FISCAL YEAR 1996 DEPARTMENT OF VETERANS AFFAIRS BUDGET

FRIDAY, FEBRUARY 24, 1995

House of Representatives,

Committee on Veterans' Affairs,

Washington, DC.

The committee met, pursuant to call, at 9 a.m., in room 334, Cannon House Office Building, Hon. Bob Stump (chairman of the committee) presiding.

Present: Representatives Stump, Bilirakis, Spence, Hutchinson, Everett, Buyer, Quinn, Bachus, Stearns, Ney, Fox, Flanagan, Barr, Weller, Hayworth, Cooley, Schaefer, Montgomery, Evans, Kennedy, Edwards, Waters, Clement, Filner, Tejeda, Gutierrez, Baesler, Bishop, Clyburn, Brown of Florida and Doyle.

OPENING STATEMENT OF CHAIRMAN STUMP

OPENING STATEMENT OF HON. G.V. (SONNY) MONTGOMERY

STATEMENTS OF HON. JESSE BROWN, SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS

OPENING STATEMENT OF HON. DAN SCHAEFER

OPENING STATEMENT OF HON. MICHAEL BILIRAKIS

OPENING STATEMENT OF HON. TIM HUTCHINSON

OPENING STATEMENT OF HON. MIKE DOYLE

OPENING STATEMENT OF HON. LUIS V. GUTIERREZ

OPENING STATEMENT OF HON. JACK QUINN

OPENING STATEMENT OF HON. WES COOLEY

OPENING STATEMENT OF HON. MIKE FLANAGAN

OPENING STATEMENT OF HON. CORRINE BROWN

OPENING STATEMENT OF HON. MAXINE WATERS

OPENING STATEMENT OF HON. CLIFF STEARNS

STATEMENT OF JAMES N. MAGILL, LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN WARS

STATEMENT OF RUSSELL W. MANK, LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA

STATEMENT OF RICHARD F. SCHULTZ, LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS

STATEMENT OF NOEL C. WOOSLEY, NATIONAL SERVICE DIRECTOR, AMVETS

STATEMENT OF LARRY D. RHEA, DEPUTY DIRECTOR OF LEGISLATIVE AFFAIRS, NON COMMISSIONED OFFICERS ASSOCIATION

STATEMENT OF CARROLL L. WILLIAMS, DIRECTOR, VETERANS AFFAIRS AND REHABILITATION, THE AMERICAN LEGION

OPENING STATEMENT OF CHAIRMAN STUMP

The Chairman. The committee will please come to order.

Today we are meeting to hear testimony on the budget for fiscal year 1996. As you know, this meeting had been scheduled for last Wednesday, but because there are eight Members on this committee, the meeting overlapped with the Armed Services Committee, so we changed it to today; and I appreciate everybody's indulgence.

I especially want to thank the Secretary and the rest of our witnesses for being able to change their schedule on such short notice. Unfortunately, there are two witnesses that couldn't do that and will not be with us, the Honorable Frank Nebeker and the Honorable Preston Taylor, Assistant Secretary for Veterans Employment and Training, could not be here. So without objection, I would like to include their presentations in the record.

[The statement of Mr. Nebeker appears on p. 93.]

[The statement of Mr. Taylor appears on p. 97.]

The Chairman. We will have three panels before us today. First, Secretary Brown. Next, the Independent Budget Panel with representatives from the Veterans of Foreign Wars, the Paralyzed Veterans of America, the Disabled American Veterans, and AMVETS; and third, we will hear from the American Legion and Non Commissioned Officers Association.

I was going to introduce Dan Schaefer, but I don't see him out here. Later, we have a new Member to introduce.

Since we do have so many new Members here, I would like to say a few comments about our Secretary, if I could, please. Jesse Brown is a Marine, a combat veteran of Vietnam, wounded in Vietnam, and he has been a tireless advocate for veterans' problems his entire professional career.

He joined the staff of the Disabled Veterans Association in 1967, working his way up to Executive Director through 1989; and then, of course, he was sworn in as Secretary in January of 1993.

Mr. Secretary, I understand that you personally appealed to the President for a better budget than came out of OMB, and we want you to know that we are very grateful for that. I commend you for your efforts and observe that the overall increase of nearly $1.3 billion is certainly an improvement over last year's budget request; and once again, we thank you for that.

Before we turn to you, Mr. Secretary, I would like to turn to my good friend, Ranking Member Sonny Montgomery.

[The prepared statement of Chairman Stump appears on p. 65.]

OPENING STATEMENT OF HON. G.V. (SONNY) MONTGOMERY

Mr. Montgomery. Thank you, Mr. Chairman. I join you in welcoming Secretary Brown and the other people at the witness table. I want to commend you. I was one of two Members of Congress at the ceremony of Iwo Jima last Sunday, and you certainly made some very fine comments, and I want to commend you for that.

I want to say that we all agree with a common belief that benefits for veterans are among the most important functions of government. What else can you give your country when you march off to war and you really don't know whether you will come back?

When the administration looked to cut the number of VA personnel providing direct health care for our new members, we successfully turned this policy around, so that we didn't lose that many FTEs out of our hospitals, that couldn't have functioned if this Reinventing Government had been pushed onto our veterans' programs. We have also worked together to fight for adequate budgets, and I believe this budget is fair.

Mr. Secretary, I hope you will cover it today. Coming out of the Appropriations Committee of the House last night--some rescissions were made that show $50 million coming out of medical equipment and $156 million out of VA construction; and I hope you are prepared to maybe make some comments on these rescission cuts. We would like to hear from you about that.

I want to express my strong opposition to the administration's proposal which would deny half of the future cost-of-living adjustments, COLAs, to persons going to school under the GI bill. I feel very strongly about this. There is a good possibility that the Pell grants, where you don't have any obligations to your country; the Perkins loans, that they don't even pay back; and then the National Service Program will receive increased funding. Yet the young men and women who march off to military service and serve for 3 years, may receive a reduced budget. This also affects the National Guard and Reserve GI Bill. This is one of the best recruiting tools we have for the military, the GI bill, and it hasn't cost the taxpayers a nickel up until this year. It cost $1,200 to the seviceman and woman; who enrolled in the program and that has paid for this program.

I think this is a fair budget. I am hopeful that we can do a little increase in medical care, and help out on research and also the national cemeteries. But I do hope you would touch on the rescissions that have come through from the Appropriations Committee. We are concerned about that.

And thank you, Mr. Chairman.

[The prepared statement of Congressman Montgomery appears on p. 70.]

The Chairman. Thank you, Sonny.

Mr. Secretary, we are going to change procedures just a little bit. Rather than going to individual Members now, we are going to go to you and let you proceed in any way you see fit; and then we will go to the Members for opening statements and/or questions under the 5-minute rule in the order that they were in the room when the gavel came down.

[The prepared statement of Congressman Weller appears on p. 75.]

[The prepared statement of Congressman Filner appears on p. 76.]

The Chairman. Mr. Secretary, we ask you to proceed as you see fit and we welcome you this morning.

STATEMENTS OF HON. JESSE BROWN, SECRETARY, U.S. DEPARTMENT OF VETERANS AFFAIRS, ACCOMPANIED BY HERSHEL GOBER, DEPUTY SECRETARY; KENNETH W. KIZER, M.D., UNDER SECRETARY FOR HEALTH; R.J. VOGEL, UNDER SECRETARY FOR BENEFITS; JERRY W. BOWEN, NATIONAL CEMETERY SYSTEM DIRECTOR; D. MARK CATLETT, ASSISTANT SECRETARY FOR MANAGEMENT; AND MARY LOU KEENER, GENERAL COUNSEL

Secretary Brown. Thank you so very much, Mr. Chairman. I really do appreciate those kind remarks that you made about me and my life's work.

The Chairman. Mr. Secretary, would you pull the microphone a little closer, please?

Thank you.

Secretary Brown. Again, thank you very much, Mr. Chairman. I do certainly appreciate those very kind introductory remarks. Before I present my oral testimony, I would like to respond to Mr. Montgomery's question with respect to the rescissions that were reported in The Washington Post this morning and also in the Congressional Record, where there is a proposal to rescind the Columbus, Missouri project; the Gainesville project; Hampton, VA; Orlando; Puerto Rico; West Haven, CT, for a total of $167 million. Quite frankly, I was very, very shocked to see that. And I was shocked because, in my view, it undermines our ability to be where we should be.

As you know, VA has to be as flexible as it can in order to take advantage of changes in treatment modalities. We can look at VA's pattern of providing care and we see consistently that the number of inpatients is going down each and every day, and at the same time, the number of outpatients is increasing; and that represents a tremendous savings.

That is what is happening all throughout America. And, unfortunately, if we do not have these projects, we are not going to be able to accommodate the people coming to us for care in an outpatient or ambulatory care setting.

I was just in Wilmington, DE at our hospital yesterday and there were hundreds of people in the hallways coming to take advantage of outpatient care. We are moving toward primary care, and as a result, it is putting a tremendous strain on our system. And therefore, I believe that to rescind these projects, quite frankly, is wrong. And I must say that this is the first time that I have seen an approach like this--in my view, it comes right at the veteran.

This is the first time that someone is actually proposing to take something away that is good for our veterans; and I hope we are able to reverse this proposal, because it is certainly not in our best interests.

Also, there is an effort to reduce by $50 million funding to reduce our equipment backlog. With respect to that, I am concerned. We have somewhere around $800 million in equipment backlog and we took $50 million out of the $111 million that the Congress was kind enough to provide to us in the 1995 budget and allocated that to reduce this equipment backlog. We are doing the same thing in our 1996 budget. I hope we do not see a trend about to develop with respect to reducing veterans' programs.

Mr. Chairman, I certainly do appreciate this opportunity to present to this committee the President's 1996 budget request for the Department of Veterans Affairs.

I am excited about VA's budget of $39.5 billion, which is an increase, as you have mentioned, of $1.3 billion over fiscal year 1995. In a nutshell, it is a good budget. Again this year, VA fought hard for the resources we need to provide adequate services for our veterans. As you again pointed out, I met with the President twice about the VA's budget and the result was a substantial increase.

VA continues to provide three basic services to this Nation's nearly 27 million veterans. These services are very simple, but they are very important. They are: providing quality health care, delivering timely benefits, and burying our veterans with dignity.

The VA's budget contains $17 billion for medical care, an increase of $747 million over the current year. This $17 billion will support 201,254 employees and provide care to 2.9 million patients. With this funding, we will provide more than 1 million episodes of inpatient care and 26.3 million outpatient visits. That, again, is an illustration of why we need to expand our ambulatory centers throughout the country if we are going to take care of our World War II, World War I, Korean War, Vietnam veterans, and all of our veterans who have served and are eligible for care from VA.

We will furnish care to 43,000 more veterans in 1996 than we will in 1995. We will open three nursing homes, a replacement medical center in Detroit, a spinal cord injury center and a 240-bed psychiatric facility.

The challenge is clear. We must continue our commitment to provide quality care to our veterans. That is why we are developing a new health care management structure.

Our new Under Secretary for Health, a great man, Dr. Ken Kizer, has been working hard on a system designed to meet the needs of veterans rather than the needs of individual facilities. It is based on networks that will function as planning, budgeting and operational units. Structuring management in this way will promote creativity, help us meet the expected workload, and generate savings through efficiency.

I will be submitting a reorganizational plan for your approval, Mr. Chairman, in the very near future.

Funding for research will increase from $252 million to $257 million in 1996. As one who understands the importance of research to the quality of care VA provides, I am extremely pleased with this proposed increase.

Major construction is increased by 45 percent to almost $514 million, and minor construction has increased by 50 percent to $229 million. The major construction funding fully meets our long-term commitments to build another new medical center in Brevard County, Florida, and a replacement facility in California at Travis Air Force Base. The minor construction increase focuses on badly needed improvements in inpatient environment.

Since becoming Secretary for Veterans Affairs, Mr. Chairman, I have traveled to more than 37 States, and I must tell you, sir, that I am very upset by having observed, firsthand, the unacceptable living conditions I have found in a number of our facilities. I am talking about things like the lack of private bathrooms for our women, and veteran patients receiving their care in 16-bed wards instead of private and semiprivate rooms, and the lack of bedside telephones for our patients. We need to bring our facilities up to community standards.

The 1996 construction budget will fully fund--fully fund, sir, five projects that address these deficiencies and will allow us to bring, as I have said, our facilities up to community standards.

The compensation and pensions account reflects an appropriation request of $17.6 billion. This includes $170.9 million of the projected costs of the U.S. Supreme Court decision of Gardner v. Brown. That decision, as you know, sir, invalidated one aspect of VA's interpretation of the law authorizing compensation for veterans disabled by medical treatment.

In the area of claims processing for benefits, I am happy to report that we have made great progress in reducing our processing time. With this budget, we will reduce processing time for original compensation claims from 212 days in 1994 to 140 days in 1996. That is a reduction of more than a third; and I also, sir, want you to know that we are working toward a goal of 106 days by 1998.

The Board of Veterans' Appeals is working hard. They are working hard and will continue to address the unacceptable amount of time it takes to process an appeal. In fiscal year 1996, we are requesting 28 additional positions which would increase the Board's staff to 477. We expect a reduction in average response time from 745 days to 687 days. Now, I recognize that this is still unacceptable, but the point here is that we are moving in the right direction; and I think we must continue to have the resources that will allow us to continue to manage this problem, as opposed to having the problem manage us at the Board of Veterans' Appeals.

As you will note, the Administration has also proposed legislation to extend through fiscal year 2000 the VA's provisions enacted in OBRA 1993. This will result in savings of nearly $3 billion.

In summary, Mr. Chairman, the challenges before us are great. Our goals remain the same, however: the best service we can give to our veterans. I look forward to working with you, as I have in the past, and the members of this committee to honor the commitment we have made to our Nation's veterans.

Mr. Chairman, this concludes my statement and I now will respond to any questions that you or members of the committee may have.

[The prepared statement of Secretary Brown appears on p. 110.]

The Chairman. Thank you, Mr. Secretary, for that presentation.

Before we go on, I would like to take this opportunity to introduce our newest member of the committee, Dan Schaefer from Colorado. Dan has been a hard worker on behalf of the veterans in this country, and we welcome him to this committee. We know that he will be an asset.

OPENING STATEMENT OF HON. DAN SCHAEFER

Mr. Schaefer. Well, I thank you, Mr. Chairman, and certainly the Ranking Member, Mr. Montgomery. As both individuals know, I have been trying to get on this committee for a long period of time.

On behalf of the 400,000-plus veterans in the State of Colorado, I was glad to hear the Secretary's statement this morning pertaining to health care, particularly when we are looking at that possibility of closing Fitzsimons Army Medical Center in Denver which serves 12 States. As the Secretary also knows, we have been working very hard on the parking facilities at our veterans' hospital in downtown Denver which are atrocious. We hope that we can solve some of these problems, and I do appreciate the Chair. Also, thank you for your efforts and Mr. Montgomery's efforts in getting me on this committee.

The Chairman. Thank you. And welcome again to the committee.

In order that we can proceed as rapidly as possible this morning, we are going to adhere strictly to the 5-minute rule, both for your questions and your answers. If you would try to abide by that, we will move along. The Secretary is under certain time constraints. As you know, we have gone in an hour earlier this morning in anticipation, and hopefully we can finish this hearing before noon with our three panels.

Before turning to my Ranking Member, Mr. Secretary, let me ask you a question. Would you agree with estimates indicating that as much as 40 percent of VA hospital admissions, may be inappropriate?

Secretary Brown. I can't respond to that. I am going to ask Dr. Kizer to respond to that one.

Dr. Kizer. Sir, in the review that I have been able to complete so far, in my short tenure in the position, that figure may apply at some facilities. I know that at other facilities that would be markedly less. And, of course many of these inappropriate admissions relate to the unusual requirements of eligibility rules that favor inpatient care over often more medically appropriate and more efficient delivery of the same service in an outpatient setting. But that option is not available for many VA patients, depending on the individual veteran's eligibility status.

The Chairman. Thank you.

Well, the Secretary mentioned in his opening remarks that the inpatient percentage is down, outpatient is up; and of course, that is what we are going to try to strive for up here. But would you, Mr. Secretary--one more quick question--explain how eligibility reform could help this situation?

Secretary Brown. Yes, sir. I think Dr. Kizer gave an example. Let me give a couple of examples to illustrate that the way we conduct business and our lack of flexibility really doesn't make sense in a modern society.

Let us say, for instance, an individual who is eligible for care from VA breaks his foot and he comes to the VA and we put a cast on that foot in an outpatient clinic. In order for us to legally give that individual crutches, we have to admit him to the hospital. That doesn't make any sense at all. So that is an indication of why we need eligibility reform--so that we can take advantage of modern efficient ways of delivering health care.

One other example. Let us take, for instance, a veteran who lost his leg below the knee in World War II, or Vietnam--it doesn't matter--Korea. He breaks his prosthetic device. He can come to VA and say, I need a new prosthesis. While he is there, the doctors say, let's take a look at you, and they give him a blood pressure test to check for hypertension. They find, let's say, his blood pressure is somewhere around 150 over 100. It is high, but not high enough for him to be hospitalized. They can only say to that man, find yourself a physician to look out for you and to manage your blood pressure.

And let's say for the purpose of this discussion that he walks out of the VA building and has a stroke right there. Then we can bring him into the hospital and give him everything he needs. It would have been much cheaper to have said, look, you have hypertension and we need to manage it, minimizing the potential of you ending up having a stroke.

The same thing with diabetes and so forth, particularly to our patients, who tend to be much older than the average patient in our society.

So those are examples of why we desperately need to have eligibility reform and we desperately need to move away as rapidly as we possibly can from inpatient care to outpatient care. That is where the savings are, and that is really what is good medicine in this country and, in fact, I think good medicine throughout the world.

The Chairman. Thank you, sir. As you know, that is going to be probably the number one priority of this committee, to try to move towards outpatient care, because we can save many, many dollars by doing that.

I apologize to you, sir, for not allowing you to introduce your assistants with you. If you would, before we go on to Mr. Montgomery.

Secretary Brown. Yes, sir. Mr. Chairman, I have Mr. Vogel, our Benefits Director; Mark Catlett, our resources and money man; we have Mr. Gober, he is our chief executive officer; and Ken Kizer, the newest member of our team. And I am so proud of this man; he is Under Secretary for Health. He has brought us so much wonderful experience and background, and a whole, new, refreshing approach to VA. I feel very proud to have him on our staff.

And we have Jerry Bowen, who is the Director of our Cemetery Service, Mr. Chairman.

The Chairman. Welcome, gentlemen. Mr. Montgomery.

Mr. Montgomery. Thank you.

Thank you, Dr. Kizer. I have got a problem for you in just a few minutes here. I have two questions and then brief answers to stay within my 5 minutes.

Mr. Secretary, you, like I and others on this committee, are concerned about the rescissions that the Appropriations Committee has brought forward. We will probably need your help on this side, maybe on that side, too, because it will affect some of our Members; there have been recommendations of not going ahead with construction. So I assume you will help us and give us the information that we need.

Secretary Brown. Yes, sir. You have my 100--no, my 1,000 percent support on this. This is so important to our veterans. It is important to do what is right for these guys.

We have spent the last 50 years talking about how well they performed for us during World War II, when we lost 400,000 of them on the fields of battle, and 700,000 came back home wounded and disabled. We need to show our respect to them and we need to show that we appreciate the contributions and sacrifices they have made to the Nation. And we can do this by providing them good, comprehensive, quality care.

Mr. Montgomery. Thank you.

My second question really follows up on regulations you have that you have to put an individual from outpatient into the hospital if the individual needs crutches. Now, my own VA hospital in Mississippi gave a penile implant to a child molester who had just gotten out of jail for child molesting, a 4-year sentence. Maybe the veteran was eligible. But the people are quite upset about that, that this procedure has been done. And it leaves the hospital in Mississippi setting up a committee to look at procedures like this. And I certainly hope it won't happen again in our other 170 hospitals where a child molester would get this penile implant, and you don't know what might happen after that.

So I hope you will take care of it and notify the other 170 hospitals, let's don't let this happen again. I know you are going to tell me, under the law this individual is eligible. I don't think he ever heard a shot fired in combat, but because of a diabetic condition he becomes eligible.

But we just can't let this go on, and I hope we don't have to move the legislation, but this shouldn't happen again.

Secretary Brown. Mr. Montgomery, let me just make a couple of observations about that. There are three things that really bother me in our society today. When I was a young boy coming up, the three groups of people that were always safe on our streets--and I came up on the streets of Chicago--were the elderly, our children, and those disabled. It appears now that we are living in a time when they are the most vulnerable. We as a society have an obligation to protect them.

And having said that, I would also say with respect to this particular individual that I am sure he is very happy that I am not a doctor and that it was not my right hand that performed the surgery. But we have to place this in its proper context, and that is, as you so rightly pointed out, he is entitled to this care by virtue of his service-connected disability. As such, we have a responsibility to separate his crime and his conduct, unacceptable conduct, from what he is entitled to from the VA. But I would be very, very cooperative in talking with you and members of this committee to try to find a solution that would be satisfactory.

The Chairman. Let me say to the Members that if you don't have enough time to get all of your questions in the 5 minutes, we will try a second go-round if time allows, or you are welcome to submit them for the record. Mr. Bilirakis.

OPENING STATEMENT OF HON. MICHAEL BILIRAKIS

Mr. Bilirakis. Thank you, Mr. Chairman. These are the rescission areas involving Florida's projects, although it includes a few others too.

Well, in the interest of time, sir, I have an opening statement that I would like to ask unanimous consent be inserted in the record and join you, of course, in welcoming the Secretary and his staff.

The Chairman. Without objection.

Mr. Bilirakis. I would like to apologize in advance. I have to testify before the Rules Committee on risk assessment and will be leaving when I have to, but certainly not before then.

Mr. Secretary, I was advised just about the time that you started to testify that part of the rescission is going to be the spinal cord injury working drawings, the construction drawings for the spinal cord injury center in Tampa, FL. We have been trying to get that on course for many, many years, as you know. You and I have talked about it before--and this, of course, is not your doing, but the center isn't part of your next year's budget. But that is okay, because we are really not at the point where we need that money anyhow. But that $4 million, as little as it is, is very, very important to us. I am hoping you will be able to help us there.

Mr. Chairman, last year I was part of, as you know, the bipartisan coalition to work up a health care plan. I was just amazed, and maybe I shouldn't have been, but I was amazed at the attitude of some of the Members of my coalition committee when it came to talk about veterans' health care. Why should they be treated any differently and that sort of thing; that is what the hell we are going through.

And I know when we had the national commander here last week to testify, only a few days ago he talked about the special category that veterans are in. And unfortunately, we have too many Members of this Congress who continue to pay no attention to that.

Nobody in our society--I mean, you rate social security, and I will defend it to the death, obviously; and you rate medicare because we put into it because you reach a certain age. You haven't really done anything to deserve it; you reach a certain age, you get it, because we set it up as a contract a long time ago and we should continue with that.

But when it comes to veterans, by God they rate it by what they have done, the hardships and that sort of thing. But we forget that the cost of war continue after the end of that war.

I would ask you, sir, getting back to the eligibility reform--in some of these instances that I still call him ``Chairman,'' I know Bob doesn't mind if I continue to call Mr. Montgomery ``Chairman.'' The need for eligibility reform, how much of that is the fault of legislation? I mean, is it just that we have set up eligibility in such a tight manner that in spite of the fact it catches situations such as these you mentioned, and Mr. Montgomery mentioned, there is no flexibility, there isn't enough flexibility to do what common sense dictates?

Secretary Brown. You actually stated it correctly. It is a direct result of legislation, a patched approach in legislation that has taken place over the last 30 or 40 years. And as a result, we are now seeing it becoming very restrictive in allowing us to be able to take advantage of the advancements that have been made in medical technology and the new techniques that are used in delivering health care in the Nation.

The Chairman. Well, now, I may be wrong, but I note--with all due respect I say this--the budget does not contain a strategic plan, if you will, if you could call it that, that would present the VA's suggestions and recommendations regarding eligibility reform. Isn't that true?

Secretary Brown. Yes, sir. We are now in the process of working on eligibility reform. We are working very hard to try to pull together all the information. As you know, we thought we had a good package last year in the national health care reform, and the veterans' portion of that was outstanding. But since that fell through the cracks, we had to go back to the drawing board. Now we are in the process of pulling together all the information we need, so we can come together with all of the interested parties and try to figure out which is the best way to proceed in the future.

Mr. Bilirakis. Well, you know, these terms are only 2-year terms, unfortunately--although some people would think, fortunately--and we don't know what your term is. God willing, you will be there at least another couple of years. I won't say that I would like to see you there more than a couple of years, as good as you are.

But the point is, time is always a factor here. So I am hoping, sir, that you all would come up with your recommendations as quickly as you can, so that we can maybe organize a task force or, as our Chairman pleases, really concentrate on that area, because an awful lot of wrong is taking place out there that we should right.

Secretary Brown. Thank you. And I do also want to say for the record, I really appreciate the support you have given us over the years.

Mr. Bilirakis. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. Thank you.

[The prepared statement of Congressman Bilirakis appears on p. 81.]

The Chairman. Mr. Edwards.

Mr. Edwards. Thank you.

Mr. Secretary, thank you for being here--all of you being here--and for your service to our Nation's veterans. Mr. Secretary, I was not privy to the process that the Appropriations Subcommittee went through in listing these rescissions. Could I ask you, have these particular projects been put on some sort of prioritized list? For example, is it possible for this committee to get a list of how these various projects, both those that were rescinded and those that were not, where they ranked on a list to see if there was some logic to which ones they picked out?

Secretary Brown. Yes, sir. And keep in mind that these projects were the ones that we had in the 1995 budget. We felt so strongly about them that we originally tried to get them in the 1995 budget with their own appropriation line. However, since we were not able to do that, we put them in the investment package, that $3 billion, and we were going to pay for them out of that because that is how strongly we felt about it.

We can see exactly what is happening. The demands being placed on our outpatient facilities are just staggering. As a result, we are going to have to move forward.

But to answer your question, yes, they have been prioritized and we can provide you with information to show that they score very high in terms of projects that we need to move forward on.

Mr. Edwards. Okay. Thank you. Thank you very much.

Dr. Kizer, I would like just to welcome you here. I believe this is your first hearing as Under Secretary before this committee, and I welcome you and look forward to working with you, as I know all other members of this committee do.

Could I just ask you your understanding of the fiscal year 1996 budget? Does it allow the funds you would like to have to really accelerate this reprioritizing of resources toward outpatient care? Or maybe, perhaps put a different way, if you had additional monies, what could you put those resources into to help us expedite that process, which I think will allow us to provide more care to more veterans at a lesser cost to the taxpayers?

Dr. Kizer. Thank you, sir, for your kind comments, and I also am appreciative to be here this morning.

With regard to your question, as has already been stated this morning, we think this is a very good budget, and the restructuring or the reorganization proposal that I am working on will complement the budget. The budget does give us a lot of room to do what needs to be done. But, as has already been commented upon this morning, we do have substantive needs that far exceed what is in the budget--that is, capital needs for patient environment improvements, for more ambulatory care facilities, and to address a large equipment backlog. So while this is a very good budget and a realistic budget, given all of the fiscal exigencies that are present today, it by no means addresses all of the needs that exist within the system.

Mr. Edwards. I appreciate that. The reason I asked that question, we may be a small number, but I think there are a number of us in the House that think it perhaps is inappropriate to have $700 billion in tax breaks at a time when we have a $200 billion deficit. My proposed idea, such as not having those kinds of tax breaks and applying most of that savings to deficit reduction, but perhaps saving some of that money for application to needed veterans' health care programs.

Thank you very much, Mr. Chairman. Thank you.

The Chairman. Chairman of the Subcommittee on Hospitals, Mr. Hutchinson.

OPENING STATEMENT OF HON. TIM HUTCHINSON

Mr. Hutchinson. Thank you, Mr. Chairman. And let me thank the Secretary for being here today. I have kind of a cold, so forgive my voice.

A special welcome to Dr. Kizer and always Hershel Gober, my fellow Arkansan. We are glad to see you again and have you here. In Arkansas we end up on different sides of the political fence a lot of the time. We certainly are united in our support for veterans and in our opposition to Bob Dole's suggestion that we ought to sell Arkansas to balance the budget. There has got to be a better way.

While we are all concerned about the rescission list, one of those concerns I think ought to focus on the fact that they had targeted ambulatory care additions in those rescissions; and so, Mr. Secretary, the VA has stated on numerous occasions that a shift to the delivery of health care services in the ambulatory care setting is a VA priority.

Your fiscal year 1996 major construction submission appears, at least to me, to be a little inconsistent with that goal in that two-thirds of the requested dollars are directed toward two facilities. So how will the construction of those two projects contribute to the VA's stated goal of achieving more ambulatory care facilities? And describe for me the construction prioritization process that resulted in the selection of those two hospital construction projects, please.

Secretary Brown. Thank you. I am so glad that you asked that question.

First of all, let me simply say that we do not believe they are inconsistent. Let me give you a backdrop on that. There is no relationship whatsoever between our efforts to continue to expand the care we provide on an outpatient basis and the two construction projects you are talking about.

I am assuming you are talking about Brevard County in Florida and the Travis Air Force Base project.

The Brevard County project has been on the books for about 10 years, and it scores 9.80 our priority score, which I can explain a little later. But it is based on our efforts to expand care in that area. Florida has one of the lowest bed rates per thousand veterans in the entire Nation. It has 1.72 whereas the Nation's average is 2.49. The supply of VA services should be comparable to the national average, and we must also take into consideration that there is a growing, ever-growing population of veterans moving to Florida who are retired and living on limited, fixed incomes, which would automatically make most of them eligible for care at our VA facility.

Another point, too--it is my understanding that the Air Force has now backed out, but we were moving to try to have a joint venture there with the Air Force. This particular project was based upon the conclusion that there were more and more veterans moving to Florida, and they did not have access to a primary care facility there in the central part of the State. So that is one of the reasons we put that project there. It has a catchment area that would serve about 258,000 veterans. We plan to complete the design in February of 1996, and we would like to complete construction in December of 1999.

With respect to the project which is a joint venture there in Travis Air Force Base--that is a replacement hospital for the hospital that would have been unsafe in an earthquake in northern California. I think that makes it very, very clear. One other point there--this catchment area is larger than 26 States. So our veterans who live in that area--an area larger than 26 States--do not have access to a VA hospital. In both instances, the project is based on need. So that is the reason we are moving forward with those two projects.

Mr. Hutchinson. Mr. Secretary, the GAO, according to figures that I have, estimates that there are 2,000 empty private hospital beds in the Brevard area. Was that reality taken into consideration as you considered the need in Florida?

Secretary Brown. Well, there was a shortage of long-term care, psychiatric and NHC beds in Florida, and that is the reason we wanted to proceed. I am going to ask Mark to give us some additional information on that.

Mr. Catlett. Those figures you cite have been recognized in the study, and as the Secretary mentioned, the emphasis is for a primary care facility. This is a case where we are putting a large number of psychiatric beds and nursing home beds in this facility; this is not tertiary care for this facility. It will be the hub for the outpatient care that we intend to provide in that area. And even with the emphasis on primary care, there needs to be a referral point when there is inpatient care needed, and that is the basis for our decision to continue with this project.

Mr. Hutchinson. All right.

Before my time runs out, I think there will be probably be an ongoing debate about some of those priorities. My understanding also is, though, that the length of stay at VA facilities is continuing to increase, and it is approximately twice the national average. I am thoroughly committed to the VA health care system, but we get all of these articles that are written and the editorials that are written now, calling for privatization and vouchers, and I think this is one of the things that fuels that.

Why is the length of stay continuing to increase, and why aren't we closer to the national average?

Secretary Brown. Well, I am going to ask Dr. Kizer to respond to that; but before I do, let me just simply say, first of all, I think we have to take into consideration that most of our veterans are sicker than the average patient here in America. So when they come to us, they are already sicker, they are older, they have more problems. And so it just required us longer to deal with those particular problems.

I am going to ask Dr. Kizer to give you some additional information on that.

Dr. Kizer. Actually, sir, I would like to see the source of those figures. Information that I have been given during my time at the Department is that while the average length of stay in VA hospitals is longer than the national average, it is decreasing; and so I would like to see the source of those figures.

I would also add that so many of the patients that are treated in the VA facilities have additional social or other problems that complicate their stay. They are homeless, or they have other problems that make it harder to find placement.

We do have shortages of extended-care beds. We have less availability of home care. We lack a number of other options. I am hoping, in part through my efforts to restructure the organization, to provide a wider menu of available options than just a traditional inpatient stay. And again, this is also complicated by the eligibility rules that, in effect, preclude some of the options that are available to private facilities. Our population could benefit from residential care and other options that are often more efficient than a typical inpatient hospital bed.

Mr. Hutchinson. Thank you.

The Chairman. The Chair recognizes Mr. Tejeda.

Mr. Tejeda. Thank you very much, Mr. Chairman.

Good morning, Mr. Secretary and welcome once again. I have a couple of questions.

You mention in your prepared testimony that the VA will be moving forward with its consolidation and integration proposals along with the VISN proposal. Will each medical center that generates savings from the integration be able to retain a portion of those savings to improve direct patient care?

Secretary Brown. I am going to ask Dr. Kizer to respond to that.

Dr. Kizer. Under the proposal that we hope to be advancing in the very near future, the answer to that would be yes in some cases; in other cases, we would be looking at how the costs in that area compare to costs elsewhere.

One of the things that has become obvious in my review of what it costs to take care of the, quote, unquote, ``average veteran patient'' in our facilities is that cost varies substantially from region to region--often not entirely on the basis of risk adjustment, severity of illness or other obvious things. And insofar as those differences in costs can't be accounted for, and we know we have shortfalls in others, then we might look at moving some of those funds elsewhere in the system, but still directed at patient care.

In other cases, I would see, as you say, that savings would be turned back to the VISN to enhance patient care in the geographic area and the patient population served by those facilities.

Mr. Tejeda. Thank you.

Mr. Secretary, will the $2.7 million increase in the National Cemetery System budget enable the cemetery system to keep up with the increased demand, while not sacrificing maintenance or equipment backlog?

Secretary Brown. The increase, the $2.7 million increase in the 1996 budget really is, sir, basically current services. It provides for some growth. We try to make sure we are as lean as we possibly can be, We have kind of broken this down in terms of expansion into two areas.

Number one, wherever possible, we try to expand open cemeteries. The second thing we do, if we can't do that, is look at possibly opening new cemeteries.

And we have about five of them now on the rolls. They are Seattle, Dallas, Chicago, Cleveland and Albany. Of those, we have already acquired the land for three of them, and those are in Seattle, Dallas and Albany.

I am going to ask Jerry if he has anything additional to add to that.

Mr. Bowen. Essentially the budget that we have for 1996 will be a current services budget. We will be able to do the same things that we did in 1995. However, as a result of our streamlining efforts, we are moving seven FTE from our Central Office elements to the field in 1995. We are also going to move some FTE from our area offices to the field in 1996.

The budget does permit us in 1996 to place into service an additional 292 acres at our existing cemeteries, and to develop an additional 100,000 gravesites. So this budget is adequate to meet our needs in 1996.

Mr. Tejeda. And it is adequate again to where you are not sacrificing maintenance or equipment backlog?

Mr. Bowen. Our equipment backlog will increase slightly in 1996. But if I may, let me tell you why we are doing that.

During my teneure here, slightly less than 2 years, I have visited 61 of our 114 national cemeteries. When I talk with our directors, I ask them, if you could have more FTE, if you could have newer and better equipment or if you could have the M&R (maintenance and repairs) projects, which of those would you choose? Invariably they will respond give us the people. We will make the equipment last longer and we will do some of the work ourselves concerning the maintenance and repair projects.

Mr. Tejeda. Mr. Secretary, what are your thoughts or what is your position on the use of leasing to provide quicker or more portable outpatient care?

Secretary Brown. I think that is the way to go. We are not necessarily in the business of always looking to build facilities for the VA. Where we can lease, that is what we are doing, and that is part of our plan. We can actually bring them on line much faster, much more efficiently. They are much more flexible for us in terms of expansion or shrinking services as needed based on actual experience. So that is the way to go, sir.

Mr. Tejeda. Just one last question. I heard Chairman Spence on the National Security Committee ask this same question the other day to some of the chiefs who were there.

If you had an additional $1 billion in your budget, how would you use it? Where would you put it?

Secretary Brown. I would, of course, take some of that money and I would put it directly into medical care. We set aside about $767 million there. I would put some there to expand, give us some increased flexibility. As Dr. Kizer mentioned, there are going to be more creative ideas coming out of this whole process under his reorganization plan.

With the rest of it, I think I would respond to the needs. I have been to 37 States, I have visited 144 cities, over 330 various activities, around the country over the last 2 years. One of the things that bothers me most is when I go to these hospitals that were built in the 1930s, and we have 16 men in one room, and all of them get up at the same time and they are trying to take care of their physical needs and they have to go to bathrooms all the way down the hall.

If there are women in the hospitals, we have to bring all the men out of the bathroom and put somebody there to guard it so that the lady can go in and take care of her needs.

I would bring our hospitals up to community standards. Each and every one of them will look very, very nice, when you walk in; it would be open, everything will be clean. That is not to say that our hospitals now are not clean, but they are just old.

And we would have TV in each room, we would have telephones in each room, we would have modern equipment that we now put in modern hospitals. But in many of our old hospitals we did not retrofit them. So those are the kinds of things I would do with the rest of that money. I would bring every one of these hospitals up, particularly many of our older nursing homes.

The thing that hurts me the most is, I went to one hospital yesterday in Delaware, and I visited a nursing home and we see these guys that are 70 and 80 and a couple of them 100 years old, some of them have been there 15 and 20 years. They are sharing the room with five or six other people. I don't think I would want to stay in a room with five or six other people for 15 years.

And then you have to go out to take a bath. I think our veterans deserve better than that. I really do.

You know, a lot of people are talking about, well, maybe if they were not hurt. You know what I think about? I think about the guy that served during World War II, who served for the duration of the war. He could have spent 4 years being shot at every day and didn't get hurt and then he came home and it so happened he didn't do very good in terms of making a living for himself, and now he is able to get into the hospital because he is poor. I think he deserves the best that this Nation can give him. He gave everything that he could give during a time of national crisis.

So that is what I would do, sir, with the rest of that money. I would make sure that these hospitals meet community standards.

Mr. Tejeda. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. Mr. Everett, the Chairman of our Subcommittee on Compensation and Pension.

Mr. Everett. Thank you, Mr. Chairman. Thank you also for having this hearing. And I want to thank Secretary Brown and his group for appearing here today.

Mr. Chairman, I have a statement that I would like to submit for the record.

The Chairman. Without objection.

Mr. Everett. Secretary Brown, you stated that the VBA had made significant strides in decreasing the processing time for adjudicating claims. What percentage of this decrease was attributable to staff overtime?

Secretary Brown. I asked that same question to Mr. Vogel, and he told me at the time that he was not actually able to break it down. But we did spend somewhere around $9 million in overtime.

But I am convinced that when you combine the overtime with our modernization approach, our reengineering, and a number of other improvements, to include moving more people into the decisionmaking, that it is going to allow us to continue this downward trend we are seeing. So I think it is permanent, and I think it is a combination of things, including the overtime we did, which I don't think we are going to have to do in 1996. So I am very pleased with that.

Mr. Vogel, would you like to add something else to that?

Mr. Vogel Mr. Everett, I think that the Secretary covered it well. There is a dynamic that happens. If we fixed the organization today, the operational mode, and infused a measure of overtime just for this one week, we could see the effect that would have right away. But, in fact, we are being--our people are being much more creative, they are much more responsive. We have more people in decisionmaking modes than we had in the past. So just to attribute our progress to one aspect is impossible to do.

The good news is that we have become much more efficient. We have many, many more people in direct service to veterans, but less people involved in the augmenting and clerical functions that support it.

We are very proud of our accomplishments. We reduced the backlog by 11 percent last year. I told the Secretary I will have it down 18 to 20 percent again this year. That is just the backlog, but we will make the improvements in timeliness as well.

Mr. Everett. Mr. Secretary, what was the basis for the General Services Administration's suspension of the delegation of procurement authority for the acquisition of VBA modernization, Stage 2, the computers?

Mr. Catlett. Mr. Everett, I would like to answer that question. That is a responsibility that I have, and we deal directly with GSA.

Overall, the delegation was restored within the week for Stage 2 modernization. That withdrawal was based on a misunderstanding between staff about the data that GSA was expecting. They are tracking this progress that Mr. Vogel is talking about, as they should in their oversight role, and that information was supplied; and whereas the delegation was withdrawn on a Monday, we had that restored by Friday.

It is just a matter of making sure that our staffs--certainly we don't want to have that happen again, and we are making sure the staff is in touch and making sure the information is provided.

Mr. Everett. In other words, strictly due to miscommunications?

Mr. Catlett. Yes, sir. They were expecting information on our progress sooner than we had provided it, and decided to withdraw the delegation to get our attention, I expect. I have encouraged them also to call us whenever there is a problem among staff in terms of getting the information they expect, because we have had a good working relationship over the last 6 months.

GSA has been very involved with this project, as OMB has, and the support they have given us--we appreciate it, and their roles, we respect; and we are just making sure that the staff, when there is a problem--and in this case, I considered it a minor one, because, as I said, I was able to get them the information they were looking for and by Friday we had it restored.

The progress on that project is continuing. The negotiations and the procurement process is under way as it should be.

Mr. Everett. What importance does VA give to Stage 2 and Stage 3?

Mr. Vogel. Mr. Everett, we believe that Stage 3 clearly will be the completion of the project. Stage 2 will give us an opportunity to image and to use imaging. If you have ever visited one of our benefits offices, we are involved in claims folders, we are in paper processes, we exchange paper between us and the VA medical centers, between ourselves and the Department of Defense and the respective military services departments.

We want to get involved in imaging overall as much as we have been involved in imaging in administrating GI bill benefits at the St. Louis regional processing office. The technology has become very important to us. What it really does is get us out of having to use so many of our personnel to carry paper from one decisionmaker to the next, while providing more personnel to ensure that some value is added on and the decision is made. These things are very important.

It is a signal to our employees, as well, because we had such a very good year in 1994, and they are certainly in tune with what we are doing. It would give our personnel in the field a great deal of confidence and hope that we are, in fact, continuing to modernize and are getting out of the 1940s and 1950s mode of operation.

Mr. Everett. What is the total dollar amount of this procurement allocation?

Mr. Catlett. I am sorry, sir. Could you repeat the question?

Mr. Everett. The total dollar amount of this procurement allocation? What is budgeted?

Mr. Catlett. Are you talking all three stages of modernization, sir?

Mr. Everett. Right.

Mr. Catlett. All three stages are around $100 million, sir. We have completed Stage 1 and that procurement has been made. Stage 2 we expect this spring; it is the smallest of the three. As Mr. Vogel indicated, Stage 3 will be awarded next summer, the summer of 1996. The total of those for the hardware and installation is around $100 million.

Mr. Everett. Thank you very much.

Mr. Chairman, I have additional questions I would like to submit for the record.

(See p. 360.)

The Chairman. Mr. Doyle, before we have to take a recess.

Mr. Doyle. Thank you, Mr. Chairman.

OPENING STATEMENT OF HON. MIKE DOYLE

Secretary Brown, it is a pleasure to have you here today. I am one of the new Members on the committee, and also was the--my age saw the Vietnam War end about 2 or 3 months before I was going to be drafted, and I was thankful for that.

My father served in World War II, with a 100 percent service-connected disability, and was taken from our family at far too young an age due to his injuries in World War II. So I have a healthy respect for what the veterans' hospital system has done for my family.

I represent a district in Pittsburgh where we have one of the highest veteran populations in the country, and I have three VA facilities servicing my district. I have recently had the opportunity to tour those facilities, in Oakland, Highland Drive, and just very recently, the new state-of-the-art facility we have in Aspinwall; and I can tell you, it does make a difference when you talk about having a facility that is updated and new. I was just there meeting with a lot of our veterans there, and it does a lot for their spirits and their morale and also for the people serving them there.

When I met with some of the directors, one of the things that came across as I spoke with directors at the VA hospital system is this need to decentralize the system and give them some more flexibility to do some things within their budgets. So I was very happy to see this Veterans' Integrated Services network that you are working on. I think it is a step in the right direction.

I have had directors tell me that sometimes because of this restriction they have on FTEs--and I am just learning this process--but apparently it doesn't distinguish the difference between a nurse and a doctor or someone that is doing janitorial services; and FTEs--you know, it is a swap--and that sometimes they found themselves going out of the system, outside contracting work at actually a higher expense than what they could have done it at within the system, but they didn't want to use an FTE slot because they were so restricted in how that process worked, and that actually they could be more efficient and do more with their budgets if they just had some flexibility.

So I think what you are doing here is a step in the right direction; it is what your directors in the field are looking for, so that they can be more efficient and do more for our veterans with their budgets. And I want to commend you and offer you my support as you move in that direction.

Secretary Brown. Thank you very much, sir.

The Chairman. Mr. Secretary, we will recess for a short 10 minutes and be right back. We apologize.

Secretary Brown. Thank you, Mr. Chairman.

[Recess.]

The Chairman. I might have been too premature, Mr. Secretary. We don't have anybody to ask questions yet.

Here comes someone.

The committee will please come to order. Let me say, I know, Dr. Kizer, that you have to leave in a little bit, but I want to welcome you aboard--I neglected to mention at the beginning, but I have heard nothing but very good remarks about you--and I want you to know that and the record to show that. We welcome you.

Dr. Kizer. Thank you very much, sir.

The Chairman. Mr. Buyer.

Mr. Buyer. Thank you, Mr. Chairman. And Jesse, thanks for coming over.

Secretary Brown. Sure, Steve.

Mr. Buyer. I have some specific questions, and I think Sonny was right when he brought up the questions in regards to the reduction of the COLAs. We can't satisfy my heart here this morning, but just to let you know where I come from, I am one that was not in support of the Americorps. I think of how it undermined volunteerism and the problem of how it would pay people to do something that millions of people do in our society anyway, and it bothers me that when the Administration bumps up Americorps really as a jobs program, it has a perverse effect in undermining what we seek to do in recruitment and education and training of veterans with the GI Bill. So I just want to let you know that.

And bumping up Pell grants. It is difficult for me to justify in my mind why, really, to go back to Indiana and go to the VFW and American Legion and talk with my veterans--veterans that are going to take a hit--we are going to bump up some other things. I think that President Clinton had a very good theme a couple of years ago when he opened up in his State of the Union address in regards to deficit reduction and he talked about shared sacrifice, and I am sure he has talked about that with you often at Cabinet meetings, and hopefully still does, because I think the theme is correct.

But it is very difficult. I found it difficult when I went back to talk to farmers, when I said, well, you are going to take a $3 billion cut in USDA, but they are bumping up food stamps by $7 billion. It is difficult to try to justify some of those things.

So help me here right now. Why did the administration propose the half-cut in COLAs, try to explain that to me. Believe me, I am one that thinks that, you know, there is no constitutional right to COLAs, okay? But help explain this one to me, please.

Secretary Brown. Well, as you know, these are merely extensions of the provisions that were already in law. Most of them would have expired in 1998. There were three of them that were scheduled to expire in 1996: the C&P rounddown, the DIC limitation of the COLA, and the one that you mentioned in the GI Bill.

Now, the thought here was that deficit reduction is very important, and since we wanted to see what we can do in order to be able to show we were doing our fair share, or doing--I don't want to call it ``fair share,'' because quite frankly, I tend to agree with you, if I had my way, veterans would not have to take any cuts. We should be given more.

But in this instance, these were already on the books, and it was felt that it would not pose a tremendous hardship on veterans to extend three of them.

Mr. Buyer. I guess in your answers to some prehearing questions, I will highlight--what bothers me is--and we are going to struggle with this on the Armed Services Committee; I serve on the Personnel Subcommittee, and as we struggle with force structure issues and recruitment and the Marine Corps, former Marines have some concerns right now in accessions and recruitment.

In your response here you said, in comparing the Montgomery GI Bill benefits of the 2-year to 3-year enlistees to those available to individuals who do not participate in the military, but choose the Americorps program. A 2-year enlistee who completes his term of service is eligible for $328.97 per month for 36 months, which works out to around $2,960.73 per academic year. Someone could serve in the Americorps and get $4,725. Add to that health care and child care, which a veteran is not going to receive.

So I want to let you know, Jesse, that this one doesn't sit right with me, and we are going address Americorps. You don't have to address Americorps; we are going to address that, because I am one of them that was very uncomfortable in extending benefits that far exceed the veterans', and especially those who have walked the walk. So I want you to know where I come from on that issue.

The other question that I have really deals with that $70 million in conversion money that got shifted over to the VA. The SMOCTA, the Service Member Occupational Conversion Training Act, placed over 13,200 veterans at an average obligation of 5,505 per veteran process.

Tell me, do you think this is a good program? Do you think it is going to extend, or do you think the Secretary, with the vets, can pretty much handle it?

Secretary Brown. I think it was an outstanding program, and I think we still have a little bit of that money left. We actually wrote to the Department of Defense to see if they would make those funds available to us, because we believe that it was very, very beneficial to our veterans.

I am going to ask Mr. Vogel to comment on that. But before I do, I just want to say one last point about these extenders. I want you to know that I am not totally committed to this. I mean, I am willing to sit down and talk about what else we can do. I just want to make sure that we don't end up hurting our veterans. I don't want to see any major cutbacks on basic programs, for instance, like we had with DIC. It was a major cutback when we actually made it impossible for a remarried widow to come back onto the rolls.

I don't want to see that. So I am willing to sit down and talk with you and members of the committee on trying to figure out a way that we can kind of work this out.

Mr. Buyer. Mr. Chairman, was this included in the armed services budget? You said you asked--did you write Secretary Perry and ask him? I don't recall.

Mr. Vogel. There was a question about whether or not the funds had to be obligated or made available beyond one fiscal year. We had to get a clarification on that congressional action, which in fact freed up some monies to be used essentially until they are exhausted. Otherwise, we would have shut the program off in October without having expended all of the money. Now we are going to carry it on through. That is what the Secretary is referring to.

We have had conversations about the availability, and this is really in the preliminary stages, of conversion monies that may in fact be available through labor sources for displaced civilian employees in defense industries to try to see whether or not some of that might be available for those who wore a uniform and were members of the actual military force during the downsizing and the conversion. But those discussions are rather preliminary. But I would be pleased to keep you informed of progress on that.

Mr. Buyer. All right. Thank you, Mr. Secretary.

Thank you, Mr. Chairman.

The Chairman. The gentleman from Illinois, Mr. Gutierrez.

Mr. Gutierrez. Thank you very much, Mr. Chairman.

OPENING STATEMENT OF HON. LUIS V. GUTIERREZ

Mr. Secretary, welcome once again here. Last year we had a--I went out to a hearing in San Juan, Puerto Rico which our department was advised about and then Chairman Montgomery of the Veterans' Committee wrote a letter and was well-advised about, and we got back a report about the outpatient care and about how in San Juan there was going to be some $30 some million that we put in the bill last year so that we could do, because of all of the overcrowding, there is really only one major center in San Juan for all of the veterans.

Just in case, for the edification of the Members, everybody in Puerto Rico is eligible for the draft and we are all American citizens, even the Island of Puerto Rico, while it is a colony, we are all American citizens there, and there is a high percentage of veterans living on that island. That is just in case, Mr. Chairman, because since the U.S. Immigration and Naturalization Service was telling different corporations that we were permanent residents of this country, I just thought we should make that absolutely clear to everybody.

So we went out in Puerto Rico, we had that hearing out there, and I would just like to ask you, I understand there was some flaw in the Appropriations Committee last year that really screwed up the money for the VA Hospital in San Juan. Can you tell me a little bit about that, and answer the question, if you might, does it make sense to you that the Congress should invoke in the name of deficit reduction to cancel these projects, one of which was canceled yesterday in the Subcommittee on Appropriations, projects like these that are improved--that are targeted to improve outpatient care, which is a less expensive form of treatment than inpatient care?

Secretary Brown. I would agree with you. No, it does not make sense.

With respect to the funding, as you know, we were prepared to move forward on that project, and it was actually in the 1995 budget. There was a mixup in terms of how the appropriation took place where they actually put all the money into one area.

In order to move forward, we were just going to notify the Congress and actually move--I think it was about $7 million, and then get authorization later to go ahead. So we were prepared to move forward on that project because it is one that we think is beneficial to our veterans.

But, as you have pointed out, at this point, if these rescissions are final or if they become final, then it makes it a moot point.

Mr. Gutierrez. Thank you, Mr. Secretary.

Mr. Secretary, in the last budget request of the National Cemetery System, we have--we talked about the much-needed cemetery in Illinois and specifically the Chicago area, and I know you came--your staff came out to a hearing that was conducted by the oversight subcommittee headed by Congressman Evans in Chicago, and we had a hearing there, and we know that it was listed as the number one priority for cemeteries in terms of the whole district, and I know that you came out and were very emphatic about it. And then we told all of the veterans in Chicago 2 years ago that it would be built by 19--it would be in operation by no later than 1999, 1998, 1999. That would be it.

It would be in operation, we were going to do it, the money was there, that we were ready to go with it. It is my understanding that there is no money in the budget to carry forward on that cemetery in Chicago, and I hope I am wrong, but could you explain to us if what we told the veterans in the City of Chicago who have no cemetery because all of them are full to the max and who is a number one priority, what is it that we are going to do to get them that national cemetery.

Secretary Brown. Okay. Everything you have said is true in the reverse. We do have money for that project, as I have mentioned in response to an earlier question. We have funds available and plan to move forward on five cemeteries, they are Seattle, Dallas, Chicago, Cleveland, and Albany.

Now, we actually have the land acquired for Seattle, Dallas, and Albany, but I don't see any problem whatsoever at this point with Chicago. I think that is going to move forward; you are absolutely right, it is needed.

We wasted too much time trying to get that land up there in north Chicago at Fort Sheridan, and we couldn't get that because of circumstances that developed. The economics just did not work out. The Army wanted $37 million and we only had about $6 million. So we identified that site, as you know, in Joliet, and it will allow us to develop and move forward and have gravesites that will last us until when?

Mr. Bowen. The 940 acres would provide space beyond the year 2075.

Mr. Gutierrez. When will it be completed, the cemetery? What is the schedule for completion?

Mr. Bowen. Right now, sir, our effort is to acquire the land. The completion date, is contingent upon when we can acquire the land and obtain construction funds. We do not need land acquisition dollars. We have the dollars.

Mr. Gutierrez. When is it scheduled for completion?

Mr. Bowen. We have no firm scheduled date for completion.

Mr. Gutierrez. Well, we gave a schedule for completion last year when we had hearings here, and if my memory serves me correctly, it was 1999 it would be completed and done and ready to go. So I would just urge everyone to try to keep on that schedule, and if there is no monetary problem that we do that, because I think it is very important.

Let me just a question to Chairman Stump. Mr. Chairman, wrapping up my time here, can we have hearings in this committee on the actions taken by the Appropriations Committee in terms of over $200 million that were taken away from the budget in rescissions and what kind of impact that specifically is going to have? Because I know we had the national veterans organizations come in here, we had them all, you know, the American Legion.

I think we should call them all back and say things have changed. There is $200 million less and we should conduct some hearings so that we can exert our authority. I know we are not the appropriators, the cardinals of the institution, but I think we have a big responsibility in terms of defending the interests of veterans, and I am just asking the chairman if we could have some hearings on that, because I think that is rather important.

The Chairman. I will assure the gentleman we can and we will in the 1996 construction budget; we have already had a request for a hearing regarding the cemetery in that area.

The gentleman from New York, Mr. Quinn.

Mr. Quinn. Thank you, Mr. Chairman. And welcome.

OPENING STATEMENT OF HON. JACK QUINN

Mr. Secretary and the team that you have brought with you today, I want to compliment you and the team on your efforts with this latest budget go-round and you know that you have a lot of support here. I think in the last year or two we know we have a lot of support from your end of things. So I appreciate your efforts. Thanks.

I have a question for which we might have to rely on, using your term, the money man, Mr. Catlett, in a minute here or two about the PT Phone Home Program. As you know, that project, not for my district, because the phones are already in, but I think for all of the other members in veterans hospitals around the country, you said earlier with the question Mr. Tejeda asked, what would you do with an extra billion dollars. I couldn't agree more with your response that we spend some of that money to bring hospitals up to current standards, with the phones at the bedsides of the veterans in the hospitals all across the country, and I saw that happen in Buffalo last year. We will talk about medicine and we will talk about doctors, but believe me, when a veteran can call his family members, children, wife, whatever, husband, that maybe is the best medicine we can provide for them while they are away and in the hospital.

This is a program, for those Members that don't know about it, that is a great effort--communication workers of America volunteer their time putting in the wires and making sure the hospital is fit. In the Buffalo situation last year, we were able to combine some work the hospital was already doing with computers when we ran some lines. It just seems to me it is a win/win situation for everybody.

My question is, having taken the platform for a minute to talk about the program, the question is that it is my understanding the money for PT Phone Home, whatever amount is there, was available through the minor project construction account.

And my question is, how does that account look for 1996? Can we compare amounts of money that we had last year and will have for next year so that I can get a handle on where it is going to be in the coming year?

Secretary Brown. Well, let me say as a matter of policy, Mr. Quinn, that I agree with you. It is a wonderful project. I am so thankful for the volunteers who spend time and their efforts in our VA hospitals. We have about 92,000 of them come to our hospitals each and every day to help our veterans and they contribute somewhere around $165 million of their services to us.

This particular project, and I am going to ask Mark to respond, it is going forward like rapid fire, all over the country, and we are going to support it. Any project will be funded. We will find the money, and I am making a commitment, we will find the money if all the other pieces are there. There will not be any projects that are turned down simply because we don't have the resources, because it is, as you pointed out, so very, very important, and it is cost-effective to us.

They are providing all of the expertise, and in many cases they are also providing the materials. So we would be foolish not to take advantage of that while it is made available to us, Mark.

Mr. Catlett. Mr. Quinn, I don't have the specifics here, we will get those to you right away, but the schedule that we are working towards is completion for the Nation by the end of 1996.

[The information follows:]

Under the Medical Care appropriation, the Veterans Health Administration expects to spend $23 million in fiscal year 1995 and $5 million in fiscal year 1996 to complete the installation of bedside telephones at all VA Medical Centers. The Congress provided $5 million of the $34 million which we will spend in fiscal year 1995. The $28 million will complete the installation of bedside telephones in the remaining 77 medical centers by end of 1996.

Mr. Catlett. We certainly have an excellent minor construction budget and as have you and the Secretary have noted most of the funding is not Federal appropriated dollars that is making this happen which is a great feature of this program.

So, as Jesse said, we will have, with the excellent minor budget that we propose, any funding that we would need. We will provide those details to you. But overall by the end of 1996, we are to have this completed throughout the Nation.

Mr. Quinn. Thank you. I would be interested to have that information and I will share it of course with other members of the committee and the Chair Monday.

I think it would also be helpful for us to share that information with some of those volunteers, namely the communication workers of America and at the same time the management of some of those phone companies, Mr. Secretary, as you mentioned, who come up with the hardware, the actual telephones and the wiring and the volunteer hours.

If we put a price tag on it and we tried to in our situation last year, it's literally hundreds of thousands of dollars for that one particular hospital. So it is absolutely a win/win. I know with the communication workers when I talked to Frank Fozio a couple of times on the telephone, he is always concerned that he doesn't see a line item in the budget for the money. I told him I would be giving him a call later today or Monday after our discussion today. I think I will hold off, Mr. Catlett, until I have those budget numbers from you, if it is okay, in the early part of next week.

Mr. Catlett. We will have them to you this week.

Mr. Quinn. That would be super.

Secretary Brown. Mr. Quinn, I just wanted to thank you for your help and your support of veterans.

Mr. Quinn. Happy to do it.

Thank you, Mr. Chairman.

The Chairman. Mr. Ney, Mr. Cooley.

OPENING STATEMENT OF HON. WES COOLEY

Mr. Cooley. Thank you, Mr. Chairman. And thank you, Mr. Brown, for being here today.

As you probably know, I am the only Korean veteran to be elected to the 104th Congress and I also have a small disability in which I lost part of my hearing in the Korean conflict.

I am looking over your budget figures and I look at the expenditures of $257 million, an increase of $5 million over last year for research. I think that the prosthetic research is quite vital to the American veterans because basically no one else is doing that. But I wonder at the expenditure of funds if we really need to be spending money on aging, mental illness, heart disease, diabetes, cancer, and AIDS research when we have other Federal agencies doing the same thing. If maybe some of that money couldn't be rechanneled into some of the things that we discussed earlier about the possibility of helping veterans at the service level and rechanneling some of those funds, maybe not into these research areas, but back to basics.

Could you give me some comment on that? Because I find that we are duplicating at NIH and everywhere else, every one of the things that you are working on as well, and wouldn't it be better to spend our money, our veterans' money, on veterans and not doing research. In your statement here you don't talk about veterans' health care, but that of the entire population. Well, this seems like a duplication.

Secretary Brown. Yes, sir. I understand your question, but I don't think I agree with your conclusion. VA is kind of a unique entity within our society.

We have 172 hospitals and I think about 126 medical schools around the country, and we are affiliated with about 106--104 of them. Research helps us attract quality people into our system. Many doctors are not necessarily interested in hands-on care. But if we can attract them into our research effort, many of them stay, and they become hands-on clinicians. They actually end up working with the patient and improving quality of care. They become part of our team in providing quality care through their sophisticated research that is going to benefit our veterans, but not only veterans, but people throughout the Nation.

For instance, the CAT SCAN was invented by VA. Not too long ago VA came out with a study saying VA is doing something a little bit different from many of the other research institutions around the country. Most of them want to get into the real sexy stuff, the high-tech stuff. VA tends to focus a lot of its attention in clinical areas. For instance, not too long ago they came out with a conclusion that you can't treat people of different races and different ages with the same medication to control hypertension. So that not only benefited our veterans, but it also benefited the entire country and people around the world.

So research is very important in allowing us to attract quality people into our institutions which end up serving our own purpose.

Mr. Cooley. Well, the thing is that I am just questioning if the Department of Veterans Affairs should be spending these monies. Is it possible that the committee could receive a breakdown of the $257 million in research money is going into these particular areas?

Secretary Brown. I think the answer to that is yes, but I am going to ask Dr. Kizer to respond.

Dr. Kizer. Sir, if I might respond, one of the things I plan to do is to look in depth at how we make the decisions to allocate our research funds, what our commitments are and what was the process of deciding that. In many cases research relates to health problems of the patients we treat. For example, about 7 percent of all of the AIDS patients in the Nation are treated at VA facilities.

I believe we are the single largest provider of AIDS treatment in the Nation. Many of our patients are diabetics or they have other conditions such as you mentioned before. So doing research in these diseases, particularly clinical, applied types of research, is directly germane to the care that is provided in our facilities.

But having said that, I also have had some of the same questions which I think that you are raising. Over the next several weeks I hope to undertake a more thorough review of exactly how we decide on the research projects that we fund. I will be happy to get back to you after I have completed this review to share with you the results and then perhaps to further address some of the concerns that you have.

Mr. Cooley. I am specifically interested in how much money we are putting into the prosthetic research, because I think that the Veterans' Administration is probably the leader in that area and that maybe we ought to be putting some more in there, because that is a vital part of bringing people back to normalcy, if we can use that term, when they have severe problems involved in this process.

Dr. Kizer. Well, we can certainly get that information to you, and that is one of the specific areas that I intend to review, particualrly how prosthetic research balances out with other areas that we are funding.

Mr. Cooley. Thank you very much.

The Chairman. Mr. Kennedy, Mr. Schaefer, Mr. Flanagan.

OPENING STATEMENT OF HON. MIKE FLANAGAN

Mr. Flanagan. Good morning, Mr. Secretary. Thank you for bringing this distinguished panel here.

Mr. Chairman, before I begin, I have a statement and some prepared questions for the record, which I would like to submit, and in the interest of time, I will just ask one of the questions.

The Chairman. Without objection.

Mr. Flanagan. Thank you.

I will once again revisit the horrors of the cemetery condition in Chicago. Mr. Gutierrez has very adequately brought the problem before us again today, and while Lou and I agree on virtually nothing, if you look at our voting records, we certainly agree on this, and that is our love for the city and our need for the cemetery.

Chicago, the statistical area that we are talking about, is between 8 and 10 million people, ranging between 17 and 20 congressional districts. And if my intensity of this seems a little significant, it is because the last national cemetery there, I believe, was closed after the Civil War. We haven't had a place to inter veterans in that area in 100 years. We need a cemetery. Promises have been made in the past, and I am mildly concerned that in your budgetary criteria you have allocated or put aside enough money to maintain the interment sites, and actually, as we have heard earlier today, are going to develop an equipment backlog in this area of the veterans affairs.

The money you have said is laying there to acquire the Joliet site. The history of it, I think, is a little longer involving the Fort Sheridan site, and I am concerned that short shrift was given to the Sheridan site and continues to be.

Mr. Bowen and I have talked on two occasions now, and Mr. Weller has introduced very important legislation to try to solve this problem, as has Mr. Crane in the past, Mr. Porter, and other Members have taken a very deep and concerning interest in a very specific way.

I wonder if I can ask Mr. Gutierrez' question again; when can Chicago look forward to having a cemetery for that area?

Secretary Brown. We can't give you an answer right now, but I can tell you, we don't have a problem there. There is no problem. We will build that cemetery. We are in the process of acquiring the rights to the land, and we are going to move forward.

There is absolutely--I see no real major problem, I really do not. And if something should develop, we will certainly be in touch with you and Mr. Gutierrez whom I have spoken with a number of times. He has been out on the lead on this issue, and we will make sure you receive that information. But I don't see a problem.

Mr. Flanagan. Well, I appreciate your concern, and the level of concern of Mr. Bowen as well. And we have talked about this again and again in a timetable, and been assured again and again, and yet you still are reluctant to get even an approximate date. And I am not trying to ask you to give me one now or anything like that, because I realize it is impossible in the context of what we are talking about.

Secretary Brown. Yes.

Mr. Flanagan. But I just wish to make it very clear to you the problem that many of these congressional districts and these millions of people have in not having a place to be interred in Chicago.

Secretary Brown. I agree with you, and I am saying for the record, we don't have a problem there. That is the least of our problems; of course, unless someone takes the money out of the budget.

Mr. Flanagan. Well, it is the greatest problem for the elderly vets in Chicago, I assure you, Mr. Secretary.

Thank you, Mr. Chairman.

[The prepared statement of Congresssman Flanagan appears on p. 78.]

Mr. Gutierrez. Would the gentleman yield?

Mr. Flanagan. Yes, Mr. Gutierrez.

Mr. Gutierrez. Mr. Secretary, you have been very generous in coming out and holding hearings with the veterans in Chicago, and with me specifically, and obviously Lane Evans' oversight committee that held a hearing on this. And I just think that somebody has already issued a statement on your behalf.

At the November 6, 1993 field hearing, held under Congressman Lane Evans' oversight committee, we heard from your representative, and I am just going to quote from him quickly and then we can move on: ``Let me emphasize that VA Secretary Jesse Brown has taken every opportunity to express his support for a national cemetery for veterans in the Chicago area. We hope to complete this project and be able to dedicate a new national cemetery, a national shrine for this area's veterans by November of 1997, just 4 years from now.'' That was the statement of the representative of the Veterans' Administration at the oversight hearing.

And I think that is why we are--I wanted to share that with you, because I know you didn't say that there at that hearing and that sometimes people misspeak at hearings. But if we could just have a definite time--not right now.

If you could just respond to us and say this is the track that we are on so that we can go back to the veterans and tell them here is what is going on today in 1995.

Secretary Brown. Give us a chance to work on it.

Mr. Gutierrez. Thank you very much, Mr. Secretary.

The Chairman. We have about seven people, and the Secretary has to be at another meeting by noon.

Mr. Evans from Illinois.

Mr. Evans. Thank you, Mr. Chairman.

Mr. Secretary, the VA's Readjustment Counseling Services is one of its best services, it has treated thousands of veterans, helping to make that transition back to civilian life. It has strong bipartisan support in Congress.

What is the budget request for the VA Readjustment Counseling Service and the anticipated caseload during fiscal year 1996?

Secretary Brown. We don't have that, Mr. Evans, but we will get it for you.

Mr. Evans. All right. That will be submitted as part of your testimony in the record?

Secretary Brown. Yes.

Mr. Evans. I understand Mr. Montgomery raised the issue of the GI bill with the COLA only being about 50 percent in terms of the cost of living that veterans need to go to school on the GI bill. Why are you proposing that and what impact do you think this might have on the use of the GI bill in the next fiscal year?

Secretary Brown. The reason we are proposing it primarily is because it is an extension of present law, is an extension of the 1993 OBRA provisions. And we felt that in order to make a contribution toward deficit reduction, this would be an area where we would not have to end up eroding any benefits, the basic core of benefits. There were 11 of them.

Of the 11, 9 were scheduled to terminate in 1998; 3 of them were scheduled to terminate in 1995, and they are the rounddown of the COLA, the DIC, and the GI bill. So that is it in a nutshell. I do want you to know, as I have already said, we are willing to work with the members of this committee on that issue.

Mr. Evans. What would an average GI bill monthly payment be for a veteran on the GI bill, with the 50 percent reduction and the cost-of-living adjustment?

Secretary Brown. We can get that for you.

Mr. Evans. All right. I think all of us are concerned that it is not going to be a viable program if it doesn't keep at least pace with inflation, or with regular inflation, much less with the increases that we see in tuition in the last few years, so I would appreciate you getting back to me.

Secretary Brown. We will.

[The information follows:]

The average GI bill monthly payment for a veteran will be $411.36 in 1996 with a 50�20percent reduction in the cost of living adjustment.

The Chairman. The gentleman from Georgia, Mr. Bishop.

Mr. Bishop. Thank you very much, Mr. Chairman.

Thank you, Mr. Secretary, for all that you do for veterans. We sincerely appreciate your sensitivities.

Moving to your budget proposals, as you know, there is a tremendous backlog in dealing with the processing time for disability claims, and looking at your proposed budget, could you sort of give us in a nutshell how you can reconcile the mission to deliver timely benefits with the 200-day processing time for disability claims, and is there anything in the budget that specifically will help to address that backlog and the time lag in dealing with the disability claims?

Secretary Brown. Yes, Mr. Bishop. We are very concerned about our timeliness, but for the purpose of your question, I have to break that question down between timeliness and the Veterans Benefits Administration and the Board of Veterans' Appeals.

In the Veterans Benefits Administration, we are extremely happy about what has occurred. In 1994, our backlog was 452,000. In 1995, it was 386,000; and in 1996, 296,000. And we expect to reach our goal of 250,000 in 1998. And that is where we want to be at 250,000, because we have about 13,000 people out there, and that will keep them busy all year-round and we will be able to get the cases out.

So we really do not have a problem in timeliness at the regional office. Where we have the big problem is that if a veteran files an appeal, because at the Board of Veterans' Appeals, the processing time there--give me those numbers, please.

At the Board of Veterans' Appeals, which is what I am really concerned about, in 1991, our average response time was 139 days. In 1992, it was 240 days. In 1993, 466; 1994, 781. In 1995, it dipped a little bit, to 745.

Mr. Bishop. Is that the number of days?

Secretary Brown. Yes, sir. And you can see why we are very, very concerned about that. While it dropped down a little bit and we received some help from the Congress in the last session, we have one-man decision authority and there were some other things that we are doing. But we are very concerned about that.

I have asked a special panel to look at it, that consists of the service organizations. We even brought in people from the private sector and other government agencies to help us look at it and try to see how we can streamline that case management. So we are working very, very hard on that, and I hope that we will continue to have this moving south to try to stabilize it.

The other problem is that we still have more cases coming in than going out. So in order to make any headway at all, the first thing we have to do is to have the same amount coming in and the same amount going out, and then once we get there, then we can begin to see a little light. So we are working very hard on it and we are open, of course, to any suggestions that you can help us with.

Mr. Bishop. That is the biggest complaint that I get from my veterans, is the tremendous lag time in having their appeals adjudicated. And many times, they call the office saying that I will be dead before I ever get a decision one way or the other.

Secretary Brown. And some of them are right. If you think about it, some of them are right. It could be as much, in some cases, as 5 years. You take a guy, a World War II veteran, 72 years old, and if he has to wait 5 years, there is a good chance he will be dead. And the bad thing about it, if he dies and we allow his case, we can only pay his widow 1-year retroactive accrued benefits. So we recognize a decision delayed really is a bad thing.

Mr. Bishop. Is a decision made?

Secretary Brown. That is exactly right. So we are going to try our best on it.

Mr. Bishop. You anticipate $170 million in our medical malpractice claims for 1996. What steps have been taken to mitigate the need for malpractice claims?

We have had some complaints about treatment from veterans that they have received and some claims of malpractice in our VA hospitals. How is that being addressed?

Secretary Brown. This has a little bit different twist in terms of malpractice. What you are referring to is the Gardner decision, which was appealed to the Supreme Court. In that decision, we had been interpreting regulations since the beginning of time, that in order for VA to assume responsibility for something that happens to an individual while in a VA hospital as a result of treatment, that it had to have happened as a result of an accident or negligence, basically.

Based on the Supreme Court decision, they said no, that is not how it should be interpreted. Any veteran, basically where the condition is increased as a result of treatment, if it is not the desired result, then it should be service-connected. So this is a direct result of that decision. The first year is $170 million, and then I think the 5 years is $1.8 million?

Did I explain that right, Mary Lou?

Come on up here.

Ms. Keener. To respond directly to your question; as I heard it, you are asking what, if anything, we were doing to reduce the number of claims that we see in hospitals, whether they are 1151 claims or tort claims? Actually, I think that the answer to that question lies in with some of the things that Dr. Kizer is doing or intends to do in the area of quality assurance. Perhaps Dr. Garthwaite could respond to that.

Dr. Garthwaite. Surely. Every medical center's goal is to reduce all variation to zero. It is like running an airline. You want no crashes sustained over time, and I think our goal in health care is no mistakes sustained over time.

Unfortunately, all health care systems are run by human beings who use a lot of judgment. We have instituted a national system of continuous quality improvement which looks at all of the processes to see if we can improve our processes to avoid instances of poor quality. We review on a regular basis all of the untoward events in the hospital, at least all of the major untoward events, and look to see if there are system problems or people problems and then we try to deal with those based on what we find.

Secretary Brown. Let me just follow up on that. First of all, did I explain that Gardner thing right?

Ms. Keener. Yes you did, Mr. Secretary. I assume; however, that your cost reference was to $1.8 billion rather than $1.8 million.

Secretary Brown. After that came into effect, Mr. Bishop--and I know you are a lawyer--so after that was brought to our attention, we did send out guidelines to all of our hospitals saying, this is what you will do in terms of people who come into the hospital. Is that right? You would tell them exactly how and what to expect? Did that go out?

Ms. Keener. Guidelines from the Benefits Administration went out regarding the manner in which pending claims are handled.

Secretary Brown. Mr. Bishop, let us get back with you on that. I think I recall what we did----

Ms. Keener. I think what the Secretary is referring to in conjunction with the Gardner decision, is that Dr. Kizer did send out guidelines to the field regarding informed consent to all providers within the system.

Mr. Bishop. That is not so much----

The Chairman. If the gentleman would please--other Members have sat here so we can get through this--before the Secretary has to leave, we will get right back to you.

Mr. Secretary, if you would identify the lady that just spoke, for the record?

Secretary Brown. Mr. Chairman, this is Dr. Garthwaite. He is our Deputy Under Secretary, and the lady that spoke is our General Counsel, Mary Lou Keener.

The Chairman. Thank you, Mr. Secretary.

I want you to know that people hope you are a little bit wrong in your statistics as relating to age and death.

The gentleman from Pennsylvania, Mr. Fox is recognized.

Mr. Fox. Thank you, Mr. Chairman. It is a pleasure to have before us this morning these honored special individuals who represent our veterans so ably, and Mr. Secretary, I am very happy to have you here today.

Secretary Brown. Thank you, sir.

Mr. Fox. One facility that serves my district is Coatesville Hospital. I wanted to hand over a newspaper article to you that, unfortunately, occurred, I guess, this week, a veteran choked to death at the hospital. And if you could have someone on your staff investigate it for me. I don't know whether it is a problem.

Following up with Congressman Bishop's questions on suits, obviously, we want to keep our veterans healthy.

To the extent that you can get back to my office and let us know, or the committee, everyone here, just what is being done over here, I don't know whether it is an isolated case or if we have a problem. There is an allegation of staff shortage, and if there is, I would like to know about it so we can work with the committee to address that.

Secretary Brown. Yes, sir, we will.

(Subsequently, the Department of Veterans Affairs provided the following information:)

The Secretary has responded directly to Congressman Fox in response to his April 11, 1995 letter (copy attached).

Mr. Fox. That is in Bucks County, Pennsylvania.

Secretary Brown. Yes, I have been there.

Mr. Fox. I have had questions from veterans in my area. Just another one brief area that I wanted to take your time on; what are the qualifications for inpatient or outpatient care with regard to the percent of disability, the percent a veteran is disabled?

Secretary Brown. If you are service-connected, you are basically entitled to inpatient and outpatient care for that service-connected disability. If you are nonservice-connected--and you correct me if I am wrong, Dr. Garthwaite--if you are nonservice-connected, (1) there is a judgment made if you may need inpatient care, or (2) if you are deemed to be in need of outpatient care as a result of the problems that you were hospitalized for, then we can provide that outpatient care to you. Is that correct?

Dr. Garthwaite. Yes.

Mr. Fox. I guess some of the questions that I am getting from veterans in my area is that they may not have the correct percentage of disability or they are not getting the outpatient care or they don't qualify, is what I am trying to say.

Secretary Brown. Yes, sir. You can run into problems, depending on the disability, when it comes to entitlement for outpatient care.

What is that, Dave--Dave Gorman--what is that?

If you are 50 percent disabled, you get everything. You get everything. So the magic number is to get 50 percent disabled and then we provide you inpatient and outpatient care for all of your service-connected and nonservice-connected disabilities. That is the very important threshold there.

Mr. Fox. Was that created more recently, or has that always been the rule?

Secretary Brown. That has been created a while. What we have seen here, sir, is there has been a constant shrinking of the eligibility through legislation. At one time, any veteran who received an honorable discharge was eligible for care in the VA. They could just come in and get it.

Now all we are treating, we are treating our service-connected veterans, our poor veterans and our prisoners of war. Everybody else has been locked out primarily through our eligibility criteria.

Mr. Fox. And is there an ongoing quality-of-care system to make sure that each of the hospitals has the level that you want as Secretary and we want as Members of Congress?

Secretary Brown. Yes, sir. And, in fact, under Dr. Kizer's leadership, we are in the process of strengthening that process to make it much more responsive. We want to be able to really treat our veterans in terms of providing medical care in the same way they would be treated if they went to their private doctor.

You know, a private doctor would not ask you, are you service-connected for this? And you say yes. Or you say no, then he would say, I can't treat you. We need to have a primary care kind of an attitude that any time a veteran enrolls in our system, we should take care of all medical needs, to include preventive care, because that is cost-effective. We are not doing that consistently all across the country, although we are moving rapidly in that direction.

Mr. Fox. I have no further questions, Mr. Chairman.

I thank you very much.

The Chairman. I think, Mr. Secretary, this points out how desperately we need eligibility reprogramming, because of all of the confusion out there as to who and who is not eligible.

The gentlewoman from Florida, Ms. Brown.

Ms. Brown of Florida. Thank you.

Thank you, Mr. Secretary.

Secretary Brown. Yes, ma'am.

OPENING STATEMENT OF HON. CORRINE BROWN

Ms. Brown of Florida. I want to thank you for your attitude, putting veterans first. I had a question about the homeless, and I will just give you that in writing, along with my statement about it. And I want to go directly to this proposed rescission list wherein I see Florida has two facilities on there.

One is the ambulatory care addition at the VA clinic in Gainesville that has been on the need list for 18 years, and then I see the Orlando Outpatient Clinic at the Orlando Naval Training Center, the $14 million, which is an example of how government best works when the Base Closure Committee recommends closing the Naval Training Center in Orlando.

We had a brand-new hospital that you and I visited, the Department of Defense gave it to the veterans, and, of course, we needed that outpatient care clinic there so desperately, and I see that $14 million to renovate that is on this list. I want every member of this committee and Appropriations to understand whatever your veterans problems, Florida is worse. We rank first and second in the country with the number of veterans, but 4th in funding, and this cannot go on.

If you need a cemetery, we need one worse in Florida. We need more facilities. Your veterans are in Florida right now in the winter and we are trying to take care of them with less money. And as these committees develop this list, I want to know when do they contact you on these priorities' lists and have you provided information to these different committees. And I want everyone to know that all of Florida will be jointly together on protecting our veterans.

Secretary Brown. Can I get you to say the same thing about my Brevard Project in 1996?

Ms. Brown of Florida. Yes, sir.

Secretary Brown. You are absolutely right. I agree with you, ma'am. As I pointed out, the facilities we provide in Florida on a per capita basis are much less than what we provide for the average location throughout the country, and we need to move forward with these projects. They are needed by our veterans.

Ms. Brown of Florida. Yes, sir. As I said before, I see two Florida projects on this list. So I am hoping that you will get that information to the Appropriations Committee.

Secretary Brown. Oh, yes.

Ms. Brown of Florida. Thank you.

[The prepared statement of Congresswoman Brown appears on p. 86.]

The Chairman. Thank you.

Mr. Clement.

Mr. Spence.

Mr. Bachus.

Mr. Bachus. Thank you.

Mr. Secretary, as I understand it, not every veteran that shows up at the VA hospital gets treatment; is that correct?

Secretary Brown. What does that mean?

Mr. Bachus. Not every veteran that shows up at a VA facility wanting treatment, gets treatment; is that correct, especially in Florida?

Secretary Brown. I would say that would be true, after that veteran has gone through the eligibility process.

Mr. Bachus. Do all who are service-related get treatment?

Secretary Brown. Yes, yes. We should not turn any veteran down. In fact, we have a priority program, we issue a little priority card for our service-related veterans.

Mr. Bachus. So any that are wounded or fall ill during their service, they are being treated?

Secretary Brown. Yes, sir. Yes, sir. The only veterans that will probably not get treated are the nonservice-connected veterans whose income is excessive. Those are the veterans that are locked out of the process. So that is what we refer to as our high-income veteran, I think the threshold is somewhere around $20,000. We can get that for the record.

Mr. Bachus. Not a very high income though, is it?

Secretary Brown. No, sir, no, sir.

(Subsequently, the Department of Veterans Affairs provided the following information:)

Hospital care is considered ``MANDATORY'', if a nonservice-connected veteran's income is: $20,469 or less if single with no dependents; or, $24,565 or less if married or single with one dependent; plus $1,368 for each additional dependent.

Hospital care is considered ``DISCRETIONARY'', if a nonservice-connected veteran's income is: $20,470 or above if single with no dependents; or, $24,566 or above if married or single with one dependent; plus $1,368 for each additional dependent. Veterans in this category must agree to pay a deductible amount for their care equal to what they would have to pay under Medicare. The Medicare deductible currently is $716 and is adjusted annually.

Outpatient care shall be furnish for any condition to prevent the need for hospitalization; to prepare for hospitalization; or to complete an episode of treatment after hospitalization, nursing home care or domiciliary care to any nonservice-connected veteran whose annual income is not greater than the maximum annual pension rate of a veteran in need of regular aid and attendance. The maximum annual pension rate with aid and attendance for: a single veteran with no dependents is $12,855; or, $15,345 or less if married or single with one dependent; plus $1,368 for each additional dependent.

VA may furnish outpatient care without limitation to prepare for hospitalization; or to complete an episode of treatment after hospitalization, nursing home care or domiciliary care to:

Any nonservice-connected veteran whose income is more than the maximum VA pension rate of a veteran in need of regular aid and attendance but less than the thresholds identified for hospital care, no copayment required.

Any nonservice-connected veteran whose income is more than the thresholds identified for hospital care and are subject to a co-payment of $39 for each outpatient visit.

Mr. Bachus. Let me ask you this; we have been hearing about long delays in getting surgery, especially during health care reform, there were a lot of statistics that came out on the delays at VA hospitals, once you were told you needed surgery--and you know, there is a now kind of famous GAO report that said you had 21 surgeons at 6 hospitals which hadn't performed a surgery in one year. Was that an accurate report?

Secretary Brown. Let me respond to your first question are there long delays? I would say in some of our specialty clinics, there are. We are very concerned about that, and that is one of the priority areas. We are working to try to reduce those waiting lists down to an acceptable level.

Mr. Bachus. Is that on a geographical basis?

Secretary Brown. Basically, yes, geographical, but in some areas it is just the reverse. We do not have waiting lists. So it really just depends on the demand for the services, and so forth, and the specialty.

Mr. Bachus. And the type of surgeries?

Secretary Brown. Yes, sir. And the specialty. The other one, with respect to the GAO, I think they said we had about 500 surgeons that we did not need.

Mr. Bachus. Then let me just talk about the 21 who hadn't performed surgery in a year.

Secretary Brown. Well, that doesn't bother me that much, depending on the circumstances. I will ask Dr. Garthwaite to respond to this, but we have many physicians that are surgeons, but they do not provide services, they provide internal medicine, they do provide other types of medical services.

Dr. Garthwaite, do you want to respond to that?

Dr. Garthwaite. You have to look at the individual situation. Sometimes there are physical disabilities or someone classified as a surgeon may not actually be performing operations. They may be providing outpatient services. We had a personnel physician who had arthritis of the neck and could no longer stand over the patient in the OR.

Mr. Bachus. Let me ask you this, doctor; should they be classified as surgeons if they don't do surgery?

Dr. Garthwaite. I suppose it would depend on what kind of care they are providing. There is a lot of preoperative care, preoperative assessment and postoperative care and assessment that would be indicated. We will continue to take a look at that.

Mr. Bachus. Did you find that any of these 21 surgeons were capable of performing surgery and were assigned to surgery?

Secretary Brown. I am not familiar with the circumstances surrounding the 21 surgeons, but I will get that information and provide it to you for the record.

Mr. Bachus. Do you know if any of them were reassigned or were transferred as a result of that study?

Secretary Brown. Is there anyone here that knows about the 21 surgeons? Okay.

Mr. Bachus. If you could get me that information.

Secretary Brown. We will get it to you.

(Subsequently, the Department of Veterans Affairs provided the following information:)

No, none of the 21 physicians referred to were reassigned or transferred as a result of that audit. The OIG Report asserts that 21 of 153 surgeons at the 6 VAMCs audited ``spent no time in the operating room during the year.'' Although it is not indicated in the Report, we were subsequently informed by the OIG that the year was 1990. The OIG also provided a copy of their summary audit sheets for 153 physicians at 5 of the 6 VAMCs. Obviously the number of individual physicians at the 6 VAMCs was more than the 153 stated in the OIG report. (We suspect their count should have been 164 or 165.)

There are other inconsistencies and a number of discrepancies in the data provided by the OIG compared to analysis of the same data sources by VHA. Although we have informally provided the OIG with our findings, we do not, as yet, have an explanation for the discrepancies. VHA believes the assignments of the 21 physicians cited were appropriate and that their productivity was excellent.

Attached is a White Paper responding to the OIG's allegations regarding these 21 physicians. In it, we review the OIG's assertions, inconsistencies between this portion of the OIG Report and the audit data supplied to us by the OIG, discrepancies between the OIG's findings and our own (despite having the same data sources) and a review of the assignment of each physician cited by the OIG as having no operating room time. For purposes of privacy, the individual physicians are identified in code for this report.

Mr. Bachus. And you can understand if someone is no longer able to perform surgery, but I would suppose you are compensating them as a surgeon if you are designating them as a surgeon, and I would think maybe a redesignation is in line.

Secretary Brown. Good point.

Mr. Bachus. Let me ask you this, this is a difficult question. I know it causes a lot of emotional feelings. But we are beginning to read in the paper, and I guess William Safire is probably the most famous vocal opponent who says that you have a failed system and that you have a veterans medical system that less than 10 percent of the veterans are utilizing; the other 90 percent have decided to go to private health care. And number one; is that accurate? And number two, you have said, according to those articles, that the private sector motivated by profit cannot meet the unique needs of veterans; would you explain that to me?

Secretary Brown. Yes, sir. First of all----

Mr. Bachus. Now, obviously, over 90 percent are going to private facilities.

Secretary Brown. Well, see, that is one of the things. This is a game. You have to discredit VA in order to help perpetuate the idea that it is no good and, therefore, should no longer exist.

Mr. Bachus. I am not doing that.

Secretary Brown. I know you are not, sir, because you have always been in our corner. I only said that to say this; because of legislation, we can only treat our service-connected veterans, our poor veterans and our prisoners of war. All the rest of them are locked out of the process. Even if you had a veteran that made $1 million a year and he said, nonservice-connected, and he said I want my care at the VA, we could not provide that individual with care. So when you say that 90 percent of the people go somewhere else, they go somewhere else because the law will not permit us to take care of them. Those are the real facts.

With respect to what do I mean when I say that the private sector cannot respond to the needs of our veterans, I mean this: number one, this is my own view; if you look at the consensus across the country now, you are going to see that our bed vacancy rate, and I think I am correct here, our occupancy rate is higher than the private sector.

Mr. Bachus. I think it is 23 percent vacant beds?

Secretary Brown. Yes. It is pretty low. And so, obviously, people are now looking for new markets. But the thing that is dangerous about this is that 60 percent of the people that we treat are poor. So if somehow you figure out to get, let's say, 20 percent of the folks that we treat that can pay for their care in the private sector and then you get rid of the VA hospital, then all of these other folks, they slip through the cracks, because no one is going to take care of them because they can't pay for it.

With respect to the specialized services, let me give you one example of why VA is so important, and this also relates to the question dealing with research--the Persian Gulf. We had about 700,000 people who actually went there, and let us say, for instance, all 700,000 of them came home sick. Now, the private sector will look at that and say, now, how much money do I want to invest in research in taking care of these people, because even if I find a cure that may cost me millions or even billions of dollars, the marketplace itself is not large enough for us to ever realize a return. The cost of the end result would be just prohibitive.

So you need a system that tries to do the right thing by the people who have given up something in carrying out national policies. And we also have special sensitivity in terms of our spinal cord injury, our PTSD. Who wants to treat people suffering from PTSD?

They are very difficult to manage, and because they are difficult to manage, many of them do not make economic adjustments. So they don't have the ability to pay for their care. So those are the kinds of things that I am afraid the private sector would not want to accept. So you end up fragmenting the system and 80 percent of the people we now provide care to, fall through the cracks.

The Chairman. The gentleman's time has expired.

Please, we have two more to go. We will----

Mr. Bachus. I just want to make a brief comment, if I could?

The Chairman. Very brief.

Mr. Bachus. I would simply say, Mr. Secretary, I would hope that in the future, those areas where you do have the unique needs, like the Gulf War veterans, and these other things you have identified, that you will put priorities with those. I think there has been some frustration with us that those are the very people whose problems sometimes haven't been addressed.

The Chairman. The gentleman from Georgia, Mr. Barr.

Mr. Barr. Thank you, Mr. Chairman.

And thank you, Mr. Secretary. I look forward to, as a new member of this committee, working closely with you on these very, very important matters.

In looking over the material that you have presented before us this morning, I would like to ask if you are comfortable with the independent budget that has been presented overall? I know that you are only one vote and one voice among many in the administration that prepares the overall budget, and there are many factors that have to be taken into account, but we have already touched on certain things here this morning that we see as problem areas that the budget proposal has failed to address, the eligibility rules, the decreases in certain COLAs, and so forth, and hopefully, we will be addressing those. But are you comfortable with this budget? Are there areas where you would like to work with us to address these problems and seek increases?

Secretary Brown. Well, obviously, with respect to the independent budget, I think that it is a great document. I know the individuals who are involved in that whole process, and, in fact, I, myself, was involved in it for a number of years. And therefore, we rely on it in trying to figure out exactly how we should proceed.

But we have a different kind of approach. We have different constraints, different limitations that we have to take into consideration. And this does not mean that we do not agree with the independent budget. Quite frankly, I think the independent budget is one that really moves more toward the ideal.

If we had enough money to do everything perfectly, to compensate for the deficient funding over the last 25 or 30 years, to do all the things we need to do to bring us to exactly where we want to be, then the independent budget is the way to go. But we don't have those resources, so we have to live within the constraints of the resources that are made available to us.

Mr. Barr. I am not quite sure I understand. There are certain things that aren't addressed in the budget proposals that I have just touched on. Are you comfortable with the failure of the budget that the President is proposing to address eligibility rules? Are you comfortable with the proposed decreases in certain of the COLAs?

Secretary Brown. That is two questions. With respect to the eligibility rules, we did not address it; that does not mean that we are not working on it. We addressed the question of eligibility reform in its entirety in the National Health Care Reform Initiative. The VA had a wonderful program that really would have resolved just about all of our problems. That fell through.

So now we are working very hard trying to put together another package. I know for a fact that this committee is interested in reforming the whole system, and we will be working with them on that. So while it is not part of the 1996 budget, we are still working on it. So that is exactly what we are doing there.

The other question had to do with----

Mr. Barr. Are you comfortable with the fact that it isn't reflected in the budget?

Secretary Brown. Yes.

Mr. Barr. I am still not sure I understand.

Secretary Brown. Yes, I am comfortable with the fact that it is not reflected, because we do not have the conceptualization in a fashion that we are ready to present anything. So in that respect, yes, I am comfortable with it.

We are now reorganizing our whole operation under Dr. Kizer, and so all of that plays a major role in it. And I think you asked about the extenders, what was the second?

Mr. Barr. The COLAs.

Secretary Brown. That hurts me. These extenders hurt me when they came out in OBRA 1993 and, quite frankly, I feel bad that we have to continue this. And the whole concept here, we just simply said, let's extend what is already in current law, in some instances, in eight instances, we extended for 2 years, and in three, we extended it for 4 years.

As I have said already, I am willing to sit down and talk with this committee about any other options that they feel that would be appropriate.

Mr. Barr. My concern, I mean, I am not comfortable with either of the two areas that I touched on. My feeling of discomfort derives partly from the fact that we look at some other portions of the budget, AmeriCorps spending increasing, and that is why I am very uncomfortable with this. And some of the other materials I have started to go through here this morning, and will have a chance to go through in detail I think touch on some of these also.

But I do look forward, Mr. Chairman, as a member of this committee, to working to address what I consider some deficiencies.

There are some provisions in here, Mr. Secretary, that I think are very good, and I hope that you will press just as hard as you can, for example, to make sure that the, both the major construction and minor construction increases continue.

Secretary Brown. Yes, sir, we will. We will.

Mr. Barr. Yield back the balance of my time, Mr. Chairman.

The Chairman. I thank the gentleman.

The gentlewoman from California, Ms. Waters.

OPENING STATEMENT OF HON. MAXINE WATERS

Ms. Waters. Thank you very much, Mr. Chairman.

I would like to add my words of welcome to the Secretary for being here this morning and allowing me to share with you my real appreciation for your passion, for your job and your work. It is unusual to hear Secretaries and others come before committees and talk about their pain at seeing certain things, and you know, certain kinds of cuts that truly cause them to despair for their constituency, so I really do appreciate your passion.

I have many questions I could ask you, but I really don't know what it means right now. I am concerned about construction. I have to be concerned about construction and rehab, because I know very well that women are not adequately served in the system, because you don't have the bathrooms to accommodate them and other kinds of things.

But why should I ask you about that when yesterday $206 million was cut from the budget in rescissions; $50 million in equipment, and another $156 million in construction.

Now, that decision was made, nobody told us when all of the veterans came before us, the paralyzed veterans, the noncommissioned officers, the disabled, nobody told us that that was in the plan. Everybody sat on this committee and told veterans how much we loved them, how we were going to fight for them, and then they went behind their back and just rescinded what I consider to be an important part of the budget.

And the reason I can't ask you the other questions about what happened to SMOCTA, the occupational conversion, the Service Members Occupational Conversion and Training Act, why isn't it in the budget? I guess I know why it isn't in the budget. The veterans are being squeezed, being asked to cut back, being asked to be a part of reducing the deficit, but that is not all. You are going to get cut some more.

I mean, we are sitting here listening to your wish list or the administration's budget and we are going to hear the independent budget. But the veterans are going to be cut some more. I would feel better if they would just come out and tell us how much they are going to cut you and then let us plead and beg for something.

I don't know where it is going to come. But you are going to be cut some more. And so I am not going to ask you anything about why aren't you doing this and why aren't you doing that; I know why you are not doing it.

You are being squeezed. And the very people who want more services, who want to reduce the backlog, who want to make sure the construction is going on, they are not, they are not asking themselves the correct question: Who pays for this? Where is the money going to come from? Am I willing to stand up and fight for veterans to have the dollars that they need in order to do what I want to be able to do?

I wish you could build all the cemeteries, reduce the backlog, expand medical care for women, put women in the clinical trials. I got a long wish list. But I am not going through this exercise of asking you why you are not doing it.

What I want to know from those who are going to cut you some more, is tell us now, tell us in advance, give us some advance notice so we will know where to get on our knees and beg you not to do it.

So thank you for coming. I wish it was under different circumstances. But the fact of the matter is, you are going to get cut some more.

Secretary Brown. Yes.

Thank you so much for that, Ms. Waters. I am going to be howling, too, all the way.

Ms. Waters. I just want you to scream in the right direction, okay?

Secretary Brown. Yes, ma'am.

Mr. Bishop. Will the gentlelady yield for just a follow up?

Mr. Secretary, the gentlelady from Florida asked the question earlier as to whether or not your Department had been consulted with regard to the rescissions. Have you all be involved in that process at all in terms of priorities, in terms of if you got the cut, we are going to cut ``X'' amount of dollars, and here are our priorities, cut this first, but don't cut this, these are essential priorities? Have you had any consultation at all from those rescission people that have cut it?

Secretary Brown. No, Mr. Bishop. We were not consulted. We read about it primarily in The Washington Post this morning. We had some indications about it yesterday afternoon, but this was the first that we were aware of it. And it bothers me.

I have to say this just for the record, it bothers me in the sense that if you look at just for the last 10 years, veterans have already been cut about $10 billion. And now, we are at a point where there are really no other programs that you can cut without really hurting the veterans, and the institutions veterans rely on. That is what bothers me. This approach is going to prevent us from looking out for these people we talked about; what a great job they did on Iwo Jima and during World War II.

Mr. Bishop. Do you know whether the VSOs were consulted, do you know whether they were consulted on those rescissions?

Secretary Brown. I think they are going to be up here next, and I am sure that you can ask that question to them. I am not sure.

The Chairman. The next panel will be able on answer that, Mr. Bishop.

The gentleman from Florida, Mr. Stearns.

Mr. Stearns. Thank you, Mr. Chairman.

OPENING STATEMENT OF HON. CLIFF STEARNS

I want to compliment you for having this hearing and, of course, I want to welcome the Secretary and his staff here today. I am probably going to echo a few of the comments made by my colleague, Corrine Brown, who is as concerned about the rescissions as I am.

I have a letter from you dated December 2, 1994, where you indicated that the psychiatric hospital that I had worked for in the 101st, and the 102nd, and the 103rd Congresses, would no longer be funded and, in fact, you were saying that, the ambulatory care addition would be. Now, of course, I see this is in a rescission package. So I have talked to my colleague from Florida and others and we know that we are going to have to work hard with the Appropriations Subcommittee on VA/HUD to see if we can reinstate the ambulatory care addition in Gainesville, FL, which I am particularly concerned about. It is not in my congressional district, but I do feel that I have been instrumental in helping with this project.

That being said, I wanted to touch on something on which I felt this committee was very forceful in taking a leadership role. Both Mr. Stump and Mr. Montgomery have mentioned this, and that is the Persian War Gulf veterans with Gulf War Syndrome--I don't know if it has been talked about--but how much compensation will the Veterans' Administration pay to the Persian Gulf vets?

Secretary Brown. Each veteran is eligible for a minimum of $89, to a maximum of single veteran, about $1,800. But if he or she is catastrophically disabled, it could go up to $5,000 a month.

Mr. Stearns. Is that going to be adequate for the number of Gulf War Syndrome veterans that are coming into the system? I don't mean in, but how many do you anticipate there will be in the system?

Secretary Brown. Well, we do not know. What we do know, we have about 40,000 on our register. And we have taken a very aggressive approach in terms of outreach. We wrote personally to all of them, and we advised them about this new law that would permit us to provide compensation for undiagnosed illnesses. And so we are going all around the country talking about it; we are establishing a new hotline and for the record, it is 1-800-PGW-VETS.

And any veteran can call and be advised about four things, basically, and these are the four things I am concerned about the most:

Number one, we want them to know they are entitled to priority care at VA. All they have to do is to say, I feel I am suffering from some problem that is related to my service in the Gulf and we are going to take care of them.

Number two, we want them to know that we are going to compensate them for undiagnosed illnesses.

Number three, we want them to know we are moving forward on our research initiatives. We have about 40 research projects out there. We have also established our own research centers in three locations. They are located in Boston; East Orange, New Jersey; and Portland. And we are also looking at everything, nothing is off the table, unlike some areas that are kind of fuzzy.

We come right up front and say we are going at depleted uranium, we are going to look at possible exposure to chemical and biological agents. We are going to look at the indoctrination process to see whether or not that is the cause of the problem. So we are going to look at absolutely everything.

And then the last thing we wanted them to know is this: we wanted them to know that the U.S. Government appreciates their service, that these services are available to them, and we want them to have them. So we are making an all-out effort to get them some information.

Mr. Stearns. Mr. Secretary, what do you anticipate the additional number coming into the system will be? As a result--what do you project over the next 1, 2, 3 years?

Mr. Vogel. We--Mr. Stearns, we have made projections--it is very difficult to make projections of undiagnosed illnesses. This is rather new ground.

Mr. Stearns. But have you set aside some money to do this.

Mr. Vogel. We have, indeed. About $21 million is the anticipated cost for this year, and slightly more than that next year. Based on the--about two-fifths of all of those who served in the Persian Gulf are still on active duty. We won't see them for a while until they are discharged or whatever.

But the anticipation is that we--there is money in the budget to take care of it. Very difficult to project undiagnosed illness and the relative cost of that. The evaluations that we have seen to date, and they are comparatively few, have been completed through the adjudication process, the evaluations are comparatively low.

The VA medical response is a very, I believe as the Secretary says, is a very healthy one. Just the other day, our President and our Secretary met personally with one of the first individuals that had a claim adjudicated under the undiagnosed illness, and the message there was that the VA responds for medical care, for compensation and research is full and adequate.

Mr. Stearns. You know, in my congressional district what I hear from the Gulf War veterans. They tell me when they go to the VA hospital, the test is sort of mediocre, it is a quick test. But, I mean, it doesn't seem to be a standardized test for them to say, I qualify. Now, maybe I am just listening to them.

Secretary Brown. Well, now, we are talking about two things, sir. When you talk about qualification, the test we provide, the protocol test, is primarily for research, for statistical purposes. That is to see if anything is wrong with them. That is kind of a baseline test and it has nothing to do with compensation.

Now, if they file a claim for compensation, then we will schedule an examination for compensation purposes, and then they will come in and we will evaluate the disability they are suffering from.

Mr. Stearns. Do all of the VA hospitals have that capability, to do evaluations in their hospitals? Has that capability been ferreted out and given to all of the hospitals? Can I say to all of the veterans, our hospitals have that capability?

Secretary Brown. Yes, you can.

Now, in fact, as a backup, some cases are referred to special hospitals when we are not able to really get a handle on what is happening, on what is the pathological problem. That is why we set up three diagnostic centers. They are located in Washington, DC, L.A., and in Houston, I think. There we send the more difficult person to get a diagnosis.

Mr. Stearns. Okay.

The Chairman. The gentleman's time has expired.

Anyone have a real quick question?

Thank you.

I would like to thank the Members for their attendance this morning and for their adherence to, as nearly as possible, to the 5-minute rule. It is very much appreciated, to allow everybody to be heard.

Mr. Secretary, we appreciate your attendance here this morning. You have been very generous with your time, and I think if you will notice the attendance of this committee this morning, 31 of 33 Members, you can see how we are concerned about veterans this year.

We thank you once again for your time.

Secretary Brown. Mr. Stump, just one last comment.

I want to thank you so very, very much for conducting a fine hearing, sir, and I look forward to continuing to work with you as we have worked together in the past on looking out for our veterans.

The Chairman. Thank you, sir.

If I could, let me remind the veterans we have two more panels that we have to go through.

The next panel would be on the Independent Budget, if they would come up, kindly.

If we could please clear the room as rapidly as possible, for those that have to leave.

Thank you.

Our next panel consists of Noel C. Woosley from the AMVETS, from the DAV, Richard Schultz; from PVA, Russell W. Mank; and from the VFW, Jim Magill.

Gentlemen, we appreciate your patience. You have 5 minutes, and your entire statement will be put in the record. If you care to summarize shorter than that, we would appreciate it.

I have no particular order; anybody want to volunteer to be first? Mr. Magill.

STATEMENT OF JAMES N. MAGILL, LEGISLATIVE DIRECTOR, VETERANS OF FOREIGN WARS; RUSSELL W. MANK, LEGISLATIVE DIRECTOR, PARALYZED VETERANS OF AMERICA; RICHARD F. SCHULTZ, LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; AND NOEL C. WOOSLEY, NATIONAL SERVICE DIRECTOR, AMVETS

STATEMENT OF JAMES N. MAGILL

Mr. Magill. Mr. Chairman, once again, AMVETS, the Disabled American Veterans, PVA and the VFW are pleased to be able to present to you for the ninth consecutive year the fiscal year 1996 Independent Budget for the Department of Veterans Affairs. As in the past, all of the recommendations contained in this document have the unanimous approval and support of the four VSOs involved. As you know, each VSO has been tasked with a specific area of responsibility.

First, you will hear from Russell Mank, who will discuss health care, followed by Rick Schultz, who will discuss veterans benefits, followed by Noel Woolsey, who will discuss the national cemetery system, and I will conclude with our presentation on the construction portion.

I would also like to bring to your attention, and particularly the new members of the committee, a brochure produced by the Partnership for Veterans Health Care, which addresses some of the myths and realities with respect to VA health care. There appears to be much confusion surrounding VA health care, and this document clears up a lot of that confusion. And I believe you all have been supplied a copy of it.

Mr. Mank.

STATEMENT OF RUSSELL W. MANK

Mr. Mank. Chairman Stump, Congressman Montgomery, members of the committee, the Paralyzed Veterans of America appreciate this opportunity to testify in conjunction with the colleagues of the Independent Budget. Oliver Wendell Holmes had a quote that will synthesize my comments. He said: ``The great thing in the world is not so much where we stand, as in what directions we are moving. To reach the the port of Heaven, we must sail sometimes with the wind and sometimes against it, but we must sail, and not drift nor lie at anchor.''

External changes continue to beset the health care system. We, in the veterans service organizations have come here year after year, pleading for more funds. This is an approach that, although warranted, is no longer constructive.

We are here today to say that we can accept the President's budget request, if together we can find the way to achieve the rest of our legislative agenda. We can do this without increasing the limited discretionary funds Congress has to allocate for veterans' medical programs. We can do this as we increase access to veteran patients and selectively allow their dependents to enter the system. But to achieve these goals, we need the cooperation and commitment of this committee.

This year, the Independent Budget coauthors began with your baseline, which was the appropriation the last Congress made to the VA medical care account. In years past, we recommended only an appropriation for medical care. This year, we recommend not only an appropriation for medical care, but also recommended budget authority. Recommending a budget authority allows us to marry our fiscal agenda with our legislative agenda. The two in previous years have been isolated one from the other.

We propose a four-point plan which requires new legislation for the VA to: (1) reform access criteria; (2) treat new patient populations; (3) capture new funding streams; and (4) emphasize the provision of specialized services in which the VA has unmatched expertise. This plan expands access to services for veterans and their families, and does not require increased Federal Government spending.

The Independent Budget recommends that Congress authorize a $19.5 billion for VA medical care, but only $16.6 billion of this funding must come from congressional discretionary funds.�20With the new authorities the Independent Budget proposes, Congress can appropriate $400 million less than the President has requested from Congress for fiscal year 1996. Without all of the proposed new authorities, Congress must appropriate $18.8 billion for VA medical care, fully $1.8 billion more than the President's request. In other words, Mr. Chairman, the status quo is more expensive than embracing change.

The savings that can be realized, however, can only be realized as part of an overall package. Part of this reform package is allowing the VA to retain third-party payments, including medicare reimbursement. Currently, the VA has to turn over third-party reimbursements collected from insurers to the Treasury. VA estimates that it has the potential to collect at least $800 million next year. We estimate that with more efficient collection practices in place, it would be possible for VA to collect far more. We must see legislation approved by this and other committees allowing the VA to keep its third-party reimbursements, and that is part of the total package.

We are also going to have to see legislation approved by other committees in the House and Senate, allowing the VA to collect and retain medicare reimbursement from current high-income, non-Category A veterans. Medicare reimbursements that could accrue to the system from current higher-income non-Category A veterans are estimated to amount to $133 million. Private sector hospitals can do this; why can't the VA?

The Independent Budget does not say, ``cut the VA appropriation by $2.1 billion from our target recommendation of $18.8 billion, and the system will be able to achieve eligibility reform and provide the full continuum of care to all veterans.'' It does say that you can achieve reductions in domestic discretionary appropriations by making the VA system more efficient, but only by allowing the system the ability to recoup and offset discretionary dollars lost in the annual appropriation by retaining third-party reimbursements.

Mr. Chairman, this is a total package. None of our recommendations are new to you or to this committee. Eligibility reform has been the battle cry of the committee and the veterans' service organizations. To accomplish our goals, we know that we must acquire new funding streams outside of discretionary funds.

In our plan, we ask Congress to allow the VA to capture funding from veterans' insurers and, for some veterans, who VA was not explicitly charged with serving, from medicare. These sources of funding are critical to VA reforms.

Mr. Chairman, I appreciate the opportunity to testify.

Thank you.

The Chairman. Thank you, Mr. Mank.

[The prepared statement of Mr. Mank appears on p. 124.]

STATEMENT OF RICHARD F. SCHULTZ

Mr. Schultz. Mr. Chairman, I will try and be brief.

It is a pleasure for the DAV to appear here to testify regarding President Clinton's budget and also our views regarding the Independent Budget. In that regard, you have the Independent Budget; I won't go over all of the things that we have said in the Independent Budget. Suffice it to say that we have made a number of recommendations and we would hope that you would give them due consideration.

A couple of things I think of note in the President's budget. One is that while there is a $22 million increase in Veterans Benefits Administration spending, we do have a reduction of 188 employees in the entire Veterans Benefits Administration. I believe Compensation Pension Service remains the same.

The Board of Veterans' Appeals, and we all know it is sorely needed, I think received a 28 FTE increase. There are few things that came up today regarding some of the OBRA extenders, as they call them, that I would like to comment on.

One, of course, is the rounding down of the cost of living. You know, we in the DAV, oppose that. As you know last year, the cost of living was rounded down in order to pay for the Persian Gulf compensation. We do not believe that one category of veterans should be required to pay the compensation for a new category of service-connected disabled veterans.

There are savings of $580 million, I believe, over 5 years, just by rounding down the COLA and cutting in half the DIC, cost of living. We certainly don't support the reduction in the Montgomery GI Bill. This is a program where active-duty personnel paid into that system; the money is there, and certainly we don't support cutting money out of the Montgomery GI Bill.

Another provision is to repeal the restrictions in current law in cases of what is called ``nonjudicial foreclosure'' that prohibits the collections for loan guarantee debts. We don't support the repeal of this law.

The President's budget, while it does increase veterans appropriations by $1.3 billion, it does identify an additional $3 billion in savings over the next 5 years. I would like to make a point, that I have heard recently proclaimed by Members of Congress, the Senate Floor, and have also read in The Washington Post that somehow veterans are escaping budget cuts.

We have heard reports that the budget ax has fallen everywhere but on the powerful veterans, we never get cut. We have seen these accounts and they are hogwash. It is put forth over and over again that somehow veterans are escaping all of these cuts.

I just want to remind the committee, I know you don't need reminding, but you know, the Decade of the 1980s, veterans programs were cut more than $2 billion. These are real cuts, not just some phoney things. There were cuts in veterans benefits and there were cuts in educational benefits, and there were several cuts over $2 billion that were identified in the 1980s. OBRA 1990 cut an additional $3.7 billion for a 5-year period; OBRA 1993 cut another $2.6 billion.

As I said, the President's budget has another $3 billion in savings in that budget. So I would hope that when you are talking to your colleagues, that you would remind them that the powerful veterans groups out there who never get cut have been cut more than $10 billion over the past decade. I felt compelled to bring this up today because we hear that same misinformation over and over again. And I just want you to know that veterans have been cut. We certainly beleive that any cuts that are identified in VA programs would like those savings to be to plowed back into the VA system.

The Budget Enforcement Act does not allow us to give back some of the benefits that have been taken away because we can't find the money. If we are going to identify savings, certainly we believe they should be used in VA programs. One of them that came up earlier deals with accrued benefits.

We know how long it takes to process appeals. I believe last year over 300 veterans died while their claims were pending at the Board of Veterans' Appeals. Now, if they die and then there is a survivor and that survivor is successful in the claim, only 1 year of retroactive benefits can be paid. All of the other years, the benefits are lost, and that is something that we put into the Independent Budget, and we certainly would like to see the committee address.

So if there are any savings that we can identify in VA programs, we would certainly wish that we could use those to correct current inequities and not send that money somewhere else, whether it is tax breaks or for whatever reason.

With that, I will just say you have seen our testimony, and certainly if you have any questions about the Independent Budget, we would be more than happy to respond to them.

Thank you.

The Chairman. Thank you, Mr. Schultz.

[The prepared statement of Mr. Schultz appears on p. 137.]

The Chairman. Mr. Woosley.

STATEMENT OF NOEL C. WOOSLEY

Mr. Woosley. Mr. Chairman, we, too, are thankful to come before this committee and discuss the Independent Budget and the President's budget. I thought it was interesting this morning, there were many more questions on the cemetery system than I would have anticipated.

I think sometimes this kind of gets buried in the larger budgets. No pun, no pun. That was an accident, believe me.

I think we need to remind ourselves periodically that many veterans come home from their service, never use the GI Bill, never use the Home Loan Guarantee program, never draw compensation, never come to the VA for anything, but spend years telling their families don't worry about me, when it is my time, just contact the VA and I will be taken care of.

And some of the cuts that Rick mentioned throughout the years, the burial allowance, the plot allowance, they changed a small benefit, where you could order a marker and get the equivalent, if you didn't use the VA's. They have subsequently changed many of the burial benefits and eligibility, making them quite restrictive. So this one benefit, many veterans use solely as the only thing they ever receive from the VA must not get treated lightly or disappear altogether.

The cemetery system operates 114 cemeteries, and 34 additional sites such as confederate cemeteries and soldiers' lots. This seem impressive when at first glance, but 56 of these cemeteries are closed already. Another will close this year and seven more will close by the year 2000. NCS has 10,662 acres of land, and 5,355 have been cleared and developed for burials.

Since its inception, during the Civil War, the cemetery system has buried 2.3 million veterans. To meet its future needs, approximately 287,000 gravesites remain available on developed land. Undeveloped acres could accommodate an additional 4.6 million casket sites.

Based on veteran population and usage, the cemetery system will be about 800,000 to 900,000 plots shy of what they will need by the year 2010, if we are to accommodate the, roughly, 10 percent of those who choose to be buried in a national cemetery.

This is not an imagined shortage. It is a shortage of severe magnitude.

The budget that they face for the next fiscal year is 278 full-time employee equivalents short. To provide current services, which was what was stated they thought they could do with the budget they received, it is estimated that they will need at least 13 additional FTEs.

Of major concern is what we have been coming to this committee and others and saying for years, and that is the $8.2 million equipment backlog, it is not going away.

This year's budget will do nothing to improve the modest gains that, through the efforts of this committee and others, were achieved in 1991 and 1992 with reference to this equipment backlog. Most of the required budget information is available in the Independent Budget, and I will just touch on some areas that we feel are extremely needed will have to take place to keep this system going.

We would like to see a total appropriation of $82 million, an FTE increase of 15, a minimum of $2 million additional funding for the equipment backlog, we would like to see the pursuit of an open cemetery in every State, and continued VA progress toward a policy of an open cemetery within 75 miles of 75 percent of America's veterans.

Mr. Chairman, this concludes my statement.

The Chairman. Thank you, Mr. Woosley.

[The prepared statement of Mr. Woosley appears on p. 146.]

The Chairman. Jim?

Mr. Magill. Thank you.

Inasmuch as you already have been provided a copy of the Independent Budget and my prepared statement, I will just take the remaining time to briefly highlight the construction program.

At the outset, I would like to comment a little bit on the rescission that we learned about this morning. As you know, $156 million is coming out of the construction aspect of it, in what we consider some of the areas of most need in the United States.

Again, I would like to let the committee know, because it was brought up on the first panel. The first we heard about it was in The Washington Post this morning.

First and foremost, there must be developed a strategic plan for VA's delivery system that corresponds to State and private sector health care reforms. When it takes approximately 5 years for a hospital to go from design to final completion, in a lot of cases, that hospital is already deemed obsolete.

With respect to major construction, we recommend an appropriation of $490 million, and that would include for leases for outpatient clinics and nursing homes; to dictate selected replacement and modernization projects that provide natural hazard mitigation and modernized and upgrade the physical plant according to an established set of priorities based on competition under State and private sector health care reforms; use new construction to complement bed leasing and new conversions VA-operated beds for nursing home care; appropriate funding for four new 120-bed nursing homes; appropriate funding for two new VA hospitals; construct two new national cemeteries annually until the national cemetery system meets previously-stated goals of one open cemetery in each State; and appropriate $16 million to acquire land for national cemeteries in States with no available gravesites.

With respect to minor construction, appropriate $269.8 million for minor construction projects; convert 12, 30-bed wards to nursing home care in fiscal year 1996; and appropriate $18 million for existing national cemetery system construction projects.

We also would recommend providing $1.5 million for the parking garage revolving funds, and provide $180 million for grants for the construction of State extended-care facilities. Also, appropriate $6 million to fund grants for the construction of State veterans cemeteries. And finally, appropriate the usual grant of $500,000 to meet the grants with the Republic of the Philippines for facilities that need repair and renovation needs.

This concludes my portion.

Again, thank you very much, and we will be happy to respond to any questions that you have.

[The prepared statement of Mr. Magill appears on p. 119.]

The Chairman. Thank you, Jim.

And thank you, gentlemen, for your testimony.

I especially want to thank all of your respective organizations for all of the time and effort that you put into this Independent Budget, and I want you to know that this committee appreciates that and we will place heavy reliance on your recommendations.

Mr. Edwards.

Mr. Edwards. I will just be very brief, Mr. Chairman, with one question. On third-party reimbursements, I know the stumbling block in the last Congress was some opposition from other committees.

We do have a new Congress now and a new Chairman in place. Have any of you have an opportunity to talk to Chairman Archer of the Ways and Means Committee or other members of the Ways and Means Committee to see if they might have a new outlook on third-party reimbursement?

Mr. Magill. Yes, sir. We brought our leadership in the week of January 9th, and met with a number of Chairmen of the committees to include Chairman Archer. We did bring up third-party reimbursement, and at best, I could say he was noncommittal.

The Chairman. Mr. Barr?

Mr. Barr. Thank you, Mr. Chairman.

I have just been going through some of the prepared testimony of the panel. I have already found several areas that I find very enlightening, but it would be somewhat irresponsible to pose questions at this time.

I would like to thank the panel for being here and give them my assurance that I am going to review this material very carefully and will probably be submitting written questions with the chairman's and the panel's consent. But I very much look forward to working very closely with you to handle the budgetary matters.

I think we do have some problems, some very serious problems in the President's budget. Some of those we have already talked about with the previous panel, and I know all of you gentlemen were here and listened to that, and I intend to do everything I can to follow up on those so that we can address the issues that aren't addressed in the President's proposed budget, as well as make sure that those areas that are covered, that are worthwhile, such as the major and the minor construction budget increases, remain in there.

And I thank the panel again and look forward to working with you and your organizations in this regard.

Thank you, Mr. Chairman.

The Chairman. Thank you, Mr. Barr.

We encourage you to submit questions. Mr. Stearns.

Mr. Stearns. Thank you, Mr. Chairman.

I just want to echo your comments, how much all of us on the committee appreciate your independent analysis and how we look forward to getting it and reviewing it.

I want to follow up a little on some of what Mr. Edwards of Texas talked about. You know, we hear over the decades a loss of this $10 billion you mentioned, and I sit here, and this is my fourth term, and I have heard this consistent plea that you folks and others have said; how are we going to come up with adequate financing when the budget requirements seem to be going down and there is less money?

So this sort of thing brings me to just two questions. First of all, just as a statement of a physician, the President's budget, based upon your numbers, is not adequate; right? And you feel that the President's budget is--well, not considerably under budget, but, shall we say, if his budget and the budget that the Secretary offered is implemented, is there going to be a dire situation, in your opinion? I mean, just give me a general feel for this?

Mr. Schultz. Well, I would just say a dire situation. I think overall.

Mr. Stearns. Why don't you use your term. What do you think--how critical is this? I mean, I am giving you a chance in a public forum to give the downside here. Are we in a crisis situation, are we in a dire situation, do you think this is something we can live with or should we all go out of here just feeling that this can be worked out?

Mr. Schultz. Well, I have to, first off, say that overall we think the President's budget was a good budget.

Mr. Stearns. A good budget.

Mr. Schultz. It did help in some areas. Other areas we are not so pleased. I think--and it was brought up many times today that we need eligibility reform in the VA health care system. We can actually use less money of appropriated dollars than what is in the President's budget.

As far as dealing with the adjudication and claims backlog and the problems at the Board of Veterans' Appeals, certainly we could use more money, we could use more people. I think the VA is moving in the right direction within their claims adjudication system to try and bring the backlogs down. There is much more work that needs to be done.

As far as with the Board of Veterans' Appeals, that is an area that is, obviously, going to take some more time in order to get those backlogs down. And certainly if there was more money in those two areas, we would be a lot happier.

But it is--as I mentioned, the problem with claims adjudication is the amount of time it takes to process claims. People are dying. They are not, they are not going to receive their benefits, because a lot of these veterans are elderly, and that is the major problem we are up against right now.

Mr. Woosley. On the health care side, it was stated this morning emphatically by the Secretary, and he is correct, the VA does take care of all service-connected disabled veterans. But as a consumer, if I have hypertension that I am service-connected for and I have to wait 3 to 6 months for a clinic appointment, is that health care? Not if I am out of medication.

Mr. Stearns. Coming from Florida with so many veterans coming in each month, it has always been a puzzle to me why when you go up north, and parts of the Midwest the hospitals have low occupancies. You come down Southeast, and in the South you have so many hospitals that are in need of more facilities. Has there ever been any thought on your part to do a study and try and work out a distribution in terms of either the people that come from the North downward, and would bring down some tax credits, or tax vouchers, or something that could be used in the Southeast, as opposed to where the occupancy is low?

I mean, is there anything in the distribution of veterans benefits--I have a bill called the Veterans Bill of Rights, which it says a geographic location, it doesn't matter, you have to have the same benefits. And we find in the South, we are just not getting the benefits, and you can see from the earlier testimony, Orlando is being cut, Gainesville is being cut, and this is after the Secretary said there is an increase in the number of veterans coming into Florida. So has there ever been a thoughtful, creative process in that area?

Mr. Mank. Mr. Stearns, PVA and the VA are currently working on a project right now to analyze where veterans are actually obtaining their care. I cannot provide you an answer today, but I would be glad to give you some more information about that.

Mr. Stearns. I think that is very encouraging to hear.

Mr. Woosley. And the other point is still this eligibility problem, because a lot of the veterans you are talking about in Florida, simply aren't eligible on the surface for care.

So turning them away--and it is crowded, I worked down there for a couple of years and I know what you are talking about, they are not denied access to an eligible veteran. But yes, I think we even talked some on the Independent Budget about an enrollment system which maybe for years we kind of opposed. If we had some kind of idea who is going to use the VA and where, then we could have an idea of how you use the funds.

Mr. Stearns. Thank you, Mr. Chairman.

You know, I just want to thank you. I think as the years go on, and I think I come back and you come back, if we could come up with some creative solutions here, that would be helpful, because I am at a loss. I will be fighting to protect these facilities.

Mr. Magill. If I could just add one other thing; we believe it is crucial that eligibility reform be enacted. And I think this is going to eliminate a lot of the problems when you do have third-party reimbursement. And as you heard my response a couple of minutes ago, we brought it up with the Chairman of Ways and Means, and we were hoping to at least get some indication, and we are still going to pursue that very aggressively.

But when you get third-party, this is going to save money in the long run and it will provide for some of the hospitals in Florida and the sunbelt to retain some funding that they can expand their benefits to veterans through outpatient clinics, et cetera----

Mr. Stearns. Yield back the balance of my time.

Thank you.

The Chairman. Gentlemen, thank you very much for your time and consideration, and thank you also for accommodating us in your schedules.

Larry, I understand that you are willing to try to do this quickly--I will abide by your wishes. It is going to take a minimum of 20 minutes, this is a 15 minute vote and another 5 minute vote. I am more than happy to come back and accommodate you, or if you think between the two of you, we can finish it up in 5 or 6 minutes, we will do that. I understand you will be willing to try.

Our next panel this morning is the last panel. Larry Rhea from the Noncommissioned Officers Association and Mr. Carroll Williams from the American Legion.

We appreciate your testimony this morning.

Please proceed. We have 5 minutes.

STATEMENT OF LARRY D. RHEA, DEPUTY DIRECTOR OF LEGISLATIVE AFFAIRS, NON COMMISSIONED OFFICERS ASSOCIATION AND CARROLL L. WILLIAMS, DIRECTOR, VETERANS AFFAIRS AND REHABILITATION, THE AMERICAN LEGION

STATEMENT OF LARRY D. RHEA

Mr. Rhea. Thank you, Mr. Chairman.

First, let me be the first to wish you a good afternoon, and I will be very brief, because at this point, it becomes very difficult not to be repetitive.

The Chairman. Your entire statement will be inserted into the record.

Mr. Rhea. Thank you. I appreciate that, Mr. Chairman.

Clearly, the points that NCOA are concerned with have been made. First, there is the subject of eligibility reform.

We think it is unfortunate that it was omitted from the budget, but we think it needs review, needs attention this year, not only for its impact on the 1996 budget, but also for its future impact.

And then the real red flag in this whole thing, Mr. Chairman, is the OBRA extender on the Montgomery GI Bill. We are totally flabbergasted by it, it is a nonstarter, it should be summarily rejected and we should, in fact, be looking for ways not to extend that, but to go back and restore the full COLA and increase the value of the educational benefit.

I can talk for hours on that, but I won't. But those are our two points, and we appreciate your consideration.

The Chairman. Thank you. I am sure this committee in its entirety agrees with you.

[The prepared statement of Mr. Rhea appears on p. 324.]

The Chairman. Mr. Williams.

STATEMENT OF CARROLL L. WILLIAMS

Mr. Williams. Thank you very much, Mr. Chairman.

The American Legion appreciates this opportunity to present our views on the administration's proposed fiscal year 1996 budget for the Department of Veterans Affairs, and we just ask that our written testimony be submitted for the record.

We are primarily concerned with eligibility reform, we are also concerned with the continuation of specialized services in the Department of Veterans Affairs, primarily the Veterans Health Administration. And we are also definitely concerned with the tremendous backlog of cases in the regional offices throughout the Nation, as well as those pending at the Board of Veterans' Appeals.

I am available for any questions. But I would just like to just take this brief moment to commend this committee for the issuance of a special order in recognition of those brave Marines and Sailors who fought and died 50 years ago on a small island in the South Pacific known as Iwo Jima. As a former veteran who taught in Vietnam, I was have always taught to never forget the extreme sacrifices made by those brave men, and I just want to take this opportunity to commend this committee for issuance of that special order.

Thank you very much, Mr. Chairman.

[The prepared statement of Mr. Williams, with attachment, appears on p. 328.]

The Chairman. Thank you very much.

As a young sailor that was at Iwo Jimo, I appreciate those remarks more than you know.

Are there any questions?

Mr. Barr. Not a question. I know we have to leave, but Mr. Rhea, I haven't met you yet, but I like you. I read your remarks in your prepared testimony. It is straightforward, it is hard-hitting, it doesn't pull any punches, I like that and I intend to use every bit of material you can get me.

Mr. Williams, I just was just going through your material and I appreciate the time you put into that and look forward to working with both of you, especially on the areas that you have just identified. I agree in going through all of this that they are critical.

Thank you, Mr. Chairman.

The Chairman. Once again, we apologize.

We thank you for cooperating. We hate to cut you short.

The meeting is adjourned.

[Whereupon, at 12:20 p.m., the committee was adjourned.]