"Aloha and welcome to all. I look forward to our dialogue with Secretary Nicholson and other top VA officials, as well as the representatives of veterans' service organizations here with us today.

"I am pleased that the Administration is requesting a straightforward increase for VA, without some of the offsets proposed in prior years. While some see this proposed budget as good and others see it as inadequate, I believe that what we need is a much better understanding of some of the specifics before our Committee goes forward to the Budget Committee with our Views and Estimates.

"For example, I believe we need to know what the actual increase is for veterans' health care in the proposed budget. It appears to me that inflation and higher automatic costs account for nearly all of the $1.9 billion increase being requested of Congress. This would leave little funding available for expansions or improvements to key programs, such as mental health and care for returning servicemembers.

"I remain committed in my opposition to the policy proposals to impose higher costs on veterans. Once again, the Administration is suggesting that we ask veterans to pay more out of their own pockets if they are not disabled, but still want access to VA care.

"Let me be clear about the veterans who would be forced to shoulder these cost increases. Many of these veterans cannot, in my view, be characterized as "higher-income." These are veterans living in places like my home state of Hawaii, where the cost of living is one of the highest in the country, who make as little as $28,000 a year and would be asked to pay new fees for their health care or medications.

"I have a number of questions about this year's enrollment fee proposal. Basing the fee upon family income is a different version than the Administration has proposed in the past. I am concerned about the lower end of the tier structure, working families with a combined income of $50,000 a year, and the impact of these fees on them.

"A family with two veteran wage earners, each taking an average number of medications and each paying the enrollment fee, would have to pay more than $3,000 in new out of pocket costs if the proposed fees are mandated. I do not believe this is the way to reward the working families who have served our country.

"The near-doubling of the prescription drug copayment is equally alarming. In the case of a veteran with diabetes, a very common condition in VA and one which requires many prescriptions, the new copayment alone would increase out of pocket fees by at least $200 a year. This is not an insignificant number for a senior living on a fixed income.

"There are other areas of concern, such as whether or not Operations Iraqi Freedom and Enduring Freedom veterans have been adequately factored into the budget proposal. The Administration's low estimate of the impact that these veterans would have on the VA health care system was one of the major contributors to the disastrous 2005 shortfall. Last year, VA's estimates were off by almost 50,000 OEF/OIF veterans. I continue to be concerned that VA is again miscalculating. It is important that we do not underestimate this population so that we can provide for a seamless transition for returning servicemembers, including demobilized Guard and Reservists.

"It is also shortsighted to cut research, as the proposed budget does. Many physicians choose to work at VA because of the opportunity to do research. I truly believe that we need to be adding to this account and not cutting it. Imperiling the research program hurts VA's ability to recruit and retain excellent physician researchers and could therefore adversely impact the quality of overall health care.

"On the benefits side of the ledger, VA must be ready to adjudicate claims in a timely and accurate manner. Should VA receive claims in excess of the 800,000 that are estimated for next year, I do not believe the Department will have the resources to handle the workload. In addition, VA does not have a history of absorbing the impact of new court decisions easily, and I am concerned that pending court cases may have an adverse affect on VA's timeliness and accuracy. We also know that the ongoing combat in Iraq and Afghanistan is increasing VA's workload and will continue to do so for years to come.

"Now is the time for VA to hire and train staff to meet the present and future demand for timely adjudication. I will continue to monitor VA's inventory and staffing requirements. Our Nation's veterans deserve nothing less than having their claims rated accurately and in a reasonable amount of time.

"I am committed to working with the Secretary and my colleagues on both sides of the aisle to ensure that the Department gets what it truly needs to deliver the highest quality benefits and services to our Nation's veterans. I am also deeply committed to working to have all of our colleagues in Congress recognize the reality that meeting the needs of veterans is truly part of the ongoing costs of war.

"I look forward to our work on behalf of the Nation's veterans in the weeks and months ahead, as the Committee works to get the best possible budget for veterans' programs in the coming fiscal year."