on September 22, 2008. A unanimous consent 
request for a House-Senate Conference was not agreed to. No 
further action was taken on this legislation in the 110th 
Congress.

    6. S.2004, Establishing Epilepsy Centers of Excellence in 
the Veterans Health Administration
    Requires the Secretary to designate no less than six VA 
health care facilities as locations for Epilepsy Centers of 
Excellence and, subject to the availability of appropriations, 
establish and operate such centers, and for other purposes. It 
was introduced in the Senate on August 3, 2007; a hearing was 
held on October 24, 2007; and the Committee ordered it 
favorably reported without amendment on November 14, 2007. 
S. Report 110-247 was filed on December 12, 2007. This 
legislation was incorporated into S.2162, the Veterans' Mental 
Health and Other Care Improvements Act of 2008, and passed the 
Senate on June 3, 2008. The compromise agreement on this 
legislation and related House-passed legislation passed the 
House on September 24, 2008. The Senate agreed to the 
compromise on September 27, 2008. S.2162, including provisions 
from S.2004, S.2142, and S.2160, was signed into law on October 
10, 2008, as Public Law 110-387.

    7. S.2142, Veterans Emergency Care Fairness Act of 2008
    Requires the Secretary of Veterans Affairs to reimburse 
veterans receiving emergency treatment in non-Department of 
Veterans Affairs facilities for such treatment until such 
veterans are transferred to Department facilities, and for 
other purposes. It was introduced in the Senate on October 4, 
2007; a hearing was held on October 24, 2007, and the Committee 
ordered it favorably reported without amendment on November 14, 
2007. S. Report 110-263 was filed on February 25, 2008. This 
legislation was incorporated into S.2162, the Veterans' Mental 
Health and Other Care Improvements Act of 2008, and passed the 
Senate on June 3, 2008. The compromise agreement on this 
legislation and related House-passed legislation passed the 
House on September 24, 2008. The Senate agreed to the 
compromise on September 27, 2008. S.2162, including provisions 
from S.2004, S.2142, and S.2160, was signed into law on October 
10, 2008, as Public Law 110-387.

    8. S.2160, Veterans Pain Care Act of 2007
    Establishes a pain care initiative in health care 
facilities of the Department of Veterans Affairs, and for other 
purposes. Introduced in the Senate on October 15, 2007; and a 
hearing was held on October 24, 2007. The Committee ordered it 
favorably reported without amendment on November 14, 2007. 
S. Report 110-267 was filed on February 28, 2008. This 
legislation was incorporated into S.2162, the Veterans' Mental 
Health and Other Care Improvements Act of 2008, and passed the 
Senate on June 3, 2008. The compromise agreement on this 
legislation and related House-passed legislation passed the 
House on September 24, 2008. The Senate agreed to the 
compromise on September 27, 2008. S.2162, including provisions 
from S.2004, S.2142, and S.2160, was signed into law on October 
10, 2008, as Public Law 110-387.

    9. S.2162, Mental Health and Other Care Improvements Act of 
2007
    Improves the treatment and services provided by the 
Department of Veterans Affairs to veterans with Post Traumatic 
Stress Disorder and substance use disorders; increases the 
travel mileage reimbursement and reduces the deductible; 
creates a new program to assist low-income veterans to prevent 
homelessness; creates multiple pilot programs to improve 
outreach and access to care; and authorizes nine major medical 
facility construction projects and 12 leases. It was introduced 
in the Senate on October 15, 2007, and a hearing was held 
October 24, 2007. The Committee ordered it favorably reported 
without amendment on November 14, 2007. S. Report 110-281 was 
filed on April 8, 2008. This legislation passed the Senate on 
June 3, 2008, with an amendment incorporating provisions from 
S.2004, S.2142, and S.2160. The compromise agreement on this 
legislation and related House-passed legislation passed the 
House on September 24, 2008. The Senate agreed to the 
compromise on September 27, 2008. S.2162, including provisions 
from S.2004, S.2142, and S.2160, was signed into law on October 
10, 2008, as Public Law 110-387.

B. Second Session (2008)
    In the Second Session, the Committee met in open session on 
June 26, and ordered reported four pieces of legislation to the 
full Senate.

    1. S.2969, Veterans' Health Care Authorization Act of 2008
    Enhances the capacity of the VA to recruit and retain 
nurses and other critical health care professionals, and for 
other purposes. It was introduced in the Senate on May 1, 2008, 
and a hearing was held on May 21, 2008. The Committee reported 
it favorably with an amendment in the nature of a substitute 
and an amendment to the title on June 26, 2008. S. Report 110-
473 was filed on September 18, 2008. The bill was placed on the 
Senate calendar and no further action was taken on this 
legislation in the 110th 
Congress.

    2. S.3339
    An original bill to clarify and improve authorities 
relating to the availability of post-9/11 veterans educational 
assistance, was introduced in the Senate on July 26, 2008. The 
measure was favorably reported by the Committee on June 26, 
2008. S. Report 110-433 was filed on July 26, 2008. The bill 
was placed on the Senate calendar and no further action was 
taken on this legislation in the 110th 
Congress.

    3. S.2617, Veterans' Compensation Cost-of-Living Adjustment 
Act of 2008
    Increase the rates of veterans' disability compensation and 
dependency and indemnity compensation for surviving spouses and 
children. It was introduced in the Senate on February 8, 2008, 
and a hearing was held on May 7, 2008. The Committee ordered it 
favorably reported on June 26, 2008. S. Report 110-430 was 
filed on July 23, 2008. This bill passed the Senate on July 30, 
2008. It passed the House on September 10, 2008. It was signed 
into law on September 24, 2008, as Public Law 110-324.

    4. S.3023, the Veterans' Benefits Improvement Act of 2008
    Improve and enhance compensation and pension, housing, 
labor and education, and insurance benefits for veterans, and 
for other purposes. It was introduced in the Senate on May 15, 
2008. The Committee ordered it favorably reported with an 
amendment on June 26, 2008. S. Report 110-449 was filed on 
September 9, 2008. This bill passed the Senate with an 
amendment on September 16, 2008. It passed the House on 
September 24, 2008, with an amendment, and the Senate agreed to 
the House amendment on September 27, 2008. The bill was signed 
into law on October 10, 2008, as Public Law 110-389.
    In addition, a bill, S.22, that was referred to the 
Committee and upon which the Committee held hearings, was added 
to the Supplemental Appropriation Act, 2008:

    5. S.22, the Post-9/11 Veterans Educational Assistance Act 
of 2007
    Establishing a new program of educational assistance for 
individuals who serve after September 11, 2001. Provisions 
derived from S.22, the Post-9/11 Veterans Educational 
Assistance Act of 2007, introduced in the Senate on January 4, 
2007, were signed into law on June 30, 2008, as title V of 
Public Law 110-252. This title established a new program of 
educational assistance for individuals serving in the Armed 
Forces on or after September 11, 2001.

C. Reports
    S.423, Veterans' Compensation Cost-of-Living Adjustment Act 
of 2007. S. Report 110-135.
    S.479, Joshua Omvig Veterans Suicide Prevention Act. Report 
110-132.
    S.1163, Blinded Veterans Paired Organ Act of 2007. 
S. Report 110-143.
    S.1233, Veterans Traumatic Brain Injury and Health Programs 
Improvement Act of 2007. S. Report 110-147.
    S.1315, Veterans' Benefits Enhancement Act of 2007. 
S. Report 110-148.
    S.2004, Epilepsy Centers of Excellence. S. Report 110-247.
    S.2142, Veterans Emergency Care Fairness Act of 2008. 
S. Report 110-263.
    S.2160, Veterans Pain Care Act of 2007. S. Report 110-267.
    S.2162, Mental Health and Other Care Improvements Act of 
2007. S. Report 110-281.
    S.2617, Veterans' Compensation Cost-of-Living Adjustment 
Act of 2008. S. Report 110-430.
    S.2969, Veterans' Health Care Authorization Act of 2008. 
S. Report 110-473.
    S.3023, Veterans' Benefits Improvement Act of 2008. 
S. Report 110-449.
    S.3339, An original bill, technical corrections to S.22, 
the Post-9/11 Veterans Educational Assistance Act of 2007. 
S. Report 110-433.
D. Public Laws
    S.22, Post-9/11 Veterans Educational Assistance Act of 2007 
is Public Law 110-252 and is contained in Title V.
    S.423, Veterans' Compensation Cost-of-Living Adjustment Act 
of 2007 is Public Law 110-111.
    S.479, Joshua Omvig Veterans Suicide Prevention Act is 
Public Law 110-110.
    S.1163, Blinded Veterans Paired Organ Act of 2007 is Public 
Law 110-157.
    S.1233, Veterans' Traumatic Brain Injury and Health 
Programs Improvement Act of 2007 is Public Law 110-181.
    S.2162, Mental Health and Other Improvements Act of 2007 is 
Public Law 110-387.
    S.2617, Veterans' Compensation Cost-of-Living Adjustment 
Act of 2008 is Public Law 110-324.
    S.3023, Veterans' Benefits Improvement Act of 2008 is 
Public Law 110-389.

                             III. OVERSIGHT

A. First Session (2007)
    Significant oversight took place with respect to the 
following issues: The budget for the Department of Veterans 
Affairs; claims adjudication for PTSD, Traumatic Brain Injury 
and tinnitus; bonuses awarded to senior Department of Veterans 
Affairs staff; the transition from DOD to VA for servicemembers 
and National Guard and Reserve members returning; and the 
quality of health care, with an emphasis on mental health 
concerns.
    In the field of claims adjudication, the Majority staff's 
lead investigator spent 36 days conducting oversight and 
visited seven VA regional offices. In addition, Majority staff 
conducted an additional 59 days of oversight for a total of 95 
days of oversight and investigations during the First Session 
of the 110th Congress. Majority staff visited California, 
Colorado, Florida, Georgia, Hawaii, Maryland, Massachusetts, 
Missouri, New Hampshire, North Carolina, North Dakota, Oregon, 
Pennsylvania, Texas, Utah, Vermont, Virginia, and Washington. 
Majority staff also conducted oversight in Guam, Korea, and 
American Samoa.
    In addition, Minority staff conducted oversight visits to 
numerous sites around the country, including North Carolina, 
Illinois, Idaho, Washington, Ohio, Missouri, and Nevada.
    In order to ensure the Department of Veterans Affairs has 
sufficient resources to discharge its missions adequately, the 
Committee staff reviewed funding levels for all health care 
programs and accounts. Majority staff conducted oversight 
visits to review homeless programs, Vet Centers, community-
based outpatient clinics, inpatient mental health facilities, 
women's programs, and substance use disorder programs. Based on 
that oversight work, including the Committee's hearing on 
February 13, 2007, the Majority Members of the Committee 
provided Views and Estimates to the Budget Committee, which 
laid the groundwork for the funding that would ultimately be 
allocated to VA for fiscal year 2008. Final appropriations for 
the Veterans Health Administration closely mirrored the levels 
laid out in the Majority Views and Estimates and constituted 
the largest funding increase in VA's 77-year history. In 
addition, oversight work led to a hearing on July 25, 2007, to 
examine issues surrounding appropriate and timely funding for 
the Department.

B. Second Session (2008)
    Committee staff continued to focus on oversight of the VA 
and added hearing loss to the issues covered by the Majority's 
lead investigator reviewing cases at VA's regional offices. She 
spent 37 days conducting oversight at 12 regional offices. In 
addition, Majority staff conducted an additional 55 days of 
oversight and investigations during the Second Session of the 
110th Congress. Majority staff visited California, Colorado, 
Hawaii, Florida, Illinois, Iowa, Louisiana, Maryland, 
Minnesota, Mississippi, Missouri, Ohio, North Carolina, New 
Hampshire, Pennsylvania, Tennessee, Texas, Virginia, and West 
Virginia. In addition, a staff delegation visited Kuwait in 
March 2008 to observe out processing of troops and the ways in 
which DOD and VA are cooperating to ensure servicemembers are 
receiving the benefits to which they are entitled.
     In addition, Minority staff conducted oversight visits to 
numerous sites around the country, including North Carolina, 
Pennsylvania, Ohio, Florida, Texas, Nevada, and Maryland.
    Oversight on the VA health care budget was also continued. 
Based on that oversight work, including the Committee's hearing 
on February 13, 2008, the Majority Members of the Committee 
provided Views and Estimates to the Budget Committee. As in the 
First Session, final appropriations for the Veterans Health 
Administration once again paralleled the levels recommended in 
the Majority Views and Estimates.

                            IV. NOMINATIONS


----------------------------------------------------------------------------------------------------------------
                                                                Date of      Date of        Date         Date
                      Name and Position                        Nomination    Hearing      Reported    Confirmed
----------------------------------------------------------------------------------------------------------------
First Session

  Thomas Harvey.............................................    6/26/06*      7/27/06      4/18/07      5/25/07
    Assistant Secretary for Congressional Affairs                 1/9/07
  Dr. Michael J. Kussman....................................     4/10/07      5/16/07      5/22/07      5/25/07
    Under Secretary of Health
  Charles L. Hopkins........................................     4/11/07      6/27/07      7/24/07       8/1/07
    Assistant Secretary (Operations, Preparedness, Security,
     and Law Enforcement)
  Paul J. Hutter............................................     6/28/07      9/27/07      10/2/07      10/4/07
    General Counsel
  Michael W. Hager..........................................     9/18/07     11/14/07     11/16/07     11/16/07
    Assistant Secretary for Human Resources and
     Administration
  LTG James B. Peake (Ret.), M.D............................    11/15/07      12/5/07     12/13/07     12/14/07
    Secretary

Second Session

  Christine O. Hill.........................................     4/23/08      6/26/08       7/9/08      10/2/08
    Assistant Secretary for Congressional Affairs
  Patrick W. Dunne..........................................     7/30/08      9/17/08      9/23/08      10/2/08
    Under Secretary of Benefits
----------------------------------------------------------------------------------------------------------------
*Nomination was first received in the 109th Congress on 6/26/06, and the nomination hearing was held on 7/27/06.
  The Congress ended without the Senate taking action on this nomination. Mr. Harvey was renominated on 1/9/07.

                    V. BUDGET FOR VETERANS PROGRAMS

A. First Session
    Pursuant to the requirements of section 301(d) of the 
Congressional Budget Act of 1974, the Democratic and Republican 
Members of the Committee submitted letters to the Budget 
Committee reflecting the Committee's Views and Estimates on the 
Administration's proposed fiscal year 2008 budget for veterans' 
programs. The two letters submitted are printed below in their 
entirety:

                                                     March 1, 2007.
Hon. Kent Conrad, Chairman,
Hon. Judd Gregg, Ranking Member,
Committee on the Budget,
U.S. Senate, Washington, DC.
    Dear Chairman Conrad and Ranking Member Gregg: Pursuant to 
Section 301(d) of the Congressional Budget Act of 1974, the 
Democratic and Independent Members of the Committee on 
Veterans' Affairs (hereinafter the ``Undersigned Members'') 
hereby report to the Committee on the Budget their views and 
estimates on the Fiscal Year 2008 (hereinafter, ``FY08'') 
budget for Function 700 (Veterans' Benefits and Services) and 
for Function 500 (Education, Training, Employment, and Social 
Services) programs within the Committee's jurisdiction, 
including the Court of Appeals for Veterans Claims. This letter 
responds to the Committee's obligation to provide 
recommendations on veterans' programs within its jurisdiction, 
albeit from the perspective of the Undersigned Members.

                               I. Summary

    The Department of Veterans Affairs (VA) requires, at a 
minimum, $4.8 billion in additional funding in FY08 to support 
its medical care operations. Our requested medical services 
increase is $2.845 billion over the Administration's request.
    For the fifth year in a row, the Administration's proposed 
budget includes a number of legislative proposals designed to 
generate additional revenue from fees or savings and deter 
certain categories of veterans from using the VA system. Just 
as Congress has done over the past five years, the Undersigned 
Members unanimously reject each of the legislative proposals--
the increase in prescription drug copayments from $8 to $15 for 
``middle-income'' veterans; the annual enrollment fee of $250 
to $750 for veterans whose families make $50,000 a year or 
more; and eliminating the practice of offsetting VA first-party 
copayment debts with collections from insurance companies.
    With respect to benefits, we disagree in particular with 
the amount requested for staff within the Veterans Benefits 
Administration and at the Board of Veterans' Appeals for the 
adjudication of claims. In addition, we believe it is time to 
provide a proper pension for Filipino veterans who served 
alongside American troops during World War II.
    We also recommend an increase in funding for the Department 
of Labor's Veterans' Employment and Training Service.
    The projections in the President's budget for discretionary 
spending in the out years are troubling. The VA health care 
system would be devastated should the Administration's budget 
for future years become a reality. It is our view that 
veterans, who have sacrificed for this country, are being asked 
to carry a disproportionate share of the burden to balance the 
Federal budget. We believe that the Government can be fiscally 
responsible and reduce the Federal deficit and debt, without 
abandoning its commitment to our Nation's veterans.
    As the Congress continues the debate the conflicts in Iraq 
and Afghanistan, including the cost of prosecuting those 
efforts, we must clearly demonstrate our understanding that the 
cost of war includes the cost of caring for servicemembers, now 
and in the decades to come.

                   II. Discretionary Account Spending

A. Medical Services
            Policy Proposals
    Prescription Drug Copayment Increase for Priority 7 and 8 
Veterans: The Undersigned Members oppose the Administration's 
proposed increase of the prescription drug copayment from $8 to 
$15, for a projected savings of $311 million from increased 
revenue and decreased enrollment of these categories of 
veterans. Many Priority 7 and 8 veterans--some earning as 
little as $27,790 a year--cannot afford to nearly double their 
payments for needed prescription drugs.
    Enrollment Fee of $250 to $750 for Priority 7 and 8 
Veterans: The Undersigned Members oppose the Administration's 
proposed new enrollment fee of $250 for veterans with family 
incomes between $50,000 and $74,999; $500 for those with family 
incomes between $75,000 and $99,999; and $750 for those with 
family incomes over $100,000. This proposal is projected to 
save $138 million from increased revenue and decreased 
enrollment starting in 2009.
    Taken together, these two fee increases would be 
particularly hard on certain categories of veterans. For 
example, a family with two veteran wage-earners, each taking an 
average number of medications and each paying an enrollment fee 
of $250, would have to pay nearly $3,000 in new out-of-pocket 
costs for VA care if the prescription and enrollment fees were 
enacted.
    Offset of First-Party Debt: The Undersigned Members of the 
Committee oppose a proposed change in law that would eliminate 
the practice of offsetting VA first-party copayment debts with 
recoveries from insurance companies. Many veterans are drawn to 
VA because of low-cost prescription drugs. Yet, in most cases, 
acquiring these drugs requires visits to a specialty care 
provider. The vast majority of these veterans are elderly and 
on a fixed income. While they are not ``high-income'' by any 
standard, they are over the VA means-test threshold. While the 
current primary care copayment of $15 is in line with most 
private insurance companies, VA's specialty care copayment is 
$50 per visit. That amount is high enough to be an instant 
disincentive to seeking medical care in VA if it cannot be paid 
by third-party insurance. VA estimates this change would yield 
$44 million in increased collections.
    The Undersigned Members also oppose the proposal to return 
revenue from the above new fees to the Treasury, rather than 
reinvesting the funds in veterans' health care.
    Waiver of Health Care Copayments and Fees for 
Catastrophically Disabled Veterans: The Undersigned Members of 
the Committee note with favor the recommendation of The 
Independent Budget, 
a document prepared by four veterans service organizations 
(AMVETS, the Disabled American Veterans, the Paralyzed Veterans 
of America, and the Veterans of Foreign Wars (hereinafter ``the 
IBVSOs'') to amend the law so as to remove the requirement that 
Priority 4 veterans--those veterans who have been deemed 
``catastrophically disabled'' but whose disabilities are not 
service-connected--pay copayments and other fees in connection 
with receiving care from VA. The Undersigned Members intend to 
review this issue with the possibility of eliminating the 
requirements for copayments and fees.
            Components of Recommended Increase
            1. Current Services (+$1.897 billion)
    Payroll inflation, increases in the costs of goods, and 
other ``uncontrollables'' dictate funding increases of at least 
$1.9 billion in FY08 simply to maintain the level of current 
services. Increased utilization of medical services by existing 
patients also continues to drive costs higher. The 
Administration has requested an additional $1.897 billion in 
funding in FY08 to meet these costs, and we support this 
request.
    We are concerned that the Administration has not adequately 
budgeted for enough physicians and nurses to meet the projected 
increase in demand for VA medical care in FY08. The number of 
physicians, nurses, and all other health professionals 
currently employed by the Veterans Health Administration (VHA) 
under the Medical Services account cannot keep pace with 
increasing demands on the system. The Undersigned Members 
believe that resources in this area must be spent on the hiring 
of additional clinical staff to better meet demand. In 
addition, we believe that VA should make the establishment of a 
national nurse staffing standard a high priority and budget 
funds accordingly.
            2. OIF/OEF Demand (+$357 million)
    For the past four years, VA has significantly 
underestimated the number of Operation Iraqi Freedom and 
Operation Enduring Freedom (OIF/OEF) veterans applying for 
health care benefits, and we are concerned that this mistake is 
being repeated. These individuals are eligible for two years of 
VA care upon separation from service. VA estimates that any 
potential workload from OIF/OEF will be negligible relative to 
the overall number of new enrollees next year. Treating these 
new veterans cost $232 million in FY05, and ultimately required 
an increase of that same amount in FY06 for a total funding 
level of $464 million. For FY07, VA estimated that it would 
need $515 million to treat OIF/OEF veterans, but is now slated 
to spend $572 million for their care.
    The Undersigned Members recommend a total funding level of 
$930 million to furnish services to OIF/OEF veterans under 
current law, an increase of $357 million over FY07.
            3. Rescinding theBan onPriority8Veterans(+$1.113billion)
    In January 2003, the Administration halted enrollment of 
Priority 8 veterans, those veterans with no compensable 
service-connected disabilities and with incomes above the HUD 
geographical low-income threshold for their respective 
counties. The Administration's request for FY08 assumes that 
the enrollment ban on Priority 8 veterans will continue.
    The Undersigned Members do not accept this assumption and 
estimate that new resources of $1.113 billion are needed to 
restore access for these veterans. This number is based on VA's 
own 
estimates of what it would cost to reopen the system to 
Priority 8 veterans.
    We believe that veterans in need of VA care should not be 
prohibited from enrolling in the system. Indeed, adequate 
funding should be appropriated to VA so that all veterans who 
choose to enroll with VA have access to needed care and 
services. Many of these veterans bring health care coverage 
with them and are also subject to copayments, effectively 
bringing revenue into the system, thereby offsetting the cost 
of their care. We can think of no other health care system 
which discourages insured patients from seeking care.
    The Undersigned Members note that VA's cost estimate for 
rescinding the ban on Category 8 veterans would be 
significantly reduced if the impact of third-party insurance 
and copayments for care and prescription drugs were factored 
in. The IBVSOs estimate that the total cost would be reduced to 
$366 million.
            4. New Initiatives (+$1.126 billion)
    The Undersigned Members of the Committee accept the 
Administration's proposed ``new initiatives''. While we support 
each of these initiatives, we believe that more can and should 
be done--especially in the areas of mental health, Traumatic 
Brain Injury/polytrauma care, readjustment counseling, and 
rehabilitative care. The Undersigned Members also support the 
expansion of many existing initiatives and recommend increases 
in the specialized services discussed below.
    Mental Health. The Undersigned Members are very concerned 
about VA's capacity to meet the mental health needs of 
returning servicemembers. For example, while the number of 
veterans diagnosed with substance abuse problems is increasing, 
the President's request would cut funds for substance abuse 
treatment. Rather than account for growing demand for mental 
health care services, the budget also projects reductions in 
inpatient psychiatric and residential care.
    We believe that VA needs greater resources for mental 
health services and recommend $693 million in additional 
funding over FY07 levels.
    This level of funding would restore $135 million needed to 
correct deficiencies in mental health programs; support 
expansion of VA's specialized substance abuse programs; expand 
VA's capacity to provide inpatient psychiatric and residential 
care; provide funds to address family-related needs of 
returning veterans experiencing distress following their 
reentry into civilian life; support more effective treatment 
for Post Traumatic Stress Disorder (PTSD); and advance efforts 
to prevent suicide among veterans. In addition, the Undersigned 
Members believe that VA must take a preemptive, proactive 
approach to assist families dealing with the stresses and 
challenges caused by servicemembers' deployments to combat 
zones and their return to civilian life.
    Traumatic Brain Injury and Polytrauma. Traumatic Brain 
Injury (TBI) has been described as the signature injury of the 
current conflicts and medical science is only beginning to 
understand the mental and physical effects of this condition. 
VA has a responsibility to be at the forefront 
of TBI research and treatment. The Undersigned Members believe 
that VA must have adequate staff and equipment to help brain-
injured veterans with rehabilitative care, and to return them 
to an independent existence in their communities.
    In recognition of the needs of veterans with traumatic 
brain and other injuries, Congress directed VA to establish 
specialized centers for rehabilitative care. The four 
Polytrauma Centers in Tampa, Palo Alto, Minneapolis, and 
Richmond are generally regarded as successful. We believe that 
VA must expand comprehensive polytrauma and rehabilitative care 
to all Veterans Integrated Service Networks to meet the needs 
of severely injured veterans and their families--and provide 
the resources to support this effort 
accordingly.
    We are concerned that the Administration has not adequately 
budgeted for intensive multi-disciplinary care and case 
management for veterans with multiple traumas, including TBI. 
We are also concerned that VA lacks specialized TBI outpatient, 
home-based, and residential rehabilitative programs. We support 
VA's efforts to assess and evaluate returning servicemembers 
for TBI, but we do not believe that the Administration has 
committed the resources necessary to provide this service.
    To improve both TBI and Polytrauma care and services, the 
Undersigned Members recommend an increase of $303.4 million for 
this program over the President's request.
    This level of funding would improve the evaluation and 
treatment of veterans with milder TBI injuries; provide 
veterans with intensive and comprehensive TBI/Polytrauma 
rehabilitation; provide each Polytrauma Center with $3 million 
to achieve accreditation for specialized outpatient programs 
for TBI; expand vocational rehabilitation opportunities for 
veterans with TBI; support 150 additional social workers to 
provide intensive care management for veterans with TBI; 
enhance family education and caregiver assistance programs; and 
provide VA with funding to improve its case management and 
research programs.
    Vet Centers. As the Global War on Terrorism continues, the 
number of veterans seeking readjustment counseling and related 
mental health services through Vet Centers will continue to 
grow. Experts predict that as many as 30 percent of returning 
servicemembers may need some kind of mental health treatment--
from basic readjustment counseling to care for debilitating 
PTSD. A study published on March 1, 2006, in the Journal of the 
American Medical Association, reported that 35 percent of Iraq 
veterans accessed mental health care services during their 
first year at home. Despite an increase in the number of 
veterans coming to Vet Centers, the budget for the program has 
remained relatively stagnant. We note that legislation to 
authorize $180 million in funding for Vet Centers passed the 
full Senate last December (Public Law 109-461).
    We recommend that Vet Centers receive a funding increase of 
$70 million above FY07 to meet that goal.
    Rehabilitation. Rehabilitative care programs offer a full 
range of rehabilitation services in a supportive environment, 
with minimal medical care. VA offers both outpatient and 
inpatient programs, including the Comprehensive Integrated 
Inpatient Rehabilitation Program, which focuses on stroke and 
other neurological diseases, vascular diseases, amputations, 
orthopedic conditions, debility, and medically complex 
conditions. While Public Law 104-262 established the 
requirement that VA maintain its capacity to provide for the 
specialized treatment and rehabilitative needs of patients, 
including those with amputations, the Administration is 
projecting a significant decrease of 169 in the average daily 
census for its residential rehabilitative care program. We 
believe that the rate of spending for this account should 
maintain the same rate of growth as in previous years.
    We recommend an increase of $34.3 million for this program.
    Homeless Grant and Per Diem Program. Veterans are 
disproportionately represented among the homeless population, 
accounting, according to estimates, for one in three homeless 
persons on any given night. VA has a responsibility to help the 
roughly 400,000 veterans experiencing homelessness over the 
course of the year. VA's Grant and Per Diem program is 
effective in creating and aiding local shelters as they help 
our Nation's veterans by providing transitional housing, 
rehabilitative services, and referrals for clinical services.
    We recommend $23 million in additional resources for this 
program to fully fund it at the $130 million level that was 
previously authorized by the Committee (Public Law 109-461).
            5. Medical Administration and Medical Facilities
    We support the President's recommendation of $265 million 
over FY07 levels for both Medical Administration and $23 
million for Medical Facilities. We expect these funding levels 
to be adequate to maintain current levels of service.
    Our overall recommendations on medical spending are 
summarized in the chart below:

                        In thousands of dollars--


------------------------------------------------------------------------
Current Services
  Increased Utilization......................................   $497,000
  Inflation and Payroll......................................  1,400,000
                                                              ----------
    Total Current Services...................................  1,897,000

Increased Patient Workload
  OIF/OEF Demand Increase....................................    357,000
  Restore Priority 8's.......................................  1,113,536
                                                              ----------
    Total Increased Patient Workload.........................  1,470,536

New Initiatives and Program Expansions
  Mental Health..............................................    693,000
  TBI/Polytrauma.............................................    296,000
  Vet Centers................................................     70,000
  Rehabilitative Care........................................     34,300
  Homeless Grant and Per Diem................................     23,000
                                                              ----------
    Total New Initiatives and Program Expansions.............  1,116,300

Total Medical Services.......................................  4,483,836
Medical Administration.......................................    265,000
Medical Facilities...........................................     23,000
                                                              ----------
    Total Recommended for Medical Care.......................  4,771,836
                                                              ==========
President's Medical Care Request.............................  1,943,671
President's Medical Care Shortfall...........................  2,828,165
------------------------------------------------------------------------

B. Proposed Discretionary Spending for FY09-FY12
    For the second year in a row, the Administration's proposed 
budget for discretionary spending in years after the current 
fiscal year would devastate VA health care. The President's 
budget assumes no increases for VA medical care for the budgets 
for Fiscal Years 2009 through 2012.
    We view the current strategy as one that gives in the first 
year and cuts heavily thereafter, in order to improve the 
overall appearance of the President's budget. A frozen 
appropriation coupled with cuts in other programs would 
translate to a reduction of services and benefits. The 
Undersigned Members believe that any budget resolution must 
reverse these cuts in future years.

C. Medical and Prosthetic Research
    The Administration's proposed FY08 budget for VA research 
is $411 million, a $1 million cut from the current year level 
of $412 million. This sum cannot sustain current research 
initiatives or provide the program growth necessary to attract 
and retain quality staff. The Administration's proposal would 
result in the direct loss of 193 FTE. Increased funding is 
required to sustain current VA research and development program 
commitments, and to cover inflationary cost increases 
associated with these commitments. VA must be able to continue 
addressing the special needs of our Nation's veterans, and 
continue to recruit and retain the highest quality physicians. 
We recommend an additional $69 million over FY07 levels for a 
total funding level of at least $481 million.

D. Grants for State Extended Care Facilities (SECF)
    The Administration requested $85 million for the second 
consecutive year for State extended care construction grants in 
FY08. Grant proposals from the States continue to increase, in 
response to an ever-growing population of veterans in need of 
long-term care.
    The FY07 ``Priority 1'' backlog of 92 validated 
construction projects, submitted by 23 State governments, 
stands at $242 million. In all cases, the State governments 
involved have satisfied VA's requirement of reserving 35 
percent of the construction cost in appropriated or bonded 
State funds. With currently available funds of $85 million in 
FY07 from Public Law 110-5, VA will be able to fund only 22 of 
these 92 projects in this fiscal year. Further, VA will be able 
to fund only one previously approved high-priority new home 
project. Three other States have proposed new State veterans 
homes to be funded in FY08, but VA would be unable to support 
those projects under the President's budget proposal. The 
States have taken on the major burden of providing veterans' 
long term care, and they ask little of the Federal Government. 
The Administration should support their efforts.
    To award these three new State home grants in FY08, and to 
fund pending meritorious grant proposals, the Undersigned 
Members recommend $250 million for FY08, a $165 million 
increase above both the Administration's FY07 and FY08 
requests.

E. Major and Minor Construction
    We support the Administration's request for $727 million 
for Major Construction and $233 million for Minor Construction 
in FY08, although increased resources for construction may be 
required in the near future. We believe VA must move forward in 
FY08 on previously approved projects with funds appropriated 
for FY07 in a more organized fashion. The Undersigned Members 
believe that VA must honor the commitments it has made to the 
completion of new hospitals in Denver, Las Vegas, and Orlando, 
as well as for other enhancements and expansions across the 
system.

F. Office of the Inspector General
    The work of the VA Office of the Inspector General (OIG) 
has made significant contributions to management effectiveness 
throughout VA. The OIG conducts vital oversight investigations 
and audits of various aspects of the Department's operations 
and budget. For the second year in a row, the Administration is 
proposing a decrease in FTE and funding for the OIG. Reductions 
in staff would severely impair the OIG's ability to identify 
fraud, waste, and mismanagement, and would result in fewer 
arrests, indictments, and convictions of individuals who prey 
on VA and our Nation's veterans.
    To reinstate the cuts made by the FY07 Joint Funding 
Resolution and to further enhance the abilities of the OIG, we 
recommend an additional $18.3 million above the amount included 
in the President's request. Funding at this level will allow 
for an additional 100 FTE to support additional auditors, 
health care inspectors, and criminal investigators to ensure 
enhanced quality and safety of VA health care and services.

G. Information Technology (IT)
    The Undersigned Members support the Administration's 
request for $1.8 billion for IT for FY08. The events of 2006 
and the subsequent restructuring of VA's IT system have the 
potential to limit future risk of catastrophic security 
breaches. The Committee intends to closely monitor developments 
as VA works to improve its IT systems.
    Provisions in Public Law 109-461 require that, in the event 
of a breach of secure personal information held by VA, the 
Secretary must ensure that, as soon as possible, a non-
Department entity or the VA Inspector General conduct an 
independent analysis to determine the level of risk associated 
with the breach. Since July 2006, VA's Security Operations 
Center has reported about 3,600 incidents involving the 
potential loss or unauthorized access of sensitive personal 
information. VA has not budgeted for the conduct of these risk 
analyses.
    We recommend that VA be allocated an additional $10 million 
for purposes of conducting data risk analyses.

H. Compensation, Pension, and Burial Staffing and Training
    The Undersigned Members are concerned that the 
Administration's request for compensation, pension, and burial 
staffing is inadequate. Although the President's FY08 budget 
request of $804 million for compensation, pension, and burial 
staffing is $27.6 million over the 2007 level, we believe that 
additional funding is necessary to provide veterans with timely 
and accurate decisions of their claims We recommend an 
additional $40 million for compensation, pension, and burial 
staffing to provide an additional 663 FTE over the President's 
request. We also recommend $10 million for the training of 
these new staff, and improvement and expansion of VBA's 
training programs.
    Staffing. The President requests 6,882 FTE for direct 
compensation staffing in FY08. The request for pension and 
burial staffing remains flatlined at 1,287 and 151, 
respectively. VA typically combines these three programs for 
their direct FTE count--in 2008 it is estimated to be 8,320 for 
all three programs. This is 457 more than last year's request, 
but not enough to meet VA's ever-increasing workload and 
backlog of claims.
    Workload. The disability claims workload from returning war 
veterans as well as from veterans of earlier periods has 
increased continuously since 2000. Annual claims grew 39 
percent from 2000-2006, from 578,773 to 806,382. Despite this 
trend, VA estimates that it will see a slight decrease in 
claims receipts in FY08 to 800,000. VA estimates that its 
pending inventory, which as of January 2007 was 393,922, will 
decrease to 329,660 by the end of 2008. However, currently 
claims receipts are up 8 percent over what was projected for 
FY07, and most of those are original rather than reopened 
claims. VA typically receives 70,000 claims per month.
    Studies have shown that the size of the active duty force 
is the best predictor of new claims activity. DOD data show 
that there were nearly 198,000 military separations in 2006. 
This number does not include demobilized Guard and Reserve. 
Trends show that 35 percent of these veterans will file a claim 
over the course of their lifetime. For 2006 separations only, 
that number is over 69,000 for active duty forces alone. It is 
clear that VA has not yet seen the bulk of claims that will be 
submitted as a result of OIF/OEF, and must prepare now for this 
influx of claims.
    In 2006, 24 percent of the compensation workload (51,260 of 
the 217,343 original compensation claims received) contained 
eight or more issues. Cases resulting from VA's popular 
Benefits Delivery at Discharge program have an average of ten 
issues per claim. These claims are increasingly complex, and 
require more time invested in development and rating. 
Additionally, many veterans receiving compensation have 
chronic, progressive diseases such as diabetes, mental illness, 
and musculoskeletal or cardiovascular illnesses. As these 
veterans age, they will undoubtedly file additional claims.
    VA estimates that these 8,320 direct FTE will have an 
average output of 101 cases per FTE per year. However, this 
number of direct FTE also includes clerical, public contact, 
and non-rating claims processors, and others working in VBA, so 
the number actually processing claims will be lower.
    Clearly, VA must reduce its backlog and prepare for an 
influx of claims resulting from ongoing operations abroad, 
recent court decisions, and legislation. Given that it takes 
two years for a claims adjudicator to become proficient in his 
or her work, the time to hire and train new employees is now.
    Training of adjudicators. The accuracy and timeliness of 
VA's claims performance is dependent upon well-trained and 
experienced staff. The President's budget cites VA's enhanced 
training efforts as ``the key'' to developing a staff capable 
of producing accurate and consistent decisions and effectively 
responding to changing workload volumes. Simply hiring 
additional FTE will not automatically increase VBA's 
productivity. There must be sufficient funds in the budget to 
absorb the cost of training new personnel before they can 
contribute to improving VBA's bottom line.
    VBA has established a broad spectrum of training programs 
and educational resources, both at VA's Regional Offices and at 
the Veterans Benefits Academy in Baltimore, MD. Veterans 
Service Representatives (VSRs) and Rating Veterans Service 
Representatives (RVSRs) are provided 3 weeks of centralized 
basic training at the Veterans Benefits Academy. The Veterans 
Benefits Academy also offers a range of advanced training 
courses in leadership and management development, as well as 
computer-based learning tools and satellite broadcasts that 
bring the Academy's expertise directly to staff desktops. As of 
FY07, all claims adjudicators are required to undergo a minimum 
of 80 hours of job-specific training.
    The Undersigned Members recommend an additional $10 million 
toward this effort.

I. Vocational Rehabilitation and Employment
    The Vocational Rehabilitation and Employment (VR&E) Program 
provides training, education, and other services to enable 
veterans to obtain and maintain employment after sustaining 
service-connected disabilities.
    The President's FY08 budget request calls for an additional 
39 direct FTE for VR&E. The VR&E workload is expected to 
increase above 2006 by 2.8 percent in 2007 to 92,126, and by 
another 2.5 percent in 2008 to 94,500. VR&E anticipates that 
the effects of OIF/OEF will result in more seriously injured 
veterans who will likely qualify for the VR&E Program.
    The Administration's request also stipulates that the 
additional FTE will be allocated toward implementation of the 
2004 VR&E Task Force Recommendations, staff for the Coming Home 
to Work and Process Consolidation initiatives, and contract 
oversight. VA maintains that implementation of the Task Force 
recommendations and removing the burden of contract oversight 
from case managers will allow it to handle the growing 
caseload. However, it is not clear that the requested 39 FTE 
will be sufficient to accommodate these objectives and meet the 
needs of a growing workload.
    The Undersigned Members recommend $4.33 million above the 
President's FY08 staffing budget request of $119.7 million, 
which is an increase of $5.7 million over the FY07 level. This 
would provide an additional 61 FTE, above the President's 
request, for VR&E to absorb increasing workload and meet 
additional 
objectives.

J. Education
    The VBA's Education Service provides veterans, 
servicemembers, Reservists, and certain family members with 
educational resources. Recent legislative changes in the 
education program for Reservists have increased the complexity 
of education claims and the resources needed to process them.
    The President's FY08 budget request calls for an additional 
14 direct FTE for the Education Service over the FY07 level of 
758. The Education Service workload is expected to increase by 
2.4 percent in both FY07 and FY08. VA expects that this level 
of direct FTE will allow it to not only process claims in a 
timely and accurate manner, but also address some of the 
deterioration in timeliness experienced in prior fiscal years.
    While this request for an additional 14 FTE for the VA's 
Education Service is a step in the right direction, we are 
concerned that this increase will not be sufficient to support 
the workload associated with the projected increase in 
education claims, together with the need to improve the 
timeliness and accuracy of education claims processing. We 
recommend an additional $11.6 million, which would support 149 
direct FTE at the Education Service.

K. Board of Veterans' Appeals
    The Board of Veterans' Appeals (BVA) is responsible for 
making final Departmental decisions on behalf of the Secretary 
for the 
thousands of benefits claims presented for appellate review annu
ally.
    The President's FY08 request for BVA is for $54.76 million, 
which would support 468 FTE, an increase of 24 FTE and $1.9 
million over the FY07 level. The Undersigned Members are 
concerned that the resolution time is rising despite an 
increase in appeals decisions per veteran law judge. In 
addition, although BVA's overall quality has improved to 93 
percent, of those cases appealed to the Court of Appeals for 
Veterans Claims (CAVC), it appears that there is still a gap 
between the Board's decisions and the CAVC's determinations. Of 
the 2135 merit decisions made by the CAVC in FY06, only 448 
cases were affirmed, while 518 were reversed, vacated, or 
remanded, and 847 were simply remanded for further action. This 
data suggests that BVA's resolution of claims, when compared to 
the court's action, is well below 50 percent for those cases 
appealed to CAVC. While we recognize that this is just one a 
snapshot of the work that BVA undertakes, it must be taken into 
account in evaluating the current performance of the Board.
    The Undersigned Members recommend that BVA be provided with 
$3.7 million above the President's request, which would provide 
32 more FTE to reduce the backlog at BVA, decrease the average 
days pending, and further improve quality.

L. State Cemetery Grant Program
    The State Cemetery Grants Program (SCGP) complements the 
National Cemetery Administration's (NCA) mission to establish 
gravesites for veterans in areas where NCA cannot fully meet 
veterans' burial needs.
    We recommend that the SCGP be funded at a level of $37 
million--a $5 million increase over the FY07 level. This 
increased funding will enable states to establish, expand, and 
improve their veterans' cemeteries.

M. Department of Labor, Veterans' Employment and Training Service
    The Undersigned Members believe that the Department of 
Labor's Veterans' Employment and Training Service (VETS) should 
receive an additional $6 million for Veterans' Workforce 
Investment Grants (VWIP) and the National Veterans' Training 
Institute (NVTI). Given the unemployment rate for young 
veterans, VWIP should continue to expand its efforts to target 
recently separated veterans as well as segments of the veteran 
population that need specialized employment assistance, such as 
single parents and those with service-connected disabilities. 
Further, those involved in the delivery of services to veterans 
must be adequately trained. We expect that with additional 
funding, NVTI will develop new courses based on the Jobs for 
Veterans Act.
    We further believe that there should be an increase of $8.5 
million in the amount available for State grants supporting the 
Disabled Veterans' Outreach Program (DVOP) and Local Veterans 
Employment Representatives (LVERs). These grants support staff 
who provide intensive services to meet the employment needs of 
disabled and other eligible veterans, with the maximum emphasis 
directed toward serving those who are economically or 
educationally disadvantaged, including homeless veterans, and 
veterans with barriers to employment. They also develop 
employment opportunities for veterans through outreach to 
employers.
    Funds for these initiatives have remained relatively 
constant for the past five fiscal years, but with increases in 
personnel costs and the effect of inflation, the actual number 
of LVERs and DVOPs has declined by more than 400 FTE since 
FY02. We believe the additional funding that we are 
recommending will allow VETS to better assist the increasing 
numbers of veterans seeking employment assistance, and will 
curb the erosion in staffing for these programs.
    We support the President's FY08 budget request of $23.6 
million for the Homeless Veterans' Reintegration Program 
(HVRP), an increase of 8 percent over the FY07 level. It is 
estimated that an additional 1,200 homeless veterans would be 
served at this level.

N. Court of Appeals for Veterans Claims
    The United States Court of Appeals for Veterans Claims 
(CAVC), a legal body independent of the Department of Veterans 
Affairs and the executive branch, is vested with the authority 
to review decisions of the Board of Veterans' Appeals (BVA) 
regarding a veteran's entitlement to benefits offered by VA. 
The court is empowered to affirm, vacate, reverse or remand 
decisions made by BVA, as well as compel actions of the 
Secretary where such action is necessary to bring VA into 
accordance with the law.
    The court's budget request of nearly $21.22 million for 
FY08 is $1.12 million more than the FY07 level. This increase 
is attributable to personnel costs for additional staff to meet 
the challenges in processing an increased workload. During FY06 
the court received more case filings that any other year in the 
court's nearly 20-year history. From FY98 to FY04, the court 
received approximately 200 case filings per month. In FY05, the 
number of case filings increased to 289 per month, and in FY06 
the average increased to more than 300 per month. This increase 
continues in FY07 with 1,584 case filings in just the first 
quarter--the highest of any quarter in the court's history. 
This trend is expected to continue throughout FY07 and into 
FY08. Thus, additional staff for the court are warranted.
    Three of the new positions that are requested in the FY08 
budget are for attorneys who will perform dual roles for the 
court. As part of their duties, these attorneys would serve as 
law clerks for retired judges who have been recalled to the 
court. We support the court's use of retired judges and 
therefore recommend that the court's requested funding to meet 
this end be provided.

                    III. Mandatory Account Spending

    The Undersigned Members support the budget request of $45.3 
billion for entitlement programs, which is a $3.2 billion 
increase over the 2007 level. However, there are several areas 
within 
this account that require funding beyond what the President has 
requested.

A. Filipino Veterans
    Filipino veterans who served with the United States' forces 
during World War II were originally promised veterans' 
benefits. Eligibility for benefits for many of these veterans 
was rescinded by Congress in 1946. While many benefits have 
been restored, some Filipino veterans and their survivors 
remain ineligible for needs-based pension benefits. We 
recommend an additional $50 million to provide pension and 
death pension benefits to World War II Filipino veterans and 
their survivors in FY08.

B. Cost-of-Living Adjustment
     The Administration's requested increase in mandatory funds 
provides for a 1.4 percent cost-of-living adjustment in VA 
compensation benefits in FY08. A 1.4 percent increase is the 
expected increase estimated in the Consumer Price Index, and is 
the same as the increase expected for Social Security benefits. 
Under current law, this COLA is rounded down to the next lowest 
whole dollar.
    VA compensation is sometimes the sole source of income for 
a veteran and his or her family. We owe it to our veterans to 
provide them with appropriate compensation, the value of which 
does not decrease with inflation. The Undersigned Members thus 
recommend that $20 million be provided to end the COLA round-
down.

C. State Approving Agencies
    For purposes of establishing institutional eligibility for 
the payment of VA education and training benefits, State 
Approving Agencies (SAAs) are responsible for the evaluation 
and approval of programs of education and training within their 
respective states, including: institutional programs, on-job 
training, and licensing and certification programs. At a time 
when the number of veterans enrolled in programs of education 
is expected to increase, we believe it does not make sense to 
decrease SAAs' funding in FY08 due to the expiration of an 
extended ceiling in the amount of mandatory funds available for 
the program. We recommend that an additional $6 million be made 
available for SAA grants.

D. Dependency and Indemnity Compensation
    Surviving spouses of veterans who have minor children 
receive an additional transitional benefit of $250 per month 
for the first two years of eligibility. Because no cost-of-
living increase has been provided since 2005, the value of this 
benefit has diminished.
    The Undersigned Members recommend an additional $500,000 in 
mandatory spending to restore the value of this benefit.

E. Service-Disabled Veterans' Insurance
    The Insurance Act of 1951 established the S-DVI program for 
veterans with service-connected disabilities rated at 10 
percent or greater. This $10,000 benefit has never been 
increased.
    Recognizing that veterans who are totally disabled have 
particular difficulties in purchasing commercial life 
insurance, Congress has provided additional benefits to these 
policyholders. Totally disabled veterans enrolled in S-DVI are 
eligible to apply for a waiver from VA which relieves them of 
the obligation to pay premiums on the basic coverage. In 
addition, in 1992, Congress made an additional $20,000 in 
supplemental coverage available to this same cohort of totally 
disabled veterans. Unlike the $10,000 basic coverage, premiums 
are not waived on supplemental coverage. As a result of this 
latter change, totally disabled veterans are currently eligible 
for a maximum of $30,000 in VA life insurance. In comparison, 
the Servicemembers' Group Life Insurance and Veterans' Group 
Life Insurance benefits, which were $10,000 and $20,000, 
respectively, at their inception, have been increased over time 
to $400,000.
    We recommend that $5 million be provided to give totally 
disabled veterans the opportunity to purchase an additional 
$20,000 in supplemental insurance, raising to $50,000 the 
maximum amount of life insurance available to a totally 
disabled veteran.

F. Burial Benefits
    The Federal Government has provided varying forms of burial 
benefits since the Civil War. We are concerned that the 
continued erosion in the value of monetary burial benefits has 
resulted in the benefit covering just a small fraction of what 
was covered in 1973, when VA first provided monetary burial 
benefits for our veterans.
    The Undersigned Members recommend that $150 million be 
provided to bring the value of this benefit closer to that 
established in 1973. Specifically, we recommend an increase in 
the plot allowance from $300 to $745; an increase in the 
service-connected burial benefit from $2,000 to $4,100; and, 
finally, an increase in the non-service-connected burial 
benefit from $300 to $1,270.

G. Specially Adapted Housing Grants
    VA provides specially adapted housing grants of up to 
$50,000 to severely disabled veterans with service-connected 
disabilities. Unfortunately, increases to this program have 
been infrequent, while real estate and construction costs have 
continued to rise. We recommend an additional $6 million to 
increase the amount of these grants to $60,000.

H. Automobile Grants and Adaptive Equipment
    VA provides certain severely disabled veterans and 
servicemembers grants for the purchase of automobiles. This 
grant also provides for adaptive equipment necessary for safe 
operation of those vehicles. When this grant was first 
established in 1946, it covered approximately 85 percent of the 
average cost of a new automobile. Over time, Congress adjusted 
the amount provided to 80 percent of a new automobile. However, 
lack of further adjustments to this grant have gradually eroded 
the benefit so that today, the current allowance of $11,000 
represents only 39 percent of the average cost of an 
automobile.
    The Undersigned Members recommend that $15 million be 
provided to increase the allowance to 80 percent of the average 
cost of a new automobile.

                              IV. Closing

    We thank the Budget Committee for its attention to the 
Undersigned Members' views and estimates of the 
Administration's Fiscal Year 2008 budget. We look forward to 
working with the Budget Committee in crafting a budget for 
veterans' programs that truly meets the needs of those who have 
served our country.
            Sincerely,
                                   Daniel K. Akaka,
                                       Chairman.
                                           John D. Rockefeller IV.
                                           Patty Murray.
                                           Barack Obama.
                                           Bernard Sanders.
                                           Sherrod Brown.
                                           James Webb.
                                           Jon Tester.
                                ------                                

                                                     March 1, 2007.
Hon. Kent Conrad, Chairman,
Hon. Judd Gregg, Ranking Member,
Committee on the Budget,
U.S. Senate, Washington, DC.

    Dear Senators Conrad and Gregg: Pursuant to Section 301(d) 
of the Congressional Budget Act of 1974, I, as Ranking Member 
of the Committee on Veterans' Affairs (hereinafter, 
``Committee'') submit this report to the Committee on the 
Budget on the proposed fiscal year 2008 (hereinafter, ``FY08'') 
budget for Function 700 (Veterans' Benefits and Services) 
programs.

                            General Comments

    From time to time, it is worth repeating the obvious. We 
are a nation at war. The fourth anniversary of the war in Iraq, 
and the sixth anniversary of the war in Afghanistan will occur 
this year. Hundreds of thousands of volunteers have been sent 
into harm's way. Thousands have given their lives in combat; 
thousands more have returned with severe disabilities. The 
mission statement of the Department of Veterans Affairs 
(hereinafter, ``VA''), ``To care for him who shall have borne 
the battle and for his widow, and his orphan . . .'' is more 
relevant now than ever. These brave men and women expect and 
deserve, our best, as do all who suffer disabilities as a 
result of military service. They are the reason VA exists. Our 
shared values demand that they, above all others, have first 
call on the Nation's resources. Within the context of a near 
$87 billion budget tor VA, few can argue that resources are not 
there to meet our obligation to those suffering disabilities as 
a result of current and past conflicts.
    We must also acknowledge that we are a nation with deficits 
and debt. After meeting our commitment to those for whom VA 
benefits and services were created, we cannot escape the 
reality of resource constraints. It is with this reality in 
mind that I make my recommendations on the President's FY08 
budget. Almost exactly ten years ago, every member of the 
Committee on Veterans' Affairs, on a bi-partisan basis, signed 
a views-and-estimates letter expressing similar sentiments. I 
believe the following excerpt from that letter provided the 
appropriate framework for debate on VA's budget then and still 
does today:

          In preparing these comments, the Committee's members 
        have kept in mind the fiscal limitations within which 
        we must operate if we are to get Federal spending under 
        control and thereby reduce the Federal deficit and 
        debt. We believe that the Government can be fiscally 
        responsible while still fulfilling its commitments to 
        the most deserving among us--including our Nation's 
        veterans. We also are mindful of the fact that 
        uncontrolled Federal spending threatens the long-term 
        health of the Nation's economy and, in turn, could 
        adversely affect the provision of veterans' benefits. 
        Thus, we recognize that those who have worn the uniform 
        in defense of the Nation seek, as we do, to protect the 
        health of the Nation's economy.

                                Summary

    Function 700 is comprised of budget authority and outlays 
associated with four entities under the jurisdiction of the 
Committee: VA; the Department of Labor's Veterans' Employment 
and Training Service (hereinafter, ``VETS''); the American 
Battle Monuments Commission (hereinafter, ``ABMC''); and the 
United States Court of Appeals for Veterans Claims 
(hereinafter, ``CAVC''). I support the President's request for 
total Function 700 discretionary funding and, except as noted 
below, the President's total mandatory funding request. With a 
few exceptions, I endorse the President's allocation of 
Function 700 spending among the various appropriations 
accounts. The exceptions are noted in the following chart and 
will be discussed in greater detail in the body of this 
letter.\1\
---------------------------------------------------------------------------
    \1\For purposes of this letter, in order to more accurately compare 
the FY08 VA budget relative to the fiscal year 2007 appropriation, I 
have not assumed the realignment of $556 million and 5,529 full-time 
equivalent employees in FY08 (as is assumed in the President's request) 
to VA's Information Technology account.


----------------------------------------------------------------------------------------------------------------
                                                                President's         V&E
                                                               FY08 Request   Recommendation      Difference
----------------------------------------------------------------------------------------------------------------
State Home Construction Grant...............................     $85 million     $10 million     ^$75 million
Medical Research............................................     412 million     432 million       +20 million
Minor Construction..........................................     233 million     284 million       +51 million
General Operating Expenses..................................   1.717 billion   1.721 billion      +3.7 million
National Veterans' Training Institute.......................   1.949 million   2.099 million      +150 thousand
Veterans' Workforce Investment Program......................   7.351 million   7.501 million      +150 thousand
----------------------------------------------------------------------------------------------------------------

VA
    The President requests total budget authority for VA in 
FY08, including revenue from medical collections authorized 
under existing law, of $86.757 billion. This total consists of 
$44.978 billion for mandatory programs and $41.779 billion for 
discretionary programs. The $41.779 billion request for 
discretionary programs is comprised of $2.352 billion in 
expected revenue from collections and $39.427 billion in 
appropriations. I do not recommend increases beyond those 
requested by the President for discretionary programs. 
Furthermore, I agree with the President that discretionary 
spending from general appropriations be limited to $39.427 
billion.
    With respect to mandatory programs, the President's budget 
assumes offsetting receipts of $355 million in FY08, and $2.313 
billion over five years, from the enactment of revenue-
generating proposals. As will be discussed below, I do not 
support revenue from these or other revenue-generating 
proposals being used as offsets against mandatory spending.
Veterans' Employment and Training Service
    The President requests $228 million for the Department of 
Labor's VETS programs and services. I recommend that $300,000 
be added to the President's request to increase funding for the 
National Veterans' Training Institute (hereinafter, ``NVTI'') 
and the Veterans' Workforce Investment Program (hereinafter, 
``VWIP'').
United States Court of Appeals for Veterans Claims
    The CAVC requests $21.2 million. I support the CAVC's full 
request provided that it continues to use its statutory 
authority to recall retired judges throughout FY08.
American Battle Monuments Commission
    The President requests $42.1 million for ABMC. I 
enthusiastically support the President's request.

                               Discussion

                         I. MANDATORY PROGRAMS

    Within Function 700, only VA programs contain mandatory 
account expenditures. The President's request for FY08 is 
$44.978 billion in budget authority for mandatory programs.
    The President's budget assumes offsetting receipts of $355 
million in FY08, and $2.313 billion over five years, from the 
enactment of legislation that would: apply a progressive annual 
premium on veterans without service-disabling conditions whose 
family income exceeds $50,000; increase pharmacy copayments 
from $8 to $15 per 30-day supply of medication for priorities 7 
and 8 veterans; and end VA's practice of offsetting first-party 
copayment debt with third-party collections. I agree that the 
proposals put forth by the President merit serious 
consideration and I recommend adoption of some mixture of 
revenue-generating proposals. However, I do not support revenue 
from these or other proposals being used as offsets against 
mandatory spending. Rather, all revenue generated from new 
collections should be used to fund veterans' medical care.
    As was noted in last year's letter, VA entitlement spending 
has nearly doubled in a ten-year period. The bulk of the 
accelerated spending is attributable to growth in the 
Compensation and Pension (hereinafter, ``C&P'') account. The 
C&P account funds disability compensation payments for veterans 
with service-connected disabilities; compensation payments to 
surviving spouses and dependents of veterans who die as a 
result of service-related conditions; pension payments to 
disabled or elderly wartime veterans; pension payments to needy 
spouses of wartime veterans; and payment of certain burial-
related expenses.
    During his testimony at the Committee's February 13, 2007, 
hearing, VA Secretary R. James Nicholson attributed the growth 
in VA's entitlement expenditures to a variety of factors, chief 
among them VA's efforts to inform eligible veterans of the 
benefits to which they may be entitled. VA expects net 
accession to the compensation roles to continue to increase, 
even in the face of an overall declining veterans' population.
    Looking at specific drivers of cost growth, VA projects 
that average compensation payments to veterans will continue to 
increase due to a variety of factors: (1) More veterans filing 
disability claims (primarily Gulf War era and Vietnam-era 
veterans); (2) More veterans filing for and being granted 
service-connection for multiple disabilities (the number of 
veterans filing for at least eight or more disabilities has 
doubled in five years); (3) Increases in average disability 
ratings (as veterans age, their disabilities may worsen and 
they may be granted increased disability ratings); (4) 
Increases in Individual Unemployability claims; (5) Cost-of-
living adjustments; and (6) More military retirees filing for 
disability compensation spurred by new laws allowing partial 
concurrent receipt of military retired pay and VA disability 
pay (43% of the Nation's 1.96 million military retirees are now 
receiving VA disability compensation).
    A number of bills, including some I have authored, already 
have been referred to the Committee proposing additional VA 
entitlement program spending. Although I am aware of and, in 
many cases, sympathetic to efforts to address gaps in 
educational assistance, compensation, insurance, and other 
benefits, I believe it is important during a time of fiscal 
restraint to live within our means. Therefore, it will be my 
policy to adhere to existing budgetary guidelines and find 
spending offsets to pay for any new, non-emergency entitlement 
spending.

                       II. DISCRETIONARY PROGRAMS

A. VA Medical Care
    The President requests $37.02 billion for medical care in 
FY08, including $462 million that is proposed to be realigned 
with the Information Technology (hereinafter, ``IT'') account. 
The President's request is comprised of a combination of 
general revenue appropriation ($34.66 billion) and medical care 
collections ($2.35 billion). I support both the President's 
total medical care request and the sources from which he 
proposes to obtain requested dollars.
    Before I provide my views on the President's request, I 
feel it is necessary to explain what ``medical care'' is in 
order to ensure accuracy. There is no longer a single VA 
``medical care'' appropriation account as in prior years. 
Beginning with fiscal year 2004 appropriations, Congress 
divided the medical care account into three separate health-
related accounts: medical services (including amounts 
transferred to medical services from medical collections), 
medical administration, and medical facilities. It is the sum 
of these three accounts I refer to when using the term 
``medical care.''
    I believe that Congress should collectively revisit the 
policy of having three separate medical appropriation accounts. 
Although the purported reason for the three account structure 
was to provide Congress with more detailed, transparent 
information about the expenditure of health resources, the 
effect has been to increase VA's financial management 
transactions with little or no benefit and to add greater 
complexity to financial accounting decisions. The following is 
a post-hearing question response from VA about the operational 
effect of the three account structure:

          Unfortunately, the change in the medical care account 
        structure has resulted in a number of unintended 
        consequences that have dramatically increased the 
        volume and complexity of VA's workload. One significant 
        impact has been the negative effect it has had on the 
        Department's budget execution activities. Financial 
        management transactions occur at all of VA's more than 
        150 medical centers. Prior to the account structure 
        revision, there were about 30,000 funding transactions 
        required to support the single medical care 
        appropriation account. With the implementation of the 
        new account structure, our workload has grown to 70,000 
        transactions. This substantial increase in the volume 
        of financial transaction workload has increased the 
        risk of errors.

          The current account structure has also had the 
        unintended effect of introducing greater complexity 
        into the hiring process at medical centers. For 
        example, payroll funds to support nurses, security 
        guards, and food service staff are now in three 
        separate accounts instead of managed through a single 
        medical care account. All three positions are key 
        components leading to safe, high-quality patient care. 
        Funding limitations caused by the more detailed account 
        structure have made it much more difficult for medical 
        center directors to staff their facility with the 
        proper combination of employees, who contribute to both 
        direct and indirect patient care. This has had the 
        greatest impact on the management and administration of 
        the Medical Services and Medical Administration 
        accounts.

I will work with the Appropriations Committee on this issue as 
the year progresses.
    As to the current request for medical care funding, the 
dramatic change in perception of VA as a national leader in the 
delivery of high-quality health care has driven an increase in 
demand for its services from veterans across the country. Of 
VA's 7.6 million enrollees, roughly 5.8 million will use VA's 
system in FY08. Couple the demand for VA care with an aging 
population, and newer veterans with complex care needs arising 
from service-related injuries suffered during Operation Iraqi 
Freedom and Operation Enduring Freedom (hereinafter, ``OIF/
OEF''), and it is not surprising that there is tension between 
demand for health services and available resources.
    Assuming enactment of the President's request, VA medical 
care will have increased by 77 percent since fiscal year 2001. 
If the President's increase for FY08 is any barometer for out-
year increases, and assuming current enrollment eligibility 
policy continues, VA's medical care budget will grow at a pace 
that may be unsustainable.
    For the sixth year in a row the President has proposed 
enacting revenue-generating policy proposals. However, this 
year's proposals are different than prior year's in that the 
President's discretionary budget request for the medical care 
system does not assume enactment of those policies in order to 
provide the system with the 
resources necessary to fund all medical care programs. Instead, 
the President proposes to deposit any receipts from the 
proposals directly into the U.S. Treasury, resulting in a 
mandatory cost 
savings.
    The first of the FY08 proposals is to charge certain 
veterans a progressive annual premium based on the veteran's 
family income: $250 per year for those making between $50,000 
and $74,999; $500 for those making between $75,000 and $99,999; 
and $750 for those who make over $100,000 annually. As a point 
of comparison, the average annual premium of an individual 
health insurance policy in the United States is $4,242. The 
second proposal would increase copayments for priority 7 and 8 
veterans to $15 for a 30-day supply of prescription medication; 
and the third is to cease waiving indebtedness of first party 
copayments under certain circumstances.
    During a time of high deficits and restrained spending in 
every account unrelated to national security, the President's 
proposals are a very reasonable way of sharing some of the 
costs associated with access to what is widely regarded as the 
Nation's best health care system. Given that this budget does 
not rely on the proposals' enactment, I believe they represent 
a good starting point from which Senators can discuss any 
responsible approach to increasing revenue from sources other 
than appropriations.
    Further, I would strongly recommend that any new revenue 
sources be devoted to VA's discretionary accounts, specifically 
the medical services account, for use in providing care to 
America's veterans. I would also recommend that any such 
revenue enhancing measures not go into effect until the start 
of fiscal year 2009. In that way, VA would have more time to 
plan for the implementation of the new proposals and additional 
time to provide Congress with a more accurate projection of 
revenue generated from them. This will allow Congress to 
properly reflect the budgetary implications of any new policy 
during the fiscal year 2009 budget cycle.
    The President's budget for medical care contains numerous 
other funding initiatives that I support and that are vital to 
veterans, particularly the 4 percent of VA's patient population 
who served in OIF/OEF. Assumed in the request are increases for 
prosthetic and sensory aids, treatment of serious mental 
illness, treatment of Post Traumatic Stress Disorder, and other 
programs to support Gulf War and OIF/OEF veterans. Care for 
veterans of the Global War on Terror must remain VA's highest 
priority.

                          B. MEDICAL RESEARCH

    The President's budget proposes flat-lined funding in the 
Medical and Prosthetic Research account in FY08. VA projects 
that the $412 million request (including $1.1 million proposed 
for IT realignment) in appropriations will be leveraged with 
other Federal (and to a lesser degree, non-Federal) resources 
to yield an overall increase in allocations for research. I 
recommend an additional $20 million above the President's 
request.
    One research priority that VA has identified for the coming 
fiscal year focuses on returning OIF/OEF veterans. Many of 
these veterans have sustained traumatic brain or spinal cord 
injuries, often in conjunction with sensory loss and loss of 
limbs. It is essential that research be conducted to guide 
treatment and rehabilitation for these individuals with 
polytraumatic injuries. VA must invest in research now to guide 
evidence-based treatments for the future. In pursuit of this 
goal, I propose that VA's Medical and Prosthetic Research 
account be increased to $432 million for FY08.

                       C. INFORMATION TECHNOLOGY

    The President requests $1.303 billion (not including $556 
million proposed for IT realignment) for IT and data security 
activities. This amount is intended to continue VA's transition 
to a fully central IT management system by the July 2008 target 
date.
    The Committee held a series of hearings during the 109th 
Congress to examine VA's plan to re-organize its IT management 
system and rectify longstanding problems with data security and 
the stewardship of veterans' sensitive personal information. I 
support the President's request for the resources necessary to 
accomplish these goals. I will continue to closely monitor the 
centralization process as well as VA's security progress to 
ensure that this transformation allows VA to maintain critical 
infrastructure, make the investments necessary to enhance 
future operations, and protect veterans' personal information.

                     D. GENERAL OPERATING EXPENSES

    The President requests $1.717 billion (including $89 
million proposed for IT realignment) in general operating 
expenses in FY08, $1.399 billion for the Veterans Benefits 
Administration (hereinafter, ``VBA'') and $318 million for 
General Administration. Included in the total is $156 million 
in appropriations that will be transferred to the General 
Operating Expense account for administration of VA's housing 
programs. I recommend a $3.7 million increase above the 
President's request, all of which would go toward General 
Administration.
    Although the President's budget recommends budget authority 
and full-time equivalent (hereinafter, ``FTE'') employment 
levels for each of the organizations funded under the General 
Operating Expense account, it is important to note that these 
are estimates only and that VA retains the authority to shift 
money around among each organization if actual events differ 
from the assumptions contained in the FY08 budget. For 
instance, should the number of disability compensation claims 
received by VA exceed expectations due to court decisions, 
legislative or regulatory changes, or otherwise unexpected 
volume, I would expect VA to adjust budget and FTE needs for 
the Compensation and Pension Service (hereinafter, ``C&P 
Service'') and the Board of Veterans' Appeals (hereinafter, 
``BVA'') as is necessary. Conversely, should claims receipts be 
less than projected, I would expect an accounting from VA as to 
how it will adjust its budgetary and FTE needs.

            Veterans Benefits Administration

    Including transferred appropriations for administration of 
VBA's housing programs, $1.399 billion (including $45 million 
proposed for IT realignment) is requested for VBA. This funding 
request will support a staffing increase of 470 FTE over fiscal 
year 2007.
            (a) Compensation and Pension Service
    The President requests funding to support 9,893 FTE 
(including 334 IT FTE) and 8,320 direct FTE to handle VBA's 
compensation and pension workload. This would provide the C&P 
Service with an increase of 457 direct FTE over the expected 
fiscal year 2007 level. That FTE level would represent almost a 
59 percent increase in direct FTE during the past ten years.
    Claims or actions involving disability rating decisions are 
the primary workload handled by C&P Service direct FTE. Since 
fiscal year 2000, the number of disability claims received by 
VA has been trending upward, from 579,000 in fiscal year 2000 
to 800,000 expected in fiscal year 2007. (The number of claims 
received in fiscal year 2006 was slightly higher than the 
expected fiscal year 2007 level, as a result of approximately 
8,000 claims generated by special outreach in six states.) 
During that time, the complexity of the workload has also 
increased. For example, the number of claims involving eight or 
more issues increased dramatically (from 21,814 in fiscal year 
2000 to 51,260 in fiscal year 2006) and court decisions have 
imposed additional procedural requirements.
    For FY08, VA expects to receive approximately 800,000 
rating claims, roughly the same level of claims that it expects 
to receive in fiscal year 2007. With the requested 8,320 direct 
C&P FTE, VA expects to complete 840,320 claims in FY08, an 
average of 101 decisions per direct FTE. The Administration 
expects that this would allow VA to reduce its pending 
inventory (from 370,000 claims at the end of fiscal year 2007 
to 330,000 claims at the end of FY08) and to improve the 
average days it takes to complete a claim (from 160 days in 
fiscal year 2007 to 145 days in FY08). I appreciate the 
Administration's focus on improving the timeliness of decisions 
on disability claims and will support the C&P Service budget 
request in its entirety.
    However, I disagree in part with the assumptions contained 
in the C&P Service budget proposal. First, the number of 
incoming claims has been steadily trending upward since 2001 
and, with the ongoing conflicts in Iraq and Afghanistan, should 
be expected to continue to increase during FY08. Assuming a 2 
percent increase over the expected fiscal year 2007 level, I 
anticipate that VA will receive approximately 816,000 claims 
during FY08.
    Also, VA has assumed a productivity level of 101 decisions 
per direct FTE for FY08. That goal is lower than VA has 
achieved in prior years and less than VA expects to achieve 
this year. It is also substantially lower than the fiscal year 
2007 goal of 108, a goal that VA described as ``realistic'' 
given the increasing experience levels of employees hired 
during fiscal year 2005 and fiscal year 2006. Although I 
recognize that the complexity of cases has continued to 
increase and that new employees will not be folly productive 
for at least two years, I believe that setting a higher 
productivity goal of 104 decisions per direct C&P Service FTE 
is reasonable. Thus, with the 8,320 direct C&P FTE requested in 
the President's budget, VA should be able to produce at least 
865,000 decisions during FY08.
    Finally, I would like to stress that, although I hope the 
requested funding level will help improve timeliness and 
alleviate the current backlog of claims, I do not believe this 
will be a long-term solution to the problem of lengthy 
processing times and high levels of pending claims. In fact, 
according to testimony provided to the Committee during the 
109th Congress, significant improvements may require 
fundamental changes to the design and operation of this system. 
During the 110th Congress, I will continue to explore what 
measures could be taken to ensure the long-term ability of VA 
to provide timely decisions to veterans.
            (b) Education Service
    The President requests funding to support 939 FTE for the 
Education Service (including 45 IT FTE). This funding level 
would allow an increase of 14 direct FTE over the expected 
fiscal year 2007 level. In addition, this request includes $6.3 
million to fund a year-round contract customer service center 
to handle telephone calls regarding education claims.
    Although I support VA's efforts to find innovative ways to 
increase productivity by using contract services, I expect that 
veterans will receive at least the same level of service that 
would be provided by VA employees. For example, I expect that 
the call center employees will be provided with adequate 
training to provide rapid, accurate answers to callers' 
inquiries and that the call center will be held to performance 
goals comparable to the blocked call and abandon call goals 
currently in place for Education Service telephone activities. 
In addition, I expect that VA will continue to pursue efforts 
to provide additional information about pending education 
claims via the internet.
    I anticipate that utilizing a year-round call center would 
allow at least 75 additional FTE to devote their time to 
processing education claims. With those FTE, along with the 
additional FTE requested in the FY08 budget proposal, the 
Education Service should be able to reduce its processing time 
(from 35 days expected in fiscal year 2007 to 25 days in FY08) 
and to reduce its pending inventory of claims.
            (c) Vocational Rehabilitation and Employment Program
    The President requests funding to support 1,290 FTE 
(including 30 IT FTE) for the Vocational Rehabilitation and 
Employment Program (hereinafter, ``VR&E''), an increase of 35 
FTE over the fiscal year 2007 level. Those new FTE would be 
used for additional contracting specialists and for two 
initiatives--the Coming Home to Work initiative and the Process 
Consolidation initiative. I believe these additional FTE will 
ultimately assist the VR&E program in its core mission of 
helping veterans with disabilities to obtain and maintain 
suitable employment.
            (d) Loan Guaranty Service
    The President requests a funding and FTE reduction for VA's 
Loan Guaranty Service, a reduction that has been a feature of 
nearly every VA budget submission since the early 1990's. Loan 
Guaranty FTE in 1997 stood at 2,254. The FY08 budget proposes 
an FTE level of 963 (including 70 IT FTE). These reductions 
have been sustained even though performance indicators have 
remained high. So to the extent the Loan Guaranty Service has 
been able to ``do more with less,'' I applaud that effort.
    This year's proposal gives me some concern in that it comes 
in the face of what is expected to be an increasing workload. 
VA expects to guarantee more VA loans in fiscal year 2007 and 
FY08, and it expects an increasing number of foreclosures and 
defaults resulting from rising interest rates. In response to a 
post-hearing question-for-the-record on this topic, VA 
responded as follows:

          VA will be prepared to ensure taxpayers and veterans 
        are well served should the Loan Guaranty program have 
        to deal with a rise in defaults and foreclosures. A 
        newly redesigned loan servicing business process and 
        its supporting IT application will, among other things, 
        improve service to veterans, and improve oversight 
        capability over VA loan servicers. Under this new 
        environment, many loan servicing functions are 
        delegated to private sector loan servicers, and VA will 
        utilize IT technology to directly oversee the work 
        being performed by these servicers on VA's behalf.

I will, of course, be monitoring actual performance to ensure 
this is the case.
            (e) Insurance Service
    For FY08, the President proposes funding to support 489 FTE 
(including 30 IT FTE) for VA's Insurance Service, a slight 
decrease over the existing fiscal year's FTE level. As is 
usually the case with respect to VA's administration of its 
insurance programs, performance is stellar. So long as all 
performance indicators--such as the timely disbursement of 
proceeds of life insurance and Traumatic Injury Protection 
under Servicemembers' Group Life Insurance--remain high, and I 
will continue to monitor those indicators, I have no reason to 
object to the President's request.
            General Administration
    For FY08, the President's budget recommends a $318 million 
appropriation (including $44 million proposed for IT 
realignment) for the administration of the offices of the 
Secretary, six Assistant Secretaries, one Appellate Board, and 
the Office of General Counsel. As noted above, I support an 
increase of $3.7 million above the President's request.
            (a) Board of Veterans' Appeals
    The President requests funding to support 475 FTE 
(including 7 IT FTE) for the BVA, an increase of 31 FTE over 
the expected fiscal year 2007 level.
    In recent years, the number of cases received at the BVA 
has been trending steadily upward, from a low of 19,000 in 
fiscal year 2001 to 43,000 expected in both fiscal year 2007 
and FY08. At the same time, staffing for the BVA has been 
trending downward (from 455 in fiscal year 2001 to 437 in 
fiscal year 2007) and the number of pending cases has been 
rising dramatically (from a low of 7,700 at the end of fiscal 
year 2001 to 40,000 expected at the end of fiscal year 2007). 
In addition, the appeals resolution time has generally been 
trending upward, from 595 days in fiscal year 2001 to 700 days 
expected in FY08.
    Although I appreciate the Administration's focus on 
improving claims processing at VBA, I believe additional focus 
must be placed on claims that have been appealed. I do not 
believe the additional 31 FTE requested for the BVA would allow 
the BVA to handle an incoming caseload of 43,000 appeals, to 
reduce its existing backlog, or to significantly improve 
timeliness. Therefore, I support an additional $3.7 million for 
the BVA, which should allow an FTE level of approximately 500. 
I expect that, with this FTE level, the BVA will be able to 
handle its incoming caseload in a timely manner and will begin 
reducing the number of pending appeals to an acceptable level.
            (b) Office of General Counsel
    The President requests funding to support 671 FTE 
(including 26 IT FTE) for the Office of General Counsel, an 
increase of 15 FTE over the fiscal year 2007 level. I support 
the President's request, but will monitor the allocation of FTE 
to ensure that sufficient FTE are available to handle an 
increasing caseload before the CAVC.

E. Major Construction
    The President requests $727 million for major construction 
projects in FY08. Included in that request is $511 million to 
continue funding six projects related to VA's Capital Asset 
Realignment for Enhanced Services (hereinafter, ``CARES'') 
program, all of which were authorized by the Congress in Public 
Law 109-461. I strongly support VA's efforts to complete 
projects it has already begun prior to initiating new capital 
projects that would require resources beyond those anticipated 
under the CARES program.

F. Minor Construction
    The President requests $233 million for minor construction. 
This account supports critical upkeep of VA's facilities. With 
over 150 hospitals currently in operation, this funding level 
would support just over $1.5 million for each hospital's minor 
construction needs. I believe this request is too low to ensure 
that VA's facilities will be maintained at the highest 
standards of quality, safety, and cleanliness.
    For many years, VA's minor construction account has been 
short-changed by budgets that, when given difficult choices 
between patient care resources and capital infrastructure 
upkeep, have consistently sided with patient care. Although 
those decisions in isolation were clearly correct, cumulatively 
they are beginning to have negative, long-term consequences on 
VA's buildings. As was noted by Mr. Dennis Cullinan, Director 
of the National Legislative Service at the Veterans of Foreign 
Wars of the United States (VFW), at the Committee's February 
13, 2007, hearing:

          The last decade of underfunded construction budgets 
        has led to a reduction in the recapitalization of VA's 
        facilities. Recapitalization is necessary to ensure 
        safe and fully functional facilities. Failure to 
        adequately invest in the system will result in its 
        deterioration, creating even greater costs down the 
        road.

Accordingly, I support an increase of $51 million above the 
President's request, for a total FY08 funding level of $284 
million.

G. State Extended Care Facility Grants
    The President requests $85 million in FY08 for State 
Extended Care Facility grants. There are two main purposes of 
this grant funding. The first is to help states build or 
acquire new nursing home facilities. The second is to help 
states maintain the highest life and safety code standards in 
existing facilities.
    I support a funding level for this grant program sufficient 
to fulfill the Federal Government's commitment to states with 
already-established nursing facilities that are in need of life 
and safety upgrades. However, I believe a suspension of grant 
funding for the purpose of establishing new nursing facilities 
is in order at this time.
    Long-term care services in America are rapidly moving from 
institutional settings, such as state home beds, to home and 
community-based programs that care for individuals with 
disabilities in their own towns close to their families and 
friends. VA's own long-term care program is moving in that 
direction.
    Today, there are approximately 18,500 institutional beds in 
the State Home system for long-term care and very little non-
institutional care services. As the old saying goes, ``when all 
you have is a hammer, the whole world looks like nails.'' In 
State Homes, this means there is a bias toward institutional 
care because that is what the State Homes provide. Each 
additional construction project brings hundreds of new beds on 
line that, naturally, continue to feed into this single-
dimensional approach to care. Congress' efforts in the State 
Home Program should be more in line with the President's budget 
for VA's long-term care program, which contains a proposed 25% 
increase in non-institutional long-term care funding.
    For these reasons, I recommend an FY08 funding level of $10 
million. My recommendation will support every life and safety 
grant project VA has identified as needing full funding in 
FY08. Again, I reiterate, I recommend that the budget support 
funding in this account that addresses facilities in need of 
life and safety upgrades only and not new construction.

H. State Cemetery Grants
    The President requests $32 million for the state cemetery 
grant program. State cemetery grants may be used to establish, 
expand, or improve state veterans' cemeteries. Although the 
funding requirements associated with pending state cemetery 
grant pre-applications far exceed the $32 million appropriation 
request for this program, it is not until each proposed project 
adheres to VA's design standards, plan review requirements, and 
other requirements that actual funds are obligated. For 
example, even though $32 million was appropriated for state 
cemetery grants in fiscal year 2006, $14.2 million was carried 
over into fiscal year 2007 because some projects were not ready 
to proceed according to the original operating plan.
    What this means is that the $32 million in annual 
appropriation is, at this time, consistent with prior year 
obligation patterns, and is therefore sufficient to cover all 
approved projects in FY08. However, 14 new state cemeteries in 
varying stages of completion are expected to begin operation 
from fiscal year 2009 to 2012. Thus, an increase in the state 
cemetery grant appropriation may be in order during that time 
period.

I. Inspector General
    The President requests $73 million in FY08 for the VA 
Office of the Inspector General (hereinafter, ``IG'').
    Assuming adoption of the President's request, VA IG funding 
will have increased by 135% since 1998. As VA's budget has 
gradually expanded over the last decade, the investment in the 
VA IG's office has been necessary to protect veterans and 
taxpayers against waste, fraud, and abuse. I will continue to 
rely on the IG to monitor VA's delivery of quality medical 
care, timely processing of benefits claims, financial 
management practices, and procurement practices. In addition, 
as VA reorganizes its IT infrastructure and strives to better 
protect the personal information of veterans and employees, 
VA's IG must provide necessary oversight.

J. National Cemetery Administration
    The President requests $171 million (including $4 million 
proposed for IT realignment) for the National Cemetery 
Administration (hereinafter, ``NCA''). This funding level will 
support operational expenses related to 105,000 total expected 
interments at NCA cemeteries and the maintenance of over 2.8 
million graves.
    The appearance of NCA's national cemeteries is best 
measured through the eyes of those who regularly visit them. In 
fiscal year 2006, 97 percent of survey respondents rated the 
appearance of NCA cemeteries as ``excellent.'' To maintain and 
improve the appearance of its cemeteries NCA is engaged in a 
multi-year initiative to address nearly $280 million worth of 
cemetery repair projects identified in a 2002, Congressionally-
mandated report. NCA completes repairs on these ``national 
shrine'' projects using funds from several sources, 
specifically, its own operations and maintenance budget and 
funds available from the major and minor construction accounts. 
Through fiscal year 1996, NCA had completed $99 million worth 
of repairs. Roughly $17 million is planned for fiscal year 
2007; and $11.1 million is planned for FY08. Additional, 
unspecified amounts for national shrine projects will be 
expended through NCA's regular operations and maintenance 
activities. I support NCA's efforts to continue toward 
completion of all repair projects in a reasonable period of 
time, preferably before fiscal year 2013.

K. Veterans' Employment and Training Service
    The President requests $228.096 million to fund VETS, a 
2.3% increase over the fiscal year 2007 funding level. That 
request includes $161.894 million to fund two employment 
programs for veterans: The Disabled Veterans' Outreach Program 
(hereinafter, ``DVOP'') and the Local Veterans' Employment 
Representative (hereinafter, ``LVER'') program; $23.620 million 
to fund the Homeless Veterans' Reintegration Program; $7.351 
million to fund the Veterans' Workforce Investment Program 
(hereinafter, ``VWIP''); $1.949 million to fund the National 
Veterans' Training Institute (hereinafter, ``NVTT); and $33.282 
million to support Federal Management.
    Nearly 71 percent of the requested funds will be used to 
provide grants to States to run the DVOP and LVER program. Last 
year, the Committee held a hearing to examine the effectiveness 
of these programs and learned that there are no reliable data 
demonstrating that the programs are effective in helping 
veterans find quality jobs. During the 110th Congress, I will 
continue to examine whether veterans would benefit from 
fundamental changes in how these funds are used, particularly 
in light of the increasing focus on employment services by VA's 
VR&E program. Although I will support the requested funding of 
$161.894 million because it is restrained and responsible, I do 
not recommend funding beyond that level.
    The NVTI provides training for DVOP specialists and LVERs. 
Under Public Law 109-461, States are now required to ensure 
that all DVOP specialists and LVERs who obtain those positions 
on or after January 1, 2006, complete the NVTI training within 
three years. In view of the additional workload that may result 
for the NVTI, I recommend an increase of $150,000 over the 
Administration's request for total of $2.099 million.
    The VWIP grants are competitively awarded to entities to 
provide targeted employment services for specific groups within 
the veteran population, such as recently separated veterans. 
Given that young, recently separated veterans continue to 
experience higher unemployment rates than non-veterans of the 
same age group, I support an additional $150,000 for this 
program, for a total of $7.501 million.
    I otherwise support VETS' budget as requested by the 
Administration.

L. United States Court of Appeals for Veterans Claims
    For FY08, the CAVC requests $21.217 million, of which 
$1.120 million will be available for the purpose of providing 
pro bono representation. The CAVC's request includes $350,000 
to continue two special initiatives: The implementation of an 
electronic case-filing system and the study and planning stages 
for a Veterans Courthouse and Justice Center. It also includes 
funding for additional attorneys to work in the Central Legal 
Staff and to serve as law clerks for any retired judges who are 
recalled to perform substantial service for the CAVC.
    Last year, the Committee held a hearing to examine dramatic 
increases in the number of cases being received by and pending 
at the CAVC and what measures could be taken to help the court 
deal with that high volume of cases. I am very pleased that, 
after that hearing, the Chief Judge recalled retired judges in 
order to assist the CAVC in handling its caseload. The CAVC's 
fiscal year 2007 funding level included one attorney to assist 
recalled judges and supplemental funding of $310,000 for three 
additional attorneys to assist the recalled judges. The CAVC's 
FY08 budget request includes continued funding for all of those 
attorney positions.
    Given that the CAVC's productivity has increased by almost 
20 percent since the CAVC began recalling judges, I believe 
this has been a useful tool in dealing with its extraordinary 
caseload. With the CAVC continuing to receive record levels of 
incoming cases and with almost 7,000 cases pending at the CAVC 
(the highest level in the CAVC's history), I expect the CAVC 
will continue to recall judges throughout FY08. Therefore, 
based on that assumption, I will support the CAVC's request in 
its entirety.

M. American Battle Monuments Commission
    The President requests $42.1 million for the ABMC. I 
enthusiastically support this request.
    I accompanied Committee Members Burr, Isakson, and Specter 
on a visit to several of ABMC's overseas cemeteries during the 
Memorial Day holiday last year. Shortly after our trip we 
learned of a backlog of necessary infrastructure repairs that 
had been identified in a 2000 report commissioned by ABMC. The 
report identified approximately $25 million of needed repairs 
to the cemeteries' electrical, water, and drainage systems. 
These are improvements critical to sustaining the beauty of 
these cemeteries, all of which are 60 to 80 years old. $8.2 
million of the repairs have been completed. The problem is that 
funding for the remaining repairs had been limited in prior 
budgets, with an estimated completion in 2033.
    I am very pleased that the FY08 budget request puts ABMC on 
a path similar to NCA's for completing all of the needed 
cemetery repairs in a more reasonable period of time. In 
addition, funding is included in this budget to begin phased 
upgrade of ABMC's outdated financial accounting system. ABMC's 
current accounting system lacks modern functionality, and it 
costs more to maintain it over time than it would to simply 
purchase a modern, upgraded version.

                          Concluding Comments

    This concludes my views and estimates for Function 700 
programs. During a time of fiscal restraint, I believe the 
President has placed the correct priority on meeting the needs 
of our Nation's veterans. Indeed, when defense and homeland 
security-related spending is factored out, the President's 
overall discretionary spending increase is $8 billion for FY08. 
Approximately $3 billion of that increase is proposed for VA; 
the remainder amounts to a 1.3 percent increase for the rest of 
government.
    Thank you for your consideration of my views on these 
important issues. Should you or your staffs have any questions 
about this letter, please contact the Committee's Republican 
Staff Director, Lupe Wissel.
            Sincerely,
                                            Larry E. Craig,
                                                    Ranking Member.
                                ------                                

B. Second Session
    Pursuant to the requirements of section 301(d) of the 
Congressional Budget Act of 1974, the Democratic and Republican 
Members of the Committee submitted letters to the Budget 
Committee reflecting the Committee's Views and Estimates on the 
Administration's proposed fiscal year 2009 budget for veterans' 
programs. The two letters submitted are printed below in their 
entirety:
                                                 February 22, 2008.
Hon. Kent Conrad, Chairman,
Hon. Judd Gregg, Ranking Member,
Committee on the Budget,
U.S. Senate, Washington, DC.

    Dear Chairman Conrad and Ranking Member Gregg: Pursuant to 
Section 301(d) of the Congressional Budget Act of 1974, the 
Democratic and Independent Members of the Committee on 
Veterans' Affairs (hereinafter the ``Undersigned Members'') 
hereby report to the Committee on the Budget their views and 
estimates on the Fiscal Year 2009 (hereinafter, ``FY09'') 
budget for Function 700 (Veterans' Benefits and Services) and 
for Function 500 (Education, Training, Employment, and Social 
Services) programs within the Committee's jurisdiction, 
including the Court of Appeals for Veterans Claims. This letter 
responds to the Committee's obligation to provide 
recommendations on veterans' programs within its jurisdiction, 
albeit from the perspective of the Undersigned Members.

                               I. Summary

    The Department of Veterans Affairs (VA) requires, at a 
minimum, $4.577 billion in additional funding in FY09 over FY08 
to support its medical care operations. Our requested medical 
services increase is $2.562 billion over the Administration's 
request. The total required for all of VA's discretionary 
accounts is $6.614 billion over FY08.
    For the seventh year in a row, the Administration's 
proposed budget includes a number of legislative proposals 
designed to generate additional revenue from fees or savings 
and deter certain categories of veterans from using the VA 
system. Just as Congress has done over the past five years, the 
Undersigned Members unanimously reject each of the following 
legislative proposals--the increase in prescription drug 
copayments from $8 to $15 for ``middle-income'' veterans; the 
annual enrollment fee of $250 to $750 for veterans whose 
families make $50,000 a year or more; and eliminating the 
practice of offsetting VA first-party copayment debts with 
collections from insurance companies.
    With respect to benefits, we disagree in particular with 
the discretionary funding request for staffing at the Board of 
Veterans' Appeals, education and Vocational Rehabilitation and 
Employment business lines' staffing, and for programs 
administered by the Department of Labor.
    In addition, we believe that the benefit level of several 
mandatory programs must be increased to quell erosion of the 
benefits over time. We also recommend that Filipino veterans 
finally get recognition for their heroic service during World 
War II and be given pensions to aid them in their twilight 
years.
    The projections in the President's budget for discretionary 
spending in the next 5-10 years are troubling. The VA health 
care system would be devastated should the Administration's 
budget for future years become a reality. It is our view that 
veterans, who have sacrificed for this country, are being asked 
to carry a disproportionate share of the burden to balance the 
Federal budget. We believe that the Government can be fiscally 
responsible and reduce the Federal deficit and debt, without 
abandoning its commitment to our Nation's veterans.
    As the Congress continues to debate the conflicts in Iraq 
and Afghanistan, including the cost of prosecuting those 
efforts, we must clearly demonstrate our understanding that the 
cost of war includes the cost of caring for servicemembers, now 
and in the decades to come.

                   II. Discretionary Account Spending

A. Medical Services
            Policy Proposals
    Prescription Drug Copayment Increase for Priority 7 and 8 
Veterans: The Undersigned Members oppose the Administration's 
proposed increase of the prescription drug copayment from $8 to 
$15, for projected revenue of $335 million in FY09 and $3.7 
billion over ten years. Many Priority 7 and 8 veterans--some 
earning less than $28,500 a year--cannot afford to pay nearly 
double for needed prescription drugs.
    Enrollment Fee of $250 to $750 for Priority 7 and 8 
Veterans: The Undersigned Members oppose the Administration's 
proposed new enrollment fee of $250 for veterans with family 
incomes between $50,000 and $74,999; $500 for those with family 
incomes between $75,000 and $99,999; and $750 for those with 
family incomes over $100,000. This proposal is projected to 
generate $129 million in revenue in FY10 and $1.1 billion over 
ten years.
    Taken together, these two fee increases would be 
particularly hard on certain categories of veterans. For 
example, a family with two veteran wage-earners, each taking an 
average number of medications and each paying an enrollment fee 
of $250, would have to pay nearly $3,000 in new out-of-pocket 
costs for VA care if the prescription drug copayment increase 
and enrollment fee are enacted.
    Offset of First-Party Debt: The Undersigned Members oppose 
a proposed change in law that would eliminate the practice of 
offsetting VA first-party copayment debts with recoveries from 
insurance companies. Many veterans are drawn to VA because of 
low-cost prescription drugs. Yet, in most cases, acquiring 
these drugs requires visits to a specialty care provider. 
Furthermore, many of these veterans are elderly and on a fixed 
income. While they are not ``high-income'' by any standard, 
their incomes are over the VA means-test threshold. While the 
current primary care copayment of $15 is in line with most 
private insurance companies, VA's specialty care copayment is 
$50 per visit. That amount is high enough to be an immediate 
disincentive to seeking medical care from VA if it cannot be 
paid for by third-party insurance. VA estimates this change 
would yield $44 million in increased collections in FY09 and 
$415 million over ten years.
    The Undersigned Members also oppose the proposal to return 
revenue from the above new fees to the Treasury, rather than 
reinvesting the funds in veterans' health care. That proposal 
clearly signals that the fees are proposed to address overall 
deficit reduction and are not intended to support VA health 
care.

            Components of Recommended Increase

            1. Current Services (+$1.995 billion)
    Medical care inflation (at an overall rate of 4.63 
percent), increases in the costs of goods, and other 
``uncontrollables'' dictate a funding increase of at least 
$1.434 billion in FY09 simply to maintain the level of current 
services. Increased intensity (which encompasses changes in 
medical care delivery to adjust for more complex care) and 
utilization of medical services by existing patients also 
continues to drive costs up as well. The Administration has 
requested an additional $534 million in funding in FY09 to meet 
these latter costs, and we support this request.
            2. OEF/OIF Demand and Services (+$742 million)
    For the past five years, VA has significantly 
underestimated the number of Operation Iraqi Freedom and 
Operation Enduring Freedom (OEF/OIF) veterans who are likely to 
seek health care services in succeeding years, and we are 
concerned that this mistake is being repeated in the FY09 
budget. Veterans of these conflicts are now eligible for five 
years of VA care upon separation from service. While VA 
estimates that any potential workload from OEF/OIF will be 
negligible relative to the overall number of new enrollees next 
year, VA has consistently underestimated the number of OEF/OIF 
veterans it projects will come for care. By the end of FY08, 
for example, VA is projecting it will have seen 293,345 total 
OEF/OIF veterans since the start of the wars; yet its own data 
from the Health Care Utilization Report provided to Congress 
for the 4th quarter of FY07 lists the total number of OEF/OIF 
veterans VA had seen by that time at 299,585. VA is essentially 
projecting, via its budget submission for FY09, that it will 
see 6,240 fewer patients in FY08 than it saw by the end of 
FY07.
    The Undersigned Members recommend a total funding level of 
$742 million to furnish services to OEF/OIF veterans under 
current law, an increase of $518 million over FY08. $432 
million would be for direct care and services. The remainder 
would be to support enhancements to the following areas:
    Outreach. VA must undertake a serious effort to reach out 
to returning servicemembers so that these new veterans will be 
made aware of the services for which they are eligible. This is 
especially important with respect to returning members of the 
National Guard and Reserves. The Undersigned Members have yet 
to see an aggressive, nationwide outreach effort made by VA to 
identify veterans in need of help and to provide services 
through appropriate mechanisms.
    Sufficient resources and energy must be devoted to ensuring 
that those in need of care receive that care. Congress has done 
its part already by widening the window for automatic 
eligibility for care from two to five years. Additional 
outreach funding is required to move VA from a passive approach 
of waiting for returned servicemembers to seek care to a much 
more aggressive one designed to help prevent suicides and long-
term mental health problems and to improve quality-of-life for 
veterans. VA must be able to reach these veterans in their 
communities and ensure they are getting the services and care 
that they need.
    Traumatic Brain Injury and Polytrauma. Traumatic Brain 
Injury (TBI) has been described as the signature wound of 
Operations Iraqi and Enduring Freedom, due to the use of 
Improvised Explosive Devices. Medical science is only beginning 
to understand the mental and physical effects of this injury. 
VA has a responsibility to be at the forefront of TBI research 
and treatment. The Undersigned Members believe that VA must 
have adequate staff and equipment to help brain-injured 
veterans with recovery and rehabilitation, and to return them 
to an independent existence in their communities when possible.
    In recognition of the needs of veterans with traumatic 
brain and other injuries, Congress directed VA to establish 
specialized centers for rehabilitative care. The four existing 
Polytrauma Centers in Tampa, Palo Alto, Minneapolis, and 
Richmond (a fifth is proposed in San Antonio) are generally 
regarded as successful. We understand that VA is in the process 
of expanding comprehensive polytrauma and rehabilitative 
(including prosthetics when necessary) care to all Veterans 
Integrated Service Networks to meet the needs of severely 
injured veterans and their families--and resources must be 
provided to support this effort accordingly.
    We also note that the National Defense Authorization Act of 
2008 (NDAA) contained a number of provisions authored by this 
Committee that seek to address TBI care. We are concerned that 
the Administration has not adequately budgeted for intensive 
multi-disciplinary care and case management for veterans with 
multiple traumas, including TBI. We are also concerned about 
VA's capacity to provide specialized TBI outpatient care, home-
based services, residential rehabilitative programs and long-
term care for those more severely injured. We support VA's 
ongoing efforts to improve their assessments of returning 
servicemembers for TBI, but we do not believe that the 
Administration has committed the resources necessary to provide 
this service.
    Assistance to Families. The Undersigned Members believe 
that families are essential to veterans' recovery and well-
being. Indeed, family members are often the primary caregivers 
for veterans. VA has taken steps to reach out to families in 
recent years, but much work remains to be done. Legislation 
reported favorably by the Committee, S.2162, would require 
expanded services for families. Pilot programs conducted by VA 
in locations around the country are expanding outreach and 
education services for families. As part of the recommendation 
to meet the needs of OEF/OIF veterans and their families, the 
Undersigned Members recommend an additional $100 million to 
support these efforts.
    VA/DOD Senior Oversight Committee. The Joint VA/DOD Senior 
Oversight Committee (SOC) was created in the wake of the media 
reports about problems at Walter Reed Army Medical Center to 
manage the implementation of the many recommendations and 
requirements from the President's Commission on Care for 
America's Returning Wounded Warriors, other reports stemming 
from the problems at Walter Reed Army Medical Center, and the 
NDAA. No funding has been identified in the President's budget 
to sustain VA's contribution to this office in 2009. Because 
the Undersigned Members believe that this is a vital enterprise 
that must be sustained, we recommend that at least $10 million 
be dedicated to this effort in FY09.
            3. Rescinding the Ban on Priority 8 Veterans (+$700 
                    million)
    In January 2003, the Administration halted enrollment of 
Priority 8 veterans, those veterans with no compensable 
service-connected disabilities and with incomes above the HUD 
geographical low-income threshold for their respective 
counties. The Administration's budget for FY09 assumes that the 
enrollment ban on Priority 8 veterans will continue.
    The Undersigned Members do not accept this assumption and 
estimate that new resources of approximately $700 million are 
needed to restore some form of access for these veterans. 
Legislation is currently pending in the Senate to open the 
system up to all Priority 8's. In addition, proposals have been 
circulating that would allow some subset of currently excluded 
Priority 8's to enroll. The $700 million figure is based on 
VA's own estimate ($1.4 billion) of what it would cost to 
reopen the system to Priority 8 veterans, and is prorated to 
reflect that if the ban is lifted, it will be done in a 
responsible manner.
    We believe that veterans in need of VA care should not be 
prohibited from enrolling in the system. Indeed, adequate 
funding should be appropriated to VA so that all veterans who 
choose to enroll with VA have access to needed care and 
services. Many of the Priority 8 veterans bring private health 
care coverage with them and are also subject to copayments, 
effectively bringing revenue into the system, thereby 
offsetting the cost of their care.
    The Undersigned Members note that VA's cost estimate for 
rescinding the ban on Priority 8 veterans would be 
significantly reduced if the impact of third-party insurance 
and copayments for care and prescription drugs were factored 
in.
            4. New Initiatives (+$579 million)
    The Undersigned Members accept the Administration's 
proposed ``new initiatives.'' While we support each of these 
initiatives, we believe that more can and should be done--
especially in the areas of mental health, readjustment 
counseling, women veterans, personnel enhancements, and rural 
veterans' access. The Undersigned Members also support the 
expansion of many existing initiatives and recommend increases 
in the specialized services discussed below.
    Mental Health. The Undersigned Members are very concerned 
about VA's capacity to meet the mental health needs of 
returning servicemembers. For example, while the number of 
veterans diagnosed with substance abuse problems is increasing, 
the President's request would cut funds for substance abuse 
treatment. Rather than account for growing demand for mental 
health care services, the budget also projects reductions in 
inpatient psychiatric and residential care.
    We believe that VA needs greater resources for mental 
health services and recommend $377 million in additional 
funding over FY08 levels.
    This level of funding would ensure funds remain to support 
expansion of VA's specialized mental health and substance abuse 
programs; expand VA's capacity to provide inpatient psychiatric 
and residential care; provide funds to address family-related 
needs of returning veterans experiencing distress following 
their reentry into civilian life; support more effective 
treatment for Post Traumatic Stress Disorder (PTSD); and 
advance efforts to prevent suicide among veterans. In addition, 
the Undersigned Members believe that VA must take a preemptive, 
proactive approach to assist families dealing with the stresses 
and challenges caused by servicemembers' deployments to combat 
zones and their return to civilian life.
    Rural Access. The Committee believes that we must continue 
to modernize VA's beneficiary travel program and bring payments 
under the program closer in line with today's cost of travel. 
The conference report accompanying the Consolidated 
Appropriations Act of 2008 specified that $125 million of the 
funds provided for Veterans Medical Services should be used to 
increase the travel reimbursement rate. In response to that 
language, the Secretary of Veterans Affairs recently increased 
the travel reimbursement rate to 28.5 cents per mile. While we 
are pleased with the rate increase--the first one since 1977--
we believe that with rising gas prices, service-connected 
veterans merit a larger increase. We recommend that the travel 
benefit be brought in line with the rate that Federal employees 
are currently paid for their official travel. The cost of doing 
so would be an additional $125 million.
    We also note that S.1233, the proposed ``Veterans' 
Traumatic Brain Injury and Health Programs Improvement Act of 
2007,'' includes a provision that would strike a provision in 
current law that allows the Secretary to raise or lower the 
deductible for reimbursements in proportion to a change in the 
mileage rate. This would have the effect of holding the 
deductible to $3 per a one-way trip.
    The Office of Rural Health (ORH) continues to play an 
essential role on improving care for veterans in rural areas. 
The resources, education, and support provided by ORH have 
proven helpful throughout the VA health care system. Demand for 
the services and support of ORH is likely to grow, given the 
high number of National Guard and Reserve deployed in Iraq and 
Afghanistan in recent years, many of whom returned to homes in 
rural locations. S.1233, currently pending consideration by the 
full Senate, would require ORH to make a number of reports to 
Congress on fee-basis health care and on rural outreach 
efforts. In light of the greater demands placed on ORH, funding 
for this office ought to be increased significantly.
    The Undersigned Members recommend $10 million over FY08, $9 
million more than the President's request for ORH in FY09.
    Vet Centers. As the conflicts in Iraq and Afghanistan 
continue, the number of veterans seeking readjustment 
counseling and related mental health services through Vet 
Centers will continue to grow. Experts predict that as many as 
30 percent of returning servicemembers may need some kind of 
mental health treatment--from basic readjustment counseling to 
care for debilitating PTSD. A study published on March 1, 2006, 
in the Journal of the American Medical Association, reported 
that 35 percent of Iraq veterans accessed mental health care 
services during their first year at home. VA's own OEF/OIF 
Health Care Utilization Report from the last quarter of FY07 
cited that 40 percent of those who have already accessed VA 
health care may have mental disorders of some kind. Despite an 
increase in the number of veterans coming to Vet Centers, the 
budget for the program has remained relatively flat. We note 
that legislation to authorize $180 million in funding for Vet 
Centers, S.3421, was by passed by Congress and signed into law 
on December 22, 2006, as Public Law 109-461.
    We recommend that Vet Centers receive a funding increase of 
$22 million above FY08 to meet that goal.
    Homeless Grant and Per Diem Program. Veterans are 
disproportionately represented among the homeless population, 
accounting, according to most estimates, for one in three 
homeless persons on any given night. VA has a responsibility to 
help the roughly 400,000 veterans experiencing homelessness 
over the course of the year. VA's Grant and Per Diem program is 
effective in creating and aiding local shelters as they help 
our Nation's veterans by providing transitional housing, 
vocational rehabilitation, and referrals for clinical services.
    We recommend $23 million in additional resources for this 
program in FY09 to fully fund it at the $130 million level that 
was previously authorized by Congress (Public Law 109-461).
    Women Veterans. Women make up a growing segment of the 
armed services, and thousands have been deployed to Iraq and 
Afghanistan. VA must be prepared to provide services to these 
servicemembers in appropriate settings when they return. While 
some facilities have found innovative solutions to meet the 
unique needs of women veterans, others are still lagging 
behind. The Undersigned Members believe that to adequately 
serve this growing special population of veterans, additional 
funding is required.
    We recommend an additional $10 million over FY08.
    Personnel--Nurses. The Undersigned Members are concerned 
that the Administration has not adequately budgeted for enough 
physicians and nurses to meet the projected increase in demand 
for VA medical care in FY09. The number of physicians, nurses, 
and all other health professionals currently employed by the 
Veterans Health Administration (VHA) cannot keep pace with 
increasing demands on the system. The Undersigned Members 
believe that resources in this area must be spent on the hiring 
of additional clinical staff to better meet demand. VA faces a 
competitive market for health care providers, particularly 
nurses, and must dedicate additional resources to recruit and 
retain staff. The Undersigned Members also recommend providing 
additional funds to support debt relief and scholarship 
programs for health personnel to promote recruitment and 
retention efforts.
    The Undersigned Members recommend that an additional 
$12.482 million be included for these programs, for a total of 
$40 million in FY09.
            5. Medical Facilities
    The Medical Facilities account delineates a specific line 
of funding for the maintenance and operation of hospitals, 
nursing homes, domiciliaries, clinics, and all other facilities 
of the Veterans Health Administration. The Undersigned Members 
support the Administration's request of $561 million over FY08, 
for a total of $4.66 billion. This amount is $85 million over 
the recommendation of the Independent Budget for FY09, and the 
Undersigned Members believe this level of funding is sufficient 
to keep VA health care facilities in proper condition.
    Our overall recommendations for medical care spending are 
summarized in the chart below:

              Needed Discretionary Revenue Above FY08 Level
                       [In thousands of dollars--]


------------------------------------------------------------------------
MEDICAL SERVICES
  Current Services..........................................  $1,995,000

New Initiatives and Program Expansions
  Mental Health.............................................     376,600
  Homeless Grant and Per Diem Program.......................      23,000
  OEF/OIF Veterans..........................................     742,000
  Women Veterans............................................      10,000
  Personnel.................................................      12,482
  Rural Initiatives.........................................     135,000
  Vet Centers...............................................      22,000
  Priority 8s...............................................     700,000
                                                             -----------
Total Medical Services......................................   4,016,082
                                                             -----------
MEDICAL FACILITIES..........................................     561,000
                                                             -----------
Total Recommended For Medical Care..........................   4,577,082
                                                             -----------
President's Medical Care Request Over FY08..................   2,015,283
                                                             -----------
Majority Recommendation vs. Administration..................   2,561,799
------------------------------------------------------------------------

B. Proposed Discretionary Spending for FY10-FY13
    For the second year in a row, the Administration's proposed 
budget for discretionary spending in future fiscal years would 
devastate VA health care. The President's budget cuts VA 
medical care funding for Fiscal Years 2010 through 2013.
    We view the current strategy as one that gives in the first 
year and cuts heavily thereafter, in order to improve the 
overall appearance of the President's budget. A frozen 
appropriation coupled with cuts in other programs would 
translate to a reduction of services and benefits. The 
Undersigned Members believe that any budget resolution must 
reverse these cuts in future years.

C. Medical and Prosthetic Research
    The Administration's proposed FY09 budget for VA research 
is $442 million, a $38 million cut from the current year level 
of $480 million. This sum cannot sustain current research 
initiatives or provide the program growth necessary to attract 
and retain quality research personnel. The Administration's 
proposal would result in the direct loss of 49 FTE and 294 
projects in key areas such as acute and traumatic injury and 
mental illness. Increased funding is required to sustain 
current VA research and development program commitments, and to 
cover inflationary cost increases associated with these 
commitments. VA must be able to continue addressing the special 
needs of our Nation's veterans, and continue to recruit and 
retain the highest quality physicians. We recommend an 
additional $75 million over the FY08 level for a total funding 
level of $555 million.

D. Grants for State Extended Care Facilities
    The State Extended Care Facilities (SECF) grant program 
assists States in acquiring or constructing State home 
facilities that intend to provide nursing home care to 
veterans, as well as in remodeling or converting existing 
buildings into long-term care facilities. VA can provide up to 
65 percent of the total cost of the project, and the States 
must provide the remaining share of the cost.
    This year again, the Administration proposed a significant 
reduction in funding for this program, requesting $85 million 
for SECF grants in FY09. Congress provided the SECF grant 
program with $165 million in FY08--an unprecedented, but very 
necessary increase. The Administration's budget would 
essentially cut this program by $80 million, delaying the many 
projects that are currently in the queue. Furthermore, new 
grant proposals from the States continue to increase, in 
response to an ever-growing population of veterans in need of 
long-term care.
    To award an adequate number of new SECF grants in FY09, the 
Undersigned Members recommend $200 million in total funding for 
FY09, a $35 million increase above FY08.

E. Major and Minor Construction
    The Administration requested only $472 million for Major 
Construction in FY09. This amounts to a decrease of $488 
million from the FY08 funding level, despite the fact that 
there are currently nine major projects underway that are only 
partially funded. The funding shortfall for all nine projects 
is $2.3 billion. The Undersigned Members believe that VA must 
ramp up its construction process and complete work on the 
projects it has already started. Total construction costs are 
continually increasing, and while much of this is due to normal 
factors in the contracting industry such as cost of materials, 
the lack of full funding for certain projects has enabled 
contractors to renegotiate their prices in certain cases.
    In addition, the President's budget includes $5 million for 
a new land acquisition line item in the Major Construction 
account. These funds will be used to purchase land as it 
becomes available in order to quickly take advantage of 
opportunities to ensure the continuation of a national cemetery 
presence in areas currently being served. One caveat related to 
this funding is that all land purchased from this account must 
be contiguous to an existing national cemetery, within an 
existing service area, or in a location that will serve the 
same veteran population center. The Undersigned Members support 
the National Cemetery Administration's attempt to achieve and 
maintain its strategic target of serving 90 percent of veterans 
with a burial option within 75 miles of their homes.
    The Undersigned Members recommend that funding for major 
construction in general be increased by $1.209 billion, and 
that the line item for new land acquisition be increased by $5 
million over the President's request to $10 million in FY09. 
Therefore, the Undersigned Members recommend a total funding 
level of $2.277 for the Major Construction account over FY08.
    For Minor Construction, the Administration's request 
proposed to reduce the account from its FY08 level by $301 
million. The Consolidated Appropriations Act of 2008 provided a 
very large increase for this account. As is the case with Major 
Construction, with the queue of projects that VA must complete, 
along with a $1.5 billion backlog in Non-Recurring Maintenance 
projects, funding for Minor Construction must stay at a 
consistent level. The Undersigned Members recommend a $4.5 
million increase over FY08, for a total of $635 million in 
FY09.

F. Office of the Inspector General
    The work of the VA Office of the Inspector General (OIG) 
has made significant contributions to management effectiveness 
throughout VA. The OIG conducts vital oversight investigations 
and audits of various aspects of the Department's operations 
and budget. One recent example of the OIG's work was uncovering 
serious quality of care issues in the surgical department at 
the Marion, Illinois, VA Medical Center after reports of 
patient deaths. Yet, for the third year in a row, the 
Administration is proposing a decrease in FTE and funding for 
the 01G. Reductions in staff would severely impair the OIG's 
ability to identify fraud, waste, and mismanagement, and would 
result in a decrease in active oversight and in fewer arrests, 
indictments, and convictions of individuals who prey on VA and 
our Nation's veterans.
    We recommend an additional $8.4 million above FY08, for a 
total of $88.9 million. Funding at this level will allow for an 
additional 48 FTE to support additional auditors, health care 
inspectors, and criminal investigators to ensure enhanced 
quality and safety of VA health care and services.

G. Information Technology
    The Administration's budget request includes a significant 
increase for Information Technology (IT) over FY08. Much of 
this funding reflects the costs associated with VA's transition 
to centralized IT management, and the costs associated with the 
migration of VA's legacy IT systems. However, the request does 
not include any funding to support the IT initiatives required 
by the NDAA, nor those recommended by the President's 
Commission on Care for America's Returning Wounded Warriors. VA 
has not defined its plans to fund the joint VA/DOD Electronic 
Health Record Office, the creation of an eBenefits web portal 
to serve as a single information source for servicemembers and 
veterans, or the development cost of a joint VA/DOD inpatient 
electronic health record system.
    The Undersigned Members recommend a $30 million increase 
over FY08, for a total of $2.564 billion to support these new 
initiatives.

H. Compensation, Pension, and Burial Staffing and Training
    The Undersigned Members believe the Administration's 
request for compensation, pension, and burial staffing in FY09 
is a step in the right direction. Congress provided funds for 
significant increases in FTE in both the FY07 emergency 
supplemental bill and the FY08 appropriation. The President's 
budget request of $944 million for FY09 represents an increase 
of $153 million over the FY07 level, and allows VBA to maintain 
the staffing levels for the Compensation and Pension (C&P) 
service that were established in FY08. However, while we 
believe that staffing levels for FY09 are sufficient, we have 
concerns that the funds available to train the nearly 3,000 new 
FTE may be insufficient.
    Staffing. The President requests 9,886 FTE for direct 
compensation staffing in FY09. The total number of 
compensation, pension, and burial FTE in FY09 will be 10,998, a 
36 percent increase over the FTE level at the end of FY06. VA 
anticipates that the productivity of the additional staff will 
increase throughout 2008, 2009, and subsequent years as the new 
staff gain experience. For example, VA projects that with the 
additional FTE it is hiring, it will be able to reduce the 
pending rating inventory, which stood at 391,593 at the end of 
FY07, to 368,292 in FY08 and 297,587 in FY09.
    Workload. The disability claims workload from returning war 
veterans, as well as from veterans of earlier periods, has 
continuously increased since 2000. Annual claims grew 45 
percent from 578,773 in 2000 to 838,141 in 2007.
    In recent years, VA has consistently underestimated its 
workload. In FY07 and FY08, VA projected that the trend of 
increasing claims receipts would cease and the number of new 
receipts would level off at approximately 800,000 per year. 
However, 838,141 new claims receipts were recorded in FY07 and 
VA's projected estimate for FY08 is 854,094 new receipts. VA's 
projection for FY09, 872,002 claims receipts, appears to be 
more consistent with current trends than its estimates in 
recent years. The Undersigned Members continue to urge VA to 
make accurate projections of its workload so that Congress can 
provide appropriate staffing to the Department.
    Studies have shown that the size of the active duty force 
is the best predictor of new claims activity. As of September 
2007, more than 1.62 million servicemembers had deployed in 
support of the Global War on Terror, including 451,792 National 
Guard and Reserve members. In addition, VA's outreach efforts 
to active duty personnel have resulted in significantly higher 
claim rates. Original claims received in 2007 were almost 4 
percent higher than the original claims received in 2006.
    In addition, veterans from the Vietnam and Gulf War eras 
are aging and filing reopened claims in greater numbers. In 
2007, reopened claims comprised slightly more than 54 percent 
of disability claims. Additionally, many veterans receiving 
compensation have chronic, progressive diseases such as 
diabetes, mental illness, and musculoskeletal or cardiovascular 
illnesses. As these veterans age, it can be predicted that they 
will file additional claims.
    Claims received by VA are increasingly complex, and require 
more time invested in development and rating. In 2007, 26 
percent of the compensation workload (58,532 of the 225,173 
original claims received) contained eight or more issues. This 
is an increase of 168 percent since 2000. On a monthly basis, 
in 2007, VA received an average of 606 claims with eight or 
more issues cited.
    VA estimates that its expanded C&P workforce of 10,998 
direct FTE will complete an average of 85.7 claims per FTE in 
FY09. This number is down considerably from the average of 98.7 
claims per FTE in FY07. We are cautiously optimistic that the 
quality of claims adjudication will improve as FTE are expected 
to complete fewer claims per year.
    The Undersigned Members will continue to monitor VBA's 
staffing requirements and output in FY09.
    Training. The President's FY09 budget submission indicates 
that additional staffing will enable VA to improve claims 
processing timeliness, reduce appeals workload, improve appeals 
processing timeliness, and enhance services to veterans 
returning from the Global War on Terror. VA indicates that it 
plans to accomplish all of this without sacrificing the 
accuracy and consistency of claims adjudication. This will 
require an intensive training effort.
    VBA has established a broad spectrum of training programs 
and educational resources, both at VA's Regional Offices and at 
the Veterans Benefits Academy in Baltimore, Maryland. Veterans 
Service Representatives (VSRs) and Rating Veterans Service 
Representatives (RVSRs) are provided 3 weeks of centralized 
basic training at the Veterans Benefits Academy. The Veterans 
Benefits Academy also offers a range of advanced training 
courses in leadership and management development, as well as 
computer-based learning tools and satellite broadcasts that 
bring the Academy's expertise directly to staff desktops.
    An important VBA workload reduction initiative for FY08 
entails putting new hires through a modified version of the 
centralized Challenge VSR training program. The modified 
training would prepare new hires to immediately contribute to 
burial and dependency claims processing, resulting in an 
estimated additional 4,000 completed claims in 2008. Throughout 
FY09, these new hires will complete VBA's Challenge training, 
introducing them to the more complicated process of 
compensation claims adjudication. The President requests a 
total of $17.2 million for the training of compensation, 
pension, and burial claims adjudicators in FY09.
    The Undersigned Members recommend an increase of $5 million 
above the President's request, for a total of $22.2 million in 
FY09, to support Departmental training initiatives for claims 
adjudicators. The Undersigned Members believe that quality 
should not suffer as timeliness improves.

I. Vocational Rehabilitation and Employment
    The Vocational Rehabilitation and Employment (VR&E) Program 
provides training, education, and other services to enable 
veterans to obtain and maintain employment after sustaining 
service-connected disabilities.
    The President's FY09 budget request calls for a reduction 
of 6 FTE for VR&E. The VR&E workload is expected to increase by 
2.5 percent in 2008 to 89,672, and by another 2.25 percent in 
2009 to 91,690. VR&E anticipates that the impact of service in 
Iraq and Afghanistan will result in more seriously injured 
veterans who will likely qualify for the VR&E Program.
    The President's request also stipulates that the additional 
FTE will be allocated toward implementation of the 2004 VR&E 
Task Force Recommendations, staff for the Coming Home to Work 
and Process Consolidation initiatives, and contract oversight. 
VA maintains that implementation of the Task Force 
recommendations and removing the burden of contract oversight 
from case managers will allow it to handle the growing 
caseload. However, it is clear that a reduction in FTE will not 
aid in handling the increased VR&E workload. Therefore, we 
believe that an additional 250 FTE--50 of whom are contract 
oversight specialists--are required.
    The Undersigned Members recommend $32 million above the 
President's FY09 staffing budget request of $152 million. This 
would provide an additional 250 FTE above the President's 
request, for VR&E to absorb increasing workload and meet 
additional objectives.
    In addition, the Undersigned Members note that the 
President's FY09 budget indicates that VR&E will continue to 
grow in the area of increasing partnerships with other agencies 
and organizations. The resources and energies of many 
organizations contribute to the reintegration and 
rehabilitation process, especially those in community-based 
organizations within close proximity of veterans' homes. We 
recommend an additional $25 million above the President's 
request be made available for these types of partnerships.

J. Education
    The VBA's Education Service provides veterans, 
servicemembers, Reservists, and certain family members with 
educational resources. Recent legislative changes in the 
education program for Reservists have increased the complexity 
of education claims and the resources needed to process them.
    The President's FY09 budget request calls for an additional 
20 direct FTE for the Education Service over the FY08 level of 
971. The Education Service workload is expected to increase by 
4.3 percent in both FY08 and FY09. VA expects that this level 
of direct FTE will allow it to not only process claims in a 
timely and accurate manner, but also address some of the 
deterioration in timeliness experienced in prior fiscal years.
    While the President's request for an additional 20 FTE for 
VA's Education Service is a step in the right direction, we are 
concerned that this increase will not be sufficient to support 
the workload associated with the projected increase in 
education claims, together with the need to improve the 
timeliness and accuracy of education claims processing. We 
recommend an additional $4.8 million, which would support a 
total of 1,045 FTE for the Education Service, which is 63 FTE 
over the President's request.

K. Board of Veterans' Appeals
    The Board of Veterans' Appeals (BVA) is responsible for 
making final Departmental decisions on behalf of the Secretary 
for the thousands of benefits claims presented for appellate 
review annually.
    The President's FY09 request for BVA is for $64.7 million, 
which would support 487 FTE, an increase of 21 FTE and $2.48 
million over the current estimate. The Undersigned Members are 
concerned that the appeals resolution time and BVA cycle time 
are rising despite an increase in appeals decisions per veteran 
law judge. Further, these two measures are not expected to 
improve in 2009.
    The Undersigned Members recommend that BVA be provided with 
$1.62 million above the President's request, which would 
provide 13 more FTE to reduce the backlog at BVA, decrease the 
average days pending, and further improve quality.

L. State Cemetery Grant Program
    The State Cemetery Grants Program (SCGP) complements the 
National Cemetery Administration's (NCA) mission to establish 
gravesites for veterans in areas where NCA cannot fully meet 
veterans' burial needs.
    We recommend that the SCGP be funded at a level of $42 
million, or $10 million above the President's request. This 
increased funding will enable states to establish, expand, and 
improve their veterans' cemeteries.

M. Department of Labor, Veterans' Employment and Training Service
    The Undersigned Members believe that the Department of 
Labor's Veterans' Employment and Training Service (VETS) should 
receive an additional $10 million for its Recovery & Employment 
Assistance Lifelines (REALifelines) and Vocational 
Rehabilitation and Employment (VR&E) initiatives. REALifelines 
provides injured servicemembers and veterans with one-on-one 
employment assistance to help them transition into the civilian 
labor force. In FY07, assistance was provided to more than 
1,000 individuals including servicemembers, veterans and their 
families. The VR&E initiative provides employment assistance 
and counseling at Department of Veterans Affairs' facilities 
and through the Transition Assistance Program. We believe that 
with additional funding, this program can substantially be 
expanded and extended to meet the very pressing needs of those 
returning from combat with serious injuries. It should be noted 
that VETS has never had a line item appropriation for this 
activity and has funded it from appropriations in Grants to 
States.
    We further believe that an additional $10 million in Grants 
to States funding should be available to provide additional 
services and assistance to the spouses of deployed 
servicemembers. These funds should also support specific 
categories of veterans in need of employment and training 
assistance, such as recently separated veterans, veterans with 
service-connected disabilities, and homeless veterans. These 
funds should be used for a combination of additional Disabled 
Veterans' Outreach Program Specialists (DVOPS) and Local 
Veterans' Employment Representatives (LVERs), as well as 
targeted grant programs.
    An additional $5 million should be provided for Federal 
Administration of VETS for the conduct of a ``Hire Heroes'' 
Public Service Announcement (PSA) campaign, as outlined in the 
Democratic Policy Committee's New Ideas Project report, 
entitled ``The 2007 Fresh 50: Fifty New Policy Ideas for Senate 
Democrats.'' This amount would not only provide for the PSA 
campaign itself, but would also provide resources for 
additional enforcement activities.
    Finally, we recommend that $750,000 in Federal 
Administration funds be included for the conduct of a national 
conference to train VETS employees. VETS has not been able to 
convene such a meeting since 2004. We believe that this meeting 
would be an opportunity to improve operational performance 
within the agency.
    The Undersigned Members recommend a total of $264 million 
for VETS, an increase of $25.8 million over the President's 
budget request.

N. Court of Appeals for Veterans Claims
    The United States Court of Appeals for Veterans Claims 
(CAVC), a legal body independent of the Department of Veterans 
Affairs and the executive branch, is vested with the authority 
to review decisions of the Board of Veterans' Appeals (BVA) 
regarding a veteran's entitlement to benefits offered by VA. 
The court is empowered to affirm, vacate, reverse or remand 
decisions made by BVA, as well as compel actions of the 
Secretary where such action is necessary to bring VA into 
accordance with the law.
    The court's budget request of nearly $24 million for FY09 
is $1.26 million more than the FY08 level. This increase is 
attributable to personnel costs for additional staff to meet 
the challenges in processing an increased workload. During 
FY06, the court received more case filings than any other year 
in the court's nearly 20-year history. From FY98 to FY04, the 
court received approximately 200 case filings per month. In 
FY05, the number of case filings increased to 289 per month, 
and in FY06 the average increased to more than 300 per month. 
This increase continued in FY07 with case filing averaging 387 
per month for a fiscal year total of 4,644. This total exceeds, 
by over 1,100 cases, the highest in court history. This trend 
is expected to continue throughout FY09.
    In FY08, Congress added funding to the President's request 
to pay for additional court personnel. The FY09 request is 
consistent with this staffing increase. The court requests 
ongoing funding for these seven additional law clerks and 
secretaries, to support recalled judges, possible Magistrates, 
and any administrative positions to support the electronic case 
filing initiative, and other operations.
    The Undersigned Members support the court's use of retired 
judges and therefore recommend that the court's requested 
funding be provided.
    The Veterans Consortium Pro Bono Program requests $1.7 
million, an increase of $288,156 over the Program's FY08 
request. The need for the Program has increased in the past few 
years, as more veterans seek judicial review. The demand for 
the Program's assistance has increased steadily: the Program 
received 742 requests for assistance in 2007 (compared to 696, 
545, 318, and 313 in 2006, 2005, 2004, and 2003, respectively). 
Of those 742 evaluated cases, 209 cases were accepted into the 
Program, with the remainder being rejected for a variety of 
reasons.
    The Undersigned Members agree with the Program's assessment 
that the need for their free legal assistance, as a result of 
increased Board of Veterans' Appeals decisions and the 
continuing wars in Iraq and Afghanistan, will increase demand 
for services in 2009 and beyond.

O. State Approving Agencies
    For purposes of establishing institutional eligibility for 
the payment of VA education and training benefits, State 
Approving Agencies (SAAs) are responsible for the evaluation 
and approval of programs of education and training within their 
respective states, including: institutional programs, on job 
training, and licensing and certification programs. At a time 
when the number of veterans enrolled in programs of education 
is expected to increase, we believe it does not make sense to 
decrease SAAs' funding in FY09, as proposed in the President's 
budget, due to the expiration of a statutory ceiling on the 
amount of mandatory funds available for the program.
    We further note that legislation restoring the funding 
ceiling to $19 million is contained in S.1315, the proposed 
``Veterans' Benefits Enhancement Act of 2007,'' which has been 
reported from the Committee and is pending action by the 
Senate. During the second session of this Congress, we hope to 
pursue legislation to stabilize funding for SAAs, by funding 
them through the General Operating Expenses account.
    The Undersigned Members recommend a total of $22 million in 
FY09 for SAAs, an increase of $9 million over the amount 
recommended in the President's Budget.

                    III. Mandatory Account Spending

    The Undersigned Members support the budget request of $46.4 
billion, an increase of $848 million for entitlement programs 
over the 2008 level. However, there are several areas within 
this account that require funding of $218 million beyond what 
the President has requested.

A. Filipino Veterans
    In the sixty-two years since the end of the Second World 
War, Filipino veterans have worked tirelessly to secure the 
veteran status they were promised when they agreed to fight 
under U.S. command during World War II. They were considered 
United States veterans until that status was taken from them by 
an Act of Congress in 1946.
    Under current law, Filipino veterans are not eligible for 
pensions, and their surviving spouses are not eligible for 
death pensions. The Undersigned Members recommend that Filipino 
veterans and their survivors receive those benefits at 
specified annual rates: single veterans, $3,600; married 
veterans, $4,500; and surviving spouses, $2,400. The 
Undersigned Members recommend that $26 million be provided to 
meet this end in FY09.

B. Cost-of-Living Adjustment
    The Administration's requested increase in mandatory funds 
provides for a projected 2.5 percent cost-of-living adjustment 
in VA compensation benefits in FY09. A 2.5 percent increase is 
the expected increase estimated in the Consumer Price Index, 
and is the same as the increase expected for Social Security 
benefits. Under current law, this COLA is rounded down to the 
next lowest whole dollar.
    VA compensation is sometimes the sole source of income for 
a veteran and his or her family. We owe it to our veterans to 
provide them with appropriate compensation, the value of which 
does not decrease with inflation. The Undersigned Members thus 
recommend that $20 million be provided to end the COLA round-
down.

C. Burial Benefits
    The Federal Government has provided varying forms of burial 
benefits since the Civil War. We are concerned that the 
continued erosion of the value of monetary burial benefits has 
resulted in the benefit covering just a small fraction of what 
was covered in 1973, when VA first provided monetary burial 
benefits for our veterans.
    The Undersigned Members recommend that $150 million be 
provided to bring the value of this benefit closer to that 
established in 1973. Specifically, we recommend an increase in 
the plot allowance from $300 to $745; an increase in the 
service-connected burial benefit from $2,000 to $4,100; and, 
finally, an increase in the non-service-connected burial 
benefit from $300 to $1,200.

D. Specially Adapted Housing Grants
    VA provides specially adapted housing grants of up to 
$50,000 to severely disabled veterans with service-connected 
disabilities. Unfortunately, increases to this program have 
been infrequent, while real estate and construction costs have 
continued to rise. We recommend an additional $5 million to 
increase the amount of these grants to $60,000.

E. Automobile Grants and Adaptive Equipment
    VA provides certain severely disabled veterans and 
servicemembers grants for the purchase of automobiles. This 
grant also provides for adaptive equipment necessary for safe 
operation of those vehicles. When this grant was first 
established in 1946, it covered approximately 85 percent of the 
average cost of a new automobile. Over time, Congress adjusted 
the amount provided to 80 percent of a new automobile. However, 
lack of further adjustments to this grant have gradually eroded 
the benefit so that today, the current allowance of $11,000 
represents approximately 39 percent of the average cost of an 
automobile.
    The Undersigned Members recommend that $17 million be 
provided in FY09 to increase the allowance to $22,500, which is 
80 percent of the average cost of a new automobile.

F. Educational Assistance Benefits
    The Undersigned Members view the educational assistance 
benefits available to active duty servicemembers, members of 
the Guard and Reserve, and veterans as having exceptional value 
to individuals as a readjustment benefit. We also recognize 
that individuals have earned these benefits not only by serving 
honorably in defense of our Nation, but in some cases, by also 
making their own contributions through payroll deductions. We 
also believe that these benefits play a vital role in helping 
the Armed Forces recruit and retain quality young men and women 
in the All-Volunteer Force, particularly those serving in the 
Guard and Reserve.
    We anticipate the need for increases in funding available 
for educational assistance benefits, especially since it 
appears likely that programs now funded under title 10, United 
States Code, may be transferred to title 38. In addition, we 
may seek enactment of legislation that would make a number of 
overall improvements and enhancements to educational assistance 
benefits, and that would necessitate an increase in funding for 
these programs. While we do not, at this time, have any 
estimate of the cost of such a proposal, we believe that the 
associated costs are likely to be substantial, and we request 
that the Budget Committee reflect that potential in the 
resolution that you bring forward to the Senate for 
consideration.

                              IV. Closing

    We thank the Budget Committee for its attention to the 
Undersigned Members' views and estimates on the Fiscal Year 
2009 budget. We look forward to working with the Budget 
Committee in crafting a budget for veterans' programs that 
truly meets the needs of those who have served our country.
            Sincerely,
                                   Daniel K. Akaka,
                                       Chairman.
                                           John D. Rockefeller IV.
                                           Patty Murray.
                                           Barack Obama.
                                           Bernard Sanders.
                                           Sherrod Brown.
                                           James Webb.
                                           Jon Tester.
                                ------                                

                                                 February 22, 2008.
Hon. Kent Conrad, Chairman,
Hon. Judd Gregg, Ranking Member,
Committee on the Budget,
U.S. Senate, Washington, DC.

    Dear Chairman Conrad and Ranking Member Gregg: Pursuant to 
Section 301(d) of the Congressional Budget Act of 1974, it is 
my pleasure as the Ranking Member of the Committee on Veterans' 
Affairs (hereinafter, ``Committee'') to submit this letter to 
the Committee on the Budget on the proposed fiscal year 2009 
(hereinafter, ``FY09'') budget for Function 700 (Veterans' 
Benefits and Services) programs and for certain Function 500 
(Education, Training, Employment, and Social Services) 
programs.

                     Department of Veterans Affairs

                          I. GENERAL COMMENTS

    The principal focus of my letter will be on the largest 
component of Function 700 spending--Department of Veterans 
Affairs (hereinafter, ``VA'') programs. A significant 
investment has been made over the past decade in VA programs 
and services. Through our collective roles in funding and 
overseeing these programs, the President and the Congress have 
taken significant steps to honor the service of our Nation's 
veterans and continue to provide them with the benefits and 
services they need and deserve. Providing resources for the 
care of our veterans must remain a top priority, particularly 
now as our Nation is at war.
    However, providing the appropriate resources for VA is the 
beginning of our obligations, not the end. It is critical that 
we also analyze whether the investments made in VA programs and 
services are translating into better outcomes for veterans. If 
veterans are not reaching the outcomes they expect and deserve, 
it is our obligation to try a new approach and find new ways to 
ensure the effective and efficient delivery of services to 
veterans. There are three areas in particular that, I suggest, 
are ripe for this type of scrutiny.
    The first area concerns the lack of coordination among 
programs administered by VA, which may impede VA's ability to 
fulfill its primary goal to ``restore the capability of 
veterans with disabilities to the greatest extent possible.'' 
Although VA has a world-class health care system, a 
comprehensive vocational rehabilitation and employment program, 
and a disability compensation program, it does not use those 
resources collectively to improve the lives of veterans. 
Indeed, as the Institute of Medicine concluded last year, ``VA 
has the services needed to maximize the potential of veterans 
with disabilities, but they are not actively coordinated and 
thus are not as effective as they could be.''
    This problem is exemplified by the apparent disconnect 
between the arm of VA that provides medical treatment (the 
Veterans Health Administration (hereinafter, ``VHA'')) and the 
arm of VA that provides disability compensation (the Veterans 
Benefits Administration (hereinafter, ``VBA'')). As you know, 
VHA is tasked with the prevention and treatment of medical 
conditions, while VBA is tasked with assessing the severity of 
service-connected medical conditions through the assignment of 
disability ratings. One would expect that medical treatment 
would improve many service-connected conditions so that, at 
best, those conditions would improve or, at worst, they would 
slow down the deterioration process. Yet, the disability 
compensation rolls suggest not only that the population of 
disabled veterans is growing but that veterans' disabilities 
are, on average, worsening each year.
    To me, this raises questions about whether Congress and VA 
have placed the proper emphasis on what I believe is the 
desired outcome for service-disabled veterans--a restoration of 
their health or an improvement in their conditions. Therefore, 
as we proceed through this budget cycle and the remainder of 
this Congress, we should move away from ``business as usual'' 
and make changes that will focus VA's resources--in a 
coordinated, comprehensive manner--on the wellness, recovery, 
rehabilitation, and restoration of veterans with disabilities.
    The second issue I would like to address is the backlog of 
disability compensation claims at VA. For many years, the VA 
claims processing system has been plagued by large numbers of 
pending claims and lengthy processing times. The primary 
response of Congress has been to provide additional funding for 
claims-processing staff, leading to a doubling of staff in the 
past ten years. Unfortunately, money has not been the answer to 
the problem. In fact, as staffing has been added over the past 
several years, VA's per-employee productivity goals have 
trended down and pending inventory levels have trended up. 
Although I understand that many factors may influence these 
trends, I think it is time to realize that staffing alone is 
not a solution to the chronic backlogs. It is time to try new 
approaches, such as increasing productivity through the use of 
modern technology and focusing VA's resources where they will 
be most effective.
    The third area I would like to address concerns long-
standing, fundamental problems with the disability evaluation 
system. Under the current system, a servicemember who is found 
unfit for further military duty may have to go through a 
lengthy, complex process at the Department of Defense 
(hereinafter, ``DOD'') to obtain a disability rating that 
determines what benefits the servicemember will receive from 
DOD. Then, the veteran may go through a similar process at VA 
to obtain a disability rating based on the same outdated rating 
schedule used by DOD. The VA rating, which often differs from 
the DOD rating, determines what benefits the veteran will 
receive from VA, including compensation for loss of earnings 
capacity caused by service-related conditions.
    For more than five decades, experts have expressed the need 
to update and modernize this system. In fact, the need for 
modernization was stressed last year by two distinguished 
commissions: The President's Commission on Care for America's 
Returning Wounded Warriors, chaired by former Senator Bob Dole 
and former Secretary Donna Shalala, and the Veterans' 
Disability Benefits Commission, chaired by General James Terry 
Scott. Both of those commissions emphasized the need to 
eliminate duplicative, confusing functions conducted by VA and 
DOD; to completely update the VA disability rating schedule; to 
compensate veterans for any loss of quality of life caused by 
their service-related disabilities, in addition to compensating 
any impact on their earnings capacity; and to place additional 
emphasis on the treatment and rehabilitation of injured 
veterans.
    With young men and women returning home from war with 
devastating injuries, we simply cannot continue to ignore the 
need to modernize this system. These brave men and women, who 
have sacrificed so much for our Nation, should have a system in 
place that will provide them with the benefits and services 
they need to return to full and productive lives. In the coming 
months, Congress should act with urgency to implement these 
common sense reforms and to create a modern, less confusing, 
and more equitable system for today's wounded warriors.

                      II. SPECIFIC AREAS OF FOCUS

    The FY09 budget proposal puts a focus on the medical care 
and disability benefits of our Nation's veterans. However, 
there are several areas where Congress may wish to provide 
additional emphasis:
    1. Medical and Prosthetic Research--The Institute of 
Medicine issued a report last year indicating that exposure 
therapy was the only treatment proven to be effective for Post 
Traumatic Stress Disorder (hereinafter, ``PTSD''). The 
Institute of Medicine also found that the quality of research 
on PTSD treatment as a whole ``has not received the level of 
research activity needed to support conclusions about the 
potential benefits of other treatment modalities.'' With 
thousands of veterans returning from the current conflicts in 
Iraq and Afghanistan who may be afflicted by PTSD, it is 
essential that we bring VA's resources to bear in finding other 
treatments that may help veterans recover.
    2. The Office of the Inspector General (hereinafter, 
``OIG'')--The OIG has been performing well and has conducted 
many valuable assessments of VA's programs and services. 
Indeed, over the past year, the OIG has proved itself to be an 
excellent resource in catching issues early on and conducting 
follow-up investigations after problems have been detected. OIG 
produces numerous investigations, audits, facility healthcare 
inspections, contract reviews, and management reviews, all of 
high quality. I believe Congress, VA, and our Nation's veterans 
have benefited from all aspects of OIG oversight, from identity 
theft incidents and information technology data losses to the 
investigations of medical facilities. The OIG continues to 
serve as a primary information source for identifying where VA 
has deficiencies and where improvements can be made. It is 
important that they have the resources to continue providing 
top level service on behalf of our Nation's veterans.
    3. General Operating Expenses--The President's request for 
General Operating Expenses includes funding to significantly 
increase staff in many areas. However, the request does not 
include any additional staffing for the Vocational 
Rehabilitation and Employment (hereinafter, ``VR&E'') program. 
This comes at a time when experts have raised serious concerns 
about the ability of the VR&E program to address the needs of 
severely disabled veterans returning from the conflicts in 
Afghanistan and Iraq. In my view, Congress and VA should take a 
critical look at whether VR&E has the appropriate staffing, 
expertise, and focus to meet the needs of this population of 
severely disabled veterans. It is critical that we provide 
these wounded warriors with the tools, assistance, and services 
they need to recover and return to productive and fulfilling 
lives.

           United States Court of Appeals for Veterans Claims

    Almost 20 years ago, Congress created the United States 
Court of Appeals for Veterans Claims (hereinafter, ``Court'') 
for a very important purpose--to provide ``fundamental 
justice'' to veterans and their families who are seeking 
veterans' benefits. To fulfill that purpose, every individual 
who comes before the Court should rightfully expect a prompt 
decision on his or her appeal. Unfortunately, as the Committee 
learned at a hearing in November 2007, the Court is facing many 
challenges in trying to fulfill that expectation:
     The Court was receiving record levels of incoming 
cases. There were over 4,600 new cases in fiscal year 2007, 
which was almost 25% more than any prior year.
     The Court had roughly 6,300 pending cases, which 
was 36% more than two years earlier and 4,000 more than ten 
years earlier.
     At least 750 cases were already awaiting action by 
the Court, and 3,700 more may be ready for a decision within 
the year.
     The median number of days to decide cases in 
fiscal year 2007 was 416 days, which was almost 19% higher than 
fiscal year 2006.
    With these staggering statistics, it seems clear that both 
Congress and the Court must take steps to ensure that veterans 
will not have to wait long for decisions. As part of that 
effort, the Court and this Committee should take a critical 
look at where there may be bottlenecks and how improvements 
could be made. It is also important that the Court fully 
utilize the experience and expertise of retired recall-eligible 
judges, who may be called back to work for up to 90 days per 
year or for longer with their consent. Since 2006, these 
retired judges have proven to be a valuable resource in helping 
the Court deal with its caseload. Finally, I believe that 
Congress, in addition to providing adequate funding for the 
Court, should consider taking other measures, such as 
authorizing magistrates, to help the Court provide justice to 
veterans in a timely manner.

               Veterans' Employment and Training Service

    The Department of Labor's Veterans' Employment and Training 
Service provides grants to states to fund the Disabled 
Veterans' Outreach Program and the Local Veterans' Employment 
Representatives program. These programs are designed to provide 
employment and training services to veterans and conduct 
outreach to employers to increase employment opportunities for 
veterans. Unfortunately, concerns have been raised about 
whether these programs are effective in helping veterans find 
good jobs, particularly injured veterans returning from the 
current conflicts. In fact, at a February 2008 hearing before 
the Committee, Mr. John Rowan, National President of Vietnam 
Veterans of America, testified that ``[i]t still remains clear 
that the system funded through the Department of Labor simply 
is failing these fine young men and women when they need 
assistance most in rebuilding their lives.'' As we move forward 
with the budget process and this Congress, it should be the 
focus of this Committee to assess the effectiveness of these 
programs and to find ways to improve the employment services 
provided to our Nation's veterans.

                          Concluding Comments

    Thank you for your consideration of my views on the 
programs and services for our Nation's veterans and the 
challenges that lie ahead. I look forward to working with the 
Committee on the Budget and all of our colleagues to help 
improve and modernize the system of benefits and services for 
all veterans.
            Sincerely,
                                              Richard Burr,
                                                    Ranking Member.

                     COMMITTEE ON VETERANS' AFFAIRS

 DANIEL K. AKAKA, Hawaii, Chairman
RICHARD BURR, North Carolina         JOHN D. ROCKEFELLER IV, West 
ARLEN SPECTER, Pennsylvania          Virginia
LARRY E. CRAIG, Idaho                PATTY MURRAY, Washington
JOHNNY ISAKSON, Georgia              BARACK OBAMA, Illinois
LINDSEY O. GRAHAM, South Carolina    BERNARD SANDERS, (I) Vermont
KAY BAILEY HUTCHISON, Texas          SHERROD BROWN, Ohio
ROGER F. WICKER, Mississippi         JIM WEBB, Virginia
                                     JON TESTER, Montana
  William E. Brew, Staff Director
  Lupe Wissel, Republican Staff 
             Director
  

                                  
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