[House Hearing, 110 Congress]
[From the U.S. Government Printing Office]





              LEGISLATIVE HEARING ON H.R. 4883, H.R. 4884,
              H.R. 4889, H.R. 4539, H.R. 3646, H.R. 5664,
              H.R. 3798, H.R. 3393, H.R. 3298, H.R. 3467,
                   H.R. 3889, H.R. 3681 AND H.R. 5684

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

                                HEARING

                               before the

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

                                 of the

                     COMMITTEE ON VETERANS' AFFAIRS
                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               __________

                             APRIL 16, 2008

                               __________

                           Serial No. 110-83

                               __________

       Printed for the use of the Committee on Veterans' Affairs





                     U.S. GOVERNMENT PRINTING OFFICE

43-049 PDF                 WASHINGTON DC:  2008
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001










                     COMMITTEE ON VETERANS' AFFAIRS

                    BOB FILNER, California, Chairman

CORRINE BROWN, Florida               STEVE BUYER, Indiana, Ranking
VIC SNYDER, Arkansas                 CLIFF STEARNS, Florida
MICHAEL H. MICHAUD, Maine            JERRY MORAN, Kansas
STEPHANIE HERSETH SANDLIN, South     HENRY E. BROWN, Jr., South 
Dakota                               Carolina
HARRY E. MITCHELL, Arizona           JEFF MILLER, Florida
JOHN J. HALL, New York               JOHN BOOZMAN, Arkansas
PHIL HARE, Illinois                  GINNY BROWN-WAITE, Florida
MICHAEL F. DOYLE, Pennsylvania       MICHAEL R. TURNER, Ohio
SHELLEY BERKLEY, Nevada              BRIAN P. BILBRAY, California
JOHN T. SALAZAR, Colorado            DOUG LAMBORN, Colorado
CIRO D. RODRIGUEZ, Texas             GUS M. BILIRAKIS, Florida
JOE DONNELLY, Indiana                VERN BUCHANAN, Florida
JERRY McNERNEY, California           VACANT
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota

                   Malcom A. Shorter, Staff Director

                                 ______

                  SUBCOMMITTEE ON ECONOMIC OPPORTUNITY

          STEPHANIE HERSETH SANDLIN, South Dakota, Chairwoman

JOE DONNELLY, Indiana                JOHN BOOZMAN, Arkansas, Ranking
JERRY McNERNEY, California           JERRY MORAN, Kansas
JOHN J. HALL, New York               VACANT

Pursuant to clause 2(e)(4) of Rule XI of the Rules of the House, public 
hearing records of the Committee on Veterans' Affairs are also 
published in electronic form. The printed hearing record remains the 
official version. Because electronic submissions are used to prepare 
both printed and electronic versions of the hearing record, the process 
of converting between various electronic formats may introduce 
unintentional errors or omissions. Such occurrences are inherent in the 
current publication process and should diminish as the process is 
further refined.










                            C O N T E N T S

                               __________

                             April 16, 2008

                                                                   Page
Legislative Hearing on H.R. 4883, H.R. 4884, H.R. 4889, H.R. 
  4539, H.R. 3646, H.R. 5664, H.R. 3798, H.R. 3393, H.R. 3298, 
  H.R. 3467, H.R. 3889, H.R. 3681 and H.R. 5684..................     1

                           OPENING STATEMENTS

Chairwoman Stephanie Herseth Sandlin.............................     1
    Prepared statement of Chairwoman Herseth Sandlin.............    47
Hon. John Boozman, Ranking Republican Member, prepared statement 
  of.............................................................    48

                               WITNESSES

U.S. Department of Labor, Hon. Charles S. Ciccolella, Assistant 
  Secretary, Veterans' Employment and Training Service...........    38
    Prepared statement of Hon. Ciccolella........................    82
U.S. Department of Defense:
    Thomas L. Bush, Acting Deputy Assistant Secretary of Defense 
      for Reserve Affairs........................................    39
    Curtis L. Gilroy, Ph.D., Director for Accession Policy, 
      Military Personnel Policy, Office of the Under Secretary of 
      Defense for Personnel and Readiness........................    41
          Prepared statement of Mr. Bush and Mr. Gilroy..........    83
U.S. Department of Veterans Affairs, Keith Pedigo, Associate 
  Deputy Under Secretary for Policy and Program Management, 
  Veterans Benefits Administration...............................    42
    Prepared statement of Mr. Pedigo.............................    86

                                 ______

American Legion, Ronald F. Chamrin, Assistant Director, Economic 
  Commission.....................................................    20
    Prepared statement of Mr. Chamrin............................    62
Buyer, Hon. Steve, Ranking Republican Member, Committee on 
  Veterans' Affairs, and a Representative in Congress from the 
  State of Indiana...............................................     4
    Prepared statement of Congressman Buyer......................    49
Davis, Hon. Artur, a Representative in Congress from the State of 
  Alabama........................................................    16
    Prepared statement of Congressman Davis......................    57
Filner, Hon. Bob, Chairman, Committee on Veterans' Affairs, and a 
  Representative in Congress from the State of California........     3
    Prepared statement of Congressman Filner.....................    48
Hayes, Hon. Robin, a Representative in Congress from the State of 
  North Carolina.................................................    14
    Prepared statement of Congressman Hayes......................    53
Iraq and Afghanistan Veterans of America, Patrick Campbell, 
  Legislative Director...........................................    26
    Prepared statement of Mr. Campbell...........................    72
Military Officers Association of America, Colonel Robert F. 
  Norton, USA (Ret.), Deputy Director, Government Relations......    27
    Prepared statement of Colonel Norton.........................    78
Murphy, Hon. Patrick J., a Representative in Congress from the 
  State of Pennsylvania..........................................    17
    Prepared statement of Congressman Murphy.....................    59
Paralyzed Veterans of America, Richard Daley, Associate 
  Legislation Director...........................................    23
    Prepared statement of Mr. Daley..............................    69
Rodriguez, Hon. Ciro D., a Representative in Congress from the 
  State of Texas.................................................     9
    Prepared statement of Congressman Rodriguez..................    50
Stearns, Hon. Cliff, a Representative in Congress from the State 
  of Florida.....................................................    10
    Prepared statement of Congressman Stearns....................    51
Yarmuth, Hon. John A., a Representative in Congress from the 
  State of Kentucky..............................................    12
    Prepared statement of Congressman Yarmuth....................    52
Veterans of Foreign Wars of the United States, Justin Brown, 
  Legislative Associate, National Legislative Service............    22
    Prepared statement of Mr. Brown..............................    66

                       SUBMISSIONS FOR THE RECORD

CTIA--The Wireless Association, Jot D. Carpenter, Jr., Vice 
  President, Government Affairs, letter..........................    93
Disabled American Veterans, Kerry Baker, Associate National 
  Legislative Director, statement................................    95
National Cable and Telecommunications Association, Kyle 
  McSlarrow, President and Chief Executive Officer, letter.......    96

                   MATERIAL SUBMITTED FOR THE RECORD

Letters:
Hon. Steve Buyer, Ranking Republican Member, and Hon. Michael 
  Michaud, Chairman, Subcommittee on Health, Committee on 
  Veterans' Affairs, to Hon. Nancy Pelosi, Speaker of the U.S. 
  House of Representatives, letter dated January 28, 2008, 
  Regarding the Stimulus Package [An identical letter was sent to 
  Hon. John Boehner, Minority Leader, U.S. House of 
  Representatives.]..............................................    97

Post-Hearing Questions and Responses for the Record:
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunity, Committee on Veterans' Affairs, to 
  Patrick Campbell, Legislative Director, Iraq and Afghanistan 
  Veterans of America, letter dated April 30, 2008, Mr. 
  Campbell's responses...........................................    98
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunity, Committee on Veterans' Affairs, to Hon. 
  Charles S. Ciccolella, Assistant Secretary, Veterans' 
  Employment and Training Service, U.S. Department of Labor, 
  letter dated April 30, 2008, and response letter dated June 23, 
  2008...........................................................   100
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunity, Committee on Veterans' Affairs, to Curtis 
  L. Gilroy, Ph.D., Director for Accession Policy, Military 
  Personnel Policy, Office of the Under Secretary of Defense for 
  Personnel and Readiness, U.S. Department of Defense, letter 
  dated April 16, 2008, and DoD responses........................   101
Hon. Stephanie Herseth Sandlin, Chairwoman, Subcommittee on 
  Economic Opportunity, Committee on Veterans' Affairs, to Keith 
  Pedigo, Associate Deputy Under Secretary for Policy and Program 
  Management, Veterans Benefits Administration, U.S. Department 
  of Veterans Affairs, letter dated April 16, 2008, and VA 
  responses......................................................   103

 
              LEGISLATIVE HEARING ON H.R. 4883, H.R. 4884,
              H.R. 4889, H.R. 4539, H.R. 3646, H.R. 5664,
              H.R. 3798, H.R. 3393, H.R. 3298, H.R. 3467,
                   H.R. 3889, H.R. 3681 AND H.R. 5684

                              ----------                              


                       WEDNESDAY, APRIL 16, 2008

             U.S. House of Representatives,
                    Committee on Veterans' Affairs,
                      Subcommittee on Economic Opportunity,
                                                    Washington, DC.

    The Subcommittee met, pursuant to notice, at 1:00 p.m., in 
Room 334, Cannon House Office Building, Hon. Stephanie Herseth 
Sandlin [Chairwoman of the Subcommittee] presiding.
    Present: Representatives Herseth Sandlin, Donnelly, Hall, 
Boozman.

         OPENING STATEMENT OF CHAIRMAN HERSETH SANDLIN

    Ms. Herseth Sandlin. Good afternoon, ladies and gentlemen. 
The Committee on Veterans' Affairs, Subcommittee on Economic 
Opportunity, hearing on pending legislation will come to order.
    For those of you that monitor this Committee's activities 
more closely, you know it is a bipartisan Subcommittee.
    The Ranking Member has a number of other responsibilities 
today in other Committees as well as on the floor and he has 
asked me to begin the Subcommittee hearing in his absence. He 
will join us as soon as possible.
    I would also like to ask unanimous consent to allow Counsel 
to pose questions to the witnesses on the third and fourth 
panels. Seeing no objection, so ordered.
    I would also like to call attention to the fact that the 
Cellular Telephone Industry Association, the Wireless 
Association, and the Disabled American Veterans have asked to 
submit written statements for the hearing record. If there is 
no objection, I ask for unanimous consent that their statements 
be entered for the record. Hearing no objection, so entered.
    Today we have 13 bills before us that seek to protect our 
Nation's veterans from possible foreclosure and financial 
burdens incurred while serving one's country, update U.S. 
Department of Veterans Affairs (VA) housing construction 
guidelines, expand education programs while meeting the current 
retention needs of the Armed Forces, strengthen employment and 
reemployment rights for returning servicemembers, veterans, and 
minimize recidivism among incarcerated veterans.
    According to a Congressional Research Service report 
updated January 25th, 2008: ``The original GI Bill provided up 
to $500 annually for education expenses. This is the equivalent 
of an estimated $5,890 in 2007 dollars. An additional $50 was 
provided monthly for living expenses in 1944, which is 
equivalent to $589 monthly or $5,301 annually in 2007 dollars. 
Thus, the total education benefit including the living 
allowance in 1944 would have been worth $11,191 annually or 
$1,243 monthly in 2007 dollars.''
    Keeping this historical perspective in mind, I, along with 
Ranking Member Boozman, have introduced H.R. 5684, the 
``Veterans Education Improvement Act,'' which seeks to address 
the educational needs of our brave men and women in uniform.
    This bipartisan bill is the product of numerous hearings 
held by our Subcommittee since the beginning of the 110th 
Congress which allowed for close evaluation of the Montgomery 
GI Bill and input from Veterans Service Organizations (VSOs), 
education leaders, government agencies, and other policy 
experts.
    H.R. 5684 would help address current Montgomery GI Bill 
(MGIB) shortfalls along with other important improvements 
including substantially increasing the amount of basic 
education assistance for veterans equal to the average cost of 
the tuition at a 4-year public college or university, provides 
veterans with a monthly cost-of-living stipend, extends the 
time limitation for use of education benefits from 10 years to 
15 years, and more fully accommodating the transition from 
military to civilian life.
    I would like to add that H.R. 5684 includes unique 
provisions that allow the overall assistance to be used for 
business courses, preparatory courses for exams, and to repay 
Federal student loans. It dramatically expands the opportunity 
for servicemembers to enroll for the benefits even if they are 
beyond the initial opportunity for automatic enrollment, 
provides increased funding for state approving agencies, an 
important partner in administering the benefits with the VA, 
rewards veterans for their service by eliminating their 
educational entitlements from being considered as income when 
applying for Federal financial aid. It also increases on-the-
job training and dependent education benefit to 85 percent, 
supplements reporting fees given to colleges and universities, 
creates a 5-year pilot program to expand work study programs 
for veterans, increases the VA's full-time employees by 150 to 
help administer the new requirements, provides funding for 
updating existing IT systems, and rearranges the advance pay 
process to prevent any breaks in benefits.
    H.R. 5684, one of the many bills we are considering today, 
provides specific improvements and adjustments meant to make it 
easier, not harder, for veterans to access the education 
benefits they have earned following their service and 
contributes to the overall national economy.
    In addition, this bill will make changes with minimal 
disruption of the current VA information technology (IT) system 
and to the beneficiaries.
    The ``Veterans Education Improvement Act'' is a well-
crafted bill that provides the VA the resources to administer 
the new changes, to update and improve the MGIB to better 
reflect today's world, and ensure that today's veterans have 
the resources they need to continue or begin their education 
when they return from service.
    I appreciate the support of many of today's witnesses for 
this bill that addresses necessary changes to veterans 
education benefits. I look forward to working with Ranking 
Member Boozman and other Members of the Committee to continue 
to improve education entitlements for the veterans that we 
serve.
    [The prepared statement of Chairwoman Herseth Sandlin 
appears on p. 47.]
    Ms. Herseth Sandlin. Joining us today and seated at the 
dais is Chairman Bob Filner, and Ranking Member Steve Buyer. 
And also joining us on the first panel is the Honorable Ciro 
Rodriguez, all of whom are distinguished Members of the 
Committee. All of their written statements will be entered into 
the hearing record. We will begin with Chairman Filner.
    Mr. Chairman.

STATEMENTS OF HON. BOB FILNER, CHAIRMAN, COMMITTEE ON VETERANS' 
  AFFAIRS, AND A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
   CALIFORNIA; HON. STEVE BUYER, RANKING REPUBLICAN MEMBER, 
    COMMITTEE ON VETERANS' AFFAIRS, AND A REPRESENTATIVE IN 
 CONGRESS FROM THE STATE OF INDIANA; HON. CIRO D. RODRIGUEZ, A 
 REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS; AND HON. 
 CLIFF STEARNS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF 
                            FLORIDA

                  STATEMENT OF HON. BOB FILNER

    Mr. Filner. Thank you, Madam Chairwoman, and we appreciate 
your leadership in this Congress.
    Because of your leadership, I think this Congress will soon 
be taking up a GI Bill for the 21st century that updates the 
educational benefits as you have proposed, looks at the housing 
program I will speak to today, and also allows the Guard and 
Reserve units to participate in the GI Bill to a much greater 
extent than they are currently allowed.
    I believe we are moving along in a major effort to do 
something that had such an impact on our society in 1944, the 
original GI Bill.
    Let me just talk about another part of that original bill 
and that is the Home Loan Program that so many of the veterans 
after World War II were able to take advantage of.
    In a meeting in my district, we heard from active-duty 
service men and women veterans, VA experts, mortgage brokers 
and lenders from the area. Based on that meeting, we saw the 
program being irrelevant, not only to the current crisis, but 
before then in terms of its loan values, equity requirements, 
refinancing caps, and fees that are imposed. We want to update 
the program to make it relevant to the veteran today.
    One bill that I want to make sure we take quick action on 
is H.R. 4883, which prevents foreclosure on active-duty 
personnel. We have had anecdotal testimony of young people 
coming back and finding that they were, going to lose their 
home soon after their tour of duty was over. That is 
unacceptable. Active-duty servicemembers should not have to 
face that consequence. What we have done in H.R. 4883 is 
prevent any foreclosure for at least a year after they return 
from active duty.
    H.R. 4884, another bill introduced, is sort of a complement 
to your bill that you just described in terms of updating the 
Home Loan Program of the Department of Veterans Affairs. It 
increases the maximum home loan guaranty to $715,000, decreases 
the equity requirements to refinance a home loan, requires the 
VA Secretary to review and streamline the process of using a 
guaranteed home loan to purchase a condominium. Right now 
condominiums are subject to a great deal of regulation and red 
tape and it is hard to finance a condominium through the VA 
Home Loan Program.
    In addition, we want to reduce the home loan refinancing 
fees to 1 percent, extend the adjustable rate mortgage 
demonstration program to the year 2018, extend the so-called 
hybrid adjustable rate mortgage demonstration project to 2012, 
and provide a yearly adjustment of the VA home loan to match 
the consumer price index.
    There are many people in my district, around the country, 
who are facing the prospect of foreclosures and the value of 
their home falling. They are not able, given the restrictions 
of the VA program, to use that at all, no matter what their 
situation is or what they may be qualified for they are not 
able to make use of a program that was meant to give them some 
loan guarantees.
    What we do in H.R. 4884 is to make that possible for 
veterans in the situation that they find themselves today, but 
even without the crisis, to make it fit the 21st century.
    In addition, I have another bill, H.R. 4889, to recodify 
the so-called REAP Program, the Reserve Education Assistance 
Program, entitlements that provide now up to 36 months of 
education benefits to certain members of the Reserve forces who 
were called on or ordered to active-duty service in response to 
war and national emergency.
    Without going into details now, it allows for far more 
flexibility, support, and help for those in the Reserve who 
have given so much of their life and time on active duty.
    I look forward to working with you. I thank you for your 
leadership and bringing all these bills up for consideration 
today.
    [The prepared statement of Congressman Filner appears on
p. 48.]
    Ms. Herseth Sandlin. Thank you, Mr. Chairman. Thank you for 
your leadership in introducing a number of those bills, 
particularly as they relate to veterans' housing, and your 
support of our efforts here on the Subcommittee to address all 
of the issues within our jurisdiction, but most recently 
veterans' education.
    I would now like to recognize our distinguished Ranking 
Member, Mr. Buyer.

                 STATEMENT OF HON. STEVE BUYER

    Mr. Buyer. Thank you.
    Chairwoman Herseth Sandlin and Ranking Member Boozman, I am 
very pleased that you have included my bill, H.R. 4539, the 
``Department of Veterans Affairs Loan Guaranty Cost Reduction 
Act of 2007,'' for the Subcommittee's consideration.
    When this bill was introduced last December, the full 
extent of the mortgage and financial sector crisis had not yet 
appeared and, frankly, this bill was intended to improve the 
day-to-day operations of the Loan Guaranty Program. But events 
since we introduced H.R. 4539 have convinced me of the need to 
make the kind of changes included in my bill.
    I recognize that Chairman Filner has a similar bill, H.R. 
4884, and I take that similarity as a confirmation of the need 
to improve the Loan Guaranty Program. I believe that between 
us, veterans will find it easier to achieve the American dream.
    I would ask unanimous consent to include in the record a 
copy of the January 28, 2008, letter co-signed by Mr. Mike 
Michaud and I that sent to Speaker Pelosi and Leader Boehner 
regarding the need to include the VA Loan Guaranty Program in 
the recent stimulus package in the hearing record.
    Ms. Herseth Sandlin. Seeing no objection, so ordered.
    [The letter to Speaker Pelosi appears on p. 97. An 
identical letter was sent to Leader Boehner and will not be 
reprinted.]
    Mr. Buyer. In the letter, Madam Chairwoman, what Mr. 
Michaud and I were asking to do was that as the Freddie Mac 
rate was increased to the limit of $720,000, the FHA loan 
limits be matched to the VA, yet the VA was excluded from the 
stimulus package. And Mr. Michaud and I sent that letter to the 
Speaker and Mr. Boehner.
    At the time when I had spoken to Mr. Boehner, he and the 
Speaker basically had an agreement. A lot of amendments and 
requests came to them and they made the judgment that the 
agreement that they struck with the President, that they would 
hold to it.
    And as painful as a lot of the corrections and the fixes 
that they were learning were, they held on tight to their 
agreement. And to me, it is sort of what can happen if you do 
not allow the Committee to do its work. If somebody writes a 
bill under the pressure of the moment, mistakes can happen.
    Now, I had made a request to Chairman Filner to do a 
stimulus fix under suspension. He had declined to do that, 
Madam Chairwoman. And, frankly, I am not upset over that 
because you are doing your due diligence. So he has a bill. I 
have a bill. You have some ideas. Mr. Boozman has some ideas. 
And I think we are at a moment here where we are going to have 
a good meeting of the minds.
    The stimulus package says 125 percent of the area median 
price of a home as determined by the U.S. Department of Housing 
and Urban Development not to exceed 175 percent of the Fannie/
Freddie conforming limit of $417,000, which is $729,750.
    So when you look at the loan limits that Mike Michaud and I 
had included in our bill, when you look at the loan limits that 
the Chairman included in his, they do not even match the 
stimulus.
    So if we really want to do this, we really should match it 
to the stimulus fix and then you can come in and look at some 
of the improvements that we have done in the bill.
    I guess my counsel to you, Madam Chairwoman, is you can 
take the best out of proposals, some that Mr. Michaud and I 
have done, some that the Chairman has done, some 
recommendations that we are going to hear today, and we will 
give great deference to your leadership.
    What we had sought to do in the bill, H.R. 4539, beyond 
this increase now, was increase the maximum loan amount 
guaranteed by VA to 125 percent of the Freddie Mac conforming 
limit, and we believe that this would enable the servicemembers 
and the veterans living in the high-cost areas to purchase 
homes using the VA Loan Guaranty Program.
    This goes right at the heart of the issue that Mr. Filner 
was talking about when he held this hearing out there with 
regard to San Diego being one of the highest cost-of-living 
index in the country. The pain of access to affordable housing 
that he has is much different than I have in rural Indiana and 
that you have in the Dakotas. And we are most hopeful that this 
would help address these issues.
    What we also sought to do here is the intent with regard to 
the President, the Speaker, and Leader Boehner in increasing 
the FHA loan limits when you have individuals who are in 
subprime loans was to be able to move them into the Federal 
guaranteed loans. Well, do not leave veterans out of the 
equation. And you and I have had that personal conversation.
    And we also seek to extend some of the fees through 2017. 
These fees provide the funds the VA needs to pay for the 
guaranty on homes that go into foreclosure. These fees have 
also provided PAYGO offsets for improvements to VA benefits.
    We also seek to increase the guaranty amount for certain 
refinanced loans by making VA refinancing more attractive and 
competitive in the marketplace.
    The Michaud/Buyer bill also reduces the equity requirement 
for a VA guaranteed refinancing loan to zero. This is 
especially important for those servicemembers and veterans 
whose home equity has decreased solely because of the current 
market forces despite the fact that they are not behind on 
their mortgage payments.
    We also want to make loans more affordable in the high-cost 
areas. The legislation would limit the total loan guaranty fees 
to the maximum dollar amounts in effect on the day of 
enactment.
    Also, to encourage an increase in the supply of affordable 
housing, H.R. 4539 would increase the guaranty amount of 30 
percent of the mortgage.
    And, finally, this legislation would require the Secretary 
to provide a small measure of assistance in offsetting closing 
costs associated with the purchase of a home. The Secretary 
would determine the amount based on the income of guaranteed 
fees in the previous year.
    Madam Chairwoman, as you know, in regards to your comments 
on the GI Bill, H.R. 5684, I mention this because it is a good 
bill and you have worked with our side of the aisle in a 
bipartisan manner. And there are a few changes that I feel are 
important.
    I believe that the train is moving quickly and there is not 
a lot of time here in this Congress. So for this restructuring 
here with regard to VA education programs, the question is 
whether it is feasible to do it in a comprehensive fashion? It 
may not be comprehensively. And I note you are trying a major 
incremental movement.
    I am in the process of drafting an extension and 
reorganization of Chapters 30, 32, 34, 35, and 36 into one or 
two chapters to standardize the administrative rules and 
education and training options to those receiving education 
benefits.
    I hope that we can work together on this approach to bring 
some order to these programs in the not too distant future.
    Madam Chairwoman, I want to thank you for your bipartisan 
manner in which you have included H.R. 4539 and several other 
bills from our side of the aisle in today's hearing.
    I would also end with this remark, that the issue with 
regard to Guard and Reserve is not in your bill. I know the 
Chairman had made comments as though it is in the bill. And I 
think what that does is it puts the Chairman and I in 
agreement, and I know you also have been a very strong advocate 
of the Guard and Reserve.
    And we do not want to do anything that would exasperate the 
gap. So as we work on the improvements with regard to the 
active duty, if, in fact, we have a moment in time, we should 
capture it. And I want to work with you to do that, whether it 
is to do only that which is within our jurisdiction or we try 
to add that and we have a joint referral with the Armed 
Services Committee. We will work with Dr. Snyder.
    I think if we are going to move, and you have the sincerity 
to make this major move, I want to join with you and do 
everything I can with Mr. Filner or anybody else on the 
Committee to satisfy equity and fairness with regard to the 
Guard and Reserve.
    Now, there is going to be a price. It will come with 
mandatory funding. I will speak with Mr. Boehner. I will speak 
with the Budget Committee on our side. You will not find 
opposition from my side of the aisle with regard to a mandatory 
fix, if we take what you are doing and we do the equity fix in 
Guard and Reserve and working with the Armed Services 
Committee, I believe that when individuals of good will share 
sentimentalities, that it is a prescription for success.
    And that is what I have always felt in all the work I have 
ever done with you. And that is where I want to proceed in 
this.
    With that, I yield back.
    [The prepared statement of Congressman Buyer appears on
p. 49.]
    Ms. Herseth Sandlin. I thank the Ranking Member, and I will 
just make a couple of remarks before recognizing our colleagues 
on the first panel for their testimony.
    I appreciate the words of the Ranking Member and I 
appreciate the leadership that you and Mr. Michaud demonstrated 
as the train was moving quickly a few months ago in putting a 
stimulus package together.
    I know that since our conversation that I have spoken with 
leadership, both on the Financial Services Committee with 
jurisdiction as well as with leadership on our side of the 
aisle. I know that Chairman Filner has done the same, because 
of our desire to want to look at another vehicle to make that 
fix, if indeed there is another stimulus or other strategy or 
avenue that we are looking at to continue to grapple with the 
crisis that we are seeing in housing, not only how veterans are 
affected but other constituents with whom we work and who we 
serve.
    As it relates to veterans' education, again, your words are 
appreciated. You are right. Mr. Boozman and I have worked hard 
when he was the Chairman of the Subcommittee and when I was 
Ranking Member and in this Congress to address the issues of 
equity for National Guard men and women and Reservists.
    The purpose of the bill that we introduced in a bipartisan 
way purposely did not include those provisions, although I 
believe Chairman Filner may have been referring to work that I 
have been undertaking with Counsel to work and fashion a 
separate bill for Guard and Reservists that would be entirely 
within the jurisdiction of the Armed Services Committee.
    We wanted to avoid joint referral for a number of reasons 
as it related to increasing basic pay, the basic benefit in the 
Montgomery GI Bill, as well as include a number of the very 
unique provisions that our bill includes that we uncovered 
during the series of hearings that we have had with this 
Subcommittee.
    I certainly share your sentiment and I think all of us do 
on the Subcommittee as well as our colleagues on the full 
Committee, of trying to undertake something in a more 
comprehensive way, if that is going to be possible. We want to 
make sure that, depending on which track the train is on, we 
have a lot of different options on the table.
    If the comprehensive approach is indeed the track we are 
on, then I think we are all in agreement that we want to make 
sure your efforts, as well as other efforts of those on the 
Subcommittee, are brought together. I know we will all work in 
good faith with the leadership on the respective sides to do 
that, based on our hard work here in the Veterans' Affairs 
Committee.
    However, I am not sure that is the track that we will be 
on. I hope so. We have great working relationships with people 
on the Armed Services Committee that undertook some of this 
work even in the ``Defense Authorization Act'' of last year.
    Again, I appreciate your sentiments. I know how hard you 
have been working as it relates to the comprehensive fix and a 
reorganization and how beneficial that could be to veterans and 
their education benefits and the administration of those 
benefits.
    Again, I thank you.
    Mr. Buyer. Would the gentlelady yield?
    Ms. Herseth Sandlin. Yes, I would.
    Mr. Buyer. Then let us step off together and work, step off 
together meaning off of the good work that was done in the last 
Congress with regard to Dr. Snyder and John McHugh.
    So as we try to move the jurisdictional issues, right, and 
as you are formulating your legislation, please work with our 
staff and we will step off together because it will take the 
leadership of Mr. Skelton and Mr. Hunter because this is 
mandatory spending on their side. So it is going to take some 
major movement.
    So with that, I yield back. I thank the gentlelady for her 
comments.
    Ms. Herseth Sandlin. I thank you.
    Mr. Boozman, would you like to be recognized?
    Mr. Boozman. I want to apologize.
    Ms. Herseth Sandlin. We have all been saying such great 
things about you.
    Mr. Boozman. Well, I apologize. I am participating in the 
``Clean Water Act,'' which is a very important thing. And so I 
am just kind of running back and forth. The other Member of my 
Committee is on the Farm Bill, so he is over doing that.
    So, again, we appreciate you, Madam Chair, in working with 
us. And I want to compliment the guys that are bringing some 
very, very good legislation before the Committee. We have some 
really good things to work with. And so thank you very much.
    [The prepared statement of Congressman Boozman appears on
p. 48.]
    Ms. Herseth Sandlin. Thank you, Mr. Boozman.
    I would now like to recognize our distinguished colleagues 
on the full Veterans' Affairs Committee, Mr. Rodriguez and Mr. 
Stearns.
    Mr. Rodriguez, we will start with you. You are recognized 
for 5 minutes. Thank you for being here and thank you for 
introducing the bill that we are considering today.

              STATEMENT OF HON. CIRO D. RODRIGUEZ

    Mr. Rodriguez. Thank you. Chairwoman Herseth Sandlin, let 
me personally thank you and the Subcommittee for giving me this 
opportunity to speak to you regarding H.R. 5664, a bill that I 
introduced to correct the bureaucratic oversight in the way 
that the Veterans Administration advises contractors 
constructing or renovating housing for disabled veterans.
    I was extremely moved by last June's hearing and testimony 
before this Subcommittee concerning specially adapted housing. 
There is little doubt that funding levels available to the 
individual disabled veterans to have their homes adjusted to 
meet their needs is too low.
    My bill does not address that particular issue. Rather, it 
seeks to ensure that veterans whose homes are updated under 
this program benefit from all of the modern technology and 
construction practices that can be provided.
    Mr. Gonsalves, President and Founder of Homes for Our 
Troops, pointed out in the hearing that service men and women 
with injuries that would have killed them in previous wars are 
now living to see another day and are in need of truly special 
home adaptations.
    The primary guidance that the VA provides the contractors 
who draw up the plans and specifications to modify homes under 
this grant program is VA Pamphlet 2613, entitled ``Handbook for 
Design, Specially Adapted Housing.''
    As Mr. Carl Blake, the National Legislative Director of the 
Paralyzed Veterans of America, pointed out, much, if not all, 
of the guidance found in the pamphlet is still applicable 
today. However, I feel, that it focuses too much on veterans 
who find themselves in wheelchairs with lower extremities and 
paralysis or amputations.
    While certainly still valid, we find increased number of 
veterans returning home from current conflicts with alternative 
injuries such as upper limb amputations or blindness. The guide 
was last updated in 1978. By comparison, the current Army Corps 
of Engineers Housing Design Guide is dated 1994 and that of the 
Air Force is 2004.
    The time has come to ensure that the guide contains updated 
directions to architect and engineering firms and contractors 
who will do the noble work of ensuring our disabled veterans 
have homes that respect the dignity of which they have 
sacrificed.
    I propose in my bill that the Secretary of Veterans Affairs 
update the guide at least on a 6-year basis.
    I also wish to express my intent that the field agents who 
approve the construction plans under this program view the 
pamphlet as a guide rather than a definitive set of 
requirements. It should be just looked at as a guide to help 
out, not one that is a definitive set of requirements.
    After consulting with several VSOs in preparing for this 
testimony, I need to clarify the wording of the bill. Rather 
than requiring the VA to update plans and specifications on a 
6-year basis, it is better stated that the pamphlet itself is 
updated every 6 years.
    Contractors actually derive the plans and specifications 
based on each veteran's home and the pamphlet. And I would hope 
that if the Committee considers my bill in the future markup 
that such language is made clear.
    I want to thank you very much for this opportunity and just 
indicate now that, we can make these homes much more adaptable. 
We can, for example, allow additional electrical outlets, allow 
for swinging doors, allowing for other types of, updates, based 
on the individual handicaps or difficulties that they have in 
getting around.
    And so thank you, Madam, and I want to thank you once again 
for allowing me this opportunity to present the bill.
    [The prepared statement of Congressman Rodriguez appears on
p. 50.]
    Ms. Herseth Sandlin. Thank you very much, Mr. Rodriguez. 
Again, thank you for your leadership on this important issue on 
veterans' housing.
    Mr. Stearns, thank you, too, for introducing the bill that 
we are considering today and look forward to hearing from you. 
You are recognized.

                STATEMENT OF HON. CLIFF STEARNS

    Mr. Stearns. Good afternoon, and thank you, Madam Chair, 
for this opportunity to testify on my bill, H.R. 3646, the 
``Veterans Effective Training Job Opportunities and Benefits 
Act of 2007,'' or the ``VET Jobs Act.''
    My colleagues, I think this bill is an important step in 
helping our veterans gain gainful employment when retiring from 
the service. When warriors return home from combat, they often 
face an uphill battle. For many servicemembers, the transition 
from active duty to veteran status and returning to a full, 
meaningful civilian life is daunting and fraught with many 
challenging obstacles and bureaucratic barriers.
    Many times, these brave service men and women require job 
training for entirely new careers. Although statistics show 
that eventually veterans in general enjoy a favorable 
employment in the Nation's job market, many veterans initially 
find it difficult to compete successfully in the labor market.
    That is why for over a decade, the Federal Government has 
provided job training benefits to veterans through the 
Department of Veterans Affairs and the Department of Labor.
    The mission statement for the Department of Labor Veterans' 
Employment and Training Service, VETS Program, is to, ``Provide 
veterans and transitioning servicemembers with the resources 
and services to succeed in the 21st century workforce by 
maximizing their employment opportunities, protecting their 
employment rights, and meeting labor market demands with 
qualified veterans today.''
    Additionally, the Department of Labor offers servicemembers 
leaving the military with a service-connected disability the 
Disabled Transition Assistance Program or DTAP. This includes a 
3-day workshop, plus additional hours of individual instruction 
to help determine their job readiness and address the special 
needs of disabled veterans.
    However, this is the identical DTAP Program offered to all 
transitioning disabled veterans across the Nation. This 3-day 
program provider valuable support, but it only provides general 
employment information and at no time addresses the specific 
needs of the community in which the veteran lives and serves.
    Unfortunately, this means that frequently there is a void 
of information on local labor market conditions that result in 
veterans using their benefits to train for jobs that do not 
exist in their own communities.
    Mr. Jeffrey Askew, who is Director of the Marion County 
Veterans Service Center in my hometown of Ocala, Florida, has 
said many veterans have used their Federal job training 
benefits for information technology--IT career training. 
However, Ocala has little demand for IT professionals and 
veterans are often advised to move to Orlando where there are 
many more opportunities for them.
    Upon finally getting settled back into civilian life, it is 
frustrating and unfortunate to say the least to be forced to 
uproot one more time and move your family to an unknown city.
    I am concerned about this problem and I believe, my 
colleagues, I have an easy solution. Currently there is a maze 
of Web sites with confusing and sometimes out-of-date 
information on employment conditions. My legislation would 
provide better information to veterans on their local job 
market needs.
    The ``VET Job Act'' directs the Secretary of Veterans 
Affairs and the Secretary of Labor to conduct a joint study on 
the greatest employment needs in various job markets around the 
United States and post the results on the VA web site. These 
results would then be updated annually to reflect the current 
and possible changing needs in the local job market.
    With this tool, veterans could simply plug in their zip 
code and see a list of the occupations that are in most demand 
within their commuting area and subsequently use their Federal 
job training most effectively.
    The Department of Labor already has the infrastructure in 
place for this kind of research, so this is a practical low-
cost solution. In fact, the Congressional Budget Office has 
unofficially scored this proposal as having insignificant cost, 
insignificant cost for immeasurable benefit to our veterans.
    Further, the ``VET Job Act'' has broad bipartisan support 
and has been endorsed by many veterans' organizations including 
the American Legion, the American Veterans (AMVETS), Veterans 
of Foreign War of the United States, the Blinded Veterans of 
America, and the Paralyzed Veterans of America. In addition, my 
bill has 44 co-sponsors from both sides of the aisle.
    So, Madam Chairwoman, I appreciate the opportunity to 
testify and allowing me this opportunity to talk about the 
``VET Jobs Act'' and I look forward to working with you and the 
Ranking Member on passing this bill.
    [The prepared statement of Congressman Stearns appears on
p. 51.]
    Ms. Herseth Sandlin. Thank you, Mr. Stearns, and thank you 
for taking time out of your busy schedule to join us today to 
speak about your important bill. Certainly the efforts that you 
make on the full Committee and on other Subcommittees to 
address employment needs and other needs to make the disruption 
in their lives during that transition as small as possible.
    Certainly Mr. Boozman and I have been working on this 
Subcommittee to address some of the issues that you are trying 
to get at in your bill. Again, we appreciate the introduction 
of it and the opportunity to hear from you directly today. 
Thank you.
    I would now like to invite the second panel to the witness 
table. Joining us on our second panel of witnesses are a set of 
other colleagues and it includes the Honorable John Yarmuth, 
the Honorable Robin Hayes, and the Honorable Artur Davis, as 
well as the Honorable Patrick Murphy.
    I welcome all of you gentlemen to our Subcommittee. As I 
have done with the other witnesses, we thank you each for 
introducing bills that we think get at the heart of the issues 
that we have analyzed and explored throughout a number of 
hearings in this Subcommittee.
    We are pleased to have you here. Thank you for joining us. 
I know the schedules can be unpredictable, but we look forward 
to hearing directly from you.
    I would like to go ahead and start with Mr. Yarmuth. You 
are recognized for 5 minutes.

    STATEMENTS OF HON. JOHN A. YARMUTH, A REPRESENTATIVE IN 
   CONGRESS FROM THE STATE OF KENTUCKY; HON. ROBIN HAYES, A 
 REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH CAROLINA; 
 HON. ARTUR DAVIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE 
  OF ALABAMA; AND HON. PATRICK J. MURPHY, A REPRESENTATIVE IN 
            CONGRESS FROM THE STATE OF PENNSYLVANIA

               STATEMENT OF HON. JOHN A. YARMUTH

    Mr. Yarmuth. Thank you, Madam Chairwoman, Members of the 
Subcommittee. I greatly appreciate the opportunity to be here 
today to discuss the ``Second Chance for America's Veterans 
Act.''
    As a small pilot program, the Incarcerated Veterans 
Transitional Program or IVTP has reduced recidivism by 90 
percent among participants and saved the taxpayers $1.6 million 
in each of the six locations where it has been implemented over 
the last 3 years.
    We are here today because by expanding this tremendous 
level of success to a national scale, we could provide hope for 
thousands of men and women who return to civilian life after 
years of serving their country.
    In my hometown of Louisville, Kentucky, Richard Waddell 
returned home 10-percent disabled and suffering from Post 
Traumatic Stress Disorder, honorably discharged after 9 years 
service in the National Guard, Army, and Marines. He had no 
job, no support, and a family to feed. Out of desperation, he 
turned to robbery and was apprehended by law enforcement while 
buying groceries for his family.
    Unfortunately to this point, Richard's story is far from 
unusual among American's veterans. Where his story departs is 
that when he was released from jail for the second time, he met 
an IVTP representative. The IVTP worker first helped him with 
the essentials, clothes, food, and transportation. And from 
there, the dignity and respect that Richard had earned serving 
our Nation returned.
    Thanks to the help of IVTP, Richard was able to activate 
his VA benefits and register for disability and he now has an 
apartment and holds a good job. Next week, he will begin 
college. And a future that once seemed bleak at best is now 
bright and full of promise.
    IVTP has similarly aided 328 veterans in Kentucky by 
partnering veterans transitioning out of prison with a 
professional mentoring staff composed of veterans to help them 
get back on their feet. Of those 328, just 22 returned to 
criminal activity after engaging in the program, a recidivism 
rate of seven percent.
    That number is impressive by any standard, but for a 
veteran population that sees over half of its ranks return to 
prison, the success of this program is extraordinary. 
Abandoning this success and the men and women who served our 
country would not only be counterproductive, but would also 
send a message that our veterans only matter when our country 
needs them and not when they need our country.
    The ``Second Chance for American Veterans Act'' would 
expand the highly successful IVTP pilot to a competitive grant 
program in 24 locations across the United States. Providers 
would assist veterans who are exiting the corrections system by 
connecting them with transitional housing, employment services, 
mental health and/or substance abuse services and other 
community support.
    After all that our veterans have given for this country, 
providing them with such vital, effective, and proven services 
should be an obligation, not an option. But this is not only 
about giving or forgiving. This is also a matter of working for 
our National interests.
    In Kentucky, we have the most rapidly growing prison 
population in the Nation, a fact that has had a devastating 
effect on the fiscal reality of the commonwealth. To keep a 
convict in prison for a year, Kentucky spends over $18,000. By 
comparison, Volunteers of America, which currently administers 
this program, spends between $700 and $1,200 to give a veteran 
the tools to stay out of prison and contribute to society for a 
lifetime.
    At a time when we search to find new approaches to 
stimulate the economy and get a handle on America's ever-
growing deficit, the ``Second Chance for Veterans Act'' offers 
the opportunity to support a program with a proven track record 
of providing immediate and substantial return on our investment 
while also repaying a debt to those in uniform who sacrificed 
to serve our country.
    This is a unique win-win for government. Still, the 
Department of Labor has chosen not to continue this highly 
successful program and without action by Congress, thousands of 
worthy veterans in need would be abandoned by the Nation they 
served, left to bounce around our overcrowded prison system.
    So I thank the Committee for looking into this legislation 
and I strongly urge the Members to support passage of H.R. 
3467, the ``Second Chance for America's Veterans Act.'' Thank 
you, Madam Chairwoman.
    [The prepared statement of Congressman Yarmuth appears on
p. 52.]
    Ms. Herseth Sandlin. Thank you, Mr. Yarmuth.
    Mr. Hayes, you are recognized.

                 STATEMENT OF HON. ROBIN HAYES

    Mr. Hayes. Thank you, Madam Chair and Members of the 
Subcommittee, Mr. Hall. Thanks for bringing wisdom to the 
Subcommittee today.
    Chairwoman Herseth and other Members of the Subcommittee, 
thank you for the opportunity to be here to address your 
Subcommittee on an issue that impacts our National Guardsmen. 
Today I am proud to stand before this Subcommittee in support 
of a critical piece of legislation, ``National Guard Employment 
Protection Act of 2007.''
    As the Subcommittee is aware, the National Guard operations 
tempo has increased exponentially since September 11th and the 
Federal duties they have been charged with have created a 
unique situation.
    Previously, National Guard doing Federal missions were 
called up under title 10 to active-duty status. The Global War 
on Terror (GWOT) became increasingly apparent and there needed 
to be a mechanism to allow the National Guard to perform 
Federal missions in Title 32 status. It is obvious that good 
staff work has helped put this together because this was 
difficult to find. I thank Ms. Shirley for her effort.
    It has become clear that unified State, Federal cooperative 
employment of the National Guard provides a uniquely powerful 
tool to address domestic security needs. Some examples of this 
type of Federal Title 32 duty are air sovereignty, providing 
air defense for our Nation, airport security, operations in 
support of natural disasters, fighting wildfires, and border 
security to name a few.
    More and more often we see operations in which the Federal 
Government provides the funds, the State Governors provide the 
authority and control to execute operations to secure the 
homeland.
    This means that a greater number of National Guardsmen are 
performing such duties, which unfortunately, are not covered 
under the Uniformed Services Employment and Reemployment Rights 
Act (USERRA). Prior to September 11th, there were essentially 
no operational missions conducted by the Guard under Title 32, 
so there was no loophole in the protection afforded Guardsmen 
for their Federal service.
    To address the loophole, I along with Congresswoman 
Madeleine Bordallo of Guam, introduced H.R. 3798, the 
``Employment Act.'' The bill would amend the ``Uniform Services 
Employment and Reemployment Rights Act 1994,'' USERRA, to 
authorize the Secretary of Defense to include full-time 
National Guard duty for exemption from the USERRA 5-year limit 
on service.
    Passage of the legislation will ensure that National Guard 
members are not forced to choose between keeping their civilian 
jobs and serving our Nation.
    Since USERRA already authorizes exemptions for service 
supporting critical active-duty missions, this amendment would 
simply correct a disparity in the treatment of National Guard 
members.
    It is essential that we make sure all our Nation's heroes 
are given adequate opportunity to support Federal missions 
without it affecting their civilian job. The Guard has 
increasingly been called on since September 11th. North 
Carolina has been one of the highest mobilization rates at over 
97 percent.
    Whether protecting our skies, saving lives in national 
disasters, enhancing security, there is no doubt that the Guard 
is an essential part of the total force. America's Guardsmen 
should never be put in a position where they are forced to 
choose to support a critical mission or to protect their 
civilian jobs.
    Seven years into fighting the Global War on Terror, we are 
starting to see a small but increasing number of Guardsmen 
bumping up against their 5-year USERRA protection. According to 
statistics provided by the Guard Bureau, since September 11th, 
6,984 of our soldiers have been called up to perform Federal 
missions under Title 32. Currently, 1,719 Guardsmen are 
performing duty under Title 32 orders.
    Air Guard has especially been impacted, particularly those 
airmen performing air sovereignty alert missions. They are by 
no means alone in their situations. This loophole affects the 
entire National Guard.
    If the ``Guard Employment Protection Act'' is not passed, 
National Guardsmen may be forced again to choose between their 
jobs and serving the Nation. Unfortunately, this is already 
starting to occur. The problem would get worse as we near the 
current USERRA 5-year protection limit.
    The Guard is performing critical missions under Article 32. 
We need to close this loophole. Legislation is fully supported 
by the Enlisted Guard Association and the United States 
National Guard Association. I believe they are in the room 
today. They have included their letters of endorsement for the 
record.
    [The letters are attached to Congressman Hayes prepared 
statement, which appears on p. 53.]
    The Bureau and U.S. Department of Defense (DoD) also favor 
the closing of the loophole to protect the Guardsmen. Citizen 
soldiers fight to protect our Nation and our freedom. The very 
least we can do is protect their right to serve and retain 
their livelihood for themselves and their families.
    Thank you very much for your serious consideration of this 
Act. I know all the Members of the Subcommittee obviously share 
my commitment to the Guard and strongly urge passage of the 
legislation. Thank you very much.
    [The prepared statement of Congressman Hayes appears on
p. 53.]
    Ms. Herseth Sandlin. Thank you, Mr. Hayes.
    Mr. Davis, you are recognized for 5 minutes.

                 STATEMENT OF HON. ARTUR DAVIS

    Mr. Davis. Thank you, Chairwoman Herseth Sandlin, and thank 
you, Mr. Hall. Good to see you as well.
    Now, let me begin by thanking the Chairwoman for her 
leadership since she came to the Congress 4 years ago on these 
issues. It is much appreciated.
    Let me thank the Committee for giving me an opportunity to 
testify today on the ``Reservist Access to Justice Act,'' H.R. 
3393. I am proud to co-sponsor this legislation which deals 
with the employment rates of our Guards and Reservists.
    I am happy to cosponsor this bill with Jason Altmire from 
Pennsylvania whose district has one of the highest percentages 
of Guards and Reservists serving in the country and with Tim 
Walz from Minnesota who is the highest Ranking Member of the 
Guard serving in the U.S. Congress right now.
    It would be inconceivable, Madam Chairwoman, to think, any 
single one of us, that any employer in this country would 
terminate someone because he or she served America. It would be 
inconceivable to any of us in this room that any employer in 
this country would decline to promote someone or cause someone 
to suffer an adverse condition of employment because he or she 
served this country.
    But as inconceivable as it is to us, as illegal as it is 
under current law, it happens. Let me give the Committee some 
numbers to put this in perspective.
    Between October 1st, 1996, and June 30th, 2005, 10,061 
complaints were filed with the Department of Labor by Guards 
and Reservists alleging that, exactly what I just described, 
happened to them at places of businesses around this country.
    About 70 percent of individuals who believe they experience 
discrimination, actually did not even file a lawsuit, were not 
aware of their protections under the law, or the law was so 
weak that it was not worth their while or worth the while of 
counsel. We do have a Federal statute. Mr. Hayes referenced it. 
It is called USERRA. It is a good statute, but in many ways, it 
does not have teeth.
    Guards and Reservists who file suit under this statute are 
doomed to a second-class kind of litigation status. They are 
limited substantially in the damages they can collect. If a 
judge finds that they have been fired because of their status 
as a Guard or Reservist, right now the judge does not have the 
authority to even put them back at work. They cannot get 
punitive damages as many individuals do who sue after being 
wrongfully discriminated against and they face a variety of 
other procedural hurdles.
    Well, this bill, H.R. 3393, seeks to give us the USERRA 
that our country deserves and that our Guardsmen and Reservists 
deserve. Let me outline some of its specific provisions.
    Importantly, this bill would expand the availability of the 
damages that are available. Without getting into too much 
technical lawyer talk today, right now Guard and Reserve 
members often cannot get compensatory damages. Only in limited 
circumstances can they get those damages. This bill would make 
those damages automatic unless an employer can show a good 
faith reliance on the law that would bring Guards and 
Reservists in line with all of the kinds of employment 
litigants around the country.
    Our bill would provide for punitive damages in the worst 
and most egregious cases of discrimination. That is what the 
law normally provides. When African Americans or women or other 
individuals believe that they have been discriminated against 
because of their status and their employer is an especially bad 
case offender, they can get punitive damages. This bill would 
allow the same opportunity for Guards and Reservists.
    This bill would hold State governments accountable. It 
might amaze us that any entity funded by taxpayers would 
practice discrimination against our citizen soldiers, but some 
do for various reasons. Right now they are exempt from USERRA. 
We would hold them accountable.
    We also would allow plaintiffs when they win these cases to 
get attorneys' fees. As the lawyers in the room recognize as a 
practical matter, it is tough to get good lawyers to bring 
employment discrimination cases unless they know they will have 
a chance to recover the cost of their labor because sometimes 
the damage awards are not great enough to compensate them.
    I end simply by saying this. There have been 600,000 
individuals who have been called up to serve this country since 
we were attacked on September 11th. At one point in 2005, 
nearly 50 percent of the soldiers in theater were members of 
the Guard and Reserve. Sometimes the numbers have even gone 
higher than that.
    These individuals who constitute the best citizen soldier 
force on God's Earth deserve the strongest level of protection 
we can give them and they ought not be second-class litigants 
in any court.
    And I thank the Committee for its consideration.
    [The prepared statement of Congressman Davis appears on
p. 57.]
    Ms. Herseth Sandlin. Thank you, Mr. Davis.
    Mr. Murphy, welcome to the Subcommittee. You are recognized 
for 5 minutes.

              STATEMENT OF HON. PATRICK J. MURPHY

    Mr. Murphy. Thank you very much, Ms. Chairwoman. I would 
like to thank you, Chairwoman Herseth Sandlin, Ranking Member 
Boozman, and also Congressman Hall, for holding this hearing 
and giving me an opportunity to speak on behalf of my bill, 
H.R. 3298, the ``21st Century Servicemembers Protection Act.''
    I would also like to thank the Members of the Committee 
staff for your continued great work.
    I would also like to ask the Committee again to grant 
permission for letters of support for this bill written by the 
Veterans of Foreign Wars, the Association of the United States 
Army, the Military Officers Association of America, the Fleet 
Reserves Association, and the National Guard Association of the 
United States be entered into the record.
    Ms. Herseth Sandlin. Hearing no objection, so ordered.
    [The letters are attached to Congressman Murphy's prepared 
statement, which appears on p. 59.]
    Mr. Murphy. Soon after my election to Congress, a friend of 
mine, Captain John Gross, a Judge Advocate General (JAG) 
attorney who does legal assistance work with the 101st Airborne 
Division, the Screaming Eagles, contacted me to let me know 
about a growing problem that many deployed servicemembers are 
currently facing.
    He explained to me that many of the soldiers he worked with 
have had their credit reports damaged during their deployment 
over issues concerning their contracts with cellular telephone 
or Internet service providers. This JAG attorney was able to 
put one of his own contracts on hold during his deployment, but 
to do so, he was forced to pay a costly fee.
    Looking into this further, I also discovered that some 
financial institutions were slow or unwilling to reduce 
servicemembers' interest rates during their deployment even 
though these creditors are already required to do so by law.
    I learned that when servicemembers and their families ran 
into problems with service providers and creditors, they not 
only had to deal with the strain of deployment, but also faced 
repeated harassment by collection agencies.
    We owe the men and women of our Armed Forces better than 
this. For decades, the ``Soldiers and Sailors Civil Relief 
Act'' and its successor, the ``Servicemembers Civil Relief 
Act,'' (SCRA) have provided crucial financial protection for 
soldiers, sailors, airmen, Marines, and Guardsmen.
    As we continue to send a new generation of servicemembers 
into harm's way, it is our obligation as Members of Congress to 
update and modernize SCRA for today's troops.
    The ``21st Century Servicemembers Protection Act'' expands 
the SCRA to cover service contracts such as cell phones, 
utilities, cable television, or internet access. Similar to 
provisions that currently exist for residential and automobile 
leases, this legislation will allow troops with deployment 
orders to more easily terminate or suspend their service 
contract without fee or penalty.
    Currently creditors who knowingly or negligently fail to 
reduce interest rates upon notification from a soldier with 
deployment orders face no specific penalty.
    Another provision of my bill would add a penalty to those 
creditors who refuse to reduce interest rates after they are 
already required to do so under SCRA.
    As a veteran of the United States Army and the War in Iraq, 
I know how important it is that our troops be able to focus on 
accomplishing their mission and coming home safely without 
worry about their credit rating or whether bill collectors are 
harassing their families.
    Since this bill's introduction, my staff and I have worked 
with the industries that will be affected by this legislation. 
In doing so, we have developed compromised language that I 
believe maintains the intent of the bill as introduced while 
alleviating the concerns of the companies that will be affected 
by the passage of this legislation.
    Notably we have adjusted the penalties to remove 
imprisonment and made the size of any civil damages more 
reasonably tied to the size of the violation. It is with great 
hope that the Committee will adopt this revised language when 
the bill moves to markup.
    We realize that there will still be a few adjustments that 
could be made to the language of the bill and my staff and I 
are eager to work with the Committee and do what it takes to 
get these protections enacted into law as soon as possible.
    This is not a Democratic or Republican issue. This is about 
doing what is right for our troops.
    With that, I would like to again thank you, Madam Chairman, 
and the Ranking Member, as well as Congressman Hall for giving 
me the opportunity to speak today, and I am happy to answer any 
questions that you may have. Thank you very much.
    [The prepared statement of Congressman Murphy appears on
p. 59.]
    Ms. Herseth Sandlin. Thank you, Mr. Murphy, for your 
military service to the country and for introducing this 
important bill.
    I want to thank all three of you for taking the time to 
testify here. We have appreciated your insights and we 
appreciate your hard work and dedication to our Nation's 
veterans.
    Mr. Murphy. Thanks, ma'am. Ma'am, I would like to note on 
the record, I see Congressman Hayes' watch of the 82nd Airborne 
Division. I mentioned the 101st Screaming Eagles. That is the 
second best airborne unit in the entire world following behind 
the great all-American division of the 82nd Airborne.
    Ms. Herseth Sandlin. Very good. Thank you, gentlemen.
    I would now like to invite panel three to the witness 
table. Joining us on our third panel of witnesses today, we 
have Mr. Ronald Chamrin, Assistant Director of the Economic 
Commission for the American Legion; Mr. Justin Brown, 
Legislative Associate of National Legislative Service for the 
Veterans of Foreign Wars (VFW) of the United States; Mr. 
Richard Daley, Associate Legislation Director for the Paralyzed 
Veterans of America (PVA); Mr. Patrick Campbell, Legislative 
Director for the Iraq and Afghanistan Veterans of America 
(IAVA); and Colonel Robert Norton, Deputy Director of 
Government Relations for the Military Officers Association of 
America (MOAA).
    Gentlemen, welcome to the Subcommittee. We are not sure 
when the next set of votes will be called, but we do have 
another panel after you. In the interest of time and respect to 
all the panelists today, I would like to ask you to limit your 
testimony to 5 minutes.
    I know that we have a lot of bills under consideration here 
and so that may be difficult, but your entire written statement 
has been entered into the Committee record.
    Mr. Chamrin, we will begin with you and you always get us 
off to a right start in keeping to your 5 minutes, so you are 
recognized.

 STATEMENTS OF RONALD F. CHAMRIN, ASSISTANT DIRECTOR, ECONOMIC 
    COMMISSION, AMERICAN LEGION; JUSTIN BROWN, LEGISLATIVE 
 ASSOCIATE, NATIONAL LEGISLATIVE SERVICE, VETERANS OF FOREIGN 
WARS OF THE UNITED STATES; RICHARD DALEY, ASSOCIATE LEGISLATION 
  DIRECTOR, PARALYZED VETERANS OF AMERICA; PATRICK CAMPBELL, 
LEGISLATIVE DIRECTOR, IRAQ AND AFGHANISTAN VETERANS OF AMERICA; 
  AND COLONEL ROBERT F. NORTON, USA (RET.), DEPUTY DIRECTOR, 
 GOVERNMENT RELATIONS, MILITARY OFFICERS ASSOCIATION OF AMERICA

                 STATEMENT OF RONALD F. CHAMRIN

    Mr. Chamrin. Madam Chairwoman and Members of the 
Subcommittee, thank you for this opportunity to present the 
American Legion's view on pending legislation before the 
Subcommittee today.
    America needs a historic investment in the educational 
future of this Nation's veterans.
    When the American Legion wrote the first draft of the 
``Servicemen's Readjustment Act 1944,'' it changed the course 
of American history. A generation of heroes was able to join 
the middle class, achieve homeownership, earn higher education, 
and live the American dream.
    More famously known as the GI Bill, it was hailed by many 
as the greatest piece of legislation ever. Sadly, as the 
generations passed and memories dimmed, the GI Bill benefits 
were so drastically reduced that many veterans either declined 
or denied even the opportunity to participate in the program.
    Few veterans today have the luxury of attending school 
without also holding a job and many colleges are completely out 
of reach simply due to financial barriers. The time to change 
history is once again upon us.
    No longer can we continue to call each piece of legislation 
in the 110th Congress a GI Bill. A true GI Bill encompasses 
such benefits as housing, employment, job counseling and 
training, healthcare, and education for veterans. These are the 
true tools for seamless transition from warrior back to 
citizen.
    A true GI Bill also accounts for the operational force of 
today's military. The DoD Manpower Data Center reports that 
since 2002 and as recent as February of 2008, the average 
cumulative length of activation for all Reserve forces in 
support of GWOT is 438 days. This accounts for 631,000 Reserve 
forces that are activated in support of the Global War on 
Terror.
    On H.R. 4883, the American Legion supports this 
legislation. This legislation would greatly assist those 
veterans that are deployed to a combat zone and have little 
time to successfully transition from active-duty military to 
the civilian sector. It is unfair to expect servicemembers to 
concentrate on fighting the battle overseas and then 
simultaneously attend to all their personal matters at home.
    Moreover, veterans have a positive track record of 
following through with payments. During the fourth quarter of 
2007, only 2.83 percent of homeowners using the VA's Loan 
Guaranty Program were seriously delinquent. This is much lower 
when compared to 6 percent of Federal Housing Administration 
(FHA) mortgages and a whopping 14.4 percent for the subprime 
mortgages.
    And I will discuss pending legislation to amend the VA Loan 
Guaranty Program. The American Legion supports elimination of 
the VA home loan funding fee and petition Congress to 
appropriate funding to sustain the VA Home Loan Program when 
the funding fee is eliminated.
    Currently only service-connected disabled veterans are 
exempt from the funding fee. The VA funding fee charged to 
veterans was enacted to defray the cost of the VA Guaranty Home 
Loan Program. Congress is not required to appropriate funding 
for this program. However, because veterans must now buy into 
the program, it no longer serves the intent of helping veterans 
afford a home.
    Approximately 80 percent of all VA Home Loan participants 
must pay the current funding fee. In some aspects, the funding 
fee makes the VA Home Loan Program less beneficial than the 
standard private loan. This has had a negative effect on many 
veterans who choose not to participate in this highly 
beneficial program and loan originations have been declining.
    A long overdue remedy to the refinancing laws is needed. In 
order to strengthen the Loan Guaranty Program, the law should 
be amended to remove the 10 percent equity requirement in order 
to refinance a home and to increase the refinancing limit a 
veteran can obtain to match the maximum loan guaranty amount.
    Specially adaptive housing is and will continue to be an 
important issue as severely wounded veterans heal and 
transition out of VA polytrauma facilities. For fiscal year 
2008, as of March 31st, 550 veterans have had grants approved 
and 1,500 veterans are in some stage of pursuit today.
    I just want to note that there are 7,200 veterans currently 
being tracked by the VA Loan Guaranty Service that are eligible 
for specially adaptive housing, but they are not taking 
advantage of it right now. These veterans could request 
adaptive housing at any time.
    Studies required every 6 years to update plans and 
specifications are not the proper solution. Rather, update the 
publication, have continuous oversight, and constant updates to 
veterans, Congress, and interested parties would better serve 
the veteran community.
    The 800 pound gorilla in the room is the housing crisis 
affecting veterans. The National Alliance to End Homelessness 
reports that 930,000 veterans pay more than 50 percent of their 
income toward housing, be it renting or owning a home.
    When testifying before your Subcommittee, economists, 
lenders, Realtors, and other experts painted a bleak outlook 
for the future in terms of veterans defaulting and foreclosing 
on their homes.
    If a veteran loses his or her job, has a financial 
emergency, or some other factor leading to delinquency, nearly 
one million veterans could be close to losing their homes.
    In conclusion, the American Legion appreciates the 
opportunity to present its views on programs that will affect 
veterans, servicemembers, and their families. An anonymous 
author once wrote, a veteran is someone who at one point in 
their life wrote a blank check made payable to the United 
States of America for the amount up to and including my life. 
That is honor.
    And there are way too many people in this country who no 
longer understand it. We believe that the Subcommittee does 
understand it and the American Legion thanks you.
    Madam Chairwoman and Members of the Subcommittee, this 
concludes my testimony. I would be happy to answer any 
questions you may have.
    [The prepared statement of Mr. Chamrin appears on p. 62.]
    Ms. Herseth Sandlin. Thank you.
    Mr. Brown, you are recognized for 5 minutes.

                   STATEMENT OF JUSTIN BROWN

    Mr. Brown. Thank you.
    Madam Chairwoman, Ranking Member Boozman, and Members of 
this Subcommittee, on behalf of the 2.3 million members of the 
Veterans of Foreign Wars of the United States and our 
auxiliaries, I would like to thank this Committee for the 
opportunity to testify.
    The issues under consideration today are of great 
importance to our members and the entire veteran population.
    In the history of our Nation, there have always been great 
men and women who put everything on the line for our country. 
Our Nation is full of these heroes who join together to create 
the world's strongest, most impressive, and smartest military.
    However, our military is not maintaining the quality of the 
force. According to a recent U.S. Government Accountability 
Office (GAO) report, the percentage of high quality recruits in 
the Army fell to 49 percent in 2006. This is the lowest level 
in more than 20 years and the lowest among the services. Also, 
the total number of medical and criminal waivers has risen 
steadily from 11\1/2\ percent of recruits in 2004 to 16.9 
percent of recruits in 2006.
    From 1973 to 1985, similar recruitment standards produced 
veterans that were three to four times more likely to be 
homeless than their nonveteran counterparts even without most 
of this group suffering the stresses and strains of combat or 
the mental and physical problems that follow.
    The risks and costs of joining the Army are becoming more 
and more apparent to young men and women who are eligible for 
recruitment. To join today's military is to risk death, it is 
to risk mental and physical impairment, it is to risk one's 
marriage, it can risk the custody of one's children, it can 
risk employment, and it can risk economic success.
    Meanwhile, the military's strongest recruitment tool of a 
college education is fast eroding as potential recruits learn 
of the shortfalls and failures of the current benefits provided 
to those who risk everything for our Nation.
    There are two strategies to solve the issue and 
respectively there are two outcomes. The Army and Marine Corps 
have not met their goal of high quality recruits since 2003. 
DoD's response has been to lower recruitment standards, thereby 
enlarging the pool of eligible recruits to meet their 
recruitment needs.
    The consequence of such actions is creating a situation in 
which the military becomes the employer of last resort. This 
will likely lead us to larger expenditures in the long term 
than investing in a robust, attractive, proven recruitment 
tool, a GI Bill that pays for the full cost of education, 
tuition, room and board, fees, and a cost-of-living stipend.
    Increased funding although necessary is not the only issue 
with our current GI Bill. Our veterans in the military need a 
GI Bill that incentivizes going to the best college possible, 
not the cheapest. Also, a new GI Bill ought to equitably 
distribute benefits to veterans. A single payment system 
becomes inhibitive to many and too generous for others.
    Our military's welfare ought to be considered a cost of 
war. We can pay it now as an investment or pay it later in much 
great cost to our government and our veterans. If we decide to 
defer this cost, it will be for increased appropriations for 
permanent housing for homeless veterans, increased 
appropriations for the expansion of the Incarcerated Veterans 
Transition Program, and increased appropriations due to 
veterans' further reliance on the VA medical and benefit 
systems.
    The VFW asks that America does its best to ensure our 
veterans a normal life with the same opportunities as those who 
chose to go to a college or as those who chose to go into the 
workforce, vice serving their Nation. It is simple and readily 
apparent, that if we continue to fail to provide our young men 
and women a bridge from the all volunteer force back to a 
civilian lifestyle, fewer high quality young men and women will 
volunteer to serve their country.
    In conclusion, the VFW supports all of the bills before the 
Subcommittee today. However, we do not agree with the 
provisions within some of these bills and we do not favor some 
of these bills in comparison to others that are not being 
considered in today's hearing.
    Madam Chairwoman and Members of this Subcommittee, this 
concludes my testimony, and I will be pleased to respond to any 
questions you or the Members of this Subcommittee may have. 
Thank you.
    [The prepared statement of Mr. Brown appears on p. 66.]
    Ms. Herseth Sandlin. Thank you, Mr. Brown.
    There are about 13 minutes remaining in this vote. There 
are about four votes, approximately 45 minutes.
    Mr. Daley, I am going to recognize you for 5 minutes and 
then I am going to recognize Counsel for the Ranking Member to 
summarize or read statements that he had intended to put forth 
on his bills before the Subcommittee and any others. I will 
have to leave and then resume with Mr. Campbell once we return.
    So, Mr. Daley, you are recognized.

                   STATEMENT OF RICHARD DALEY

    Mr. Daley. Chairwoman Herseth Sandlin, Ranking Member 
Boozman, Members of the Subcommittee, the Paralyzed Veterans of 
America would like to thank you today for the opportunity to 
testify on various pending legislation.
    We appreciate the Subcommittee's focus on such a broad 
range of issues. In the interest of time, I will limit my 
comments to just a few of the bills while the rest of them are 
submitted for the record.
    On H.R. 5664, specially adaptive housing, while PVA 
supports the intent of H.R. 5664, we have serious concerns with 
the language of the bill as it is written. The legislation 
specifically calls for the VA to regularly update specially 
adaptive housing plans and specifications furnished to the 
veterans by the VA.
    The VA is now responsible for providing plans and 
specifications to the veterans who are eligible for the 
specially adaptive grant. It provides assistance to the 
veterans through the application of ideas presented in the 
Handbook for Design, Specially Adaptive Housing VA Pamphlet 
2613.
    We believe that the language of the bill should read the 
Secretary shall update the Handbook for Design at least once 
every 6 years. The update should include considerations for new 
and unique disabilities to include vision impairments, 
impairment specifically by limb amputation, or some of the 
serious burn situations that we are having now from the War on 
Terror.
    PVA was fortunate to participate in the hearings held last 
year regarding the application of specially adaptive housing 
grant. We are well aware of the unique challenges faced by many 
of the veterans with complex disabilities incurred while 
serving in the War on Terror.
    However, it is important to understand that the basic 
accessibility concepts in the VA Pamphlet 2613 are not outdated 
as implied during that hearing.
    If there is a fault, it is that it seems to be basically 
centered around wheelchair accessibility, but wheelchair 
accessibility is basically the pamphlet centers around a lot of 
universal design concepts that are good for a lot of 
disabilities.
    Furthermore, the accessibility recommended in the suggested 
VA Pamphlet 2613 actually exceeds ``Americans With Disabilities 
Act'' recommendations as well as fair housing accessibility 
guidelines. With that thought in mind, PVA supports the 
legislation if the language can be changed to reflect the 
intent of the bill.
    The bill, H.R. 3889, the study of the vocational 
rehabilitation, PVA fully supports H.R. 3889, a bill that would 
require the VA to conduct a longitudinal study of veterans who 
enter the vocational rehabilitation program beginning with 
fiscal year 2008.
    We believe that the Vocational Rehabilitation and 
Employment (VR&E) is critical to the reintegration of severely 
disabled veterans into civilian life. The primary mission of 
VR&E program is to provide veterans with service-connected 
disabilities all the necessary services and assistance to 
achieve maximum independence and daily living and to maximize 
the extent feasible to become employable and to obtain and 
maintain suitable employment.
    In fact, PVA places such an importance on vocational 
rehabilitation that last year, we designed our own vocational 
rehabilitation program to further support what the VA is 
currently doing.
    The concept of the program is to provide vocational 
rehabilitation services under a PVA corporate partnership that 
augments many of the existing vocational programs. PVA believes 
that by introducing the veteran with a spinal cord injured 
disability to vocational rehabilitation counseling soon in 
their rehabilitation process is beneficial for the veteran.
    The partnership that the VA and Healthnet Federal Services 
has, PVA opened its first vocational rehabilitation office in 
the Spinal Cord Center of the VA Medical Center in Richmond, 
Virginia, in July of 2007. The workload in our pilot office has 
grown rapidly and our PVA vocational rehabilitation counselor 
in Richmond is currently carrying a caseload of more than 107 
veterans. Encouraged by our rapidly growing caseload in 
Richmond, the establishment of productive relationships with 
the VA's Veterans Health Administration and Vocational 
Rehabilitation and Employment, PVA recently opened a second 
vocational rehabilitation office in Minneapolis under the 
corporate sponsorship of TriWest.
    Ms. Herseth Sandlin. Mr. Daley, I am sorry. I am going to 
have to cut you off because I still want to get Mr. Brinck 
recognized before I have to get over to the Capitol. Okay?
    Mr. Daley. Okay.
    Ms. Herseth Sandlin. And then----
    Mr. Daley. Thank you for this opportunity.
    [The prepared statement of Mr. Daley appears on p. 69.]
    Ms. Herseth Sandlin. You bet. Thank you, Mr. Daley.
    Mr. Brinck.
    Mr. Brinck. Thank you, Madam Chairwoman for extending the 
courtesy to me. I will just very quickly summarize Mr. 
Boozman's two bills that you have been so good to bring before 
the Committee.
    H.R. 3681, the ``Veterans Benefits Awareness Act of 2007,'' 
will authorize VA to use national electronic media to advertise 
veterans' benefits, employment at the VA, whatever they would 
deem appropriate.
    I know when we were researching the background on this 
bill, there seemed to be difference of opinion among the VA 
staff as to whether they were currently authorized under law to 
spend appropriated funds in that manner. This would make it 
clear that the Congress' intent is to modernize the way VA does 
this outreach.
    The second bill, H.R. 3889, would require VA to conduct a 
20-year longitudinal study for those participating in 
vocational rehabilitation. Unfortunately, the data that the 
Department has on the outcomes of vocational rehabilitation and 
you could probably also say the other business lines within VBA 
is relatively sparse. And I would note that the Department's 
testimony, while it opposes the bill, has some, I think, good 
technical corrections that will improve the bill and we would 
certainly like to consider those as we move forward.
    And, finally, I would like to read Mr. Boozman's statement 
in support of H.R. 5684, your GI Bill. It says, ``as an 
original cosponsor of your GI Bill, H.R. 5684, I believe that 
unlike some other of the nearly 40 veterans' education bills 
that have been introduced, H.R. 5684 is an approach that is 
manageable and affordable. Veterans will get between 17,000 and 
18,000 per school year, not counting other Federal aid, and VA 
will not be required to retool its system to pay the 
benefits.''
    ``I am very pleased that we will be taking action on 
improving education benefits for our veterans and I look 
forward to passing the bill next week.''
    Thank you very much, Madam Chairwoman.
    Ms. Herseth Sandlin. Thank you.
    I will return hopefully in not too much time.
    Thank you for your patience and we will resume with Mr. 
Campbell. Thanks.
    [Recess.]
    Ms. Herseth Sandlin. Okay. Thank you for waiting. Sorry it 
took longer than we anticipated.
    Mr. Campbell, you are now recognized for 5 minutes.

                 STATEMENT OF PATRICK CAMPBELL

    Mr. Campbell. It is kind of like icing the kicker. But, no. 
It is very good to be back.
    Madam Chairman, Members of the Subcommittee, thank you for 
this opportunity to testify. It is very good to be here and not 
have to leave to go to class or go study for the Bar. It truly 
is wonderful.
    We want to start off by saying that IAVA believes that H.R. 
5684, the ``Veterans Education Improvement Act,'' with its 
substantial increases in the level of education benefits and 
innovative modifications to Chapter 30, will help veterans 
across the country to see a considerable improvement in their 
education benefits.
    We thank the Chairwoman and this Committee for their hard 
work in creating this bill. And we look forward to working with 
you to make sure that this bill is the best bill it can be.
    With that, as we have 13 bills, we are going to try to get 
to, what recommendations we feel would be good additions to 
this bill.
    IAVA does have some concerns that this bill does not 
address key structural flaws with the current benefit system. 
First, flat rate education benefits creates an incentive for 
veterans to go to the cheapest school and does not reward 
veterans for challenging themselves.
    The genius behind the original 1944 GI Bill was that it 
challenged veterans to be all they could be by rewarding those 
who challenged themselves and attended better and more 
expensive schools.
    However, under this proposal, a veteran attending a 
community college in rural America will be pocketing almost 
$7,000 while other veterans will still need to take out loans 
or to work to see their education paid for.
    If you look at my testimony on page 2, you will see how 
this current proposed benefit in this program is broken out 
between 4 different schools, Southeast Technical in your State, 
Madam Chairwoman; the University of Arkansas; my school, 
California Berkeley; and Notre Dame, which two of the 
distinguished Members went to.
    Now, I am the first to admit when I was wrong. When I 
originally read this bill, I thought the $500 benefit, the 
monthly stipend was going to be starting right away. Because it 
is not starting for 2 years, you actually need to subtract 
$4,500 from the amount that I have given. So let me make a few 
little adjustments here.
    If you attend Southeast Technical under the current bill 
for the next 2 years, you will only be getting $2,350 more than 
you would need to go to Southeast Technical. If you were to go 
to University of Arkansas, this bill would leave $4,108 to be 
able to afford to go to the University of Arkansas. If you were 
to go to University of California, it would be $12,200, and 
Notre Dame, $35,600.
    Now, IAVA would like to see that the $500 be implemented 
right away and just included in the original benefit. There is 
no reason to make it a monthly stipend, just make it part of 
the initial increase.
    If you still want to wait 2 years, we encourage you to not 
make it a monthly stipend, but increase the benefit in 2 years 
because, otherwise, you are going to get in a situation where 
Reservists are not going to be able to get this benefit. I am 
worried that they are not going to be able to get this benefit 
because the way it is structured right now, it says that those 
people taking ``under this chapter'' and because Reservists 
take under Chapter 1607, a different chapter, it would exclude 
them from this bill.
    Also, for many veterans, as I just laid out, attending 
schools in high cost urban areas, this benefit will not cover 
the full cost of an education. It will not cover the cost at 
any of the University of California campuses, nor 14 of the 
California State Universities.
    IAVA believes that we need to make a commitment to our 
veterans that if a veteran wants to attend a public university 
anywhere in the country, it should be covered by the GI Bill.
    We, therefore, recommend modifying this bill to provide an 
incentive for veterans that challenge themselves by creating a 
tuition credit to a set amount, preferably the average tuition 
cost at a public university. This will ensure every public 
university is within reach for our service men and women and 
that the benefit will challenge those to be the best they can 
be.
    Lastly, IAVA is concerned that this bill does not have a 
mechanism for keeping the benefit up with the rising cost of 
education. By looking at the second chart on my testimony on 
page three, you will see that in 10 years, we will be in the 
same situation we are right now where 2-year universities will 
be the only type of benefit available to veterans who depend on 
their GI Bill benefits to pay for school.
    IAVA recommends linking yearly increases of education 
benefits to be based on the rising cost of education as tracked 
by the Department of Education and not on the consumer price 
index as is done now.
    We appreciate the work that you and the Committee have done 
on this bill. We look forward to working with you to ensure 
that we keep our promise to veterans that they can go to school 
both now and tomorrow.
    [The prepared statement of Mr. Campbell appears on p. 72.]
    Ms. Herseth Sandlin. Thank you, Mr. Campbell.
    Colonel Norton, you are now recognized for 5 minutes.

       STATEMENT OF COLONEL ROBERT F. NORTON, USA (RET.)

    Colonel Norton. Thank you, Madam Chairwoman. It is good to 
see you again and we thank you and the Members of the 
Subcommittee for this opportunity to appear before you today on 
behalf of the Military Officers Association of America.
    Listening to Patrick, I just want to say it is just an 
honor for me personally to work with this distinguished young 
American veteran and a number of the other folks at this table. 
Patrick has been a tireless advocate for the GI Bill 
representing the brave young men and women who have served in 
Iraq and Afghanistan. And we really appreciate the work that he 
and his colleagues in IAVA have done on the GI Bill.
    In a hearing before this Subcommittee, Madam Chairwoman, in 
January, I stated that MOAA's top two priorities for the GI 
Bill this year are, first, to raise rates to cover at least the 
average cost of a public college education and, second, to 
authorize Reservists to earn GI Bill benefits for multiple 
tours of active duty.
    We are very pleased to see that H.R. 5684, your bill, 
addresses the first priority and then some. The upgrades in 
H.R. 5684 are substantial. We thank you, Madam Chairwoman and 
Ranking Member Boozman, for the bill and we support it.
    Our second priority, however, permitting Reservists to 
accrue GI Bill benefits as they serve on active duty is not 
addressed in H.R. 5684. However, I was very encouraged to hear 
you and Chairman Filner and the full Committee Ranking Member, 
Mr. Buyer, talking about the need for what Mr. Buyer called an 
``equity fix'' in this regard and the fact that you share the 
sentiment that we need to do more for our Reserve warriors.
    And for that reason, MOAA strongly supports as a first step 
passage of Chairman Filner's H.R. 4889 to integrate the 
operational Reserve GI Bill into title 38.
    When General Petraeus completed his testimony before 
Congress last week, the President announced that the Army 
rotations to Iraq and Afghanistan will be reduced to 12 months 
going forward, that can only mean that there will be more 
deployments of Guard and Reserve units.
    If the Army is going to be able to sustain operations in 
both countries for the indefinite future, it can only do that 
through increased deployments and call-ups of our Guard and 
Reserve troops. They are bearing a bigger share of the 
operational load and that will only increase in the future. 
They should not be denied credit for all of their active-duty 
service. The principle on this issue is quite simple. Same 
service, same battlefield, same benefits.
    MOAA also strongly supports legislation to improve 
financial protections for our troops under the ``Servicemembers 
Civil Relief Act.'' H.R. 3298 would allow a servicemember who 
receives a permanent change of station or deployment order to 
terminate its cell phone or similar personal services contract 
without steep financial penalty.
    Chairman Filner's H.R. 4883 would protect a returning 
servicemember for 1 year from a mortgage foreclosure or 
property seizure action. MOAA urges the Subcommittee to endorse 
both measures.
    MOAA and our colleagues in the Military Coalition also 
strongly support H.R. 3393 to strengthen reemployment rights 
protections for our activated troops under the ``Uniform 
Services Employment and Reemployment Rights Act.''
    In addition, we recommend the Subcommittee adopt 
legislation to assign one Federal agency the responsibility to 
track and report both formal and informal claims under the 
USERRA as recommended by the GAO.
    I want to close, Madam Chairwoman, by offering a few 
remarks on what we see as an historic opportunity before this 
Subcommittee and the Congress.
    I met the author of the GI Bill named for him, the late 
G.V. Sonny Montgomery, on a number of occasions. Early this 
decade, Mr. Montgomery spoke at the first press conference of 
the Partnership for Veterans Education, giving his endorsement 
of a new total force GI Bill that would match benefits to the 
average cost of a public college education.
    Today there is a rising tide in both chambers to do the 
right thing on the GI Bill this year. And, of course, you and 
your fellow colleagues on the Subcommittee were talking about 
that at the beginning of this hearing.
    There are different approaches to that goal, but it is a 
goal that more and more lawmakers are recognizing and embracing 
in both the House and Senate. We at MOAA fervently hope that 
Members of this Subcommittee and the entire Congress will be 
able to look back with enormous pride years from now on their 
work today on the GI Bill.
    As with the great World War II GI Bill, the GI Bill that 
bears Mr. Montgomery's name and which helped the fragile all 
volunteer force experiment to succeed, we believe this is a 
rare moment to make a new GI Bill for a new century and a new 
force.
    A better GI Bill will be an engine for quality recruiting 
and a sound investment not only in and for our warriors but for 
the future of our great Nation.
    Thank you, Madam Chairwoman. I look forward to your 
questions.
    [The prepared statement of Colonel Norton appears on p. 
78.]
    Ms. Herseth Sandlin. Thank you. I appreciate the testimony 
of all of our witnesses.
    Let me start with posing a question to all of you, but most 
directly in response to verbal testimony you provide to the 
Subcommittee to Mr. Brown, Mr. Campbell, and Colonel Norton.
    Given that there is broad agreement as you heard at the 
outset of this Subcommittee hearing for a comprehensive 
approach, can you describe to me how you have been working with 
the House Armed Services Committee as it relates to addressing 
the provisions for Selected Reserve within their jurisdiction?
    Colonel Norton. Well, first, I would like to say, Madam 
Chairwoman, that while--the issue of jurisdiction is a real 
one, inside baseball, if you will, and the issue of mandatory 
spending is a real one, the fact of the matter is that soldiers 
on the battlefield serve together. They deploy together. They 
go into harm's way together. And we believe there is a way to 
overcome the jurisdictional, the territorial turf battles 
involving this issue.
    And I agree with you and Ranking Member, Mr. Buyer, that I 
think Representative Snyder is a key guy, a key Member to move 
this issue. And I am also encouraged by the fact that a senior 
Defense Department official said before your Subcommittee in 
January that he sees no objection from the Department in moving 
the Reserve GI Bill, the operational GI Bill under Chapter 
1607, title 10, over here to title 38. And that is where I 
would start on any discussion on this.
    Ms. Herseth Sandlin. Okay. Before other responses, I agree 
that we should not allow jurisdictional issues to result in a 
lack of focus of those of us on Committees, but perhaps do not 
have direct jurisdiction over these issues to make noise and 
advance the effort.
    However, we undertook that last year. We undertook the 
jurisdictional change last year working with all of you and we 
did not get it done. Now, we made some steps forward to, 
perhaps, that way and I agree that Dr. Snyder is a key Member 
on this Committee, on the Armed Services Committee, in doing 
so.
    We do not want to limit our options in making improvements. 
I would hope that you would all keep us apprised as to your 
work with other key Members both on the House Armed Services 
and the Senate Armed Services Committee as it relates to 
finally enacting a jurisdictional change that will ease the way 
of addressing the equity issues for the National Guard and 
Reserve.
    That is why I posed the question, because we, on this 
Committee, are always assisted enormously by your efforts, when 
we know that you working alongside with us are making inroads 
with Committees that have the jurisdiction as of today versus 
the jurisdiction that we wish we had today.
    Mr. Campbell or Mr. Brown, do you care to also address this 
question?
    Mr. Campbell. We have been working with Members of the 
House Armed Services Committee, but not with the staff. I know 
I have talked to your staff about this before. We have been 
dealing directly with Members, talking about the need for 
having this fix. We have not approached the staff directly.
    Mr. Brown. Madam Chairwoman, I concur with Patrick's 
comments. We have been actively engaging the individual Members 
in regards to increasing the GI Bill and especially in regards 
to the Reserve and Guard issues, but we have not actively 
talked about jurisdictional issues.
    Ms. Herseth Sandlin. Let me just say before moving on to 
other questions, some of what we have been working on outside 
of the formal Committee hearing process is also inside baseball 
in keeping all of our strategic options open in getting this 
objective achieved.
    While I understand the concern that the bill under 
consideration today that Mr. Boozman and I introduced does not 
include some of the provisions that you would ultimately like 
to see enacted, it does not include provisions I would 
ultimately like to see enacted.
    Mr. Boozman and I, as you know, have been pretty loud 
advocates for addressing the equity issue and working with our 
colleagues both here in the House and in the Senate.
    However, I think that one could make the argument that if 
we can get momentum behind this bill, that will improve our 
position to make the case that we also have to address the 
equity issue for Guard and Reserves if we move this bill, 
because then you have a greater gap if you do not do so.
    I just want to lay that out so you understand my thinking 
to try to keep all options on the table as we continue these 
rather onerous negotiations with a lot of different players not 
only in our chamber but over in the Senate.
    Mr. Campbell, in your testimony, I just want to make sure 
that I am clear so that we can get on the same page with regard 
to facts and we know what sources everyone is using.
    You state that the average cost of a public school 
education is $17,336 a year. We contacted the U.S. Department 
of Education who informed us that for the 2007-2008 school 
years, tuition and fees were $6,185, room and board, $7,404 for 
a total of $13,589. That information comes from the College 
Board's annually updated publication of trends and college 
pricing.
    Mr. Campbell. I used the same one, but on the next page 
where it talks about, the same exact document that you are 
using, there is actually miscellaneous expenses, that we need 
to be talking about when discussing the total cost of 
education, not just tuition, room and board. The next page says 
that the total cost is 17,336 per year for a public school for 
next year.
    So one of the things while we were going through this, I 
had my staff looking at tuition, room and board, but then you 
also have miscellaneous expenses.
    And so what I normally like to do when I reference the 
total cost of education, I look at what people can apply for in 
terms of financial aid because the Department of Education 
authorizes a student up to a certain amount. This expected 
number is what would be required to actually go to school and 
make that your full-time job.
    And so that is what that number is. And I can get you the 
reference, but it is the same exact document that you are 
talking about.
    Ms. Herseth Sandlin. Okay. I would appreciate if you could 
get us that information. That assumes that the student is not 
doing any part-time work, no work study, et cetera, right?
    Mr. Campbell. Exactly. Our premise is that school should be 
their full-time job.
    [The information was provided by Mr. Campbell in the post-
hearing questions and responses for the record, which appear on 
p. 72.]
    Ms. Herseth Sandlin. Let me explore a little with you on 
this issue of the structural flaw that you think that there is 
a possibility that veterans will choose the cheapest 
alternative, you cited Southeast Tech and you cited University 
of Arkansas and Notre Dame and University of California.
    I am interested in exploring this further with you and I am 
interested in what your fellow panelists would think about 
this. But, part of what we have tried to do on the Subcommittee 
as well is to make sure that veterans have a lot of flexibility 
in utilizing their GI Bill benefits.
    While I am certain that there might be a subset of veterans 
that might make those types of economic decisions and not 
challenge themselves as much as we may think they have the 
potential to do, I also know that a number of students who go 
to Southeast Technical Institute choose Southeast Technical 
Institute because of their areas of interest and wanting to be 
trained for a specific vocation, a specific growing industry, 
that they do not necessarily think a 4-year college degree is 
better suited to them.
    How do we grapple with that issue?
    Mr. Campbell. I definitely agree that you need to compare 
apples to apples, and 4-year universities like Berkeley, 
University of Arkansas are not for everyone.
    If you look at my testimony, in 2000, RAND did a study and 
came out with the fact that 90 percent of veterans go to 2-year 
colleges while 38 percent of all students usually attend 2-year 
colleges.
    So what we are talking about is most people end up going to 
2-year colleges for their first 2 years and then try to 
transfer. Now, that does not mean currently 90 percent of 
veterans are going to 2-year colleges.
    In 2000, of the veterans going to school, 90 percent of 
them went to 2-year colleges at some point in their college 
career. So this is twice as much as the average student.
    So structurally there is a problem where we incentivize, 
going to the cheapest school. I mean, when you have a choice 
between going to a school where you can fully afford it and not 
have to work and you are going to be able to keep some money 
versus really challenging yourself, by going out on the limb, 
because for a lot of these guys, I mean--let us talk about my 
unit.
    Half my guys that I went overseas with had GEDs. When they 
come home and they wanted to go to Louisiana State University, 
they could not do it because they could not handle the academic 
rigor while having two jobs at the same time. If they are going 
to go to a harder school, school needed to be their full-time 
job versus if they go to ULL, which is the University of 
Louisiana Lafayette, the curriculum is a lot easier. They could 
just go and they did not have to try at all.
    And the reason why I know this is because when I contacted 
the VA about, what are the top 25 schools that, GI Bill users 
are going to, University of Phoenix tops the list. Eight of the 
top ten schools are, some form of correspondence courses.
    So, I understand that for some people 4-year universities 
are not the way to go. That is why you create an incentive, so 
people can choose. You want that flexibility.
    That is also why IAVA is recommending that you have a 
tuition cap of some sort that flexes, that says we will give up 
to, we suggest at least $6,000. I would say 80 percent of the 
people would never get anywhere near that $6,000.
    But for those people who are making decisions, can I go to 
a tougher school? Can I go to a tougher school versus can I go 
to a tougher school and work a job? Another job or two jobs 
just to afford to go there, this tuition will challenge them 
and give them the way to make going to school their full-time 
job.
    Mr. Chamrin. Madam Chair, could I comment on that?
    Ms. Herseth Sandlin. Please. Then I want to recognize 
Counsel for the Ranking Member for follow-up questions he may 
have.
    Mr. Chamrin. The American Legion views all veterans as 
equal. So regardless of what they did when they did it, a 
veteran is a veteran. They should have equal status.
    With a flat rate, what that will do is inadvertently have 
some veterans who served side by side be able to afford, say, a 
college in Maryland for $10,000 a year. But if they want to go 
to another private school, say Duke University, who is another 
ACC school, they will receive that flat rate, but they will not 
be able to pay for the whole thing and they will have to take 
out loans.
    They can serve side by side, but that flat rate does not 
have the equity. So some sort of fix would be probably 
advantageous to the veteran so there is no, how would I say, 
people are not jealous of another person for going to a school 
when they cannot.
    Ms. Herseth Sandlin. Because of their personal finances?
    Mr. Chamrin. Let us say someone gets into Duke University. 
It is an ACC school, costs about $30,000 a year.
    Ms. Herseth Sandlin. Right.
    Mr. Chamrin. I believe that the H.R. 5684 pays what, 
$17,000 approximately a year? So they are short $13,000. If a 
veteran who serves side-by-side decides to go to the University 
of Maryland, it costs about ten to eleven thousand dollars a 
year. They will be able to pay for that school and get 
additional money.
    So now you are having two different tiers of veterans going 
to college, but they are receiving two different--one will be 
in debt and then one will receive an overpayment, yet they 
served the same exact timeframe while in service.
    Ms. Herseth Sandlin. But I think inherent in your point 
there is assuming that one of the veterans has an economic 
background either before going into the service or while in 
service or other members of his or her family that have the 
wherewithal to make up the difference in tuition.
    Mr. Chamrin. If a veteran is able to go to Duke University, 
able to go to Wake Forest, they should be able to go and not 
have to take out a full $17,000 loan to cover the difference 
that the GI Bill will not pay for regardless of where they come 
from, their economic status.
    Ms. Herseth Sandlin. Mr. Chamrin--you are going further 
than I think Mr. Campbell was going in that you think it should 
be the full cost of tuition of the veteran's choice.
    Mr. Chamrin. Right. And similar to the World War II GI Bill 
for a veteran to go to Harvard, pay for Harvard. If a veteran 
wants to go to South Dakota, pay for South Dakota.
    Ms. Herseth Sandlin. I understand what you are saying 
there, although in my opening statement, I looked at the 2007--
I cited a recent report that compared the dollar amount in 2007 
dollars and what the original GI Bill was.
    Now, I know we want to do some things on this Committee 
that are not directly in our jurisdiction, but we also have the 
issue of the rising cost of tuition at private universities as 
well as public colleges and universities, and we are trying to 
grapple with that issue too.
    I hear what you are saying, and we have seen even a 
modification of Senator Webb's bill as it relates to the 
average cost by State. My concern with that is then you are 
going to have the possibility of veterans maybe going to 
California schools instead of to South Dakota schools based on 
the overall amount of what benefit they can reach.
    So, there are unintended consequences with all of this, and 
I appreciate everyone's perspective as to how our bill is 
constructed, changes you would like to make versus the standard 
of what you are describing. Do all the panelists still advocate 
that as a top priority, that we cover the cost of full tuition 
of the college or university of the veteran's choosing?
    Mr. Brown. The Veterans of Foreign Wars does advocate for 
that. We are actively engaged in trying to get a GI Bill that 
is going to pay for the full cost of education at any 
university.
    Ms. Herseth Sandlin. But that does not mean you are opposed 
to bills that have been introduced in the House or the Senate 
that fall short of that?
    Mr. Brown. No. We are not. Correct.
    Ms. Herseth Sandlin. I would now like to recognize----
    Colonel Norton. Madam Chairwoman, if I could just add our 
position, is that we support increasing the benefit to cover at 
least the national average cost. And with the Partnership for 
Veterans Education over the last 7 years and the Partnership 
includes all the major education associations, the idea of 
benchmarking the benefit so that it keeps pace year after year 
after year with the cost of education.
    That way, in a sense, you kind of overcome the debates 
because you have a single standard and you are able to match 
that standard year after year, as you indicated, as measured by 
the Department of Education's data.
    I think that would be a great way, for example, for 
recruiters to basically market, if you will, the GI Bill, 
because you have a very clear idea of what is out there, what 
you get, and what you receive when you complete your service.
    Ms. Herseth Sandlin. Very good point. While the bill that 
Mr. Boozman and I introduced does not necessarily have that 
inflation adjustment, some of the figures that you cite in some 
of the testimony that was submitted assumes there would be no 
Congressional intervention to make up for that in better budget 
times. We certainly appreciate the point you are making, 
especially as it relates to giving young men and women who may 
be considering entering the service, to give those recruiters 
some more concrete information, if it was in law, that it is 
always going to keep pace rather than wondering at what point 
in ad hoc fashion Congress might intervene.
    Mr. Brinck.
    Mr. Brinck. Thank you, Madam Chairwoman. I appreciate the 
courtesy you are extending to me.
    Just a comment before I ask a couple of questions. I think 
it is a basic fallacy to equate the quality of an education 
with the cost of an education. Certainly the elite universities 
in this country offer first-rate education.
    But there are certainly lots of State-supported 
institutions, you know, you could take any of the major 
universities, the University of Michigan, the Cal system, are 
all recognized as wonderful institutions that provide a first-
rate education.
    So I think making an argument based on the cost of an 
education is just inappropriate.
    Now, do each of your organizations support H.R. 5684? Mr. 
Chamrin.
    Mr. Chamrin. At this time, we have not taken a position. We 
certainly do not oppose. And there are actually a lot of 
provisions that we like in the bill. But at this very moment in 
time, we have no position on this bill.
    Mr. Brown. At this time, the VFW does support H.R. 5684. 
However, it is not our favorite bill in regards to education. 
We believe that it needs to be based on a system that is 
relevant to the entirety of the country and the different 
geographic regions and the different costs of education.
    Mr. Daley. Paralyzed Veterans of America, we would support 
some of the things in H.R. 5684. But the reduced fee of $50 a 
month for the E-1 or E-2 to put in, that is still a lot of 
money. And there was not a cost for the World War II veteran to 
go or the Vietnam era veteran to go. They did not have to put 
in money to be part of the program. So that is one thing that 
we would oppose about the program. And, of course, we certainly 
want to see the Guard and Reserve included in any program, but 
that is another issue.
    Mr. Campbell. IAVA has not taken a position on this bill.
    Colonel Norton. As I testified, we support H.R. 5684.
    Mr. Brinck. Thank you.
    Changing the subject slightly, Colonel Norton, you 
mentioned the USERRA enforcement.
    Does each of your organizations have an opinion on what one 
Federal agency should be responsible for USERRA enforcement?
    Colonel Norton. No, Mr. Brinck, we have not looked into the 
technical side of that at this point in time.
    Mr. Campbell. If I had to speak on behalf of our 
organization, I would say we prefer the Office of Special 
Counsel, but that is just me shooting off the hip.
    Mr. Daley. Counsel, we do not have a position on that, but 
possibly the Department of Justice could take it over. That is 
some of the talk among some of the veterans groups. But it 
certainly needs more enforcement than it has now.
    Mr. Brown. The VFW does not have a position on this.
    Mr. Chamrin. Like everyone else, we do not have a position 
on this.
    Mr. Brinck. Okay. If there was a bill floating around out 
there that the Department of Veterans Affairs said would 
essentially cause VA to administer, have to administer the bill 
for the benefit program in a manner that would cause a 
significant increase in the backlog of claims processing for 
education benefits, would you support that bill?
    Colonel Norton. Put in those terms, no. But I think there 
are fixes that can be made in terms of administrative software 
support, et cetera. I mean, those systems, current systems, are 
30 years old in the VA. So they have to be modernized in any 
case.
    Mr. Brinck. But if such a bill passed today and it takes 
some amount of time to put new systems in place to replace the 
old antiquated systems, and you are exactly right, by the way, 
would you still support such a bill?
    Mr. Chamrin. The American Legion would. We would support 
the bill. If it passes tomorrow and it takes a year to get the 
benefit online, it is going to take a year from 6 months from 
now. It is going to take a year from a year from now. The more 
we wait, the longer that these veterans are not able to afford 
the cost of college.
    Colonel Norton. Mr. Brinck, this was an issue, is an issue 
that was raised by Senator Akaka with respect to Senator Webb's 
S. 22. And Senator Akaka, however, has agreed to cosponsor the 
bill. And so the similar concerns that you are asking us about 
and raising apparently have been addressed to the Chairman of 
the Senate Veterans' Affairs Committee's satisfaction. So we 
think other approaches should be looked at as well.
    Mr. Brinck. Thank you, Madam Chairwoman.
    Ms. Herseth Sandlin. Let me pose a question to all of you 
about Congressman Murphy's bill on the service providers. In 
seeking to protect servicemembers from creditors and increased 
interest rates for credit cards and some of the issues that 
have arisen for servicemembers with cell phone contracts, do 
you think that the proposed changes in H.R. 3298 could 
influence providers in the future to adopt stricter policies 
for new applicants?
    Mr. Campbell. I have been waiting for someone to ask me 
this question. And, I mean, I----
    Ms. Herseth Sandlin. Thanks for the thumbs up.
    Mr. Campbell. I appreciate it. I appreciate it.
    I spent my first day back from Iraq in a Cingular Wireless 
store for 5\1/2\ hours suffering probably my worst fit of Post 
Traumatic Stress Disorder that I ever had, screaming at people 
because they would not give me a phone. And I had paid the 
entire 14 months I was on deployment, about $15 a month, so 
that I could keep my service, on the premise that when I got 
home, I would get, to be able to turn on my service.
    And, it is funny because I had to actually leave Cingular 
Wireless, go and sign up with Verizon. That was the only way 
for me to get a phone and to get my service turned on that day.
    To put in context, we landed 2 days before Hurricane Rita 
was about to hit. I was with the Louisiana National Guard. So 
getting a phone was not just about me being about to talk to my 
family. It was about the fact that we had to evacuate in a day 
and a half and my family did not know if I was going to be 
okay.
    And so, what I could not understand is while I was fighting 
with them, they kept coming up with these rules that my father 
was originally on the account and because the account was made 
on my father's account and not mine, I was, therefore, denied 
any protections under the ``Servicemembers Civil Relief Act,'' 
so that even if I had wanted to cancel the contract right 
there, they said, oh, you do not even have that right. And I 
replied I have been a customer with you guys for 3\1/2\ years. 
I have been paying just so I could keep my phone and now you 
are telling me no.
    It took 7 months for me to get this resolved, and a 
complaint to the Federal Communication Commission. And the 
taste that was left in my mouth was that we do not have 
adequate protection for servicemembers dealing with service 
contracts. A veteran needs to be able to know that they can go 
away, keep their phone number, and keep their service and not 
have to pay a fee because if you cancel the contract, you are 
fine. But if you try to keep the contract, you are at their 
will. There are no protections whatsoever at that point for 
you. You pay whatever fee they want. And after 6 months, I 
started getting bills for the full rate. It was insanity. Like 
this was a huge--I am sorry. I get a little passionate about 
this.
    Ms. Herseth Sandlin. Would H.R. 3298 as drafted, as 
written, would it have solved the particular problems you 
experienced?
    Mr. Campbell. Yes. And specifically it is modeled after the 
``Illinois Cell Phone for Servicemembers Act'' that was passed 
a couple years ago. That has been quite successful in Illinois. 
Basically it allows you to suspend service. And it gives you 
that right.
    Right now you do not have that right, so, therefore, the 
cell phone companies or the service providers can decide the 
circumstances in which that will happen. It also deals directly 
with making contracts on behalf of, not just making contracts 
by. That is a huge difference for a lot of people who are using 
their parents as a creditor in order to get onto the service 
contract in the first place.
    Ms. Herseth Sandlin. Does anyone else care to respond to 
the question about whether or not the providers would put 
stricter controls on new applicants? Mr. Campbell, the answer 
to the question is that, you are not worried based on what you 
see in the bill and maybe what Illinois' experience has been, 
that providers would then put stricter controls on even new 
applicants that are going in?
    Mr. Campbell. I mean, there are cell phone companies all 
over bases, all over the place. They know this is happening. 
And I am not worried. If anything, the rules that I had to 
follow while I was there could not get any stricter.
    Ms. Herseth Sandlin. Anyone else care to comment?
    [No response.]
    Ms. Herseth Sandlin. I apologize to our fourth panel. You 
have been very patient. I think this may be just one vote, but 
I will make sure that Mr. Lara here updates you so you can know 
how much time you may have to be doing other business either on 
cell phones or being away from the Committee hearing room for a 
time.
    I thank you for your patience. In light of that, we may 
have some additional follow-up questions that we will want to 
submit to you in writing. I appreciate your testimony, your 
service to the country, to our Nation's veterans, and your 
willingness to come together to address 13 different bills, not 
all of which address all the same topics, but we do want to 
move on a number of these bills. Your insights are important to 
us in a more formal setting in addition to all of the work that 
has been undertaken with you, with Committee staff on both 
sides of the aisle.
    I thank you for your testimony today. We will take a short 
recess and then we will come back and begin our fourth panel. 
Thank you.
    [Recess.]
    Ms. Herseth Sandlin. Sorry to keep you waiting, but we do 
want to make use of the 20 minutes or so that we might have 
before I head back for another vote to hear from our witnesses 
on the fourth panel today.
    Participating, we have the Honorable Charles Ciccolella, 
Assistant Secretary for Veterans' Employment and Training 
Service in the U.S. Department of Labor; Mr. Thomas L. Bush, 
Principal Director of Manpower and Personnel for the U.S. 
Department of Defense; Dr. Curtis Gilroy, Director of Accession 
Policy, Office of the Under Secretary of Defense for Personnel 
and Readiness, U.S. Department of Defense; and Mr. Keith 
Pedigo, Associate Deputy Under Secretary for Policy and Program 
management for the U.S. Department of Veterans Affairs; 
accompanied by Mr. John Brizzi, Staff Attorney of the Office of 
General Counsel for the U.S. Department of Veterans Affairs.
    Your written statements have been entered into the hearing 
record. I appreciate all of you being back to the Subcommittee 
to address the important bills that are being considered today.
    We will start with you, Secretary Ciccolella. You are 
recognized for 5 minutes.

   STATEMENTS OF CHARLES S. CICCOLELLA, ASSISTANT SECRETARY, 
 VETERANS' EMPLOYMENT AND TRAINING SERVICE, U.S. DEPARTMENT OF 
   LABOR; THOMAS L. BUSH, PRINCIPAL DIRECTOR OF MANPOWER AND 
  PERSONNEL, ACTING DEPUTY ASSISTANT SECRETARY OF DEFENSE FOR 
RESERVE AFFAIRS, U.S. DEPARTMENT OF DEFENSE; CURTIS L. GILROY, 
DIRECTOR FOR ACCESSION POLICY, OFFICE OF THE UNDER SECRETARY OF 
    DEFENSE FOR PERSONNEL AND READINESS, U.S. DEPARTMENT OF 
 DEFENSE; AND KEITH PEDIGO, ASSOCIATE DEPUTY UNDER SECRETARY, 
  POLICY AND PROGRAM MANAGEMENT, U.S. DEPARTMENT OF VETERANS 
AFFAIRS; ACCOMPANIED BY JOHN BRIZZI, STAFF ATTORNEY, OFFICE OF 
      GENERAL COUNSEL, U.S. DEPARTMENT OF VETERANS AFFAIRS

            STATEMENT OF HON. CHARLES S. CICCOLELLA

    Mr. Ciccolella. Thank you, Madam Chair. I am pleased to 
appear before you today to discuss 4 of the 13 bills that you 
are looking at today. I will just move very quickly through 
them.
    H.R. 3646 is a joint study on employment needs by the 
Department of Labor and Department of Veterans Affairs. The 
bill mandates a study to be conducted by both the agencies on 
the fields of employment for which the greatest need for 
employees exist in various geographic areas.
    The Department of Labor's Bureau of Labor Statistics 
develops a 10-year national level industry and employment 
projections and they prepare and they publish career 
information on those projections already. Projections are done 
on a biannual basis. The last projections were done in 2007 for 
the period 2006 through 2016.
    The national projections data that they produce are 
provided to the State workforce agencies and the States also 
collect labor market information themselves. They share it with 
the Department of Veterans Affairs, and in particular, the 
Department of Veterans Affairs Vocational Rehabilitation and 
Employment folks, to assure that disabled veterans are not 
placed in education and training programs for jobs that are 
unavailable in the local economy.
    We do not believe that the joint study that would be 
required by the bill would produce more or better data than the 
information that we already have. However, listening to the 
testimony by Congressman Stearns, it appears to me that what we 
have here is an accessibility and a presentation issue. And we 
would be very pleased to work with the Committee on how to work 
this out so we make this stuff absolutely available.
    H.R. 3393 is the improvement to ``Veterans Employments 
Rights Act.'' The bill would make a number of very, very 
significant changes to the enforcement and the remedies for 
USERRA, give the courts discretion to award $20,000 in 
liquidated damages, and authorize the court to award punitive 
damages that are essentially unlimited.
    States would also be required in USERRA cases to waive 
their sovereign immunity under the 11th amendment to the 
Constitution.
    We are concerned that we have not had a sufficient amount 
of time to study the impact that the changes to this law would 
have. And these are far-reaching changes. We believe that as a 
further issue, we need to discuss these changes with our 
enforcement partners.
    It is also not clear the impact that these changes would 
have on the hiring of veterans. I would be pleased to go into a 
little bit more detail during the question and answer period if 
you would like.
    H.R. 3798 is the reemployment rights following certain 
National Guard duty. Congressman Hayes presented this bill. We 
would support this proposal. We just need to understand from 
the Department of Defense under what circumstances the 
exemptions would take place because the bill does not make that 
entirely clear.
    But having said that, there are certain types of duty, 
airport security duty and patrol duty that absolutely make 
sense to be counted as exempted from the 5-year limit. So I 
think the thing here, and I think DoD would agree, is that the 
exclusions from the 5-year limit have to be well-defined in 
order to preserve the intent of USERRA which is to protect 
noncareer military service.
    H.R. 3467 is the ``Second Chance for America's Veterans 
Act'' and the bill would authorize VA to establish a workforce 
reentry program between 2008 and 2011 at something like $15 
million. It would provide a prisoner reentry program for 
veterans in 24 locations. Congressman Yarmuth presented that 
bill today.
    The Administration supports the intent of the bill. 
However, we think that most of the services, which are very 
similar to the recently concluded Incarcerated Veteran 
Transition Program, which is a very successful program, most of 
these services could be provided through the ``Second Chance 
Act'' that the President signed earlier last week.
    In fact, what we have done is we have been working closely 
with the Department of Labor unit that is actually responsible 
for the prisoner reentry initiative to incorporate veteran-
specific issues that we had in the Incarcerated Veteran 
Transition Program into the next round of the prisoner reentry 
initiative grants. And that round will be awarded effective 1 
July.
    There are some differences in what we did in the IVTP, the 
Incarcerated Veteran Transition demonstration, and the prisoner 
reentry initiative, but we think we can probably work those 
out.
    Madam Chair, that concludes my testimony. I have 1 second 
left, so I would be happy to answer any questions when that 
time comes.
    [The prepared statement of Hon. Ciccolella appears on p. 
82.]
    Ms. Herseth Sandlin. Thank you very much.
    Mr. Bush, you are now recognized for 5 minutes.

                  STATEMENT OF THOMAS L. BUSH

    Mr. Bush. Madam Chairwoman, thank you for the opportunity 
to share the views of the Department on bills that are being 
considered by this Committee.
    The success the Department is experiencing in recruiting 
and retaining Guard and Reserve members over the last 6\1/2\ 
years is due in large part to the support of Congress. You have 
recognized the expanded role that Reserve components are 
playing in national defense and have been very generous with 
the pay and additional benefits that are now available to 
members of the National Guard and Reserve and their families.
    Some of the bills being considered by the Subcommittee 
today would continue that support for National Guard and 
Reserve members and I will focus my remarks on those bills that 
directly affect the Guard and Reserve.
    H.R. 4889, the ``Guard and Reserves Are Fighting Too Act of 
2008,'' as currently drafted would reinstate the retention 
aspects of the Reserve Education Assistance Program, yet would 
recodify the program into title 38.
    As I have previously testified, the Department does not 
support placing what would again become a military force 
management program under the administration of the Department 
of Veterans Affairs. Therefore, the Department does not support 
H.R. 4889.
    Two bills would amend the ``Servicemembers Civil Relief 
Act,'' H.R. 3289 and H.R. 4883. Although the Department is 
preparing a formal views letter for the Committee on those 
bills, I can report that the Department generally supports both 
bills.
    In fact, H.R. 4883, which would extend the post-service 
limitation on the sale, foreclosure, and seizure of property 
from 90 days to 1 year, is a recommendation included in the 
final report from the Commission on the National Guard and 
Reserves and appears to have broad support within the 
Department.
    Regarding H.R. 3298, the ``21st Century Servicemembers 
Protection Act,'' the Department's views letter is likely to 
offer several recommendations regarding the right of 
servicemembers to bring action in their own name and to 
strengthen the protections proposed in the bill.
    Two bills would amend the ``Uniform Services Employment and 
Reemployment Rights Act.'' Although USERRA is under the purview 
of the Department of Labor, DoD offers the following comments.
    H.R. 3798 would provide a limited exclusion of the 5-year 
USERRA limit for National Guard members who perform certain 
federally-funded State duty. While we think it may be 
appropriate to provide such an exclusion, we need to work with 
our partners at the Department of Labor and this Committee to 
ensure any exclusion is well-defined and consistent with the 
purposes of other duty that is excluded from the 5-year USERRA 
limit.
    H.R. 3393, the ``Reservist Access to Justice Act of 2007,'' 
would allow courts to award punitive damages in cases of an 
employer who willfully fails to comply with USERRA. While this 
may be appropriate in some isolated cases, we are concerned 
with the chilling effect this may have on all employers.
    As I previously stated, Congress, and particularly this 
Committee, has been very supportive of the Guard and Reserve. I 
would like to thank you for your unwavering support of the 1.3 
million members of the National Guard and Reserve.
    This concludes my remarks, and I look forward to answering 
your questions.
    [The prepared statement of Mr. Bush and Mr. Gilroy appears 
on
p. 83.]
    Ms. Herseth Sandlin. Thank you, Mr. Bush.
    Mr. Gilroy, you are recognized.

              STATEMENT OF CURTIS L. GILROY, PH.D.

    Mr. Gilroy. Thank you, ma'am.
    Madam Chairwoman, Members of the Subcommittee, and staff, I 
want to thank you for the opportunity to appear before you 
again to discuss how we might best enhance the educational 
benefits of our servicemembers and our veterans.
    As before, I will limit my remarks to the effects of any 
proposed legislative initiatives to the active-duty force. 
Specifically, I will limit my remarks to H.R. 5684 that you, 
Madam Chair, and Ranking Member Boozman have sponsored.
    There are some very attractive features to this bill and 
there is much that the Department of Defense sees of value in 
it.
    I personally congratulate both of you and your staffs for 
carefully crafting a very unique piece of legislation. I have 
six points to make regarding that legislation.
    First, your bill increases the basic benefit from about 
$1,100 a month to $1,450 a month, which is the average cost of 
a public 4-year institution, and also the value of the so-
called ``tipping point'' about which we spoke in previous 
hearings. This is the point at which the benefit may begin to 
have a negative effect on retention. The Department supports 
this increase in the basic benefit.
    Your bill also adds a $500 a month stipend for living 
expenses for full-time students and something less for part-
time students. Although this is somewhat more generous than we 
would like, we do support some level of increase, and perhaps 
we can work with the Committee on what that number might be.
    Third, your bill permits members to use their GI Bill 
benefits to pay off their student loans. We like that.
    And veterans who apply for other financial aid would not be 
required to report the value or the moneys received from the 
Montgomery GI Bill benefits as income. We also like that.
    Fourth, your bill does not eliminate the $1,200 member 
contribution, but there really is not any need since it is not 
a deterrent to enrollment, as we have seen. Today, 97 percent 
of new recruits sign up for participation in the Montgomery GI 
Bill under the current situation. But what your bill does is 
allow them to pay it over a 2-year period. We could also 
support you on this.
    Sixth, your bill gives veterans more time to use their 
benefits. That is point number five. Fifteen years instead of 
10 years. We support you on that.
    Although less generous than the Senate Bill S. 22 and its 
House cousin, H.R. 5740, your bill addresses nearly all of the 
significant issues as we see them. It is much simpler and 
straightforward to implement since it is an amendment to the 
current Montgomery GI Bill in title 38. Compared to S. 22, it 
is far less costly and does not add to the bureaucracy, and it 
does not create an unnecessary strain on retention.
    Now, one feature of educational benefits that is not 
included in your bill that is a priority for this 
Administration is transferability of benefits for all 
servicemembers, to spouses, and children. Transferability, we 
feel, is important to a volunteer force where families also 
serve.
    As you know, half of our force is, in fact, married. The 
adage that we enlist soldiers, sailors, airmen, Marines, and 
Coast Guardsmen and, yet, we retain families is really true.
    In summary, H.R. 5684 has been thoughtfully prepared and we 
look forward to working with you on this piece of legislation.
    Thank you again for the opportunity to appear before you 
and for promulgating and continuing to protect educational 
benefits for our servicemembers and our veterans. And I would 
be prepared and happy to answer questions at the appropriate 
time. Thank you again.
    Ms. Herseth Sandlin. Thank you, Mr. Gilroy.
    Mr. Pedigo, you are now recognized for 5 minutes.

                   STATEMENT OF KEITH PEDIGO

    Mr. Pedigo. Thank you, Madam Chairwoman. I am pleased to be 
here today to discuss a number of bills that would affect 
several benefit programs administered by the Department of 
Veterans Affairs.
    With me today is Mr. John Brizzi, Staff Attorney from our 
Office of General Counsel.
    Madam Chairwoman, H.R. 5684, the ``Veterans Education 
Improvement Act of 2008,'' contains numerous amendments to 
title 38 of the U.S. Code that are intended to improve the 
basic educational assistance programs offered by VA. We 
estimate that enactment of this bill would result in direct 
cost to VA of $22.3 billion over 10 years. VA cannot support 
this legislation without identified offsets for these costs.
    H.R. 4889, the ``Guard and Reserves Are Fighting Too Act of 
2008,'' proposed to recodify the statutory provisions of 
Chapter 1607 of title 10 of the U.S.C. to a new Chapter 33 of 
title 38 of U.S.C. VA does not support this bill as it would 
inappropriately place the Reserve Force Management Program 
under VA rather than the Department of Defense where it 
currently resides.
    Finally, we cannot support this proposal without identified 
offsets as it would result in a $1.2 billion additional net 
direct benefit cost to VA over the next 10 years.
    H.R. 3467, the ``Second Chance for America's Veterans 
Act,'' would establish a grant program for referral and 
counseling services to assist at-risk veterans transitioning 
from institutional living into the workplace. While VA strongly 
supports efforts to assist these at-risk veterans, we note that 
most of the services proposed under this legislation could be 
provided through the ``Second Chance Act'' which the President 
signed into law last week.
    Madam Chairwoman, H.R. 3646 would direct the Secretaries of 
Veterans Affairs and Labor to conduct a joint study with annual 
updates on fields of employment for which the greatest need for 
employees exists in various geographic regions. The Department 
of Labor, in many States, currently conduct these types of 
studies. Consequently, we defer to the Department of Labor on 
this issue and cannot support this bill.
    H.R. 3889 would amend Chapter 31 of title 38 by adding a 
new section 3122 to require VA to conduct a 20-year 
longitudinal study of a statistically valid sample of the 
veterans who begin participating in a program of vocational 
rehabilitation during fiscal year 2008. Because VA is currently 
developing a proposal to conduct its own long-term study of 
issues affecting program outcomes, we do not support this bill 
as it would duplicate those efforts.
    H.R. 4539, the ``Department of Veterans Affairs Loan 
Guaranty Cost Reduction Act of 2007,'' would amend title 38 of 
the U.S. Code to make several key changes to the home loan 
benefit. While we do not object to certain provisions of the 
bill, we would not support its enactment in its present form. 
VA estimates that this bill would result in cost savings of 
$1.8 billion over 10 years.
    H.R. 4884, the ``Helping Our Veterans Keep Their Homes Act 
of 2008,'' contains a number of provisions similar to those of 
H.R. 4539. While we do not object to certain provisions of this 
bill, we would not support its enactment in its present form. 
The VA estimates that this bill would result in a cost savings 
of $8.1 million in fiscal year 2008, but would cost $1.93 
billion over 10 years.
    H.R. 5664 would amend title 38, section 2103 to require the 
Secretary to update VA's plans and specifications for suitable 
adapted housing at least once every 6 years. VA does not 
support enactment of this bill as section 2103 currently 
authorizes the Secretary to furnish model plans and 
specifications for suitable housing units for eligible 
veterans.
    VA does this by providing our Handbook for Design for 
Specially Adapted Housing to all veterans who are eligible for 
the specially adapted housing assistance. We do not believe 
legislation is required to ensure that this handbook is updated 
and, therefore, do not support this bill.
    Finally, H.R. 3681, the ``Veterans Benefits Awareness Act 
of 2007,'' would add a new section 532 to title 38 to authorize 
the Secretary of VA to purchase advertising in national media 
outlets for the purposes of promoting awareness of benefits 
under laws administered by VA. We do not believe enactment of 
this bill is needed as current law provides sufficient 
authority for the Secretary to purchase such advertising as 
appropriate. Therefore, we do not support enactment of the 
bill.
    Madam Chairwoman, this concludes my testimony. I would be 
pleased to respond to any questions that you may have.
    [The prepared statement of Mr. Pedigo appears on p. 86.]
    Ms. Herseth Sandlin. Thank you.
    Well, let me start with just an observation, Mr. 
Ciccolella. I think that in light of Mr. Stearns' testimony and 
what we heard from Mr. Daley with the PVA, you are saying is if 
indeed you can demonstrate to Mr. Stearns and to the 
Subcommittee that you have these statistics, this issue of 
availability and accessibility, then perhaps his bill can be 
modified to achieve that objective.
    We plan on working with Mr. Stearns and if you could assist 
us in that to address his first question, which I anticipate 
was show me the statistics, that they do exist, then it becomes 
the issue of making sure they are available to veterans that 
can calculate within their area of commuting what is available.
    Mr. Ciccolella. Absolutely. And if there is something that 
is missing, we will try to identify that and factor that in as 
well.
    Ms. Herseth Sandlin. Thank you.
    Mr. Bush, thank you for your testimony. I know in previous 
Subcommittee hearings, we have engaged in a bit of a back and 
forth on this jurisdictional issue. I know that on a hearing 
that we had on January 17th, you stated that if the 10-year 
post-service REAP benefit were included in the ``National 
Defense Authorization Act,'' that Chapter 1607 would, ``Look 
exactly like the Chapter 30 benefit. It no longer serves the 
DoD recruiting and retention purpose.''
    If that is the case, why would you continue to oppose? Why 
does the Administration continue to oppose moving Chapter 1607 
from DoD to VA authority?
    Mr. Bush. The way this bill is crafted, it takes the pre-
2008 ``National Defense Authorization Act'' provisions and 
transfers them. So what the bill would do is repeal the 10-year 
post-service authorization. It repeals some of the other 
improvements that were made in the 2008 authorization.
    Ms. Herseth Sandlin. So it is not on moving the 
jurisdiction? It is the way it is currently written that if we 
can make modifications so it does not affect what was signed 
into law in the ``National Defense Authorization Act''?
    Mr. Bush. If the bill was modified to reflect the current 
provisions of 1607, our only concern would be transferring the 
funds that we have in the DoD education trust fund to VA 
because we look at that as those funds will help us offset the 
attrition that we anticipate will occur when people now will 
use the benefit when they leave as opposed to stay with us.
    Ms. Herseth Sandlin. Okay. I appreciate that clarification. 
Maybe that is something we can work toward as we make 
incremental progress on this issue, at least progress from some 
of our perspectives.
    Mr. Bush. I think that would be helpful.
    Ms. Herseth Sandlin. Okay. Great.
    In your statement, you talk about H.R. 3393 and your 
concern about the negative message that may send to the 
Nation's employers. As we heard Mr. Davis, who introduced the 
bill, explain, the issue of punitive damages is current law as 
it relates to the most egregious instances.
    If we simply made some changes for National Guard men and 
women and Reservists, if there is a violation of their 
employment or reemployment rights similar to what is in current 
law for others who may be discriminated against, do you think 
that will have an impact on hiring Guard and Reservists?
    Mr. Bush. USERRA is a not very friendly employer law. This 
would make it less employer friendly. There are cases when 
employers may find a reason not to hire, not advance a Guard 
and Reserve member.
    And it is hard, and I think Secretary Ciccolella can 
probably talk to that in greater detail, but what we would 
rather do is try to reach out and work with employers to 
encourage them to, you know, reemploy their Guard and Reserve 
members, employ Guard and Reserve members. If there is a 
problem, we try to resolve those through our National Committee 
for Employer Support and Guard and Reserve. You know, it is the 
carrot approach as opposed to the stick approach.
    There may be times when it is appropriate to have punitive 
damages and this bill may be appropriate. But we are concerned 
with the effect it would have on employers as they consider 
hiring Guard and Reserve members. And that is our concern.
    Ms. Herseth Sandlin. My time is running low here. Most of 
the Members stayed over there to vote, so they are not going to 
give me as much time in holding it open. I am going to have to 
leave in just a couple minutes and we will talk about how we 
want to handle that in just a moment.
    But I wanted to get to you, Mr. Gilroy, on the issue of 
transferability. Two questions. Was this just proposed this 
year as reflected in the President's State of the Union Address 
and do you have any estimated costs of transferability of the 
benefit?
    Mr. Gilroy. Well, with regard to your first question, the 
services, particularly the Army, have been asking for 
transferability of benefits for some time now, and it has been 
near the top of their list of items which they believe soldiers 
in the field really want.
    The President announced in his State of the Union Address, 
this past January, that it was very important to him as well.
    We also know that it is an important issue for the 
Chairman. Again, we hear it from the field as the senior 
leaders talk to troops. That is the primary reason why it was 
included in the President's State of the Union message. 
Transferability is becoming more and more of an issue of 
concern to servicemembers.
    Ms. Herseth Sandlin. I do not doubt that because I have 
talked to a number of servicemembers back home. You may have 
heard me say this previously. A friend of mine I graduated high 
school with, if he could transfer some of those benefits to his 
three daughters or even to his wife for her, to get her 
graduate degree, he would more than readily do that.
    I am interested in pursuing this, although I know that 
there are some VSOs that are concerned about moving this now 
over some of the other priorities we have been working on. If 
we could maintain an open dialog as it relates to estimated 
costs, and as it relates to transferring the whole benefit. 
Some people do not like incrementalism, but I prefer action 
over inaction and some results over none. I would just 
encourage you to maintain a dialog as you work with Secretary 
Gates and others in each of the branches.
    I have some follow-up questions I want to pose in writing 
to both you and Mr. Pedigo. I know Mr. Brinck has some 
questions. We are going to submit those in writing because you 
have been waiting a long time. I would come back if you had the 
time to stay, but I have been probably testing your patience 
with how long this has taken with the interruption of votes.
    Thank you for your testimony, your insights on these many 
bills that we are considering, and one of the things that I 
wanted to ask and wish I had the time to was on the issue on 
the Guard and Reserve equity. I appreciate the DoD being 
supportive of the bill Mr. Boozman and I have introduced, but 
if that were to move and actually get signed into law, we have 
actually exacerbated the gap as Mr. Buyer pointed out.
    I would like to get your thoughts given where the 
percentage is currently and where it might end up if we do not 
make some other changes to Guard and Reserve benefits. We will 
be pursuing that with you as well.
    Thank you for your service to our Nation's servicemembers, 
to our Nation's veterans, for working so closely with us and 
with our staff here on the Committee. We will look forward to 
seeing you again. Thank you.
    The hearing now stands adjourned.
    [Whereupon, at 5:00 p.m., the Subcommittee was adjourned.]







                            A P P E N D I X

                              ----------                              

      Prepared Statement of Stephanie Herseth Sandlin, Chairwoman,
                  Subcommittee on Economic Opportunity
    Today we have thirteen bills before us that seek to: protect our 
nation's veterans from possible foreclosure and financial burdens 
incurred while serving one's country; update VA housing construction 
guidelines; expand education programs while meeting the current 
retention needs of the Armed Forces; strengthen employment and 
reemployment rights for returning service members and veterans; and 
minimize recidivism among incarcerated veterans.
    According to a Congressional Research Service Report updated 
January 25, 2008 ``the original GI Bill provided up to $500 annually 
for education expenses. This is the equivalent of an estimated $5,890 
in 2007 dollars. An additional $50 was provided monthly for living 
expenses in 1944, which is equivalent to $589 monthly, or $5,301 
annually in 2007 dollars. Thus, the total education benefit, including 
the living allowance, in 1944 would have been worth $11,191 annually, 
or $1,243 monthly in 2007 dollars.''
    Keeping this historic perspective in mind, I along with Ranking 
Member Boozman have introduced H.R. 5684, the Veterans Education 
Improvement Act which seeks to address the educational needs of our 
brave men and women in uniform. This bipartisan bill is the product of 
numerous hearings held by our Subcommittee since the beginning of the 
110th Congress, which allowed for close evaluation of the Montgomery GI 
Bill and input from veteran service organizations, education leaders, 
government agencies, and other policy experts.
    H.R. 5684 would help address current MGIB shortfalls, along with 
other important improvements, including:

      Substantially increases the amount of basic education 
assistance for veterans equal to the average cost of the tuition at a 
4-year public college or university;
      Provides veterans with a monthly cost of living stipend; 
and
      Extends the time limitation for use of education benefits 
from 10 years to 15 years, more fully accommodating the transition from 
military to civilian life.

    I would like to add that H.R. 5684 includes unique provisions that:

      Allows the overall assistance to be used for business 
courses, prepatory courses for exams, and to repay federal student 
loans;
      Dramatically expands the opportunity for service members 
to enroll for the benefits, even if they are beyond the initial 
opportunity for automatic enrollment;
      Provides increased funding for State Approving Agencies, 
an important partner in administering the benefits with the VA;
      Rewards veterans for their service by eliminating their 
educational entitlements from being considered as income when applying 
for federal financial aid;
      Increases On the Job Training and dependent education 
benefit to 85 percent;
      Supplements reporting fees given to colleges and 
universities;
      Creates a 5-year pilot program to expand work-study 
programs for veterans;
      Increase the VA's full time employees by 150 to help 
administer the new requirements;
      Provides funding for updating existing IT systems; and
      Rearranges the ``advance pay'' process to prevent any 
break in benefits.

    H.R. 5684 provides specific improvements and adjustments meant to 
make it easier, not harder for veterans to access the education 
benefits they've earned following their service and contributes to the 
overall national economy. In addition, this bill will make changes with 
minimal disruption of the current VA IT system and to the 
beneficiaries.
    The Veterans Education Improvement Act is a well crafted bill that 
provides the VA the resources to administer the new changes to update 
and improve the Montgomery GI Bill to better reflect today's world, and 
ensure that today's veterans have the resources they need to continue 
or begin their education when they return from service. I appreciate 
the support of many of today's witnesses for this bill that addresses 
necessary changes to veterans' education benefits.
    I look forward to working with Ranking Member Boozman and other 
Members of the Committee to continue to improve education entitlements 
for veterans. Those serving in our Armed Forces deserve to be protected 
as best we know how--not just with weaponry, armor and other equipment, 
but also healthcare, education, and support for the families who await 
their return.

                                 
  Prepared Statement of Hon. John Boozman, Ranking Republican Member,
                  Subcommittee on Economic Opportunity
    Good afternoon. We have a lot of business to transact this 
afternoon so in the interest of time, I will forego my usual clever and 
highly insightful analysis so that we may hear from our witnesses. I 
would say that we have an interesting mix of bills before us and I am 
eager to hear the various points of view.
    I yield back.

       Honorable John Boozman Remarks on H.R. 3681 and H.R. 3889

    Thank you Madam Chairwoman. My first bill on the agenda is H.R. 
3681, the Veterans Benefits Awareness Act of 2007. Over the years, 
Congress has given VA millions of dollars to increase outreach to raise 
awareness of veterans benefits. I suspect anyone who watches or listens 
to sports or other types of entertainment in the national media has 
seen or heard ads for each of the military services. But when was the 
last time any of us saw a TV advertisement in prime time or a 
continuing radio campaign designed to achieve those goals?
    VA produces significant amounts of brochures and posters. And VA 
staffs meet with lots of service organization posts and other small 
venues. These are nice from a personal contact standpoint, but 
relatively inefficient in getting the word out on veterans benefits.
    That is the purpose of H.R. 3681, to authorize VA to use modern 
electronic media to promote the programs earned by service to the 
nation. Staff tells me there has been a body of opinion at VA that the 
Department was prohibited from spending on this type of outreach. My 
bill will put an end to that type of out-of-date thinking.
    My second bill, H.R. 3889 is designed to develop a database of 
outcomes experienced by those who participate in the VA's Vocational 
Rehabilitation and Employment program. Unfortunately, there is 
relatively little data on how the program improves the lives of our 
more seriously injured veterans. Conducting a 20 year longitudinal 
study that requires annual reports to Congress will make future 
management decisions easier for VA and legislative decisions more 
accurate for Congress. As a matter of fact, each of VBA's business 
lines should be conducting longitudinal studies, but that is a matter 
for another time.
    Finally, as an original cosponsor of your GI Bill, H.R. 5684, I 
believe that unlike some of the other nearly 40 veterans education 
bills that have been introduced, H.R. 5684 is an approach that is 
manageable and affordable. Veterans will get between $17,000 and 
$18,000 per school year not counting other federal aid and VA will not 
be required to retool its system to pay the benefits. I am very pleased 
we will be taking action on improving education benefits for our 
veterans and I look forward to passing the bill next week.
    I hope my colleagues will support H.R. 3681 and 3889 at our markup 
next week and thank you for including these bills in today's agenda. I 
yield back.

                                 
            Prepared Statement of Hon. Bob Filner, Chairman,
                    Committee on Veterans' Affairs,
     and a Representative in Congress from the State of California
    Thank you for the opportunity to speak before the Subcommittee on 
three important pieces of legislation to address the needs of veterans.
    Like most Americans, our nation's heroes see homeownership as an 
integral part of the American dream. Unfortunately, for many service 
members and veterans, that part of the American dream can become a 
nightmare when coupled with frequent deployments, the high cost of 
purchasing a home and rising interest rates.
    Currently, the Department of Veterans Affairs offers veterans VA-
guaranteed loans through common lending institutions, including banks, 
savings and loan associations and mortgage brokers. For veterans that 
qualify, the VA will guarantee a portion of the loan to the lender, 
thereby protecting the lender for the guarantee amount.
    Unfortunately, the current VA loan program is not sufficient to 
meet the needs of our veterans because, too often, the loan amount is 
insufficient to purchase a home, does not offer alternatives for 
veterans with less than perfect credit and does not incorporate younger 
veterans that may lack the necessary financial track record to prove 
they are a good risk.
    As Chairman of the Committee, I am especially concerned about the 
affects of the housing market and home foreclosures on our active duty 
service members and veterans. These courageous, young men and women 
should never be forced to worry about their homes, while they are 
serving overseas and dealing with the intense stresses of deployment.
    I have introduced two bills that improve the VA home loam program. 
H.R. 4883 will prohibit foreclosure of property owned by a service 
member for one year following a period of military service.
    The second, H.R. 4884, Helping Our Veterans to Keep Their Homes Act 
of 2008 will:

      increase the maximum home loan guarantee amount to 
$625,500;
      decrease the equity requirement to refinance a home loan;
      require the VA Secretary to review and streamline the 
process of using a guaranteed home loan to purchase a condominium;
      reduce the home loan funding fees to one percent;
      extends the adjustable rate mortgage demonstration 
project to 2018;
      extend the hybrid adjustable rate mortgage demonstration 
project to 2012; and
      provide a yearly adjustment of the VA home loan to match 
the consumer price index.

    Madam Chair, when our service members return home, it is our solemn 
obligation to protect and serve them with the same commitment and 
dedication with which they protected and served us. Both H.R. 4883 and 
H.R. 4884 would demonstrate just such a level of commitment and I ask 
for your support.
    Each day members of the National Guard and Reserve serving in 
support of contingency operations both at home and abroad experience 
the inequity of educational benefits that exist between members of 
Active Duty and Reserve Forces.
    I also urge you to support H.R. 4889, a bill to recodify Reserve 
Education Assistance Program entitlements from the Department of 
Defense to the Department of Veterans Affairs.
    Currently, REAP provides up to 36 months of education benefits to 
certain members of the Reserve Forces, who are called or ordered to 
active duty service in response to a war or national emergency.
    This cost neutral legislation would augment timeliness and quality 
of receipt of benefits while enabling better support for recruitment 
and readjustment outcomes, as intended by Congress. This bill is an 
important administrative step in establishing readjustment benefits for 
activated Guard and Reserve members who are subject to the same 
hardships, and face the same enemy fire, as active duty troops.
    As you will hear later today, this legislative proposal is a top 
priority for most of the veteran service organization, many of which 
have endorsed my bill. I urge all my colleagues to join me and these 
veterans service organizations in supporting our nation's Reserve 
Forces by cosponsoring H.R. 4889.
    Again, thank you for including H.R. 4883, H.R. 4884 and H.R. 4889 
in today's Subcommittee hearing. I look forward to working with my 
colleagues to address the negative impact the recent subprime 
foreclosures have had on our veterans and service members and ensure 
our veterans are afforded the education entitlement they deserve.

                                 
   Prepared Statement of Hon. Steve Buyer, Ranking Republican Member,
                    Committee on Veterans' Affairs,
       and a Representative in Congress from the State of Indiana
    Chairwoman Herseth Sandlin and Ranking Member Boozman, I am very 
pleased you have included my bill, H.R. 4539, the Department of 
Veterans Affairs Loan Guaranty Cost Reduction Act of 2007, for the 
Subcommittee's consideration.
    When I introduced the bill last December with Mike Michaud, the 
full extent of the mortgage and financial sector crisis had not yet 
appeared and frankly, this bill was intended to improve the day-to-day 
operations of loan guaranty program. But events since I introduced H.R. 
4539 have convinced me of the need to make the kinds of changes 
included in my bill.
    I would note that subsequent to introduction of H.R. 4539 by Mike 
Michaud and I, Chairman Filner introduced a similar bill, H.R. 4884, 
and I take that similarity as confirmation of the need to improve the 
loan guaranty program. I believe that between us, veterans will find it 
easier to achieve the American dream.
    I also ask unanimous consent to include a copy of a January 28, 
2008 letter to Speaker Pelosi and Leader Boehner cosigned by Mike 
Michaud and me regarding the need to include the VA loan guaranty 
program the recent stimulus package in the hearing record. I was very 
disappointed it was not addressed when the stimulus package increased 
the loan limits for FHA mortgage loans to move people from risky 
subprime loans to federally guaranteed loans. I did appropriately bring 
this matter to you and thank you for your attention.
    In addition to the details of the bill, I note that VA's loan 
Guaranty program is not experiencing the same financial difficulties as 
the broader market because VA maintained its standards while others did 
not. I must also emphasize that H.R. 4539 has no affect on VA's 
underwriting standards.
    Madame Chairwoman, H.R. 4539 would do the following:

      Increase the maximum loan amount guaranteed by VA to 125 
percent of the Freddie MAC conforming limit. This will enable service 
members and veterans living in high cost areas to purchase homes using 
the VA loan guaranty.
      Extend some of the fees through 2017. These fees provide 
the funds VA needs to pay for the guaranty on homes that go to 
foreclosure. These fees have also provided PAYGO offsets for 
improvements to other VA benefits.
      Increase the guaranty amount for certain refinanced loans 
making VA refinancing more attractive and competitive in the 
marketplace.
      My bill reduces the equity requirement for a VA-
guaranteed refinancing loan to zero. This is especially important for 
those service members and veterans whose home equity has decrease 
solely because of the current market forces despite the fact that they 
are not behind on their mortgage payments.
      To make loans more affordable in the high cost areas, my 
bill would limit the total loan guaranty fees to the maximum dollar 
amounts in effect on the day of enactment.
      To encourage an increase in the supply of affordable 
housing, H.R. 4539 would increase the guaranty amount to 30 percent of 
the mortgage.
      And finally, my bill would require the Secretary to 
provide a small measure of assistance in offsetting closing costs 
associated with the purchase of a home. The Secretary would determine 
the amount--if any--based on the income from guaranty fees in the 
previous year.

    Madame Chairwoman, as you know, I support your GI Bill, H.R. 5684. 
I mention this because it is a good bill and you have worked with our 
side in a bipartisan manner to make a few changes we felt important. 
Additionally, we all know the train is moving quickly on this issue so 
major restructuring of all VA education programs is not feasible at 
this time. In the spirit of full disclosure, I am in the process of 
drafting an extensive reorganization of chapters 30, 32, 34, 35 and 36 
into one or two chapters to standardize the administrative rules and 
education and training options to those receiving education benefits. I 
hope we can work together on this approach to bring some order to these 
programs in the not too distant future.
    Chairwoman Herseth Sandlin, I thank you again for the bipartisan 
manner in which you have included H.R. 4539 and several other bills 
from our side of the aisle in today's hearing. I look forward to 
working with you and all the Members of the full committee to improve 
the VA loan Guaranty program.

                                 
             Prepared Statement of Hon. Ciro D. Rodriguez,
          a Representative in Congress from the State of Texas
    Chairwoman Herseth Sandlin, members of the subcommittee, thank you 
for the opportunity to speak regarding H.R. 5664, a bill that I 
introduced to correct a bureaucratic oversight in the way that the 
Veterans Administration advises contractors constructing or renovating 
housing for disabled veterans. I was extremely moved by last June's 
hearing before this subcommittee concerning Specially Adaptive Housing.
    There is little doubt that funding level available to individual 
disabled veterans to have their homes adjusted to meet their needs is 
too low. My bill does not address that particular issue, rather it 
seeks to ensure that veterans whose homes are updated under this 
program benefit from all that modern technology and construction 
practice can provide.
    As Mr. Gonsalves, President and Founder of Homes for Our Troops, 
pointed out in the hearing, ``service men and women with injuries that 
would have killed them in previous wars are now living to see another 
day, and are in need of truly `special' home adaptations.'' The primary 
guidance that the VA provides contractors who draw up plans and 
specifications to modify homes under this grant program is VA Pamphlet 
26-13, titled Handbook for Design: Specially Adaptive Housing. As Mr. 
Carl Blake, National Legislative Director of the Paralyzed Veterans of 
America pointed out: much, if not all, of the guidance found in the 
pamphlet is still applicable today. However, I feel that it focuses too 
much on veterans who find themselves in wheelchairs with lower 
extremity paralysis or amputation. While certainly still valid, we find 
increasing numbers of veterans returning home from current conflicts 
with alternative injuries such as upper-limb amputation or blindness. 
The guide was last updated in 1978. By comparison, the current Army 
Corps of Engineers housing design guide is dated 1994 and that of the 
Air Force, 2004.
    The time has come to ensure that the guide contains up-to-date 
direction to architect and engineer firms and contractors who will do 
the noble work of ensuring our disabled veterans have homes that 
respect the dignity by which they sacrificed. I propose in my bill that 
the Secretary of Veterans Affairs update the guide on at least a six-
year basis. I also wish to express my intent that the field agents who 
approve the construction plans under this program view the pamphlet as 
a guide rather than a definitive set of requirements.
    After consulting with several VSOs in preparing for this testimony, 
I need to clarify the wording of my bill. Rather than requiring the VA 
to update plans and specifications on a six-year basis, it is better 
stated that the pamphlet itself is updated on a six-year basis. 
Contractors actually derive the plans and specifications based on each 
veteran's home and the pamphlet. I would hope that if the committee 
considers my bill in any future mark-up that such language is made 
clear. Thank you for allowing me the opportunity to speak today and for 
considering my bill, H.R. 5664.

                                 
               Prepared Statement of Hon. Cliff Stearns,
         a Representative in Congress from the State of Florida
Executive Summary
    For many service members, the transition from active duty to 
veteran status, and returning to a full meaningful civilian life is 
daunting, fraught with many challenging obstacles and bureaucratic 
barriers. Many times, these brave service men and women require job 
training for entirely new careers.
    My legislation, H.R. 3646, the Veterans' Effective Training Job 
Opportunities and Benefits Act of 2007, or the VET JOBS Act, would 
provide better information to veterans on their local job market needs. 
The VET JOBS Act directs the Secretary of Veterans Affairs and the 
Secretary of Labor to conduct a joint study on the greatest employment 
needs in various job markets around the country and post the results on 
the VA website. These results would then be updated annually to reflect 
the current and possibly changing needs in the local job market.
    The VET JOBS Act has broad bipartisan support and has been endorsed 
by many veterans' organizations, such as the American Legion, AMVETS, 
Veterans of Foreign Wars, Blinded Veterans of America and the Paralyzed 
Veterans of America. In addition, my bill has 44 co-sponsors from both 
sides of the aisle.

                               __________
    Thank you, Madam Chair, for allowing me the opportunity to testify 
on behalf of my bill, H.R. 3646, the Veterans' Effective Training Job 
Opportunities and Benefits Act of 2007, or the VET JOBS Act. This bill 
is an important step in helping our veterans find gainful employment 
when retiring from service.
    When warriors return home from combat, they often face another 
uphill battle. For many service members, the transition from active 
duty to veteran status, and returning to a full meaningful civilian 
life is daunting, fraught with many challenging obstacles and 
bureaucratic barriers. Many times, these brave service men and women 
require job training for entirely new careers.
    Although statistics show that eventually veterans in general enjoy 
a favorable employment rate in the nation's job market, many veterans 
initially find it difficult to compete successfully in the labor 
market. That's why for over a decade, the federal government has 
provided job-training benefits to veterans through the Department of 
Veterans Affairs and the Department of Labor. The mission statement for 
the Department of Labor's Veterans' Employment and Training Service 
(VETS) program is to ``provide veterans and transitioning service 
members with the resources and services to succeed in the 21st century 
workforce by maximizing their employment opportunities, protecting 
their employment rights and meeting labor-market demands with qualified 
veterans today.''
    Additionally, the Department of Labor offers service members 
leaving the military with a service-connected disability, the Disabled 
Transition Assistance Program (DTAP). DTAP includes a three-day 
workshop plus additional hours of individual instruction to help 
determine job readiness and address the special needs of disabled 
veterans. However, this is the identical DTAP program offered to all 
transitioning disabled veterans across the nation.
    This three-day program is valuable support, but it only provides 
general employment information and at no time addresses the specific 
needs of the community in which the veteran lives. Unfortunately, this 
means that frequently there is a void of information on local labor 
market conditions that results in veterans using their benefit to train 
for jobs that don't exist in their communities.
    Mr. Jeffrey Askew is Director of the Marion County Veterans' 
Service Center in my hometown of Ocala, Florida. He said many veterans 
have used their federal job training benefits for Information 
Technology (IT) career training. However, Ocala has little demand for 
IT professionals, and veterans often are advised to move to Orlando 
where there are more opportunities. Upon finally getting settled back 
into civilian life, it is frustrating and unfortunate--to say the 
least--to be forced to uproot one more time and move your family to an 
unknown city. I am concerned about this problem, but I believe there is 
an easy solution.
    Currently, there is a maze of websites with confusing and sometimes 
out of date information on employment conditions. My legislation would 
provide better information to veterans on their local job market needs. 
The VET JOBS Act directs the Secretary of Veterans Affairs and the 
Secretary of Labor to conduct a joint study on the greatest employment 
needs in various job markets around the country and post the results on 
the VA website. These results would then be updated annually to reflect 
the current and possibly changing needs in the local job market. With 
this tool, veterans could plug in their zip code and see a list of the 
occupations that are most in demand within their commuting area, and 
subsequently use their federal job training most effectively. The 
Department of Labor already has the infrastructure in place for this 
kind of research, so this is a practical, low cost solution. In fact, 
the Congressional Budget Office has unofficially scored this proposal 
as having ``insignificant'' costs. Insignificant costs for immeasurable 
benefit to our veterans.
    Furthermore, the VET JOBS Act has broad bipartisan support and has 
been endorsed by many veterans' organizations, such as the American 
Legion, AMVETS, Veterans of Foreign Wars, Blinded Veterans of America 
and the Paralyzed Veterans of America. In addition, my bill has 44 
cosponsors from both sides of the aisle.
    Thank you again for allowing me the opportunity to testify on the 
VET JOBS Act. I look forward to working with my colleagues to help our 
veterans obtain quality employment.

                                 
              Prepared Statement of Hon. John A. Yarmuth,
        a Representative in Congress from the State of Kentucky
    Madam Chairwoman, I thank you for inviting me here today to discuss 
the Second Chance for America's Veterans Act. As a small pilot program, 
the Incarcerated Veterans Transitional Program or IVTP has reduced 
recidivism by 90 percent among participants and saved the taxpayers 1.6 
million dollars in each of the six locations where it has been 
implemented over the last three years. We're here today because by 
expanding this tremendous level of success to a national scale, we 
could provide hope for thousands men and women who return to civilian 
life after years of serving their country.
    In my hometown of Louisville, Kentucky, Richard Waddell returned 
home 10 percent disabled and suffering from post traumatic stress 
disorder, honorably discharged after nine years service in the National 
Guard, Army, and Marines. He had no job, no support, and a family to 
feed. Out of desperation, he turned to robbery, and was apprehended by 
law enforcement while buying groceries for his family.
    Unfortunately, to this point, Richard's story is far from unusual 
among America's veterans. Where his story departs is when he was 
released from jail for the second time, he met an IVTP representative. 
The IVTP worker first helped him with the essentials--clothes, food, 
and transportation--and from there, the dignity and respect that 
Richard had earned serving our nation returned. Thanks to the help of 
IVTP, Richard was able to activate his VA benefits and register for 
disability, and he now has an apartment and holds a good job. Next week 
he will begin college, and a future that once seemed bleak at best is 
now bright and full of promise.
    IVTP has similarly aided 328 veterans in Kentucky, by partnering 
veterans transitioning out of prison, who are at risk of homelessness 
upon their release, with a professional mentoring staff composed of 
veterans to help them get back on their feet. Of those 328, just 22 
returned to criminal activity after engaging the program, a recidivism 
rate of seven percent. That number is impressive by any standard, but 
for a veteran population that sees over half of its ranks return to 
prison, the success of this program is extraordinary. Abandoning this 
success, and the men and women who served our country, would not only 
be counterproductive, but also send the message that our veterans only 
matter when our country needs them and not when they need our country.
    The Second Chance for America's Veterans Act, would expand the 
highly successful IVTP pilot to a competitive grant program in twenty-
four locations across the U.S. Providers would assist veterans who are 
exiting the corrections system by connecting them with transitional 
housing, employment services, mental health and/or substance abuse 
services, and other community support.
    After all that our veterans have given for this country, providing 
them with such vital, effective, and proven services should be an 
obligation not an option. But this isn't only about giving, this is 
also a matter of working for our national interest. In Kentucky, we 
have the most rapidly growing prison population in the nation, a truth 
that has had a devastating effect on the fiscal reality of the 
Commonwealth.
    To keep a convict in prison for a year, Kentucky spends over 18,000 
dollars. By comparison, Volunteers of America, which currently 
administers the program, spends between 700 and 1,200 dollars to give a 
veteran the tools to stay out of prison and contribute to society for a 
lifetime.
    At a time when we search to find new approaches to stimulate the 
economy and get a handle on America's ever-growing deficit, the Second 
Chance for America's Veterans Act offers us the opportunity to support 
a program with a proven track record of providing immediate and 
substantial return on our investment, while also paying a debt to those 
in uniform who sacrificed to serve our country. This is a unique win-
win in government.
    Still, the Department of Labor has chosen not to continue this 
highly successful program, and without action by Congress, thousands of 
worthy veterans in need would be abandoned by the nation they served; 
left to bounce around our overcrowded prison system.
    I thank the committee for looking into this legislation and 
strongly urge you to support passage of H.R. 3467, the Second Chance 
for America's Veterans Act.

                                 
                Prepared Statement of Hon. Robin Hayes,
     a Representative in Congress from the State of North Carolina

                           EXECUTIVE SUMMARY

    Purpose of Legislation: This bill would amend the Uniformed 
Services Employment and Reemployment Rights Act 1994 (USERRA) to 
authorize the Secretary of Defense to include Full Time National Guard 
Duty for possible exemption from the USERRA 5-year limit on service. 
The Secretary of Defense would be authorized to exempt National Guard 
service supporting critical homeland defense missions or other missions 
as deemed appropriate. Since USERRA already authorizes exemptions for 
service supporting critical active duty missions, this amendment would 
simply correct a disparity in the treatment of National Guard members.

    Background: Currently, certain types of active duty service are 
exempted from the five-year reemployment limit under the Uniformed 
Services Employment and Reemployment Rights Act 1994 (USERRA). These 
exemptions cover service during a time of war or national emergency, 
support of missions where others have been ordered to duty under an 
involuntary call-up authority, and for other critical missions or 
requirements.
    After the events of September 11, 2001, voluntary active duty in 
support of Operation Noble Eagle (ONE) and Operation Enduring Freedom 
(OEF) were exempted from the USERRA 5-year limit on reemployment. 
However, full-time National Guard duty performed under Title 32 is not 
covered under those exemptions.
    As part of the new operational reserve construct, National Guard 
personnel will be used in ever-increasing numbers to support certain 
operational requirements while serving in a Title 32, full-time 
National Guard duty status. Indeed, section 512 of the Ronald W. Reagan 
National Defense Authorization Act for Fiscal Year 2005 (Public Law 
108-375) added a new chapter 9 to Title 32 to authorize this type of 
service. Despite this fact, there is no authority under USERRA to 
exempt this type of National Guard service.
    Examples of National Guard employment when such a USERRA exemption 
might be appropriate include airport security following the terrorist 
attacks of September 11, the recent southwest border security mission, 
Hurricane Katrina, and the Air Sovereignty Alert missions defending the 
United States from air attacks. As we continue to pursue the Global War 
on Terror, and the National Guard continues to be utilized at a high 
rate, more of these missions may identify themselves.

    Conclusion: If the National Guard Employment Protection Act of 2007 
is not passed, National Guard members may be put into a position where 
they are forced to choose whether they support a critical mission, such 
as Katrina or a mission in support of the Global War on Terror or 
return to work with their civilian employers. This is already starting 
to occur. Like their counterparts supporting critical active duty 
missions, they should not be forced to make the choice of whether to 
keep their civilian jobs or support critical national security 
missions.
    The lack of a USERRA exemption for Title 32 Federal full-time 
National Guard duty is a clear disparity that needs to be addressed. 
H.R. 3798 will close this loophole and protect our citizen soldiers. 
This legislation is fully supported by the National Guard Association 
of the United States (NGAUS) and the Enlisted Guard Association of the 
United States (EANGUS).

                               __________
    Chairwoman Herseth, Ranking Member Boozman, representatives of our 
Veterans' Service Organizations, thank you for the opportunity to be 
here to address your Subcommittee on an issue that impacts our National 
Guardsman. Today, I am proud to stand before this Subcommittee in 
support of a critical piece of legislation: The National Guard 
Employment Protection Act of 2007.
    As this Subcommittee is aware, the National Guard operations tempo 
has increased exponentially since September 11th, and the Federal 
duties they have been charged with have created a unique situation. 
Previously, National Guard doing Federal missions were called up to 
Title 10 active duty status, but with the Global War on Terror, it 
became increasingly apparent that there needed to be a mechanism to 
allow the National Guard to perform Federal missions in Title 32 
status.
    It has become clear that unified state-federal cooperative 
employment of the National Guard provides a uniquely powerful tool to 
address domestic security needs. Some examples of this type of Federal 
Title 32 duty are Air Sovereignty Alert (ASA) providing air defense for 
our Nation, airport security, operations in support of natural 
disasters such as Hurricane Katrina, fighting wildfires, and border 
security to name a critical few.
    More and more often, we see operations in which the Federal 
government provides the funds and the State governors provide the 
authority and control to execute operations to secure the homeland. 
This means that a greater number of National Guardsmen are performing 
such duties, which unfortunately are not currently covered under 
USERRA. Prior to September 11th, there were essentially no operational 
missions conducted by the National Guard under Title 32 so there was no 
loophole in the protection afforded National Guardsmen for their 
Federal service.
    To address this loophole, I introduced H.R. 3798, The National 
Guard Employment Protection Act of 2007, with Congresswoman Madeleine 
Bordallo of Guam as my Democratic original cosponsor. The bill would 
amend the Uniformed Services Employment and Reemployment Rights Act 
1994 (USERRA) to authorize the Secretary of Defense to include Full 
Time National Guard Duty for possible exemption from the USERRA 5-year 
limit on service. Passage of this legislation will ensure that National 
Guard members are not forced to choose between keeping their civilian 
jobs and serving our Nation. Since USERRA already authorizes exemptions 
for service supporting critical active duty missions, this amendment 
would simply correct a disparity in the treatment of National Guard 
members.
    It is essential that we make sure all of our nation's heroes are 
given adequate opportunity to support Federal missions without it 
affecting their civilian jobs. The National Guard has increasingly been 
called up since September 11th, and North Carolina has one of the 
highest mobilization rates at over 97 percent. Whether they are 
protecting our skies, helping save lives during a national disaster 
such as Hurricane Katrina, enhancing our border security, or doing 
another Federal mission, there is no doubt that the National Guard is 
an essential part of the total force. America's National Guardsmen 
should never be put in a position where they are forced to choose 
whether to support a critical mission, such as a mission in support of 
the Global War on Terror, or return to work with their civilian 
employers in order to protect their jobs.
    At seven years into fighting the Global War on Terror (GWOT), we 
are starting to see a small but increasing number of National Guardsmen 
bumping up against their 5 year USERRA protection for their civilian 
jobs. According to statistics provided by the National Guard Bureau, 
since September 11th, 6,984 of our citizen soldiers have been called up 
to perform Federal missions under Title 32. There are currently 1,719 
Guardsmen performing duty under Title 32 orders. The Air National Guard 
has especially been impacted, particularly those airmen performing the 
Air Sovereignty Alert mission. They are by no means alone in their 
situation, as this loophole in employment protection affects the entire 
National Guard.
    If the National Guard Employment Protection Act of 2007 is not 
passed, National Guard members may be forced to choose between keeping 
their civilian jobs and serving our nation. Unfortunately, this is 
already starting to occur and the problem will likely get worse as 
people near the current USERRA 5-year job protection limit. The 
National Guard is performing critical Federal missions under Title 32 
and it is essential that this loophole be closed so that we protect 
those whose service protects us.
    This legislation is fully supported by the Enlisted Guard 
Association of the United States (EANGUS) and the National Guard 
Association of the United States (NGAUS) and I have enclosed their 
letters of endorsement for the record. The National Guard Bureau and 
Department of Defense also favor closing this loophole to protect our 
National Guardsmen. Our citizen soldiers fight to protect our nation 
and our freedom and the very least we can do is protect their rights to 
serve and also retain livelihood for themselves and their families.
    Thank you for the serious consideration of the National Guard 
Employment Protection Act. I know all the Members of this Subcommittee 
share my commitment to the National Guard, and therefore strongly urge 
passage of this legislation.

                               __________
    Enlisted Association of the National Guard of the United States
                                                    Alexandria, VA.
                                                   October 11, 2007

The Honorable Ike Skelton
The Honorable Duncan Hunter
United States House of Representatives
Washington, D.C. 20515

    The Enlisted Association of the National Guard of the United States 
(EANGUS) is the only military service association that represents the 
interests of every enlisted soldier and airmen in the Army and Air 
National Guard. With a constituency base of over 414,000 soldiers and 
airmen, their families, and a large retiree membership, EANGUS engages 
Capitol Hill on behalf of courageous Guard persons across this nation.
    As you begin negotiations for conference on the National Defense 
Authorization Act for Fiscal Year 2008 (H.R. 1585), we write to express 
our strong support for fully authorizing the President's Budget request 
for the Joint Cargo Aircraft (JCA) and to maintain an Army-led Joint 
Program Office in accordance with the Memorandum of Agreement. In 
particular, we write to express our concerns that section 132 of the 
House bill and section 1029 of the Senate bill would delay fielding of 
this critical program.
    Providing robust intra-theater lift capabilities over the ``last 
tactical mile'' of combat operations plays a critical role in 
supporting the modern war fighter. However, the current inventory of 
intra-theater transports is increasingly inadequate for this mission 
due to increased use in current combat operations, which not only 
stresses older aircraft such as the C-23 Sherpa but also rapidly ages 
newer rotorcraft aircraft as well. The Army C-23 in particular is an 
aging aircraft which is not pressurized, not certified for medical 
evacuation missions and incompatible with the standard cargo pallets. 
This important intra-theater lift mission cannot continue to be 
supported by a rapidly aging, overstretched and inadequate fixed wing 
fleet.
    Once fielded, JCA will provide the rapid, reliable and flexible 
intra-theater lift capabilities on an asymmetric battlefield. The JCA 
will ease the strain on our present fleet and afford the immediate need 
for greater maximum loads at smaller, unrefined landing strips. This 
will get critical equipment and supplies into the fight faster in 
support of the war fighter.
    The need for improved intra-theater lift has repeatedly been 
studied and validated by the Department of Defense (DOD) through the 
Joint Requirements Oversight Council (JROC). The Army and Air Force, in 
coordination with the National Guard Bureau, meet the joint validated 
requirement through the capabilities provided by the JCA.
    Additionally, the U.S. Government Accountability Office (GAO) ruled 
against the JCA bid protest is a testament to the program's joint 
acquisition management. The joint requirements call for fielding a 
total of 78 aircraft to the Army, Air Force, National Guard and Army 
Reserves. Also, on June 20, 2006, the Army and Air Force Vice Chiefs of 
Staff signed a Memorandum of Agreement that clearly laid out the joint 
requirements for the program that meet both Army and Air Force 
operational capabilities.
    As importantly, current planning would assign the JCA to Army and 
Air National Guard units in 19 states and the territories of Guam and 
Puerto Rico. JCA will provide an added critical capability to state 
emergency management and homeland security missions. In addition, JCA 
will help National Guard units across the country replace missions lost 
to BRAC 2005, retain personnel with needed skills and recruit new 
members. This is the right mission at the right time for the National 
Guard, and one that is strongly supported by Governors and Adjutants 
General across the country.
    Legislative language in the Senate and House versions of the 
Defense Authorization Bill, as currently written, would delay the 
fielding of JCA aircraft. In particular, the Senate, in section 1029, 
has included language that would shift responsibility of the Joint 
Cargo Aircraft program from the Army to the Air Force divesting the 
Army of any fixed-wing aircraft missions. Such a directive would 
undermine Army fixed-wing capabilities essential to supporting critical 
combat missions and protecting the homeland. The Army-led program is on 
schedule and has met all of its milestones. Shifting responsibility to 
the Air Force at this point would set the program back at least two to 
three years--if not more--due to differing fielding timelines between 
the services.
    The Army, Air Force and the National Guard have worked together to 
provide a workable Joint solution to an important Joint capability gap. 
Given the critical need for improved intra-theater lift capabilities, 
we believe that it is critical that the JCA program continue to move 
forward without delay. To this end, we respectfully request your 
support in conference for fully authorizing the Joint Cargo Aircraft 
program in fiscal year 2008 as submitted to Congress in the President's 
Budget, and removing any legislative provisions or requirements that 
could impede the program's progress.
    Thank you for your consideration and strong support for the men and 
women of our armed forces.

            Working for America's Best!
                                    MSG Michael P. Cline, USA (Ret)
                                                 Executive Director

                               __________
                    National Guard Association of the United States
                                                    Washington, DC.
                                                  November 19, 2007

The Honorable Robin Hayes
130 Cannon House Office Building
Washington, D.C. 20515
Dear Representative Hayes:
    Thank you for sponsoring H.R. 3798.
    The service of our men and women of the National Guard ordered to 
full-time National Guard duty under Title 32 must be protected by the 
same reemployment rights under the Uniformed Services Employment and 
Reemployment Rights Act (USERRA) as are afforded our members ordered to 
active duty under Title 10.
    Although not readily visible to the American public and media, the 
men and women of the National Guard ordered to serve on full-time 
National Guard duty under Title 32 after September 11, 2001 are playing 
an indispensable role in maintaining the National Guard as ready 
operational force in the Global War on Terror. As with the active 
forces, the sacrifice of these men and women involves spending extended 
periods away from civilian occupations. They should have the same 
rights under USERRA upon completion of their duty to return with 
certainty to their civilian jobs as those protecting Reserve Component 
members serving on active duty under Title 10.
    NGAUS strongly supports H.R. 3798 now before the 110th Congress 
which would establish a National Guard Employment Protection Act that 
would apply the benefits of USERRA to individuals ordered to full time 
National Guard duty under section 502(f) of Title 32 on or after 
September 11, 2001.
    Our young men and women ordered to serve full-time in the National 
Guard under Title 32 in the Global War of Terror deserve the same re-
employment rights as those protecting their active duty counterparts. 
Thank you again for your efforts.

            Sincerely,
                                                   Stephen M. Koper
                                     Brigadier General, USAF, (ret)
                                                          President

                                 
                Prepared Statement of Hon. Artur Davis,
         a Representative in Congress from the State of Alabama
    Chairwoman Herseth Sandlin and Ranking Member Boozman, thank you 
for holding today's hearing to examine proposals to protect the jobs, 
housing and educational opportunities of our brave men and women of the 
U.S. Guard and Reserves. I appreciate the opportunity to testify on the 
Reservist Access to Justice Act (RAJA), H.R. 3393, that I cosponsored 
with Reps. Altmire and Walz.
    All of us recognize that our military service men and women are 
offering the highest personal service to their country as the war 
continues. Since 9/11, more than 600,000 reservists and guardsmen have 
been mobilized.\i\ Defense Department Data shows that while members of 
the Guard and Reserve have made up about 28 percent of all U.S. forces 
deployed to Iraq or Afghanistan, there were periods during 2005 when 
they made up nearly half of all U.S. troops in combat.\ii\ These 
deployments have taken a toll on the mental health, family lives, and 
economic stability of these brave men and women.
---------------------------------------------------------------------------
    \i\ Jill Carroll. The Christian Science Monitor. While Reservists 
Serve, Their Jobs Don't Always Wait. April 10, 2008.
    \ii\ Kimberly Hefling. Associated Press. Iraq War Vets' Suicide 
Rates Analyzed: High Numbers Found Among Members of Guard, Reserves. 
February 13, 2008.
---------------------------------------------------------------------------
    Understanding the role of reservists in the military, Congress 
acted in 1994 to ensure that when reservists and guardsmen answer the 
call of duty and return home, they also have the right to return to 
their civilian jobs. The Uniformed Services Employment and Reemployment 
Rights Act (USERRA) prohibits employer discrimination against members 
of the military, on the basis of their military service, in hiring or 
in reemployment. Unfortunately, studies and reports familiar to this 
Subcommittee show that--due to a number of factors--USERRA has not kept 
all of our reservists and guardsmen from falling through the cracks.
    For example, a Christian Science Monitor article published this 
weekend bore the title, ``While Reservists Serve, Their Jobs Don't 
Always Wait.'' The article outlines the story of Marine Reservist Steve 
Duarte, who held his civilian job for 19 years. Yet when he returned 
from Iraq in 2003, he was told that he would be let go at the end of 
the week. When his efforts with the Departments of Labor and Defense 
led nowhere, Duarte hired a private attorney and spent $12,000 of his 
own money for fees. Several years later, he won his lawsuit and was 
awarded almost $400,000. Duarte is not an isolated case. Numbers 
indicate that:

      10,061 formal complaints were filed with DOL from October 
1, 1996 through June 30, 2005.\iii\
---------------------------------------------------------------------------
    \iii\ GAO. Posthearing Questions Related to Federal Agencies' 
Activities Regarding the Uniformed Services Employment and Reemployment 
Rights Act. GAO-08-397R Military Personnel. Senate Committee on Health, 
Education, Labor and Pensions. 1/9/08.
---------------------------------------------------------------------------
      Nearly 10,000 informal complaints were filed with the 
Office of Employment Support for the Guard and Reserve (ESGR), and over 
2,000 formal complaints were filed with the Veterans' Employment and 
Training Service (VETS) and Office of Special Counsel (OSC) during 
fiscal years 2004-2005 (a total of almost 16,000).\iv\
---------------------------------------------------------------------------
    \iv\ Id.
---------------------------------------------------------------------------
      Though numbers show slight improvement, the June 2006 
Status of Forces Survey showed that military personnel reported being 
briefed on USERRA 1.8 times on average (up from 1.3 in 2004). The 
number of servicemembers who had never been briefed on USERRA decreased 
from 27 percent in 2004 to 21 percent in 2006.\v\
---------------------------------------------------------------------------
    \v\ Id.
---------------------------------------------------------------------------
      According to the GAO, about seventy percent of reservists 
facing difficulties in being reemployed or promoted did not seek any 
type of redress.

    We must agree that these numbers are unacceptable. However, recent 
court decisions have weakened service members' ability to use USERRA to 
enforce their rights. These include allowing service members to be 
subject to binding arbitration agreements and limiting the types of 
relief the court can provide. My bill, H.R. 3393, will correct and 
clarify gaps in USERRA that have allowed employers to escape their 
legal obligations to the military service members they hire.
    For example, in 2003 Lieutenant Colonel Michael Garrett, USMCR, was 
fired from his position with Circuit City stores following more than 10 
years of work-related problems due to his service and training in the 
Marine Corps Reserve. When he sued the company, Circuit City responded 
with a motion to compel arbitration on the basis of a binding 
arbitration agreement that had been distributed to all employees in 
1995. While the district court found that USERRA superseded the 
arbitration agreement, the 5th Circuit Court of Appeals reversed, 
finding that because Congress has not explicitly stated that USERRA 
plaintiffs ``procedural'' (as opposed to ``substantive'') rights are 
superseded by USERRA, the agreement was enforceable. The Reservist 
Access to Justice Act will provide needed clarity on this issue by 
amending the Federal Arbitration Act to exempt USERRA plaintiffs from 
binding pre-dispute arbitration agreements.
    This legislation also addresses the need to ensure that injunctive 
relief is available to reservists who have been fired in violation of 
USERRA. Current law holds that only violations that result in 
``irreparable injury'' can be prevented by a court injunction. Firings 
are not considered ``irreparable'' injury, since a court can award 
backpay if it finds that the firing was discriminatory. However, the 
unique goals of USERRA--to ensure that the jobs of service members are 
protected--cannot be achieved if the Court cannot act to prevent a 
discriminatory firing. H.R. 3393 strengthens USERRA by clarifying that 
the court ``shall'' use its equity powers to protect military service 
members.\vi\
---------------------------------------------------------------------------
    \vi\ Section 4323(e) of USERRA allows the court to make 
discretionary use of its equity powers in order to vindicate the rights 
and benefits of the veteran. In the case of Bedrossian v. Northwestern 
Memorial Hospital, 409 F.3d 840 (7th Cir. 2005), the court declined to 
grant Dr. Bedrossian an injunction to prevent his employer from firing 
him. By amending Section 4323(e) to read that the court ``shall use its 
full equity powers'' instead of ``may use its full equity powers,'' 
RAJA ensures that courts can act to prevent discriminatory firings.
---------------------------------------------------------------------------
    Additional key provisions of RAJA would accomplish the following:

    1.  Expand Availability of Liquidated Damages in USERRA disputes. 
Section 4323(d) of USERRA currently allows for liquidated damages only 
in disputes with a State or local government, or a private employer. 
Further, because liquidated damages are determined by doubling the 
amount of actual damages, a veteran may still end up without any 
monetary relief. RAJA will extend section 4323(d)(C) by making it 
applicable to the Federal Government. RAJA will also ensure that 
liquidated damages are always available by making the amount of damages 
equal to the actual amount of damages or $20,000, whichever is greater.
    2.  Make compensatory damages automatic absent a showing of good 
faith by the employer. Section 4323(d) allows for a range of 
discretionary relief, including compensatory damages. RAJA will make 
the award of damages the default outcome, except where the employer can 
show that the USERRA violation was made in good faith.
    3.  Provide for Punitive Damages in the Worst Cases of 
Discrimination. USERRA currently does not provide the court with 
additional remedies to deter the most egregious violations of service 
members' employment rights. RAJA would make punitive damages available 
as a remedy in cases where the discriminator acted with ``malice or 
reckless indifference to the federally protected rights of the 
person.''
    4.  Holds State Governments Accountable. RAJA provides that States 
that accept federal funds for any state programs or activities have 
waived their sovereign immunity in cases of USERRA actions.

    In addition to these key provisions, my office is currently 
finalizing the drafting of several additional provisions which would 
further re-invigorate USERRA. These provisions would do the following:

    1.  Clarify the Definition of Successor in Interest. In Coffman v. 
Chugach Support Services, Inc., 411 F.3d 1231 (11th Cir. 2005), a court 
found that Coffman had no remedy under USERRA. While the USERRA 
definition of ``employer,'' includes a ``successor-in-interest,'' the 
definition does not make clear that a merger or transfer of assets need 
not occur for a successor company to take on the reemployment 
obligations of the original company. In USERRA's legislative history, 
Congress stated its intent to apply factors used in Leib v. Georgia-
Pacific Corp., 925 F.2d 240 (8th Cir. 1991) to define ``successor-in-
interest.'' RAJA will codify Congress' intent so that a company like 
Chugach, which interviewed all 100 of the previous contractors' 
employees and hired 97 of them, would be considered a successor-in-
interest for the purposes of protecting USERRA plaintiffs.
    2.  Ensure that Prevailing Plaintiffs Receive Attorneys' Fees. 
Currently, USERRA makes the award of attorneys' fees discretionary. By 
requiring the award of attorneys' fees where appropriate, USERRA will 
ensure that reservists are able to turn to private attorneys to 
represent them when they are unable to find relief through government 
channels.

    The views and recommendations of a number of experts were 
considered in the drafting of this legislation. As a result, H.R. 3393 
has been endorsed by the National Defense Committee, The Military 
Officers Association of America, the Military Coalition, and the 
Reserve Officers Association. In a letter of support signed by 
representatives of 32 member organizations, the Military Coalition 
states, ``Since September 11, 2001, more than 600,000 members of the 
Guard and Reserve have served the nation on active duty in the war on 
terror. Over 132,000 have served multiple tours and thousands more are 
in the call-up pipeline. For these selfless patriots and their families 
returning to home, hearth, and jobs is second only to accomplishing 
their mission. . . . The Military Coalition appreciates your 
introduction of this legislation. Your bill is a very positive step in 
helping sustain the Guard and Reserve as full partners in our operating 
forces. TMC strongly supports H.R. 3393 and pledges to work with you 
and all of Congress to secure its enactment.''
    I urge you to join these organizations and support this 
legislation.

                                 
             Prepared Statement of Hon. Patrick J. Murphy,
      a Representative in Congress from the State of Pennsylvania
    First, I would like to thank Chairwoman Herseth Sandlin and Ranking 
Member Boozman for holding this hearing and giving me the opportunity 
to speak on behalf of my bill, H.R. 3298, the 21st Century 
Servicemembers Protection Act.
    Soon after my election to Congress, a JAG attorney who does legal 
assistance in the 101st Airborne contacted me to let me know about a 
growing problem that many deployed servicemembers are currently facing.
    He explained to me that many of the soldiers he worked with have 
had their credit reports damaged during their deployments over issues 
concerning their contracts with cellular telephone or Internet service 
providers. This JAG attorney was able to put one of his own contracts 
on hold during his deployment, but to do so he was forced to pay a 
costly fee.
    Looking into this further, I also discovered that some financial 
institutions were slow or unwilling to reduce servicemembers' interest 
rates during their deployments, even though these creditors are already 
required to do so by law.
    I learned that when servicemembers and their families ran into 
problems with service providers and creditors, they not only had to 
deal with the strain of deployment, but also faced repeated harassment 
by collection agencies.
    We owe the men and women of our Armed Forces better than this.
    For decades, the Soldiers and Sailors Civil Relief Act and its 
successor, the Servicemembers Civil Relief Act (SCRA) have provided 
crucial financial protection for our Soldiers, Sailors, Airmen, 
Marines, and Guardsmen. Now, as we continue to send a new generation of 
servicemembers into harm's way, it is our obligation as Members of 
Congress to update and modernize SCRA for today's troops.
    The 21st Century Servicemembers Protection Act expands SCRA to 
cover service contracts such as cellular phones, utilities, cable 
television, or Internet access. Similar to provisions that currently 
exist for residential and automobile leases, this legislation will 
allow troops with deployment orders to more easily terminate or suspend 
their service contracts without fee or penalty.
    Currently, creditors who knowingly or negligently fail to reduce 
interest rates upon notification from a soldier with deployment orders, 
face no specific penalty. Another provision of my bill would add a 
penalty to those creditors who refuse to reduce interest rates as they 
are already required to do under SCRA.
    As a veteran of the United States Army and the war in Iraq, I know 
how important it is that our troops be able to focus on accomplishing 
their mission and coming home safely, without worrying about their 
credit rating or whether bill collectors are harassing their families.
    Since this bill's introduction, my staff and I have worked with the 
industries that will be affected by this legislation. In doing so, we 
have developed compromise language that I believe maintains the intent 
of the bill as introduced while alleviating the concerns of the 
companies that will be affected by passage of this legislation. It is 
my hope that the Committee will adopt this revised language when the 
bill moves to mark-up.
    This is not a Democratic or Republican issue. This is about doing 
what's right for our troops. With that, I would again like to thank the 
Chairwoman and the Ranking Member for giving me the opportunity to 
testify today, and I am happy to answer any questions.

                               __________
                                          Fleet Reserve Association
                                                    Alexandria, VA.
                                                     22 August 2007

The Honorable Patrick Murphy
U.S. House of Representatives
1007 Longworth Office Building
Washington, DC 20515

Fax: 202-225-9511
Dear Representative Murphy:
    The Fleet Reserve Association strongly supports, ``The 21st Century 
Service Members Protection Act'' (H.R. 3298) to expand current credit 
protections for service members to terminate or suspend certain service 
contracts entered into before the individual receives notice of a 
permanent change of station or deployment orders.
    Under current law, only residential leases (90 days or more) and 
vehicle leases (180 days or more) can be canceled. Your proposal 
expands these protections to include other services such as cell phone 
service, cable/satellite television, Internet service, auto insurance 
and utility payments. In cases of fees paid in advance, a company would 
have 30 days from the effective date of termination to provide a 
refund.
    The bill also increases the potential penalty for companies that do 
not provide interest rate reduction to those eligible under the Service 
Members Civil Relief Act, which mandates a six percent rate cap on 
loans incurred prior to the service member coming on active duty.
    The Association appreciates your leadership on this legislation and 
stands ready to assist you in its passage in the 110th Congress. The 
FRA point of contact is John Davis, FRA's Director of Legislative 
Programs at the above numbers or (john@fra.org).

            Sincerely,
                                                   JOSEPH L. BARNES
                                       National Executive Secretary

JLB:jrd:aal

                               __________
                              Association of the United States Army
                                                     Arlington, VA.
                                                  12 September 2007

The Honorable Patrick Murphy
U.S. House of Representatives
1007 Longworth Office Building
Washington, DC 20515
Dear Mr. Murphy:
    On behalf of the 105,000 members of the Association of the United 
States Army, I write to express our support for your legislation, the 
21st Century Servicemembers Protection Act, H.R. 3298.
    The Association of the United States Army strongly believes that 
military members called to defend our great nation should not be 
penalized by steep termination fees in contracts involving cellular 
phone service, car insurance, utilities, cable television, or Internet 
access. Also, we appreciate your recognition of the fact that serious 
penalties are warranted for unscrupulous lenders who knowingly fail to 
reduce interest rates for deploying servicemembers.
    The Association of the United States Army applauds and supports 
your efforts to provide greater protections for military members and 
their families. We look forward to working with you to secure enactment 
of this legislation.

            Sincerely,
                                                 GORDON R. SULLIVAN
                                               General, USA Retired

GRS/WBL/rmw

                               __________
                      Veterans of Foreign Wars of the United States
                                                    Washington, DC.
                                                  November 15, 2007

The Honorable Patrick Murphy
1007 Longworth Office Building
U.S. House of Representatives
Washington, DC 20515
Dear Representative Murphy:
    On behalf of the 2.4 million members of the Veterans of Foreign 
Wars and our Auxiliaries, I'd like to offer our support for H.R. 3298, 
legislation that would expand the Servicemembers Civil Relief Act 
(SCRA) to cover service contracts such as cellular phone service, car 
insurance, utilities, cable television, or Internet access. This 
legislation would allow troops with deployment orders to terminate or 
suspend their service contracts without fee or penalty.
    This important legislation would also create a penalty of up to 
$10,000 for creditors who refuse to reduce interest rates as required 
by SCRA. As of currently, there is no penalty for creditors that choose 
not to adhere to SCRA; this legislation would ensure our service 
members being sent into harm's way are taken care of.
    The VFW commends you for introducing this legislation and we look 
forward to working with you and your staff to ensure its success. Thank 
you for your continued support of all America's veterans. Also, thank 
you for your service in the 82nd Airborne.

            Sincerely,
                                          Dennis Cullinan, Director
                                       National Legislative Service

                               __________
                           Military Officers Association of America
                                                    Alexandria, VA.
                                                    August 30, 2007

The Honorable Patrick Murphy
The Honorable Tim Walz
U.S. House of Representatives
Washington, DC 20515
Dear Representatives Murphy and Walz:
    On behalf of the nearly 367,000 members of the Military Officers 
Association of America (MOAA), I am writing to express our support for 
your legislation, the 21st Century Service Members Protection Act, H.R. 
3298.
    MOAA strongly believes that military members called to defend our 
great nation should not be penalized by steep termination fees in 
contracts involving cellular phone service, car insurance, utilities, 
cable television. or Internet access. Also, we appreciate your 
recognition of the fact that serious penalties are warranted for 
unscrupulous lenders who knowingly fail to reduce interest rates for 
deploying service members.
    We would recommend further review of potential unintended 
consequences in the lease termination provisions in the bill. In many 
states a landlord would be required to hold and protect for a specified 
period personal property of a deployed service member who has 
terminated a lease. This requirement is intended to protect tenants 
from retaliation. However, the bill would apparently result in criminal 
penalties for holding tenants' property that may be in their interest.
    MOAA applauds and supports your efforts to provide greater 
protections for military members and their families. We look forward to 
working with you to secure enactment of this legislation.

            Sincerely,
                               VADM Norbert R. Ryan, Jr. USN (Ret.)
                                                          President

                               __________
              National Guard Association of the United States, Inc.
                                                    Washington, DC.
                                                 September 10, 2007

The Honorable Patrick Murphy
1007 Longworth Office Building
U.S. House of Representatives
Washington, DC 20515
Dear Mr. Murphy:
    As a vital part of our Nation's Armed Forces, National Guard 
members continue to perform their federal active duty mission with 
distinction but not without risks to their legal interests at home.
    While serving on active duty, National Guard members requires full 
protection of their civil legal interests and, where appropriate, 
relief from performing certain contractual obligations adversely 
affected by their active duty service.
    NGAUS strongly supports H.R. 3298 now before the 110th Congress 
which seeks to expand the protections available to National Guard 
members under the Servicemembers Civil Relief Act with respect to 
terminating or suspending contracts for cellular phone service, cable 
or satellite television service, Internet service, automobile 
insurance, water, electricity, oil, gas, telephone and other utilities.
    Our young men and women, who are selflessly serving our states and 
nation, deserve the protections they need to obtain relief from 
contractual obligations for services that they will not require during 
deployment.
    NGAUS thanks you for your continued support of the National Guard.

            Sincerely,
                                                   Stephen M. Koper
                                     Brigadier General, USAF, (ret)
                                                          President

                                 
      Prepared Statement of Ronald F. Chamrin, Assistant Director,
                  Economic Commission, American Legion
Madam Chairwoman and Members of the Subcommittee:
    Thank you for this opportunity to present The American Legion's 
view on pending legislation before the Subcommittee today.
    America needs a historic investment in the educational future of 
this nation's veterans. When The American Legion wrote the first draft 
of the Servicemen's Readjustment Act 1944, it changed the course of 
American history. A generation of heroes was able to join the middle 
class, achieve home ownership, earn higher education and live the 
American dream. More famously known as the GI Bill, it was hailed by 
many as the greatest piece of legislation ever. Sadly, as the 
generations passed and memories dimmed, the GI Bill benefits were so 
drastically reduced that many veterans either declined or were denied 
even the opportunity to participate in the program. Few veterans today 
have the luxury of attending school without also holding a job, and 
many colleges are completely out of reach simply due to financial 
barriers.
    No longer can we continue to call each piece of education 
legislation in the 110th Congress a GI Bill. A true GI Bill encompasses 
such benefits as housing, employment, job counseling and training, 
health care, and education for veterans. These are the true ``tools'' 
for seamless transition from warrior back to citizen. The time to 
change history is once again upon us.
H.R. 4883, A bill to amend the Servicemembers Civil Relief Act to 
        provide for a limitation on the sale, foreclosure, or seizure 
        of property owned by a servicemember during the 1-year period 
        following the service members period of military service.
    The American Legion supports this legislation. This legislation 
would greatly assist those veterans that were deployed to a combat zone 
and had little time to successfully transition from active duty 
military service to the civilian sector. Members of the Reserve 
components would be the largest benefactors of an extension from 90 
days to 1 year. Enactment of this legislation would provide veterans an 
extended period of time to become employed, correct all their finances 
and assist them in the transition process.
    In the most unfortunate of circumstances, lenders are unwilling to 
negotiate and assist veterans who are in default status even though 
these veterans are in a good position to correct the situation. It is 
unfair to expect servicemembers to concentrate on fighting a battle 
overseas and then simultaneously attend to all their personal matters 
at home. Moreover, veterans have a positive track record of following 
through with payments. During the fourth quarter of 2007, only 2.83 
percent of homeowners using the Department of Veterans Affairs' (VA's) 
Loan Guaranty program were seriously delinquent. This is much lower 
when compared to 6 percent for Federal Housing Administration (FHA) 
mortgages, and a whopping 14.44 percent for the subprime mortgages.
H.R. 3798, National Guard Employment Protection Act
    Protecting employment rights of National Guard soldiers who are 
training to support their missions in the Global War on Terror is the 
right thing to do. This bill would improve current law by amending 
Title 38, United States Code (U.S.C.) to protect the reemployment 
rights of members of the National Guard who were ordered to active duty 
in support of national or state emergencies.
PENDING LEGISLATION TO AMEND THE VA LOAN GUARANTEE PROGRAM: H.R. 4884, 
        H.R. 4539, H.R. 5664
    Since the VA Home Loan program was enacted as part of the original 
Servicemen's Readjustment Act 1944 (the GI Bill), VA has guaranteed 
more than 18.2 million home loans totaling nearly $938 billion for 
veterans to purchase or construct a home, or to refinance another home 
loan on more favorable terms. In the last five years (2001-2006), VA 
has assisted more than 1.4 million veterans in obtaining home loan 
financing totaling almost $197 billion. About half of these loans, just 
over 730,000, were to assist veterans to obtain a lower interest rate 
on an existing VA guaranteed home loan through VA's Interest Rate 
Reduction Refinancing Loan Program.
    The American Legion supports the elimination of the VA Home Loan 
funding fee and petition Congress to appropriate funding to sustain the 
VA Home Loan program when the funding fee is eliminated. Currently, 
only service-connected disabled veterans are exempt from this funding 
fee. However, for all other eligible veterans, the VA funding fee 
charged to veterans was enacted to defray the costs of the VA 
guaranteed home loan program. The fee, currently 2.15 percent on no 
downpayment loans for first-time use, is intended to enable the veteran 
who obtains a VA home loan to contribute toward the cost of this 
benefit. Congress is not required to appropriate funding for this 
program; however, because veterans must now ``buy'' into the program, 
it no longer serves the intent of helping veterans afford a home.
    In some aspects, the funding fee makes the VA Home Loan program 
less beneficial than a standard, private loan. Approximately 80 percent 
of all VA Home Loan participants must pay the current funding fee to VA 
to defray the cost of appropriating funding for the home loan program. 
This has had a negative effect on many veterans who choose not to 
participate in this highly beneficial program.
    The American Legion supports the reinstatement and extension of the 
adjustable rate mortgage and hybrid adjustable rate mortgage project, 
not just for the immediate future, but indefinitely. The adjustable 
rate mortgage authority would enable VA the flexibility to assist more 
veterans in obtaining affordable homes.
    The American Legion supports allowing spouses of deceased veterans 
to gain eligibility for the VA Home Loan program. The current 
eligibility for a home loan for spouses are: an unremarried spouse of a 
veteran who died while in service or from a service-connected 
disability, or are a spouse of a serviceperson missing in action or a 
prisoner of war. It is unfair for a veteran's spouse only to become 
eligible for the home loan if the veteran dies of a service-connected 
disability. Moreover, veterans are more likely than not to be the 
primary income provider for the household and contribute the majority 
of payments to mortgages for the family. Upon death of a veteran, the 
mortgage payments must continue to be paid and the burden falls on the 
surviving spouse. Many times the spouse elects to relocate to a 
smaller, more economical home that is within their means. By allowing 
spouses to gain eligibility, many elderly widows/widowers will be able 
to enter the VA Loan Program.
    A long overdue remedy to the refinancing laws is needed. In order 
to strengthen the Loan Guarantee program, the law should be amended to 
remove the 10 percent equity requirement in order to refinance a home 
and to increase the refinancing limit a veteran can obtain to match the 
maximum loan guarantee amount; currently $417,000. Under current law, a 
veteran who wishes to refinance their home is limited to a loan of 
$144,000.
    Specially adaptive housing (SAH) is and will continue to be an 
important issue as severely wounded veterans heal and transition out of 
VA Polytrauma facilities. Since 1948, SAH assisted over 34,000 veterans 
totaling $650M. For FY 2008 as of March 31, 2008, 550 veterans have had 
grants approved and 1,500 veterans are in some stage of pursuit of 
grant today.
    It is important to note that there are 7,200 veterans currently 
being tracked by the VA Loan Guarantee Service that are eligible, but 
not taking advantage of SAH at this time. These veterans could request 
specially adaptive housing assistance at any time and as the Global War 
on Terror continues, more veterans will require special adaptations to 
their homes. Studies required every six years to update plans and 
specifications are not the proper solution. Rather, continuous 
oversight and constant updates to veterans, Congress, and interested 
parties would better serve the veteran community.
Housing Crisis Affecting Veterans
    The National Alliance to End Homelessness (NAEH) report, ``Vital 
Mission, Ending Homelessness Among Veterans'' reports that currently, 
over 930,000 veterans pay more than 50 percent of their income toward 
housing, be it renting or owning a home. (476,877 rent/453,354 own) 
When testifying before your Subcommittee; economists, lenders, 
realtors, and other experts painted a bleak outlook for the future in 
terms of veterans defaulting and foreclosing on their homes. If a 
veteran loses his or her job, has a financial emergency, or some other 
factor leading to delinquency, nearly 1 million veterans could be close 
to losing their homes.
    The Government Accountability Office (GAO) reported that the 
overall default rate grew by 29 percent, reaching a point at which just 
over 1 in every 100 mortgages was in default, almost a 28-year high. 
The foreclosure start rate did reach a 28-year high, rising by 55 
percent. (GAO-08-78R Default and Foreclosure Trends (October 2007)).
    In comparison to the subprime mortgage crisis, the VA Home Loan 
program is helping veterans maintain their homes through supplemental 
services. The VA Loan Guarantee Service reports that in 2007, there 
were 58,836 reported defaults:

      Only 16,000 had VA-Veteran assistance through the 
Supplemental Servicing program provided by the VA.
      Approximately 8,400 saved loans with assistance with the 
VA Home Loan program supplemental servicing.
      Just 8,100 homes foreclosed.

PENDING LEGISLATION TO ESTABLISH A STUDY OF VETERAN TRENDS AND 
        PROGRAMS: H.R. 3646, H.R. 3889
    A joint study to ascertain the needs of employees between 
Department of Labor's (DOL) Veterans' Employment and Training Services 
(VETS) and VA, as proposed in H.R. 3646, must also have Department of 
Defense (DOD) involvement to determine what military occupational 
skills can successfully translate over to the civilian sector. In the 
Armed Forces, unique occupations are performed to approved military 
standards that may meet or exceed the civilian license or certification 
criteria. Upon separation, many former military personnel, certified as 
proficient in their military occupational career, are not licensed or 
certified to perform the comparable job in the civilian workforce, thus 
hindering chances for immediate civilian employment and delaying career 
advancement. This situation creates an artificial barrier to employment 
upon separation from military service.
    Unemployment, underemployment, difficulty translating military 
skills to the civilian sector and the state of our economy are proving 
to be obstacles to employment. Younger veterans of Operation Iraqi 
Freedom/Operation Enduring Freedom (OIF/OEF) are experiencing 
employment obstacles at an alarming rate. A report by the DOL-VETS 
finds that 11.3 percent of veterans ages 20 to 24 were unemployed in 
2007, compared to only 8.1 percent of nonveterans in the same age 
group. Moreover, a separate report by VA (Employment Histories Report 
Final Compilation Report, Associates Inc. September 28, 2007) shows a 
rise in the figure for those who stopped looking for work because they 
couldn't find jobs or returned to school from just 10 percent of young 
veterans in 2000 to 23 percent in 2005. VA even reports a higher 
percentage of unemployed veterans, 18 percent of veterans aged 20-24 
who sought jobs within one to three years of discharge were unemployed.
    A longitudinal study of the vocational rehabilitation program 
proposed in H.R. 3889 has the potential to greatly assist VA's efforts 
in rehabilitation and other aspects of benefits and health care. The 
requirement to provide annual reports enforces greater oversight of 
this vital program. In addition to the requirements set forth by the 
legislation, The American Legion recommends that the Secretary report 
on all aspects of employment and housing and other related data of the 
families of veteran sample source.
PENDING LEGISLATION TO AMEND VETERANS' EDUCATION BENEFITS: H.R. 4889
    The American Legion strongly agrees with H.R. 4889, The Guard and 
Reserves Are Fighting Too Act of 2008, and fully supports the intent of 
the bill that would move the Reserve Educational Assistance Program 
(REAP) from Chapter 1607, Title 10, U.S.C., to a new chapter under 
Title 38, U.S.C. Recodification of REAP benefits would place the 
administration and oversight authority under VA and the Veterans' 
Affairs Committees. Traditionally seen as a recruitment tool, 
Montgomery GI Bill (MGIB) benefits can also be viewed as a readjustment 
tool that more closely falls in line with the purview of VA for 
seamless transition from active-duty to the classroom.
    However, The American Legion has concerns regarding the technical 
language. If H.R. 4889 were enacted in its current form, the positive 
veterans' education provisions contained in the FY 08 National Defense 
Authorization Act (NDAA) would be removed. Therefore, The American 
Legion most strongly recommends making technical corrections to H.R. 
4889 to contain the new veterans' education provisions enacted under 
Title 10, U.S.C., by the NDAA. The language would then fully match the 
legislative intent to transfer of all REAP benefits to Title 38, U.S.C.
    The most notable positive provision in the NDAA in regards to 
veterans' education is the portability of benefits of REAP 
beneficiaries. The NDAA enacted legislation in Title 10, U.S.C., to 
allow Reservists to use their Chapter 1607 educational benefits for 10 
years after separation from the Reserves and permits Reservists to 
reclaim previously earned 1607 benefits and use them for 10 years 
following any subsequent separation, if they rejoin the Armed Forces.
    This is important because we must understand that many of the 
Reservists, who have fought in Iraq and Afghanistan, have already left 
the service due to multiple deployments, injuries, family, or 
retirement. Reservists should not be penalized because they served in 
the war, but chose to separate before the war ended.
    Additionally, the NDAA authorizes an accelerated payment program; 
allowing Reservists with three cumulative years of active-duty service 
to qualify for education benefits at 80 percent of the active-duty 
rate, and creates a buy-up program for service members eligible for 
Chapter 1607 benefits.
    The American Legion has no official position at this time on H.R. 
5684, Veteran Education Improvement Act and H.R. 3681, the Veterans 
Benefits Awareness Act
    The American Legion has no official position on H.R. 3393, 
Reservist Access to Justice Act; H.R. 3298, 21st Century Servicemembers 
Protection Act; and H.R. 3467, Second Chance for America's Veterans 
Act.
CONCLUSION
    The American Legion appreciates the opportunity to present its 
views on programs that will affect veterans, servicemembers and their 
families. An author once wrote, ``A veteran is someone who, at one 
point in their life, wrote a `blank check' made payable to the United 
States of America for an amount `up to and including my life.' That is 
honor, and there are way too many people in this country who no longer 
understand it.'' We ask that this Subcommittee take into consideration 
the recommendations of The American Legion as your colleagues address 
these issues. Many steps should be taken to ensure that those who have 
put on the uniform and have written a ``blank check'' to this country 
(to include the ultimate sacrifice) continue to receive the thanks of a 
grateful nation. We also ask the Subcommittee not to forget the 
sacrifices and contributions made by America's veterans and their 
families as the legislation that you deliberate upon will have lasting 
effects on them.
    The American Legion looks forward to continuing to work with the 
Subcommittee to assist the nation's veterans. Madam Chairwoman and 
Members of the Subcommittee, this concludes my testimony.

                                 
       Prepared Statement of Justin Brown, Legislative Associate,
 National Legislative Service, Veterans of Foreign Wars of the United 
                                 States
Madam Chairwoman and Members of this Subcommittee:
    On behalf of the 2.3 million members of the Veterans of Foreign 
Wars of the United States and our Auxiliaries, I would like to thank 
this committee for the opportunity to testify. The issues under 
consideration today are of great importance to our members, and the 
entire veteran population.
    In the history of our nation there have always been great men and 
women who have put everything on the line for our country. Our nation 
is full of these heroes, who join together to create the world's 
strongest, most impressive, and smartest military. However, our 
military is not maintaining the quality of the force. According to a 
recent GAO report, the percentage of high quality recruits in the Army 
fell to 49 percent in 2006--the lowest level in more than 20 years and 
the lowest among the services. Also, the total number of medical and 
criminal waivers has risen steadily from 11.5% of recruits in 2004 to 
16.9% of recruits in 2006 (10.1% of 2006 recruits were waived for pre-
service drug use, criminal charges, or convictions).
    From 1973-1985, similar recruitment standards produced veterans 
that were three to four times more likely to be homeless than their 
non-veteran counterparts, even without most of this group suffering the 
stresses and strains of combat or the mental and physical problems that 
follow.
    The risks and costs of joining the Army are becoming more and more 
apparent to young men and women who are eligible for recruitment. To 
join today's military is to risk death; it is to risk mental and 
physical impairments; it is to risk one's marriage; it is to risk the 
custody of one's children; it is to risk employment; and it is to risk 
economic success. The military's strongest recruitment tool of a 
college education is fast eroding as potential recruits learn of the 
shortfalls and failures of the current benefits provided to those who 
risk everything for their nation.
    There are two strategies to solve the issue and respectively there 
are two outcomes. The Army and Marine Corps have not met their goal of 
high-quality recruits since 2003. DoD's response has been to lower 
recruitment standards, thereby enlarging the pool of eligible recruits, 
to meet their recruitment needs. The consequence of such actions is 
creating a situation in which the military becomes the employer of last 
resort. This will likely lead us to larger expenditures in the long 
term, than investing in a robust, attractive, proven recruitment tool--
a GI Bill that pays for the full cost of education: tuition, room, 
board, fees, and a cost-of-living stipend.
    Increased funding, albeit necessary, is not the only issue with our 
current GI Bill. Our veterans, and military, need a GI Bill that 
incentivizes going to the best college possible, not the cheapest. 
Also, a new GI Bill ought to equitably distribute benefits to veterans. 
A single payment system becomes inhibitive to many and too generous for 
others.
    The GI Bill is a cost of war; we can pay it now as an investment, 
or pay it later in much greater costs to our government and our 
veterans. If we decide to defer this cost it will be for increased 
appropriations for permanent housing for homeless veterans, increased 
appropriations for the expansion of the Incarcerated Veterans 
Transition Program, and increased appropriations due to a further 
reliance on the VA medical and benefits system.
    The VFW asks that America does its best to ensure our veterans a 
normal life with the same opportunities as those who chose to go to 
college, or as those who chose to go into the workforce, vice serving 
their nation. It is simple, and readily apparent, that if we continue 
to fail to provide our young men and women a bridge from the all 
volunteer force back to a civilian lifestyle, fewer high-quality young 
men and women will volunteer to serve their country.

         H.R. 3298, 21st Century Servicemembers Protection Act.

    We support this legislation, which would expand the Servicemembers 
Civil Relief Act (SCRA) to cover service contracts such as cellular 
phone service, car insurance, utilities, cable television, or Internet 
access. This legislation would allow troops with deployment orders to 
terminate or suspend their service contracts without fee or penalty. 
The current SCRA legislation applies no penalties for creditors who 
refuse to reduce interest rates as required; this legislation would 
create a penalty mechanism thereby increasing the likelihood for 
companies to comply with the law. This is important because many 
deployed men and women are coming home to large bills that were not 
efficiently canceled by service providers.

          H.R. 3393, Reservist Access to Justice Act of 2007.

    The VFW believes that there is great need for reform to the 
Uniformed Services Employment and Reemployment Rights Act of 2004 
(USERRA). The original intent of USERRA was to provide employment 
protections to veterans in Reserve and Guard units who were being 
deployed. The current USERRA is not getting the job done as many 
veterans are returning from deployments without their previous 
employment.
    H.R. 3393 would correct some previous court decisions that favored 
employers. The bill would hold federal, state or private employers 
liable for up to $20,000 in liquidated damages if they willfully 
discriminated against employees who are activated to active-duty 
status. The bill would also increase the likelihood that the courts 
would award injunctive relief to those making USERRA claims. The bill 
would stipulate that veterans are not bound to pre-arbitration 
agreements.
    The VFW strongly supports these necessary reforms to USERRA, and 
supports its swift passage. Our Reserve and Guard units should come 
home to their previous employment if they choose to do so. They have 
served in the name of their country and should be treated honorably.

          H.R. 3467, Second Chance for America's Veterans Act.

    The Second Chance for America's Veterans Act would extend and 
provide funding for the Incarcerated Veterans Transition Program 
(IVTP). During its pilot phase, IVTP stated it reduced recidivism rates 
amongst participants by 90 percent. IVTP also recorded that 90 percent 
of its participants were moved into permanent housing, and 72 percent 
became gainfully employed. Under this assumption, IVTP has saved 
taxpayers millions of dollars a year in incarceration costs and has 
stimulated local job growth and economic development by providing 
former offenders with jobs. The pilot program stopped receiving funding 
as of September 2007. If this program continues to reduce recidivism 
rates for veterans and offsets the cost of the program with the cost of 
incarceration, the VFW supports this program and this legislation.

    H.R. 3646, To direct the Secretary of Veterans Affairs and the 
Secretary of Labor to conduct a joint study on the fields of employment 
for which the greatest need for employees exists in various geographic 
                                 areas.

    The VFW supports this legislation, which would assist veterans in 
finding employment based on the needs of local employers. While the VFW 
is aware of the strong unemployment levels of recently separated 
servicemembers, and the importance of locating potential employment 
opportunities for veterans, it is also important to give these veterans 
access to training and education should they want to pursue a technical 
vocation, college degree, or certification. It is the VFW's belief that 
increased transitional benefits, the GI Bill and Vocational 
Rehabilitation in particular, are the best answer to employment issues 
facing veterans, especially in regards to our recently separated 
servicemembers.

           H.R. 3681, Veterans Benefits Awareness Act of 2007

    The VFW supports this legislation, which would authorize the 
Secretary of Veterans Affairs to advertise in the national media in 
regards to veterans benefits. The VFW believes that targeted national 
media campaigns could be conducive to ensuring America's veterans are 
receiving necessary information in a timely manner. Other departments 
frequently utilize national media and advertisement with great success. 
In particular, DoD uses national media extensively for recruitment. It 
is the belief of the VFW that our government should be as proactive in 
their approach to veteran's welfare as they are in making them.

   H.R. 3889, To amend title 38, United States Code, to require the 
 Secretary of Veterans Affairs to conduct a longitudinal study of the 
   vocational rehabilitation programs administered by the Secretary.

    The VFW supports this legislation, which would provide information 
in regards to the effectiveness of the VA's Vocational Rehabilitation 
program. The VFW would like to see this, and similar studies, conducted 
on all educational, transitional, and employment benefits, as very 
little is known in regards to the end results provided by our current 
transitional benefits. Such a study, and tracking, of the benefit and 
participants would provide Congress and the VA invaluable information 
as to what is, and what is not, working in regards to benefits that are 
currently being distributed for the purpose of employment and 
education.

      H.R. 3798, National Guard Employment Protection Act of 2007.

    The VFW supports this legislation that would ensure that the 
National Guard receives equal employment protections under USERRA. This 
legislation clears up a legal loophole for employers of National Guard 
members. The National Guard, like our Reserve components, deserves full 
employment protections while serving our country.

H.R. 4539, Department of Veterans Affairs Loan Guaranty Cost Reduction 
                              Act of 2007.

    The VFW would like to see the loan fees of the VA home loan 
guarantee program repealed. While this legislation does not repeal the 
fees, it would make them more feasible for veterans using the program 
by extending them over a period of time. The VFW strongly supports 
provisions of the bill that would increase the max loan VA can 
guarantee to 125% of the Freddie Mac conforming limit, currently 
$521,250. This legislation would also reduce the equity requirement for 
the VA to guaranty a mortgage refinance from 10 percent currently to 0 
percent. We also support the provisions that would raise refinance 
loans to the conforming limit and increase the guaranty for affordable 
housing (as determined by VA and HUD) to 30% of the total loan. This 
legislation also authorizes VA to use a portion of the previous year's 
fee revenue to reduce closing costs.

H.R. 4883, To amend the Servicemembers Civil Relief Act to provide for 
a limitation on the sale, foreclosure, or seizure of property owned by 
       a servicemember during the one-year period following the 
              servicemember's period of military service.

    This legislation would temporarily increase servicemembers' 
foreclosure relief from 90 days to one year. This legislation would 
help families that have been caught in the subprime mortgage crisis 
and/or are in risk of default on their mortgage due to military 
service. This legislation could be the difference between a 
servicemember's family having a home or being homeless.

    H.R. 4884, Helping Our Veterans to Keep Their Homes Act of 2008.

    The VFW supports this legislation, that would: increase the maximum 
home loan guarantee amount to $625,500; decrease the equity requirement 
to refinance a home loan; require the VA Secretary to review and 
streamline the process of using a guaranteed home loan to purchase a 
condominium; reduce the home loan funding fees to one percent; extend 
the adjustable and hybrid rate mortgage demonstration projects to 2018; 
and provide a yearly adjustment of the VA home loan to match the 
consumer price index.

    H.R. 4889, The Guard and Reserves Are Fighting Too Act of 2008.

    The VFW strongly supports this legislation, which would recodify 
chapter 1607 of title 10, United States Code, by adding it to title 38, 
United States Code. This in effect would transfer responsibility of the 
National Guard and Ready Reserves educational benefits from the 
Department of Defense to the Secretary of Veterans Affairs. This would 
greatly simplify an already complicated system and allow for the 
greatest amount of transitional assistance in one location, the VA. 
Since the introduction of transportability in the National Defense 
Authorization Act of 2008--which allows National Guard and Reservist to 
use their benefit following their service--the VFW believes that their 
educational benefits should be the responsibility of the VA.

    H.R. 5664, To amend title 38, United States Code, to direct the 
 Secretary of Veterans Affairs to update at least once every six years 
the plans and specifications for specially adapted housing furnished to 
                       veterans by the Secretary.

    The VFW supports this legislation. That would require VA to 
periodically update its publications so that they reflect current times 
and methods. The current Handbook For Design: Specially Adapted 
Housing, that is printed and distributed by VA, was last updated in 
April 1978. Having a title date that is thirty years old could easily, 
and would likely be, misconstrued as old out-of-date material.

         H.R. 5684, Veterans Education Improvement Act of 2008.

    The VFW supports this legislation, which would provide for an 
increased monetary benefit. It would also increase the time limitation 
for use from ten years to fifteen years. It does not repeal the $1,200 
buy in, but it would make it more palatable by distributing the buy in 
over a 24-month period, instead of a twelve month period. H.R. 5684 
would extend the amount of programs that the educational benefit could 
be used for and could also be used to repay student loans. The bill 
would allow for active-duty military to enroll in the GI Bill program 
at any time during their service. This benefit would not be counted 
against veterans applying for additional financial aid. The bill would 
also provide funding for additional employment for the VA to implement 
the legislation and calls for a five-year pilot program for on-campus 
work-study positions. Also, of importance is the bill's section calling 
for an upgrade in the antiquated VA's informational technology system 
that is used for the administration of educational benefits.
    Madam Chairwoman, this concludes my testimony and I will be pleased 
to respond to any questions you or the Members of this Subcommittee may 
have. Thank you.

                                 
  Prepared Statement of Richard Daley, Associate Legislation Director,
                     Paralyzed Veterans of America
    Chairwoman Herseth Sandlin, Ranking Member Boozman, members of the 
Subcommittee, Paralyzed Veterans of America (PVA) would like to thank 
you for the opportunity to testify today on the various pending 
legislation. We appreciate the Subcommittee's focus on such a broad 
range of issues.

     H.R. 3298, the ``21st Century Servicemembers Protection Act''

    PVA supports H.R. 3298, the ``21st Century Servicemembers 
Protection Act''. This bill is a necessary complement to other 
legislation previously passed that aids service members with their 
transfer or deployment when the departure was not planned. This will 
allow the servicemember to terminate a contract without penalty when 
the individual is required to relocate. Service contracts entail a 
specific number of days, months, or years to protect both the provider 
of the service and the user. When a man or woman is serving in a branch 
of the military, standard contracts that are written for, and used in 
the civilian world must grant this leeway with a time commitment. Those 
that have chosen to serve in the military should not be penalized by a 
contract when called to serve this nation.

       H.R. 3393, the ``Reservist Access to Justice Act of 2007''

    PVA supports H.R. 3393, the Reservist Access to Justice Act of 
2007. This bill reinforces the intent of Congress when they passed 
improvements to the Uniformed Service Employment and Reemployment 
Rights Act (USERRA) in 2004. It is unthinkable that some employers have 
spent large amounts of money in the legal system to prevent a Reservist 
or National Guardsman from returning to his or her job after performing 
their service in the armed forces. H.R. 3393 would give reservists the 
right to bring their case in state or U.S. district court. It would 
make injunctive relief mandatory and provide for punitive damages in 
the worst cases of discrimination.

      H.R. 3467, the ``Second Chance for America's Veterans Act''

    PVA supports H.R. 3467, the ``Second Chance for America's Veterans 
Act''. This will provide funding for the Incarcerated Veterans 
Transitional Program (IVTP) for fiscal years 2008 through 2011. It will 
expand the program allowing more veterans to participate during these 
years. The success of the program has been documented with the three-
year pilot program that ended in 2007. It has proven to be extremely 
effective in reducing the recidivism of veterans, improving the quality 
of life for the veterans, and saving the taxpayer the estimated $33,600 
per year cost for incarceration. This program could help turn these men 
and women that served their nation honorably into upstanding citizens 
once again.

                               H.R. 3646

    PVA supports H.R. 3646, a bill that requests a joint study of 
employment opportunities for veterans. With more that 220,000 active 
duty military personnel leaving the military each year, every state 
will have thousands of veterans looking for employment. The 110th 
Congress has introduced several new bills that are intended to help 
these new veterans as they seek training, education, or employment.
    H.R. 3646 can be another tool for these men and women as they plan 
their transition from military to civilian life. This bill calls for 
the Department of Labor and the Department of Veterans Affairs to 
conduct a study to locate employment opportunities and the fields of 
employment for which the greatest need for employees exists. This would 
indicate opportunities by zip codes or regions of a state. The 
Department of Labor has most of this information in their data base.
    By posting this information on the VA's web site, the veteran will 
be able to identify employers in their home state and review the 
requirements for employment. This could be a useful tool for the 
veteran when looking for employment opportunities or planning 
employment training using the Montgomery GI Bill.

       H.R. 3681, the ``Veterans Benefits Awareness Act of 2007''

    PVA fully supports H.R. 3681, the ``Veterans Benefits Awareness 
Act.'' This bill would allow the VA to use national media outlets to 
conduct outreach to veterans around the country. Many veterans leave 
the service with very little knowledge of benefits available. Some 
service members participate in the Transition Assistance Program (TAP) 
prior to their separation from the military. In TAP they receive 
information about searching for a job and VA benefits. Though it has 
been used more widely in recent years, this program is still not 
mandatory for service members and it is not a standard program where 
all servicemembers in all branches receive the same information. PVA 
and other veterans' service organizations have continuously expressed 
concerns about the VA not making an effort to reach out to veterans who 
have earned and deserve healthcare and benefits.
    We believe it is the responsibility of the VA to use whatever means 
necessary to inform veterans and their families of the benefits and 
services available to them. VA must ensure that the needs of the men 
and women who have served and sacrificed are provided for.

             H.R. 3889, Longitudinal Study of VA Voc Rehab

    PVA fully supports the H.R. 3889, a bill that requires the VA to 
conduct a longitudinal study of veterans who enter the Vocational 
Rehabilitation and Employment (VR&E) program beginning in FY 2008. We 
believe that VR&E is critical to the reintegration of severely disabled 
veterans into civilian life. The primary mission of the VR&E program is 
to provide veterans with service-connected disabilities all the 
necessary services and assistance to achieve maximum independence in 
daily living and to the maximum extent feasible, to become employable 
and to obtain and maintain suitable employment.
    In fact, PVA places such an importance on vocational rehabilitation 
that last year we designed our own vocational rehabilitation program to 
further support what the VA is already doing, and to go above and 
beyond current services. The concept of the program is to provide 
vocational rehabilitation services under a PVA-corporate partnership 
that augments the many existing vocational programs. PVA believes that 
by introducing veterans with SCI disability to vocational 
rehabilitation counselors specializing in SCI disability that are able 
to provide extensive vocational-oriented services early in the medical 
rehabilitation process and who can continue to provide services as 
needed, the productivity and employment rates for this group of 
veterans will improve.
    In partnership with VA and Health Net Federal Services, PVA opened 
its first vocational rehabilitation office in the SCI Center of the VA 
Medical Center in Richmond, Virginia in July 2007. The workload in our 
pilot office has grown rapidly and our PVA vocational rehabilitation 
counselor in Richmond is currently carrying a caseload of more than 70 
veterans.
    Buoyed by our rapidly growing caseload in Richmond, the 
establishment of productive relationships with the Veterans Health 
Administration and VR&E, PVA just recently opened a second vocational 
rehabilitation office in Minneapolis under the corporate sponsorship of 
Tri West. In fact, the ribbon cutting for that office will be this 
Friday, April 18, 2008. We are confident that our continuing efforts in 
this initiative as well as the continuing efforts of our VA partners 
will result in the 85 percent unemployment rate among PVA members 
becoming a sad statistic of the past.

  H.R. 4539, the ``Department of Veterans Affairs Loan Guaranty Cost 
                        Reduction Act of 2007''

    PVA supports H.R. 4539, the Department of Veterans Affairs Loan 
Guaranty Cost Reduction Act of 2007. This legislation will increase the 
maximum amount of the home loan guaranty that the VA provides to 
veterans. It will cap funding fees on loans and provide incentives for 
using the VA loan for affordable housing. The bill will update the 
existing VA Loan Guaranty Program with the hope that more veterans will 
become homeowners.

                               H.R. 4883

    H.R. 4883 will amend the Servicemembers Civil Relief Act to provide 
for a limitation on the sale, foreclosure, or seizure of property owned 
by a servicemember during the 1-year period following the 
servicemember's period of military service. PVA supports this 
legislation that will protect the servicemember from losing his or her 
home because they were away defending this nation.

 H.R. 4884 the ``Helping our Veterans to Keep their Homes Act of 2008''

    PVA supports H.R. 4884, the ``Helping our Veterans to Keep their 
Homes Act of 2008''. H.R. 4884 will amend Title 38, United States Code, 
to make improvements in the home loan guaranty program increasing the 
total amount of the loan guaranty and restricting fees to make the 
program more attractive for veterans to use.

   H.R. 4889, ``The Guard and Reserves Are Fighting Too Act of 2008''

    PVA supports H.R. 4889 the ``Guard and Reserves Are Fighting Too 
Act of 2008''. This legislation will recodify the educational benefit 
for the Guard and Reserve from the current Title 10, to Title 38, 
United States Code. Along with this recodification, Congress will make 
significant changes in the educational benefits for those 
servicemembers that are playing a significant role in the War on 
Terrorism. Many of the young Guard and Reserve members worked in a part 
time position, attended school, or worked in a position that paid less 
than a living wage. This legislation will allow Guard and Reserve 
members to return to school or enroll in a training class to further 
their career.
    Recent surveys show that veterans returning home from military duty 
face a bleak job market. Eighteen percent of the veterans who recently 
returned from tours of duty are unemployed. Of those employed since 
leaving the military, 25 percent earn less than $21,800 a year, 
according to the VA. This legislation will provide these veterans with 
the money needed to continue their education while employed, or looking 
for employment.

                  H.R. 5664, Specially Adapted Housing

    While PVA supports the intent of H.R. 5664, we have serious 
concerns with the language of the bill, as it is written. The 
legislation specifically calls for the VA to regularly update specially 
adapted housing ``plans and specifications'' furnished to veterans by 
the VA. The VA is not responsible for providing plans and 
specifications to veterans who are eligible for the Specially Adapted 
Housing (SAH) grant. It provides assistance to the veteran through 
application of ideas presented in the Handbook for Design: Specially 
Adapted Housing (VA Pamphlet 26-13). We believe that the language of 
the bill should read ``The Secretary shall update the Handbook for 
Design at least once every six years. The update should include 
consideration for new and unique disabilities to include vision 
impairments, impairments specific to upper limb amputation, and burn 
injuries.''
    PVA was fortunate to participate in the hearing held last year 
regarding application of the SAH grant. We are well aware of the unique 
challenges faced by many new veterans with complex disabilities 
incurred while serving in the War on Terror. However, it is important 
to understand that the basic accessibility concepts in the VA Pamphlet 
26-13 are not outdated, as implied during that hearing. If there is a 
fault, it is that it seems to focus on wheelchair accessibility. But 
what most people do not realize is that basic wheelchair accessibility 
is meant to cover the concept of universal home design. Furthermore, 
the accessibility recommendations suggested in VA Pamphlet 26-13 
actually exceed American's With Disabilities Act (ADA) recommendations 
as well as the Fair Housing Accessibility Guidelines. With these 
thoughts in mind, PVA can support the legislation if the language is 
changed to reflect the actual intent.

     H.R. 5684, the ``Veterans Education Improvement Act of 2008''

    PVA supports most of the provisions of this bill. We realize that 
legislation intended to replace existing landmark legislation such as 
the Montgomery GI Bill, will receive many modifications to satisfy 
various parties before if becomes law. With that in mind, we have only 
a few concerns. The Fee to participate in the program should be 
removed.
    There was no charge for the educational benefit for the veterans of 
WWII or the Vietnam era veterans. The veterans of the current conflict 
should not have to pay for this benefit. Although it is a reduced fee 
of $50 per month (for 24 months) from $100 per month, it is still a 
large amount of money from an E-1 or E-2 in the service.
    The bill does not include educational benefits for the Guard and 
Reserve. Without these military components, the nation could not 
conduct the War on Terror. They are fighting and paying the cost war 
along with the regular forces. We have an obligation to provide the 
same educational benefits that the regular forces receive. We should 
not have to inform these veterans that perhaps a law will be passed 
next year, or 2010, that will give them equal educational benefits.
    The extension of time to use the program is helpful for veterans 
who may need more time to complete there education. We favor the 
provision of including veterans in the program discharged with a 
General Discharge. The 5-Year pilot program for on-campus work-study 
positions can be helpful for many students. Using the educational 
assistance program for business courses and seminars is an innovative 
use of the program.
    Increasing the fees paid to the schools will help the institutions 
with processing the veterans. Chairwoman Herseth Sandlin, Ranking 
Member Boozman, Members of the Committee, I would like to thank you 
again for this opportunity to express our concerns on these issues. I 
would be happy to answer any questions you may have.

                                 
     Prepared Statement of Patrick Campbell, Legislative Director,
                Iraq and Afghanistan Veterans of America
    Madam Chairwoman and members of the House Veterans' Affairs 
Committee, Subcommittee on Economic Opportunity, on behalf of Iraq and 
Afghanistan Veterans of America (IAVA), thank you for this opportunity 
to testify in front of this Subcommittee again, especially with so many 
important pieces of legislation being considered at one time.

          I. H.R. 5684 ``Veterans Education Improvement Act''

    In January, IAVA along with the other Veteran Service Organizations 
(VSO) sitting with me today presented to you our top priorities for 
reforming the education benefits for veterans. After months of 
discussion and debate, the VSO and Education community united behind 
two critical reforms. We need a GI Bill that:

    1.  Fully Covers the Cost of Education at any Public School in the 
Country
    2.  Compensates Guard/Reserve Servicemembers for Serving Multiple 
Tours

    We are happy to see that this Committee is continuing to focus on 
the plight of servicemembers attempting to earn a degree with 
substandard education benefits. If enacted, H.R. 5684 would mean a 
considerable improvement in education benefits for veterans across the 
country.
    IAVA is encouraged to see provisions that would increase the 
monthly rate for education benefits under Chapter 30 to $1950/month, an 
increase of 77%. At most, a veteran would receive $17,550/yr. which is 
slightly above the average cost of a public school education, currently 
at $17,336/yr. according to the College Board.
    We also support the inclusion of a 5-year usage extension, allowing 
servicemembers to pay back their student loans, and many of the 
administrative changes contained in the bill. By adding additional 
staff, money for information technology and increasing the per-veteran 
fee paid to schools for GI bill administrators, veterans who depend on 
this benefit will experience substantially better customer service. We 
thank the chairwoman and this committee for their hard work on this 
bill.
    However, to borrow a phrase used in the 1944 debates about the 
original GI bill, ``Not all that glitters is gold.'' I have testified 
before this Committee that the current Chapter 30 benefit structure is 
fundamentally flawed and unfortunately, this bill fails to address key 
structural issues with the benefit.
    First, flat-rate education benefits create an incentive for 
veterans to attend the cheapest school possible and do not reward 
veterans for challenging themselves. Second, for many veterans 
attending school in high-cost urban areas even $17,550/yr will not 
cover the full cost of a public school education. Third, requiring 
veterans to burn months of entitlement to pay for up front costs, such 
as tuition and books, will discourage veterans from completing a 4-year 
degree. Last and most importantly, there is no mechanism for this 
benefit to keep up with the rising cost of education.
1. Flat Rate Benefits Create Disincentives
    The genius behind the original 1944 GI bill was that it challenged 
veterans to ``be all they could be'' by rewarding those veterans who 
attended more challenging and consequently more expensive schools. The 
benefit, which paid for the full cost of tuition and provided a monthly 
living stipend, was a promise to the veteran: ``You worry about getting 
accepted and the government will cover the cost.'' Unfortunately, when 
the GI bill transferred to a flat monthly rate in 1977, veterans were 
forced to choose between more difficult schools that would require them 
to work a second job or attending cheaper and easier schools where they 
would be able to pocket some of their education benefits.
    A veteran attending a community college in rural America will be 
pocketing almost $7,000/yr. (over $11,000 if they apply for a Pell 
grant) under this proposed benefit scheme, while other veterans will 
still need to take out loans or work to see their education paid for.


----------------------------------------------------------------------------------------------------------------
                                                 SE Tech. (SD)    U. of Ark.     Cal. Berkeley      Notre Dame
----------------------------------------------------------------------------------------------------------------
Tuition:                                                $3,800        $6,038            $8,382          $36,850
----------------------------------------------------------------------------------------------------------------
Room & Board:                                           $5,900        $7,982           $13,848           $9,830
----------------------------------------------------------------------------------------------------------------
Other Expenses:                                         $1,000        $3,138            $3,076           $2,350
----------------------------------------------------------------------------------------------------------------
Total Cost of Educ.:                                   $10,700       $17,158           $25,308          $49,030
----------------------------------------------------------------------------------------------------------------
vs. H.R. 5684 Benefits                                  $6,850          $392          ($7,758)        ($31,480)
----------------------------------------------------------------------------------------------------------------


    This phenomenon explains why many veterans choose the cheapest path 
to earning a college degree and why online courses have the highest 
rates of GI Bill users, and why, according to a RAND study from 2000, 
``90 percent of veterans go to two-year colleges'' compared to ``38 
percent of all students'' (Asch, Fair and Kilburn, RAND, 2000). IAVA 
recommends modifying H.R. 5684 to provide veterans an incentive to 
challenge themselves by providing tuition credits up to a set amount, 
preferably at least the average cost of tuition at public university 
(currently $6,185/year, according to the College Board.
2. Benefit Does Not Cover Full Cost of Education at Many Public Schools
    IAVA believes that any new education benefit should renew the 
promise made to our men and women in uniform back in 1944, by 
guaranteeing that these veterans will be able to attend any public 
university with their GI bill benefits. Although this benefit will 
cover the full cost of education at any public school in Arkansas, 
Indiana, Kansas and South Dakota, the benefit falls well short for 
public institutions in California and New York. In California alone, 
the benefit will not cover the cost of education at any of the 
University of California campuses nor fourteen of the California State 
Universities. In New York, the overall benefit is slightly below the 
typical cost of education at a State University of New York (SUNY) 
campus--currently estimated at $17,630/yr.--and the cost of education 
at many SUNY campuses exceeds that estimate.

3. Burning Future Entitlement Discourages Finishing Degrees

    IAVA agrees that charging advance payments used to help veterans 
pay for initial education costs from the final months of a veteran's 
education entitlement, as provided for in Section 19 of H.R. 5684, 
would be a marked improvement from the current system. However, IAVA 
also believes that H.R. 5684 should abandon the advance payment scheme 
altogether in exchange for up front tuition payments made directly to 
the school.
    Currently, veterans can only use one month of education entitlement 
every year to help defray the large startup cost associated with paying 
for tuition and fees. The current value of one month of entitlement is 
$1,101 ($1,950 under H.R. 5684) and that amount does little to help a 
veteran pay the $6,185 average tuition payment for a four-year public 
university. Furthermore, if a veteran were to use advance payments for 
all four years of their education, by the time they got to their final 
semester they would have no educational benefits left. Either option, 
taking or not taking advance payments leaves the veteran in a Catch-22. 
IAVA recommends modifying H.R. 5684 to strike the advance payment 
system and provide tuition credits paid directly to the school that are 
not charged against a veteran's monthly entitlement.

4. Value of Benefit Diminishes Rapidly

    There is no mechanism for this new benefit to keep up with the 
rising cost of education. Since H.R. 5684 does not modify the current 
yearly increases linked to the Consumer Price Index, every year a 
veteran remains in service the value of their education benefit 
dwindles. The cost of education has outpaced inflation by over 100% 
since 1984 and 34% since 1996. Based on the previous increases to the 
CPI (Bureau of Labor & Statistics) and Total Charges for education 
(College Board) this is what the new education benefit will look like 
in five and ten years.


----------------------------------------------------------------------------------------------------------------
                   5 years                       SE Tech. (SD)    U. of Ark.     Cal. Berkeley      Notre Dame
----------------------------------------------------------------------------------------------------------------
Cost of Education (40% increase)                       $14,980       $24,021           $35,431          $68,642
----------------------------------------------------------------------------------------------------------------
H.R. 5684 Benefit (18% increase)                       $20,743       $20,743           $20,743          $20,743
----------------------------------------------------------------------------------------------------------------
Difference                                              $5,763      $(3,278)         $(14,688)        $(47,899)
----------------------------------------------------------------------------------------------------------------

----------------------------------------------------------------------------------------------------------------
                   10 years                      SE Tech. (SD)    U. of Ark.     Cal. Berkeley      Notre Dame
----------------------------------------------------------------------------------------------------------------
Cost of Education (82% increase)                       $19,501       $31,270           $46,124          $89,357
----------------------------------------------------------------------------------------------------------------
H.R. 5684 Benefit (30% increase)                       $22,885       $22,885           $22,885          $22,885
----------------------------------------------------------------------------------------------------------------
Difference                                              $3,385      $(8,385)         $(23,238)        $(66,472)
----------------------------------------------------------------------------------------------------------------


    In ten years, we will be in the same situation we are right now 
where two-year universities will be the only type of education 
available to veterans who depend on their GI Bill benefits to pay for 
school. IAVA recommends linking yearly increases to education benefits 
to be based on the rising cost of education as tracked by the 
Department of Education and not on the Consumer Price Index as it is 
done now.

5. Conclusion

    IAVA estimates that H.R. 5684 will cost approximately $1.8 billion 
in FY2009. The chart below breaks down that approximation into cost 
estimates of each of the various new provisions.


------------------------------------------------------------------------

------------------------------------------------------------------------
New Education Benefits:                                   $1.66 billion
------------------------------------------------------------------------
Chapter 30:                                               $1.47 billion
------------------------------------------------------------------------
Chapter 1607:                                              $189 million
------------------------------------------------------------------------
Buy-in Adjustment:                                         $112 million
------------------------------------------------------------------------
150 Full Time Employees:                                    $10 million
------------------------------------------------------------------------
State Approving Agencies:                                   $13 million
------------------------------------------------------------------------
Increasing Fee/Veteran:                                      $5 million
------------------------------------------------------------------------
Work Study Program:                                         $10 million
------------------------------------------------------------------------


    IAVA recommends that H.R. 5684 be amended to ensure that all public 
universities will be covered by these new education benefits. IAVA 
suggests that H.R. 5684 should accomplish this goal by creating an 
additional tuition payment, no less then $6,185/yr., that is paid 
directly to the school. IAVA also recommends that H.R. 5684 is amended 
so that yearly increases are linked to the growing cost of education to 
ensure that this benefit will remain robust for the next generation of 
servicemembers.

  II. H.R. 4883 Extension of Servicemember Civil Relief Act Homeowner 
                              Protections

    This bill will extend the Servicemembers Civil Relief Act to 
provide for a limitation on the sale, foreclosure or seizure of 
property owned by a servicemember during the one-year period following 
the servicemember's period of military service. The current protection 
of 90 days from adversarial proceedings is inadequate for many 
returning veterans, especially while they are facing the daunting task 
of readjusting to civilian life. IAVA endorses this straight forward 
and helpful measure.

  III. H.R. 4884 ``The Helping Our Veterans to Keep Their Homes Act''

    H.R. 4884 will allow veterans to refinance their home loans up to 
the full value of their residence or farm, limit fees for VA loan 
guarantees to only 1% of the total loan value, extend a series of 
demonstration projects, raise the overall ``maximum guaranty amount'', 
emplace yearly increases to the maximum loan guaranty based on the 
Consumer Price Index and require the Secretary of the VA to review the 
loan process for condominium purchases. Veterans, much like their 
civilian counterparts, are struggling to keep their homes and lives in 
tack even with foreclosure clouds hanging over this nation.
    The provisions of this bill will allow veterans to refinance their 
home loans and take advantage of both lower interest rates and the 
security of VA's home loan guaranty. The increase to the ``maximum 
guaranty amount'' and the linking of this maximum to the CPI will 
ensure that veterans' home loans will continue to be a valuable benefit 
for generations to come. There does however appear to be a minor typo 
in section 2(e) of this bill. The bill should read ``by `striking 25 
percent of' and inserting `150 percent of.' '' IAVA endorses this 
timely and important legislation.

     IV. H.R. 4889 ``The Guard and Reserves Are Fighting Too Act''

    IAVA strongly endorses recodification of Chapter 1607, education 
benefits for Reservists who have served at least one active-duty 
deployment, from Title 10 to Title 38. Education benefits for these 
servicemembers should be considered a readjustment benefit and 
therefore should be administered by the Department of Veterans Affairs, 
not the Department of Defense. H.R. 4889 would recodify Chapter 1607 
into Title 38, without making any substantial changes to the Chapter 
1607 program. However, H.R. 4889 does not contain any of the amendments 
to Chapter 1607 contained in last year's National Defense Authorization 
Act. IAVA believes that H.R. 4889 must not only contain the provisions 
included in the NDAA, but also deal directly with two issues.
    First, H.R. 4889 must clarify that Reserve and National Guard 
servicemembers deployed from or retiring into the Inactive Ready 
Reserve (IRR) are still entitled to portability of their education 
benefits after they separate from the military. This was the original 
intent of the legislation passed in the NDAA, but the Department of 
Veterans Affairs has interpreted the portability provision extremely 
narrowly, which has caused much angst and confusion among the veteran 
community.
    Second, benefits for Reserve/National Guard servicemembers should 
be based on the cumulative length of their active-duty deployments and 
not on their single longest deployment. This fix would eliminate a 
glaring inequity faced by reservists serving multiple deployments. 
Currently Marine Reservists serving more frequent but shorter tours 
never qualify for the higher level of REAP benefits. The average Marine 
reservist has been deployed on multiple 9-month tours and therefore 
might have served 18 months of active-duty but still receive $220/month 
less in educational benefits then an Army National Guardsman who served 
the same amount of active duty. IAVA strongly endorses modifying the 
current Chapter 1607 structure of benefits to be based on cumulative 
service and by adding intermediary qualification steps that increase 
the level of education benefits for every six months of service (see 
attachment).
    IAVA can not endorse H.R. 4889, until the issues mentioned above 
are addressed.

   V. H.R. 4539 ``Department of Veterans Affairs Loan Guaranty Cost 
                            Reduction Act''

    As stated above, IAVA is supportive of allowing veterans to 
refinance their home loans up to the full value of their residence or 
farm and raising the overall ``maximum guaranty amount'' which would be 
provided for in this bill. IAVA is also supportive of programs that 
reduce the closing cost of affordable homes.
    IAVA is unable, however, to comment on the provision concerning 
``limitation on amount of fee'' because the text of that section relies 
on a reference to a provision in the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1454(a)(2)) that appears to be completely 
unrelated to limitations on fees. IAVA is generally supportive of 
increases for loan guaranties for affordable housing, though we are 
curious why the veteran must be ``first owner-occupant'' to qualify for 
the benefit. Lastly, IAVA recommends that H.R. 4539 provide the 
Secretary of Veterans Affairs further guidance in establishing 
regulations concerning ``maximum income amount[s]'' that would 
determine eligibility for this program.

                  VI. H.R. 3646 Joint Employment Study

    This bill will direct the Secretary of Veterans Affairs and the 
Secretary of Labor to conduct a joint study on the fields of employment 
for which the greatest need for employees exists in various geographic 
areas. IAVA only recommends that the findings of these studies be 
integrated in the Department of Veterans Affairs Transition Assistance 
Programs' (TAP) presentations to separating active personnel and be 
sent to the pertinent National Guard and Reserve centers across the 
nation.

    VII. H.R. 5664 Reviewing Adaptive Housing Plans & Specifications

    H.R. 5664 directs the Secretary of Veterans Affairs to update at 
least once every six years the plans and specifications for specially 
adapted housing furnished to veterans by the Secretary. IAVA has no 
position on this bill.

      VIII. H.R. 3798 ``National Guard Employment Protection Act''

    This bill will extend Uniformed Services Employment and 
Reemployment Rights Act (USERRA) protections to National Guard 
servicemembers who are ``ordered to perform training or other duty'' 
with or without their consent that is above and beyond the required 
normal one weekend a month and two weeks a year. USERRA provides 
meaningful protections for these citizen soldiers and should be 
extended to all forms of involuntary call-ups. IAVA strongly endorses 
this legislation.

            IX. H.R. 3681 ``Veterans Benefit Awareness Act''

    H.R. 3681 will authorize the Secretary of Veterans Affairs to 
advertise in the national media to promote awareness of benefits 
administered by the Secretary. IAVA has testified many times that we 
believe that the VA is a passive system that waits for the veteran to 
ask for help. H.R. 3681 will allow the VA to reach out to many veterans 
across this country by advertising in the national media and alerting 
them that they are entitled to benefits. This provision is long overdue 
and IAVA emphatically endorses the Veterans Benefit Awareness Act.

            X. H.R. 3393 ``Reservist Access to Justice Act''

    The Reservist Access to Justice Act will expand USERRA protections 
to apply to all federal, state and private employers. The purpose of 
USERRA was to encourage ``noncareer service in the uniformed service by 
eliminating . . . disadvantages to civilian careers . . . minimiz[ing] 
disruption . . . by providing prompt reemployment [and] prohibit[ing] 
discrimination against'' 38 U.S.C. 4301(a) (2007). IAVA believes that 
the federal government should be held to at least the same standard as 
the private sector when dealing with our service men and women.
    This bill will set a minimum recovery for a successful USERRA 
claim. A veteran will receive compensation for either their lost wages 
and benefits or $20,000, whichever is greater. Many veterans fail to 
pursue USERRA discrimination claims against their employers, because 
the prospects of a long legal fight with the possibility of a minuscule 
recovery leaves a veteran little reason to vindicate their rights. 
Furthermore, other forms of discrimination claims have similar recovery 
guidelines. Although IAVA is strongly supportive of this provision, we 
suggest that USERRA remedies adopt the Title VII tiered model that sets 
higher penalties for discrimination claims against larger employers.
    H.R. 3393 will allow for punitive damages against employers whose 
discrimination against servicemembers is ``done with malice or reckless 
indifference.'' This provision would directly affect repeat offenders 
that continue to ignore USERRA protections even after the employer is 
made aware of the existence and relevance of these protections. This 
bill will also require courts to use their full equity powers, 
including injunctions, ``to vindicate fully the rights and benefits of 
persons'' protected under USERRA. This will allow courts to enjoin 
employers from firing an employee while a USERRA claim is being 
processed.
    Lastly, the bill would definitely clarify that USERRA claims would 
be exempt from binding arbitration agreements, even in spite of recent 
court decision to the contrary. Congress had clearly intended to exempt 
USERRA complaints from binding arbitration agreements. The USERRA 
statute states, ``In the case of an action against a private employer . 
. . the district courts of the United States shall have jurisdiction of 
the action.'' USERRA also ``supersedes any . . . contract, agreement, 
policy, plan, practice . . . that reduces, limits, or eliminates in any 
manner any right or benefit . . . including the establishment of 
additional prerequisites to the exercise of any such right or the 
receipt of any such benefit.'' This very committee stated that USERRA 
claims are not to be preempted by binding arbitration in House Report 
103-65. ``It is the Committee's intent that, even if a person protected 
under the Act resorts to arbitration, any arbitration decision shall 
not be binding as a matter of law.''
    IAVA strongly endorses this H.R. 3393 ``Reservist Access to Justice 
Act.''

      XI. H.R. 3298 ``21st Century Servicemembers Protection Act''

    The ``21st Century Servicemembers Protection Act'' is a long over 
due overhaul of the Servicemember Civil Relief Act. Arguably the most 
important provision of this bill is the section that allows for the 
termination or suspension of service contracts made by a servicemember 
or on behalf of a servicemember.
    While I was in Iraq, I was required to pay a monthly fee to my cell 
phone provider in order to keep my cell phone contract current. Even 
after paying 12 months of fees to Cingular wireless, when I returned 
home I was unable to get a replacement phone with my old number without 
paying a deposit of $500. I spent five hours of my first day back from 
Iraq in the mall just trying to get my service restored. It took over 7 
months for the whole issue to get resolved and it involved filing a 
complaint to the FCC and switching service providers.
    IAVA is encouraged to see that this protection has been expanded to 
contracts made on behalf of a servicemember, because many 
servicemembers are sharing contracts with their families and therefore 
are being denied protections because they are not the ``name on 
account.''
    H.R. 3298 also creates a meaningful remedy for violations of the 6% 
interest cap provided for in section 207 of the Servicemember Civil 
Relief Act. Currently there is no penalty for a creditor who simply 
ignores this important protection. This bill would allow for the 
recovery of damages caused by higher interest rates and provide a 
penalty up to $10,000 for creditors who willfully or negligently 
violate this protection.
    IAVA strongly endorses this legislation. IAVA also recommends that 
H.R. 3298 adopt section 3 of the Veterans Education Tuition Support 
Act, H.R. 2910, which clarifies that student loans do qualify for the 
6% interest rate cap.

      XII. H.R. 3467 ``Second Chance for America's Veterans Act''

    The ``Second Chance for America's Veterans Act'' extends programs 
that provide counseling, job placement, healthcare and housing to 
veterans to help veterans in the transition from prison or mental 
institutions to the workforce. Based on the demonstration project 
called the Incarcerated Veterans Transition Program, this model has 
been shown to reduce veteran recidivism rates by 90%. IAVA supports the 
authorization and appropriation of $15 million for this program.

 XIII. H.R. 3889 Longitudinal Study of Vocation Rehabilitation Programs

    H.R. 3889 would require the Secretary of Veterans Affairs to 
conduct a longitudinal study of the vocational rehabilitation programs 
administered by the Secretary. IAVA has no position on this bill.

            Respectfully Submitted,
                                                   Patrick Campbell
                                               Legislative Director
                      Iraq & Afghanistan Veterans of America (IAVA)

                                 
      Prepared Statement of Colonel Robert F. Norton, USA (Ret.),
                 Deputy Director, Government Relations,
                Military Officers Association of America
    MADAM CHAIRWOMAN AND DISTINGUISHED MEMBERS OF THE SUBCOMMITTEE, on 
behalf of the nearly 370,000 members of the Military Officers 
Association of America (MOAA), I am honored to have this opportunity to 
present the Association's views on various legislative proposals before 
the Subcommittee today.
    MOAA does not receive any grants or contracts from the federal 
government.

                               STATEMENT

    MOAA appreciates the work of this Subcommittee for holding a number 
of hearings in recent years on educational and other benefits 
legislative proposals that support our veterans' reintegration to 
civilian life following active military service.
    This Statement offers our views and recommendations on a number of 
bills before the Subcommittee today that we believe are important to 
the needs of the military community and veterans.

    H.R. 5684 (Rep. Herseth-Sandlin, D-SD, At Large). MOAA strongly 
supports H.R. 5684 and we are very grateful for the bipartisan support 
for the substantial MGIB upgrades in the bill. During a time of war, 
our service men and women deserve no less.
    MOAA is particularly pleased that H.R. 5684 includes a number of 
longstanding MOAA priorities, including:

      Higher reimbursement rates that would cover at least the 
average cost of a public college/university education
      Extension of the post-service usage period to 15 years 
(from 10 years)
      Prohibition against counting MGIB benefits as income when 
applying for federal financial aid
      More flexible rules for the use of benefits--such as for 
licensing or certification prep courses and business-related courses
      An opportunity for currently serving members who declined 
to enroll in the MGIB to withdraw that decision and enroll in the 
program

    MOAA is also grateful for the new monthly stipend provision of $500 
for full time study/training and $250 for half-time study; and, for the 
bill provisions that would improve the capability of the VA Education 
Service to more efficiently and effectively administer GI Bill 
benefits.
A Coherent Approach to the New GI Bill
    Over the course of a number of hearings before this Subcommittee 
and the full Committee, we have urged restructuring the MGIB to reflect 
the way our combined active duty and reserve forces team is used today 
to accomplish operational missions at home and overseas.
    A ``total force'' approach to the MGIB essentially means that 
educational benefits should be structured according to the type and 
length of duty performed by our service men and women. It no longer 
makes sense to have multiple GI Bill programs that reflect Cold war 
policies and procedures.
    Active duty service entrants earn benefits according to the 
duration of their initial service contract, usually two to four years.
    Historically, National Guard and Reserve recruits received about 
47-50 percent of the three-year active duty contract rate. That changed 
in the late 1990s. Reserve initial entry rates dropped to 29% of the 
active duty rate and have remained stagnant for the five long years of 
this war.
    MOAA continues to urge that the Department of Defense restore the 
47-50 percent ratio of the basic reserve MGIB with the active duty 
program. We are confident that would help sustain quality recruiting in 
this difficult recruiting period.
    Alternatively, DoD and the Armed Services Committees should 
consider either converting the basic reserve MGIB program authorized 
under Chapter 1606, 10 U.S.C. to a service-funded ``tuition 
assistance'' program, or relinquishing jurisdiction to the Veterans 
Affairs Committees.
Operational Reserve Service Should be Included in H.R. 5684
    The FY 2008 National Defense Authorization Act established 
readjustment benefits under Chapter 1607, 10 U.S.C. for operational 
reservists who serve on active duty on contingency operation orders. 
This change accomplished MOAA's and the

Partnership for Veterans' Education's top priority for the MGIB in 2007 
and we are very grateful to Congress for it.
    Two inequities, however, remain for operational reservists with 
respect to their GI Bill benefits. First, reservists are limited to 
crediting the single longest tour of active duty until they acquire 36 
months of active duty service. Second, for those who do complete an 
aggregate of 36 months service, they are limited to 80% of the Chapter 
30 MGIB rate--the two-year contract rate--instead of the 100% rate 
their 36 months of cumulative active duty service has earned them.
    Since 9/11 more than 150,000 reservists have served multiple active 
duty tours. Some have already served 36 months active duty and 
thousands more will reach that level soon.

    The only way for the Army to meet sustained deployment rotations 
under the newly announced 12 month tours for active Army soldiers is to 
increase reliance on National Guard brigade combat teams and other 
federal reserve force assets.
    If you serve the nation on active duty in the war on terror, your 
GI Bill benefits should be equal for the same service performed.
    MOAA strongly recommends that the Subcommittee amend H.R. 5684 to 
include an accrual provision that would authorize our Guard and Reserve 
warriors to earn active duty MGIB benefits as they serve up to a 
maximum of 36 months.
Other Legislative Proposals
    MOAA respectfully recommends that the Subcommittee examine recently 
re-introduced Senate and House proposals, such as S. 22, in structuring 
a new GI Bill for today's service men and women. S. 22, for example, 
includes a reserve accrual authority discussed above, an innovative 
public-private partnership with independent colleges, a geographic 
housing allowance (an alternative approach to H.R. 5684's flat rate 
stipend), and an authority for Service Academy and ROTC Scholarship 
recipient graduate commissioned officers to enroll in the GI Bill in 
exchange for a service extension agreement.
    During MOAA's legislative presentation before a joint hearing of 
the House and Senate Veterans Affairs Committees on 3 April 2008, we 
strongly endorsed Senate bill, S. 22, as reintroduced by Senator Jim 
Webb (D-VA) with original cosponsors Senators John Warner (R-VA), Frank 
Lautenberg (D-NJ) and Chuck Hagel (D-NE).
    MOAA urged that

        ``the [House and Senate Veterans Affairs] Committees 
        `deconflict' the statutory authority for the MGIB in Chapter 
        30, 38 U.S.C. with the proposed new GI Bill for the 21st 
        century, S. 22 (Revised). We believe desirable features in the 
        MGIB should be incorporated into the proposed new Chapter 33, 
        38 U.S.C., or vice versa. To maintain two GI Bill program 
        authorities at the same time will undoubtedly cause confusion 
        and be difficult to administer.''

    In this regard, MOAA has no preference whether the most desirable 
features of H.R. 5684 and other pending GI Bill legislation should be 
incorporated into Chapter 30, 38 U.S.C. or in Chapter 33 (the proposed 
`site' for S. 22). We strongly believe, however, that only one Chapter 
should be used to create a ``total force'' approach to the GI Bill for 
our 21st century warriors.
    MOAA also respectfully requests the Subcommittee consider including 
two other initiatives in the final version of H.R. 5684.
    VEAP `Decliner' Enrollment. <20,000 servicemembers who declined to 
enroll in VEAP remain on active duty. This cohort has at least 22+ 
years service and most will retire in the near term.
    VEAP Participants with zero-balance accounts were permitted to 
enroll in the MGIB in the late '90s if they agreed to pay $2700--the 
out-of-pocket cost for a full VEAP account. Only 11% of that group 
agreed to pay the $2700 fee to get into the MGIB. Consistent with this 
policy, it would not be unreasonable to expect VEAP Decliners still on 
active duty to pay $2700 with a COLA-adjustment as a condition of MGIB 
enrollment. Based on the earlier VEAP-MGIB conversion, we estimate that 
the cost would be very low since only about 2200 (11%) would elect to 
enroll.

    MOAA recommends the Subcommittee include a VEAP Decliner MGIB 
enrollment opportunity in Section 9--Opportunity to withdraw election 
not to enroll in educational assistance program--of H.R. 5684.

    Surviving Spouses of Dual-Military Couples. The second initiative 
concerns certain surviving spouses of dual-military couples. There are 
cases in today's force where a military surviving spouse of a military 
member who died in the line of duty is ineligible for the MGIB; e.g., 
Service Academy or SROTC Scholarship commissioned officers are 
ineligible for the MGIB. Under current law, the military surviving 
spouse is also denied use of Survivors and Dependents Educational 
Assistance (DEA) benefits while continuing to serve on active duty 
(See: Chapter 35, Section 3501(d), 38 U.S.C.).

    MOAA recommends a law change to permit military surviving spouses 
who elect to remain on active duty but are ineligible for the MGIB to 
be authorized to use Chapter 35 DEA benefits while continuing to serve.
H.R. 4889, the Guard and Reserves Are Fighting Too Act of 2008 
        (Chairman Bob Filner, D-CA).
    At a hearing before this Subcommittee on 17 January, in response to 
a question from Chairwoman Herseth-Sandlin, a senior DoD official 
stated that the Department of Defense no longer objected to the 
recodification of the Reserve Educational Assistance Program (REAP) in 
Title 38.
    The FY 2008 National Defense Authorization Act (NDAA) established 
readjustment benefits for operational reservists entitled to REAP under 
Chapter 1607, 10 U.S.C. With the NDAA change, however, the DoD must 
``pay for'' a veteran's benefit--namely REAP readjustment benefits--for 
our National Guard and Reserve warriors following their separation from 
military service.
    Under a ``total force'' approach to the GI Bill, active duty and 
reserve forces' readjustment educational benefits should be overseen 
and administered under Title 38. (Basic reserve educational benefits 
for enlistment--Chapter 1606, 10 U.S.C.--have no readjustment purpose 
and could remain in Title 10 subject to the judgment of the House Armed 
Services and the Veterans Affairs Committees).
    MOAA strongly agrees with the Department of Defense's conclusion 
that the Chapter 1607 program no longer belongs in Title 10 since its 
purpose is to support veterans' readjustment.

    MOAA strongly recommends that H.R. 4889 be incorporated as an 
amendment to H.R. 5684 in full Committee markup of H.R. 5684.
Servicemembers Civil Relief Act (SCRA) Legislation
H.R. 3298, 21st Century Servicemembers Protection Act (Rep. Patrick J. 
        Murphy, D-PA)
    H.R. 3298 would amend the SCRA to allow individuals called to 
military service to terminate or suspend a service contract, after the 
date of entry into service or the date of the military orders, if: (1) 
the service contract (such as cellular phone, cable or satellite 
television service, Internet service, utilities or automobile 
insurance) is executed before the individual is called to service for a 
period of at least 90 days; or (2) the person enters into the contract 
while in military service and thereafter receives orders for a change 
of permanent station to a location outside the United States, or to 
deploy with a military unit for a period of at least 180 days.
    H.R. 3298 would establish penalties against anyone who: (1) holds 
property or funds of a person in military service who lawfully 
terminates a contract; or (2) violates the 6% limit on interest rates 
charged to servicemembers during a period of military service.
    MOAA strongly believes that military men and women called to defend 
our nation should not be penalized by steep termination fees for 
personal services contracts such as cell phone service, cable and 
satellite TV or Internet service. MOAA strongly supports H.R. 3298.

    H.R. 4883 (Chairman Bob Filner, D-CA). H.R. 4883 would amend the 
SCRA by extending from 90 days to one year the limitation on the sale, 
foreclosure, or seizure of property owned by a servicemember following 
release from a period of active duty service.
    In this particularly difficult ``mortgage meltdown'' environment, 
our nation's defenders should be given every reasonable extension on 
their mortgage payment obligations upon return from active duty 
service. MOAA strongly endorses H.R. 4883.
Uniformed Services Employment and Reemployment Rights Act (USERRA)
    H.R. 3393, Reservists Access to Justice Act of 2007 (Rep. Artur 
Davis, D-AL). H.R. 3393 would amend the USERRA by allowing a court, if 
it determines that a federal, state, or private employer's failure to 
comply with a veteran's reemployment rights was willful, to require the 
employer to pay the individual the greater of any loss of wages or 
benefits, or $20,000. The bill would require--current law permits--a 
court to exercise injunctive relief to fully vindicate such rights.
    H.R. 3393 also would authorize a court to require a state or 
private employer to pay punitive damages for violations found to be 
with malice or reckless indifference to the individual's federally 
protected reemployment rights. In addition, the bill would make federal 
arbitration procedures inapplicable to claims for veterans' employment 
and reemployment rights and benefits.

    MOAA and our colleagues in The Military Coalition endorsed H.R. 
3393 in a letter to Representative Davis on 3 October 2007 (copy 
enclosed with this Statement).

    In addition to the protections proposed in H.R. 3393, MOAA also 
recommends the Subcommittee establish a single office in the government 
to be responsible for overseeing and tracking USERRA claims, whether 
formal or informal. MOAA addressed this issue in our legislative 
presentation before the House and Senate Veterans' Affairs Committees 
on 3 April:
    ``The routine activation of National Guard and reserve service men 
and women is a fact of life in today's world. Under `operational 
reserve' policies, reservists can expect to be on active duty for at 
least one year of every five years they serve on inactive (drill) duty. 
But the reality in the war on terror is otherwise: over 150,000 Guard 
and Reserve members already have served multiple tours of active duty 
in the last five years and tours often stretch to 15 months or longer.
    In this context, MOAA believes it's imperative to regularly review 
and update, as necessary, the laws, procedures and resources for 
ensuring the reemployment rights of reservists under the USERRA.
    In its most recent Report, ``Military Personnel: Federal Agencies 
Have Taken Actions to Address Servicemembers' Employment Rights, but a 
Single Entity Needs to Maintain Visibility to Improve Focus on Overall 
Program Results'' (GAO-08-254T, 8 November 2007), the GAO noted that:

      No single agency is accountable for overseeing the USERRA 
complaint resolution process
      Required reports to Congress on USERRA complaints do not 
include informal complaints data from the Employer Support of the Guard 
and Reserve (ESGR) network of ombudsmen
      USERRA information outreach and servicemember reporting 
of employer information has improved
      The four Federal agencies responsible for USERRA 
complaints do not systematically track disability-related complaints. 
Disability-related complaints and other complaints are not 
distinguished

    MOAA agrees with the GAO's recommendation that Congress should 
establish in law `a single entity accountable for maintaining 
visibility over the entire USERRA complaint resolution process.' 
Support passage of H.R. 1632.''

    H.R. 3798, National Guard Employment Protection Act of 2007 (Rep. 
Robin Hayes, R-NC). H.R. 3798 would establish reemployment rights under 
the USERRA for certain National Guard service men and women called to 
active duty in their state under Title 32 to accomplish a mission 
requested by the Secretary of Defense.
    This proposed change appears to conform with post-September 11, 
2001 law-changes that authorize members of the National Guard to be 
ordered to state active duty under Title 32 at the request of the 
President or the Secretary of Defense to perform a homeland security or 
national security mission within the limits of a particular state. 
Although such duty is performed in the interest of the national 
security, Guard members currently are not authorized reemployment 
rights for performing such duty.

    MOAA strongly recommends passage of H.R. 3798 to protect the 
reemployment rights of certain National Guard service men and women who 
are performing a national security mission while serving on state 
active duty under Title 32.

    H.R. 4539, Dept. of Veterans Affairs Loan Guaranty Cost Reduction 
Act of 2007 (Rep. Steve Buyer, R-IN, Ranking Member, House Committee on 
Veterans' Affairs). H.R. 4539 is a bipartisan bill that would increase 
the maximum loan VA can guarantee to 125% of the Freddie Mac conforming 
limit ($417,000 X 1.25); extend some of the loan fees to 2017 (as a 
PAYGO offset); add refinancing of VA loans to the conforming limit; 
reduce the equity needed for VA to guaranty a refinance to 0% from the 
current 10%; and, for other purposes. MOAA supports H.R. 4539.

                               Conclusion

    MOAA appreciates the opportunity to present our views on 
legislation that supports our service men women and veterans. We look 
forward to working with the Members of the Subcommittee to ensure that 
our 21st century warriors, including members of the National Guard and 
Reserve, and veterans receive the benefits that match their service and 
sacrifice during this time of war.

                                 
 Prepared Statement of Hon. Charles S. Ciccolella, Assistant Secretary,
  Veterans' Employment and Training Service, U.S. Department of Labor
Chairman Herseth Sandlin, Ranking Member Boozman, and Members of the 
        Committee.
    I am pleased to appear before you today to discuss four bills 
introduced in the House of Representatives and referred to this 
Subcommittee for action.

                               H.R. 3646

    H.R. 3646 mandates a study, to be conducted jointly by the 
Secretaries of Labor and Veterans' Affairs, ``on the fields of 
employment for which the greatest need for employees exists in various 
geographic areas . . .''
    The Department of Labor's (DOL) Bureau of Labor Statistics (BLS) 
develops ten-year National-level industry and employment projections 
and prepares and publishes career information based on those 
projections. Projections are done on a biennial basis; the most recent 
set, released in December 2007, covers 2006 to 2016. BLS provides the 
National projections data files through DOL's Employment and Training 
Administration (ETA) to state workforce agencies to use as a starting 
point for developing state and area projections. In addition, the 
states currently collect labor market information and share it with the 
Department of Veterans Affairs' (VA) Vocational Rehabilitation and 
Employment (VR&E) service to better assist disabled veterans in making 
an informed choice on the type of career they would like to pursue. 
This information is used to assure disabled veterans are not placed 
into education or training programs for jobs that are unavailable in 
the local economy.
    The Department urges the Congress to fund the President's FY09 
budget request for BLS so we and the states can continue to produce the 
occupational employment and wage information, and the national 
projections that underlie the state and area projections that VR&E and 
others who work with veterans are already using. We do not believe that 
the joint study that would be required if this bill became law would 
produce more or better data than the information described above, which 
is already available and used in the federally-funded workforce 
investment system to assist in matching veterans with good jobs and 
promising careers. Accordingly, the Department opposes this bill.

                               H.R. 3393

    H.R. 3393 would make a number of significant changes to the 
enforcement and remedies provisions of USERRA. For example, the bill 
would give the court the discretion to award $20,000 in liquidated 
damages if it finds that the employer willfully violated USERRA. In 
addition, it would authorize the court to award punitive damages, 
subject only to Constitutional limits, against State and private 
employers of 15 or more employees if the court determined that the 
violation was done with malice or reckless indifference to the service 
member's USERRA rights. States would also be required in USERRA cases 
to waive their sovereign immunity under the 11th amendment of the U.S. 
Constitution or otherwise.
    In general, the Department supports efforts to strengthen the 
ability of service members to reclaim their civilian employment upon 
leaving military service. However, the Department cannot support this 
bill, as drafted, because it is concerned that the far-reaching 
provisions of this bill, particularly its provision for unlimited 
punitive damages, could have a chilling effect on employers' desire to 
hire service members. The provision requiring states to waive various 
rights would also deserve thorough debate.

                               H.R. 3798

    The Department would like to work with the Subcommittee and the 
Department of Defense to further explore the intent of this proposed 
legislation. USERRA was intended to encourage noncareer service--as 
opposed to career service--in the uniformed services. The Department 
therefore is concerned that, as drafted, this legislation could extend 
USERRA protection to certain members of the National Guard well beyond 
the existing five-year limit on military service while working for a 
single employer.

                               H.R. 3467

    H.R. 3467 would authorize the Department of Veterans Affairs to 
establish a workforce reentry program for fiscal years 2008-2011 at $15 
million per year. Additionally, the bill would: provide for a prisoner 
re-entry program for veterans in 24 locations across the country that 
would provide counseling and referral services, in addition to job 
training; vest the authority for this program with the Secretary of VA; 
make relevant state agencies, including state and local workforce 
investment boards, and non-profit organizations eligible to receive 
grants to provide services to incarcerated veterans; and require 
grantees to submit an evaluation of the program three years after 
receiving the grant.
    The Administration supports the intent of the ``Second Chance for 
America's Veterans Act.'' However, we would note that most of the 
services proposed under this legislation, which mirrors the recently 
concluded Incarcerated Veterans Transition Program (IVTP), could be 
provided through the Second Chance Act, which the President signed into 
law last week.
    Among other things, the recently enacted Second Chance Act formally 
authorizes key features of the Prisoner Re-entry Initiative (PRI), 
which provides recently released ex-offenders--including veterans--the 
support and services they need to successfully reintegrate into 
mainstream society.
    We fully recognize the promising early results of the Incarcerated 
Veterans Transition Program demonstration, and believe the lessons 
learned and best practices from that demonstration can be incorporated 
into the PRI. These lessons include: active collaboration with the 
Department of Veterans Affairs; pre-release counseling; veterans' 
benefits counseling; coordination with other programs for housing and 
other assistance; and discharge upgrade consideration.
    VETS will work closely with DOL's Employment and Training 
Administration and with VA to assure that IVTP best practices are 
incorporated into the Prisoner Re-entry Initiative and that eligible 
veterans receive priority of service.
    That concludes my statement and I would be happy to answer any 
questions.

                                 
     Prepared Statement of Thomas L. Bush, Acting Deputy Assistant
  Secretary of Defense for Reserve Affairs, U.S. Department of Defense
                                  and
  Statement of Curtis L. Gilroy, Ph.D., Director for Accession Policy,
Military Personnel Policy, Office of the Under Secretary of Defense for 
          Personnel and Readiness, U.S. Department of Defense
Introduction
    Good afternoon Madam Chairwoman and Members of the Subcommittee. We 
are pleased to appear before you today, on behalf of the Department of 
Defense (DoD), to testify about pending legislation that affects 
programs available to active duty members, National Guard and Reserve 
members, and veterans. The pending bills that directly affect DoD are 
H.R. 4889, H.R. 5684, H.R. 3393, and H.R. 3798. The changes proposed in 
these bills will significantly alter the Montgomery GI Bill (MGIB) and 
the Reserve Educational Assistance Program (REAP), which provide 
educational assistance benefits to Active, Guard and Reserve members 
who have served in support of contingencies, and the impact of 
activation of members of the Reserve components on their employers.
Program Changes and Enhancements
    For today's hearing, you asked that we comment on several bills 
that would modify educational assistance programs, home loan programs, 
employer relations and support, and provisions of the Servicemembers' 
Civil Relief Act. Our comments will focus on the implications of the 
proposals on military force management, specifically military 
recruiting and retention, and the relationship of the Department of 
Defense with the Nation's businesses and employers of Service members. 
As for the amendments affecting the Servicemembers' Civil Relief Act, 
H.R. 3798 and H.R. 4883, the Department is in general support of these 
bills. We will submit a separate views letter to address minor 
technical change recommendations.
    We will defer to the Department of Veterans Affairs for those bills 
that impact programs under their purview, specifically H.R. 4884, H.R. 
4539, H.R. 3889, H.R. 3681, H.R. 3646, H.R. 3467, and H.R. 5664.
Reserve Educational Assistance Program
    The Reserve Educational Assistance Program (REAP) was developed to 
reward National Guard and Reserve members who served in support of a 
contingency operation and National Guard members who performed 
federally funded state duty at the request of the President or 
Secretary of Defense to respond to a national emergency, and to provide 
an incentive to continue to serve following a mobilization when 
pressure to separate may be strong. However, the retention aspect of 
REAP was lost with enactment of the National Defense Authorization Act 
for Fiscal Year 2008 (NDAA 2008) when Congress added the 10-year post-
service eligibility provision to REAP.

    H.R. 4889, the Guard and Reserves are Fighting Too Act of 2008, 
would eliminate the 10-year post-service eligibility thereby restoring 
the retention incentive and recodify chapter 1607 (REAP) of title 10, 
as a new chapter in title 38. This bill is substantively flawed. 
Although we support restoring REAP as a retention incentive, the bill 
would inappropriately, move a reserve force management program to the 
Department of Veterans Affairs.
    Second, H.R. 4889 would require the Secretary of Defense to 
transfer to the Secretary of Veterans Affairs the funds that are in the 
Department of Defense Education Benefits Fund. These are funds 
appropriated to the Department of Defense and programmed to be spent on 
the Department's reserve component retention incentive programs and 
should remain with DoD to fund what would be a restored DoD incentive 
program. The Department needs the dollars in the Education Benefits 
Fund programmed for REAP if this bill is enacted as drafted, or to fund 
other, alternative retention programs and additional recruiting efforts 
to make up for the losses in skilled manpower that will result from the 
FY 2008 NDAA revision of REAP.
    For these reasons, the Department does not support H.R. 4889.
Veterans Educational Assistance Program
    H.R. 5684, the Veterans Education Improvement Act of 2008 would 
make significant changes to Chapter 30, title 38, United States Code. 
As we have testified before, the Department does not believe that the 
basic structure of the Montgomery GI Bill is broken. However, we do 
recognize that some changes to the program would be advantageous. Since 
the administration and funding for the MGIB fall within the VA, we 
focus on only those aspects of the bill that would have an impact on 
military force management and defer to VA for other comments. There are 
some attractive features of this bill which we support, but we do have 
some concerns.
    First, we regret that H.R. 5684 does not make changes to the 
existing transferability provision currently in section 3020, title 38, 
United States Code (U.S.C.). The Department's number one imperative 
with regard to the MGIB is opening up of the authority for the Service 
Secretaries to allow all career members the ability to transfer their 
unused education benefits to family members, consistent with strong 
messages from the field and fleet, and the President's specific request 
that was presented in his State of the Union Address. As a result, the 
Administration cannot support this bill in lieu of the Administration's 
transferability proposal, which will be transmitted shortly.
    Second, research sponsored by the Department and conducted at 
Clemson University by the Lewin Group suggests that negative retention 
effects begin to intrude when the monthly benefit exceeds $1,400 to 
$1,500. Therefore, we are confident that this bill, as currently 
structured with a monthly benefit of $1,950, would encourage untimely 
separation among many members who otherwise would have elected to 
remain in the military. In turn, this would demand new investments to 
hike retention incentives as a counterbalance. This challenge could be 
offset by targeting those who have completed at least six years of 
service--the timeframe recognized in current law (e.g., section 1174, 
title 1, U.S.C.) as the point at which special benefits would be 
required to recognize career oriented service members making a 
transition from the military. Six years should represent the minimum 
service period required to qualify for the expanded benefits available 
under H.R. 5684.
    Section 2 of H.R. 5684 would increase the monthly educational 
benefit from the current $1,101 to $1,450 for those whose initial tour 
was three years or more. This benefit level is in line with the average 
cost of a four-year public education (tuition, fees, room, and board) 
as estimated using data from the Department of Education--a benchmark 
we believe would not negatively impact our force management programs. 
We support this provision.
    Section 3 would extend the current 10-year delimiting period for 
MGIB usage to 15 years. This provision has no impact on military force 
management and is directly applicable to military veterans. We defer to 
the VA for comment relating to program and administration costs.
    Section 4 would add a $500 monthly educational stipend to the basic 
benefit for those pursuing an approved program of education on at least 
a half-time basis. While the basic benefit as proposed in this bill 
would cover the average tuition, fees, room, and board at a 4-year 
public institution, we recognize that students may have other expenses. 
The College Board has estimated that books, supplies, and personal 
expenses average just over $2,200 per academic year, or about $245 per 
month. If available only to new Service members who would elect a four 
or more year initial term of service, the Department could support a 
stipend at the $245 level, as it would increase experienced man-years 
across the Department. As an example, even a modest increase in four or 
more year enlistments in the Army above the current 58% would have a 
significant positive effect on military readiness.
    Section 5 would make changes to the way the current pay reduction 
required for enrollment is administered by extending the current 
reduction of $100 per month for the first 12 months of service to $50 
per month for the first 24 months. In essence, this would be like a 
small pay raise for our most junior troops at a time they may most need 
it. Although there could be a first year decrement to the General 
Treasury of about $90 million, in the second and subsequent years there 
should be no impact on treasury receipts. We would support this 
provision.
    Section 8 would allow the use of MGIB benefits to repay federal 
student loans. Currently, new enlistees who receive college loan 
repayment under the provisions of Chapter 109, title 10, United States 
Code, are ineligible to use that period of service to qualify for the 
MGIB. This provision would allow young men and women the opportunity to 
serve and use their earned MGIB benefits for either pre-service 
education or post-service education, or a combination of the two. This 
provision would be very advantageous to those young men and women who 
choose to stop or drop out of college to serve their country, but who 
fully intend to continue their education either during or after 
service. We would support this increased flexibility in the use of 
educational benefits.
    The Department is in general support of increasing flexibility in 
the use of MGIB benefits as specified in section 6, 7, and 9 through 
19. However, we defer to the VA for comment as it affects their 
program, the costs and its administration.
Other Program Changes
    H.R. 3393, the Reserve Access to Justice Act of 2007, would provide 
an additional Uniformed Services Employment and Reemployment Rights Act 
(USERRA) enforcement mechanism to the U.S. District Court, in the case 
of a civilian employer, or the U.S. Court of the Federal Circuit, in 
the case of a Federal employer, who willfully fails to comply with the 
provisions of USERRA. Under chapter 43 of title 38, U.S.C., as it would 
be amended by this bill, the court may require the employer to 
compensate the affected employee the greater of any loss of wages or 
benefits suffered by reason of the employer's failure to comply with 
USERRA or $20,000, in addition to any other rights and benefits the 
employee may have. The court may also award punitive damages when the 
employer has 15 or more employees. Actions may also be brought against 
States as employers and State officials.
    The Department is not aware of any data that would indicate a need 
for this legislation. On the contrary, we are concerned about the 
negative message its enactment may send to the Nation's employers. With 
over 630,000 RC members who have been activated, a large number of 
employers are affected by the temporary loss of an employee to military 
service and it is inevitable that some conflicts will arise even though 
reservists' employment rights are protected by law. To give perspective 
to the problems that have arisen, between September 11, 2001 and 
September 30, 2007, data show that 513,248 Guard and Reserve members 
were deactivated. During this timeframe, the Department of Labor 
received 6,606 cases filed by Reserve or Guard members. This represents 
less than 1.3% of the deactivated population. The Department believes 
USERRA is working well, and employers continue to support to their 
Reserve component employees.
    We would rather reach out to employers and work with them to 
resolve problems, as we do through Employer Support for the Guard and 
Reserve organization. Therefore, we suggest the Congress not take this 
decisive action without compelling evidence of its need and certainty 
that it will not do more harm than good.

    H.R. 3798, the National Guard Employment Protection Act of 2007, 
would amend USERRA to specify that the Secretary of Defense may 
designate service by a member of the National Guard in a state status 
under the provisions of section 502(f), title 32, U.S.C., as service 
that is exempt from the five-year cumulative service limitation on 
USERRA protections. The Department supports the intent of this bill, 
but would like to work with the Subcommittee and DOL to further explore 
the intent of this legislation.

    H.R. 3298, the 21st Century Servicemembers Protection Act, would 
amend the Servicemembers Civil Relief Act to allow individuals called 
to military service to terminate or suspend certain service contracts 
entered into before the individual receives notice of a permanent 
change of station or deployment orders and to provide penalties for 
violations of interest rate limitations. The Administration's position 
on this bill is under development and will be forwarded under separate 
cover.
Conclusion
    Today, the volunteer military stands ready, willing, and able to 
defend our great nation, as well as its values and principles. Credit 
for our success in attracting and retaining high-quality people to 
serve in uniform belongs in large measure to the Congress and to your 
Committee for providing military members with the benefits embodied in 
the educational assistance programs. Few areas, if any, are more 
important to DoD than recruiting and retention. We recognize our duty 
to man the All-Volunteer Force with high-quality, motivated, and well-
trained men and women. The MGIB education benefit has been a major 
contributor to recruiting achievements for our active forces and a 
major contributor to both recruiting and retention of our Guard and 
Reserve forces for more than 20 years and REAP has been an effective 
new retention tool for sustaining membership in the Selected Reserve as 
evidenced with more than 58,000 Reserve component members having used 
the this benefit during the three and a half since it was authorized. 
As we move through the 21st century, we must continue to build upon the 
remarkable legacy of the visionaries who crafted preceding versions and 
improvements in the GI Bill. I thank this Committee for its dedicated 
support to the men and women who currently serve, and those who have 
served, our great nation.

                                 
                  Prepared Statement of Keith Pedigo,
  Associate Deputy Under Secretary for Policy and Program Management,
 Veterans Benefits Administration, U.S. Department of Veterans Affairs
    Madam Chairwoman and distinguished Members of the Subcommittee, I 
am pleased to be here today to discuss a number of bills that would 
affect several benefit programs administered by the Department of 
Veterans Affairs (VA). Accompanying me today is Mr. John Brizzi, Staff 
Attorney, Office of General Counsel. At the outset, I would note that 
several bills on the agenda affect programs or laws administered, 
respectively, by the Departments of Defense (DoD) and Labor (DOL). 
Accordingly, my testimony today does not address the following bills: 
H.R. 3298 and H.R. 4883 (Servicemembers Civil Relief Act amendments--
DoD), and H.R. 3393 and H.R. 3798 (veterans' reemployment rights 
amendments--DOL). VA respectfully defers to the views of those 
Departments with regard to these bills.

                           Education Benefits

H.R. 5684
    Madam Chairwoman, your bill, H.R. 5684, the ``Veterans Education 
Improvement Act of 2008,'' contains numerous amendments to title 38, 
United States Code, that are intended to improve the basic educational 
assistance programs administered by VA.
    If enacted, H.R. 5684 would accomplish the following:

      Increase the full-time 3-year benefit rate for the 
Montgomery GI Bill--Active Duty (MGIB-AD) to $1,450 monthly and 
increase the full-time 2-year monthly benefit rate for MGIB-AD to 
$1,250 for pursuit of approved programs of education for months 
beginning on or after January 1, 2009. The bill also states that the 
rate increases shall apply with respect to a payment of educational 
assistance for the month beginning after the date that is 90 days after 
the date of enactment of the Act.
      Extend the delimiting date for MGIB-AD from 10 years to 
15 years, effective for an individual who is entitled to educational 
assistance 90 days after the date of enactment.
      Create a monthly stipend for those entitled to education 
benefits under MGIB-AD. Those who are in a program of education at an 
Institution of Higher Learning (IHL) at the half-time or more rate 
would receive a monthly stipend of $500. Individuals in a program of 
education at an IHL at a less-than-half-time rate would receive a 
stipend of $250. This proposal would become effective 2 years after the 
date of enactment.
      Change the pay reduction for enrollment into MGIB-AD from 
$100 for 12 months to $50 over 24 months. This proposal would become 
effective 90 days after the date of enactment.
      Amend 38 U.S.C. Sec. Sec. 3452(b) and Sec. 3501(a)(5) to 
include business courses and seminars related to the operation of a 
business and continuing education courses, as approved programs of 
education. These changes would become effective 2 years after the date 
of enactment.
      Amend 38 U.S.C. Sec. Sec. 3452(b) and Sec. 3501(a)(5) to 
include preparatory courses for licensure or certification tests as 
approved programs of education. These changes would become effective 2 
years after the date of enactment.
      Allow an individual with entitlement to MGIB-AD to use 
his or her benefit to repay federal student loans accrued under title 
IV of the Higher Education Act 1965. The individual would have to be on 
active duty when the loan is repaid and the payment could not exceed 
$6,000 over a 12-month period. Payments would be made on a monthly 
basis and the payment of educational assistance could not exceed the 
individual's amount of entitlement. These changes would become 
effective 2 years after the date of enactment.
      Allow an individual who previously elected not to enroll 
in MGIB-AD to enroll in the program as long as the individual is on 
active duty and his or her pay is reduced or the individual otherwise 
pays $1,200 no later than 90 days after discharge. This section would 
apply to individuals who serve 2 years on active duty and 4 years in 
the Selected Reserves. These changes would become effective 90 days 
after the date of enactment and would apply to individuals serving on 
active duty on the date of enactment.
      Amend 20 U.S.C. Sec. 1087vv(j) to provide that the 
receipt of MGIB-AD educational assistance shall not be considered as 
part of the Expected Family Contribution calculation for federal 
financial aid. Thus, federal financial aid would be calculated as if an 
individual is not in receipt of MGIB-AD benefits.
      Extend to January 1, 2014, the on-the-job and 
apprenticeship training program benefit rate increases that expired on 
January 1, 2008. This provision would become effective 90 days after 
the date of enactment.
      Amend 38 U.S.C. Sec. 3674(a)(4) to set funding for State 
Approving Agencies at no more than $19 million per fiscal year. This 
amendment would become effective on the date of enactment.
      Allow individuals separated with a general discharge 
(under honorable conditions) to be eligible to receive MGIB-AD. This 
amendment would become effective for individuals who are discharged on 
or after 90 days following the date of enactment.
      Increase annual reporting fee amounts in 38 U.S.C. 
Sec. 3684 from $7 to $21, and $11 to $21, respectively. This amendment 
would become effective 90 days after the date of enactment.
      Expand the work-study program to include students 
attending a program of education at the half-time or more rates. This 
amendment would become effective 90 days after the date of enactment.
      Create a pilot work-study program that would expand work-
study positions at educational institutions. Examples of some eligible 
positions would include tutors, lab assistants, and positions in campus 
orientation. The Secretary would be required to prescribe regulations 
to carry out the program and to provide for the supervision of the 
work-study positions. An amount of $10 million would be authorized to 
be appropriated for each of fiscal years 2009 through 2012 to carry out 
the purpose of this provision. This provision would become effective on 
the date of enactment.
      Require the Secretary to increase the number of full-time 
equivalent employees (FTE) for the Education Service business line in 
the Veterans Business Administration by 150 additional employees. This 
provision would become effective on the date of enactment.
      Require VA's Director of Education Service and VA's 
General Information Officer to submit to the Committees on Veterans' 
Affairs of the Senate and the House of Representatives an action plan 
describing how VA intends to upgrade the information technology (IT) 
system used to administer education benefits. VA would be required to 
update the Committees annually on any progress made in upgrading the 
systems. The bill would authorize the appropriation of $8 million for 
fiscal year 2009 and $3 million for each of fiscal years 2010 through 
2012. This provision would become effective on the date of enactment.
      Amend 38 U.S.C. Sec. 3680(d)(2) to charge entitlement for 
an advanced payment against the final month of the individual's 
entitlement. An individual would be limited to one advance payment per 
academic year. This provision would be effective 90 days after the date 
of enactment.

    We estimate that enactment of H.R. 5684 would result in direct 
costs to VA of $595 million during the first year, $8.6 billion for 5 
years, and $22.3 billion over 10 years. VA cannot support this 
legislation without identified offsets for these costs.
    Furthermore, as noted in the State of the Union address, the 
President is committed to expanding MGIB to include transferability of 
benefits from servicemembers to their spouses and children. The 
Administration's first priority is to transfer the benefit to family 
members of those committed to a career in service, an initiative our 
senior uniformed leaders enthusiastically support and one that is more 
supportive of the current makeup and retention of the all-volunteer 
force. VA defers to DoD on how the various legislative proposals will 
affect DoD's ability to recruit and retain the all-volunteer force. As 
a result, VA cannot support this bill in lieu of the Administration's 
transferability proposal, which will be transmitted shortly.
    We offer the following comments on how the several provisions of 
H.R. 5684 would affect program implementation:

      Section 2 of the bill appears to have conflicting 
effective date provisions. While this section would, in section 2(a), 
amend 38 U.S.C. Sec. Sec. 3015(a)(1)(A) and (b)(1)(A) to reflect higher 
rates for full-time MGIB-AD pursuit for months beginning on or after 
January 1, 2009, it also provides, in subsection 2(b), that the benefit 
rate increases shall be effective with respect to payments of 
educational assistance for months beginning after the date that is 90 
days after the date of enactment. To avoid this conflict, we recommend 
simply making the amendments to 38 U.S.C. Sec. 3015, as proposed in 
section 2(a) of the bill, effective on the date of enactment of the 
Act.
      Section 4 of the bill would establish a stipend for 
individuals receiving MGIB-AD; however it does not indicate whether VA 
should pay an individual the full stipend amount versus a prorated 
amount when he or she attends school for a partial month versus a whole 
month.
      Section 6 would include business courses and seminars as 
approved programs of education. This is problematic because an 
individual attending a 2-day business seminar under the proposed full-
time MGIB-AD rate ($1,450) would only be entitled to $96.66, well short 
of the amount necessary to cover the cost of most business seminars. VA 
believes the more advantageous way to pay for seminars (and charge 
entitlement) would be similar to the way that VA administers payment 
for Licensure or Certification tests. If we were to administer this in 
the same way we administer payments for Licensure or Certification 
tests, an individual would be refunded the cost of the seminar (up to 
$2,000) and his or her entitlement would be charged by dividing the 
amount of the seminar payment by the applicable full-time rate.
      The provision added by section 8 that would allow an 
individual with entitlement to MGIB-AD to use his or her benefit to 
repay a federal loan accrued under title IV of the Higher Education Act 
of 1995 might be read to permit a borrower to repay a PLUS loan that he 
or she obtained for a child's education as well as a loan for the 
borrower's education. Accordingly, we believe this provision should be 
clarified.
      The amendment in section 10 of the bill to 20 U.S.C. 
Sec. 1087vv(j) to provide that the receipt of MGIB-AD educational 
assistance shall not be counted as part of the Expected Family 
Contribution for federal financial aid likely would increase federal 
student loan amounts for MGIB-AD recipients and could result in 
additional subsidy costs to be paid by the Department of Education.
      The language in section 11(a) of the bill is not 
complete. That subsection states that ``Subsection (c) of such section 
is amended. . . .'' However, the applicable section of law is not 
identified. Based on our review of the other provisions in section 11, 
we believe the intended reference is to section 103(c) of the 
``Veterans Earn and Learn Act of 2004,'' Pub. L. No. 108-454, 38 U.S.C. 
Sec. 3032 note.
      Section 12 would authorize reimbursement from VA's 
readjustment benefits account to state approving agencies (SAAs) for 
certain expenses incurred in the administration of VA education benefit 
programs, not to exceed $19 million in any year. VA supports section 12 
subject to identified offsets. The current funding amount is limited to 
$13 million. For FY 2008, the Omnibus Appropriations bill (P.L. 110-
161) made available an additional $6 million from General Operating 
Expenses for these reimbursements. However, without relief for future 
years, we anticipate that funding at the reduced level would cause SAAs 
to reduce staffing proportionately, severely curtail travel and 
outreach activities, and perform fewer approval/supervisory duties 
under their VA contracts. Some SAAs might decline to contract with VA 
altogether, requiring that VA employees assume their duties.
      Section 16 of the bill would establish a 5-year work-
study pilot program that would be effective on the date of enactment. 
Because VA would need to promulgate regulations to implement this 
provision, we recommend making this provision effective at a later 
date. We also note that section 16 authorizes appropriated dollars for 
only 4 fiscal years of the 5-year pilot program.
      Section 17 of the bill would require the Secretary to 
increase the number of employees of the Education Service by 150 
additional employees. VA does not support this section because it 
inappropriately directs internal staffing decisions made by the 
Secretary. The Education Service staffing level provided for in the FY 
2009 President's Budget already enables us to improve timeliness and 
accuracy of claim processing, reducing the average days to process 
original education claims from 32 in 2007 to 19, and the average days 
to process supplemental claims from 13 to 10.
      The intent and desired outcome of the provisions in 
section 19 are unclear. Generally, an individual is entitled to 36 
months of educational assistance. On average, an eligible individual 
uses 17 months of this entitlement before his or her eligibility period 
expires. If an individual were to receive an advance payment equal to 
1.5 months of his or her entitlement, VA would charge 1.5 months 
against the 36 months. The individual would then have 34.5 months of 
benefits remaining. Regardless of when VA assesses entitlement charge, 
the result will be the same--the individual will have used 1.5 months 
of entitlement and have 34.5 months of entitlement remaining.

H.R. 4889
    Madam Chairwoman, H.R. 4889, the ``Guard and Reserves Are Fighting 
Too Act of 2008,'' proposes to recodify the statutory provisions of 
chapter 1607 of title 10, United States Code (Educational Assistance 
for Reserve Component Members Supporting Contingency Operations and 
Certain Other Operations (REAP)), in a new chapter 33 of title 38, 
United States Code. Under current law, educational assistance under a 
program established under the authority of 10 U.S.C. Sec. 16162 is paid 
to entitled servicemembers by the Education Benefits Fund at the 
Department of Defense (DoD) through the Secretary of Veterans Affairs.
    VA does not support H.R. 4889. This bill would inappropriately 
place a reserve force management program under VA rather than the DoD 
where it currently resides. Additionally, the current funding structure 
for the REAP program is sound budget and programmatic policy because it 
helps ensure policymakers fully consider the cost of promised future 
benefits when making personnel and benefit decisions. We also note that 
several sections of H.R. 4889 would need to be amended to align the 
proposed chapter 33 codification with REAP as it currently exists in 
title 10.
    Finally, we cannot support this proposal without identified offsets 
for the additional $1.2 billion in direct benefit net costs that VA 
would bear over the next 10 years. Since the effective date for this 
bill would be October 1, 2009, there is no funding impact in fiscal 
year 2009. While VA funding needs would increase by $183.2 million in 
FY 2010, $718.9 million over 5 years, and nearly $1.6 billion over 10 
years, the anticipated transfers from DoD's Education Benefit Trust 
Fund (EBTF) totaling approximately $383.2 million, partially offset 
VA's appropriation requests for the Readjustment Benefit (RB) account. 
The initial transfer from EBTF of $183.2 million covers the entire FY 
2010 resource requirement; therefore the VA RB appropriation for FY 
2010 would not be affected. A subsequent transfer of approximately $200 
million from the EBTF to the RB account, results in a net increase of 
$335.7 million over 5 years, and nearly $1.2 billion over 10 years in 
VA's RB appropriation request. Because VA currently administers the 
REAP benefit for DoD, the administrative or staffing impacts of H.R. 
4889 would be minimal/negligible.

                       Vocational Rehabilitation

H.R. 3467
    H.R. 3467, the ``Second Chance for 's Veterans Act,'' would 
establish a grant program for referral and counseling services to 
assist at-risk veterans transitioning from institutional living into 
the workplace. The bill is intended to reduce recidivism, increase 
employment, and assist these veterans in locating permanent housing.
    The Administration supports the intent of the bill. However, we 
would note that most of the services proposed under this legislation, 
which mirrors the recently concluded Incarcerated Veterans Transition 
Program (IVTP), could be provided through the Second Chance Act, which 
the President signed into law last week.
    Among other things, the Second Chance Act formally authorizes key 
features of the Prisoner Re-entry Initiative (PRI), which provides 
recently released ex-offenders--including veterans--the support and 
services they need to successfully reintegrate into mainstream society.
H.R. 3646
    Madam Chairwoman, H.R. 3646 would direct the Secretaries of 
Veterans Affairs and Labor to conduct a joint study, with annual 
updates, on the fields of employment for which the greatest need for 
employees exists in various geographic regions, as determined by the 
Secretaries. The bill would also require the Secretary of Veterans 
Affairs to make the findings of the study (with the annual updates) 
available on VA's Internet website. We defer to DOL on this issue. VA 
does not support H.R. 3646.
H.R. 3889
    H.R. 3889 would amend chapter 31 of title 38, United States Code, 
by adding a new section 3122 to require VA to conduct a 20-year 
longitudinal study of a statistically valid sample of the veterans who 
begin participating in a program of vocational rehabilitation under 
that chapter during fiscal year 2008.
    The annual report would include any data necessary to determine the 
long-term outcomes of those veterans included in the study. Data 
elements could be added as necessary, but the report would contain at 
least the following information collected during the year covered by 
the report:

      Number of veterans who suspended participation
      Number of months veterans served on active duty
      Average disability rating
      Types of other VA benefits received
      Types of Social Security benefits received
      Unemployment benefits received
      Average number of months veterans were employed
      Starting and ending salaries of veterans
      Number of veterans enrolled in institutions of higher 
learning
      Average number of college credits and degrees obtained
      Average number of visits to VA medical facilities
      Average number of visits to non-VA medical facilities
      Average total household income
      Percentage of veterans who own their principal residences
      Average number of dependents.

    VA supports efforts to determine the long-term outcomes of the 
veterans participating in vocational rehabilitation programs under 
chapter 31 of title 38, United States Code. However, since VR&E is 
currently developing a proposal to conduct its own long-term study of 
issues affecting program outcomes, we do not support H.R. 3889 because 
it duplicates efforts the Department is already taking. We also cite 
additional concerns with provisions of H.R. 3889 as outlined below:

      Effective Date--The bill would be effective on the date 
of enactment and would require data collection on veterans who began 
participation during fiscal year 2008. VA would need to attempt to 
retroactively collect data on veterans who began participation from 
October 1, 2007, to September 30, 2008. Some of the required data may 
only be available by self-report. Self-reporting of events that 
occurred more than 6 months in the past could be unreliable. Some 
veterans may have begun and dropped out of the program by the time the 
bill is enacted into law; therefore, it may not be possible to obtain 
the cooperation needed for self-reporting in some cases. VA is 
currently conducting a study of those veterans who dropped out of the 
program before completion. That study should be available soon, and we 
will make it available to the Committee.
      Single Cohort--The bill requires only a single cohort of 
veterans to be followed during this study--those veterans who began 
participation in a vocational rehabilitation program during fiscal year 
2008. Concerns regarding data collection on this cohort have been 
expressed. Moving the initial cohort to the fiscal year following 
enactment of the bill into law and adding additional cohorts would 
permit more reliable data collection and increase the validity of the 
results of the study. We recommend following participants who entered a 
program during the first, third, and fifth years following enactment of 
the bill into law.
      Identification of Participants--Participants in 
vocational rehabilitation programs under chapter 31 include veterans 
and servicemembers. The bill identifies only veterans as subjects of 
this study. We believe servicemembers should also be included.
      Funding--H.R. 3889 does not contain provisions to fund VA 
for the additional general operating expenses required to administer 
this program.
      Data Collection--Designation of the initial cohort should 
not occur before the coordination of all methods of data collection is 
in place. For data elements that are only available through self-
report, VA may be required to obtain approval from the Office of 
Management and Budget for any collection instrument developed for this 
study.
      Required Reporting Elements--
        Unemployment Benefits, Number of Months Employed, and 
Salary: Several states will not provide this information to VA due to 
privacy concerns. Self-report of this information may not be reliable.
        Visits to Non-VA Medical Facilities, Total Household 
Income, Owning Principal Residence: This information would be obtained 
by self-report and may not be reliable.

    We estimate that enactment of H.R. 3889 would result in a cost of 
approximately $11 million over the 20-year duration of the study, 
beginning in fiscal year 2009.

                                Housing

H.R. 4539
    H.R. 4539, the ``Department of Veterans Affairs Loan Guaranty Cost 
Reduction Act of 2007,'' would amend title 38, United States Code, to 
make several key changes to the home loan guaranty benefit veterans 
currently enjoy. While we do not object to certain provisions of this 
bill, we would not support its enactment in its present form.
    The bill would amend the maximum guaranty entitlement available to 
veterans for purchase, construction and refinancing loans. Currently 
the maximum guaranty amount is 25 percent of the Freddie Mac conforming 
loan limitation, for a single family home, as adjusted annually. This 
means that the current VA maximum guaranty is $104,250 on a no-
downpayment loan of $417,000. In high cost areas, defined by Freddie 
Mac as Alaska, Guam, Hawaii, and the Virgin Islands, the maximum 
guaranty amount is $156,375 on a no-downpayment loan of $625,500.
    H.R. 4539 would increase the maximum guaranty amount so that it 
would be equal to 25 percent of 125 percent of the Freddie Mac 
conforming loan limit. Because lenders generally accept the 25 percent 
guaranty in lieu of a downpayment, an increase to the maximum guaranty 
translates into more purchasing power for veterans.
    Two proposals in H.R. 4539 would make changes to the VA funding 
fee. First, the statutory funding fees would be extended to October 1, 
2017. Second, the funding fee would be capped so that the highest 
funding fee a veteran would pay would be based on the Freddie Mac 
conforming loan limitation in effect on the date of enactment, not 
necessarily the limitation in effect at the time of loan origination. 
For example, if this bill were enacted today, a veteran obtaining a 
$450,000 loan in January of 2009 would pay a funding fee based on 
today's Freddie Mac loan limitation of $417,000.
    Funding fee collections are used to offset the costs of paying 
claims and other expenses incurred by the Department as part of 
providing the home loan benefit to veterans. VA opposes capping the 
funding fee based on the current conforming loan limitation. H.R. 4539 
would increase the maximum amount of a VA housing loan guarantee by 25 
percent; VA would need to increase the funding fee to offset additional 
costs (or reduced savings) associated with this increase.
    H.R. 4539 would also increase the maximum guaranty amount for 
certain refinance loans, sometimes referred to as ``regular'' 
refinances, while eliminating the existing equity requirement. 
Currently, the law limits VA's guaranty of regular refinance loans to 
$144,000, and limits the size of these loans to 90 percent of the value 
of the security for the loan. This means that a veteran who has no 
equity in his or her home is able to obtain a regular VA refinance loan 
for only 90 percent of the home's appraised value, and the maximum loan 
he or she may effectively borrow is $144,000. The statutory changes 
proposed in H.R. 4539 would provide many veterans who obtained 
conventional or subprime mortgages with an avenue to refinance into a 
VA guaranteed home loan. However, borrowers with higher loan-to-value 
(LTV) ratios have a higher incidence of default than otherwise 
comparable borrowers. Removing the 90 percent LTV cap on VA ``regular'' 
refinances would therefore introduce additional risk and cost to the VA 
guaranteed housing loan portfolio.
    H.R. 4539 further would increase the guaranty available to a 
veteran whose income ``is below a maximum income amount'' (as 
determined by the Secretary) for purposes of purchasing ``affordable 
housing''. Additionally, VA would be required to use $14 million of the 
Veterans Housing Benefit Program Fund to reduce closing costs for VA 
guaranteed home loans for affordable homes. We cannot support either of 
these proposals. First, VA lacks the requisite expertise, staffing, and 
statutory mandate to address the myriad issues involved in affordable 
housing programs. Additionally, administering the closing-cost 
provision of this bill would be difficult at best, given the fixed 
amount of money available for the assistance. We also note that $14 
million over 10 years ($1.4 million each year) would yield an 
insignificant amount of assistance to veterans. If we estimate that 20 
percent of last year's 130,000 loans were made to ``low-income'' 
veterans for purchase of ``affordable housing,'' each of those 26,000 
veterans would receive only $53 in closing-cost assistance.
    Finally, we would like to point out two technical problems in the 
bill as it is drafted. First, section 2(b)(1) refers to a non-existent 
38 U.S.C. Sec. 3729(b)(2)(C)(iii). We believe the correct citation 
should be to section 3729(b)(2)(C)(ii). Second, we believe that section 
2(g)(2) of the bill would create a statutory inconsistency within the 
Veterans Housing Benefit Program Fund. Currently, the Veterans Housing 
Benefit Program Fund expressly precludes loans made pursuant to the 
Native American Direct Loan Program. Therefore, by referring to 38 
U.S.C. Sec. 3762 (the Native American Direct Loan Program), the 
proposed change seems to conflict with existing 38 U.S.C. Sec. 3722(e).
    VA estimates that H.R. 4539 would result in a cost savings of $1.24 
million in fiscal year 2008, $237.7 million by fiscal year 2013, and 
$1.8 billion over 10 years.
H.R. 4884
    H.R. 4884, the ``Helping our Veterans to Keep Their Homes Act of 
2008,'' contains a number of proposals similar to provisions contained 
in H.R. 4539. While we do not object to certain provisions of this 
bill, we would not support enactment in its present form for the 
following reasons:
    Section 2(a) of H.R. 4884 proposes to eliminate the equity 
requirement for regular refinance loans. As discussed earlier, 
elimination of the current requirement for a 10 percent equity position 
would provide veterans who obtained conventional or subprime loans an 
avenue to refinance into a VA home loan, but would also increase risk 
and cost in the VA guaranteed home loan portfolio.
    Section 2(b) of H.R. 4884 would make the VA funding fee a flat 1 
percent of the total loan amount. Under current provisions found in 38 
U.S.C. Sec. 3729(b), the funding fee ranges from 0.05 percent on a rate 
reduction loan, up to 3.30 percent of the loan amount for no-
downpayment loans to veterans who have had more than one VA guaranteed 
loan (not counting a rate reduction loan).
    Funding fee collections are used to offset the costs of paying 
claims and other expenses incurred by the Department as part of 
providing the home loan benefit to veterans. The current fee structure 
on VA guaranteed housing loans appropriately targets the highest fees 
to the highest risk loans. VA opposes changes to its fee structure that 
would encourage risky borrowing practices by lowering fees on the 
riskiest kinds of loans. Such changes would also likely result in 
additional cost to VA.
    Subsections 2(c) and 2(d) of H.R. 4884 would extend VA's authority 
to conduct its demonstration projects on adjustable rate mortgages 
(ARMs) and hybrid ARMs, as VA's authority to offer these options to 
veterans expires in fiscal year 2008. Since the inception of this 
project, VA has guaranteed over 227,000 ARMs and hybrid ARMs, making up 
approximately 11 percent of VA's business.
    At this time, we do not object to making the provisions of 38 
U.S.C. Sec. Sec. 3707 and 3707A permanent, provided Congress identifies 
offsets for the increased direct spending.
    H.R. 4884 also proposes an increase in the maximum guaranty amount. 
This provision is similar to that contained in H.R. 4539. However, H.R. 
4884 would increase the maximum guaranty amount to 25 percent of 150 
percent of the Freddie Mac conforming loan limit (CLL), which would 
enable veterans to purchase homes in more costly areas.
    Section 2(f) of H.R. 4884 would provide for an annual increase in 
the amount of guaranty by applying the 12-month increase in the 
Consumer Price Index for Urban Consumers (CPI-U). This provision, as 
drafted, would conflict with the current method for increasing the 
maximum guaranty--the statutory tie to the Freddie Mac conforming loan 
limit. As such, we cannot support this proposal as drafted.
    Finally, section 2(g) of this bill calls on the Department to 
review and streamline the process of guaranteeing loans obtained in 
conjunction with the purchase of condominiums. We agree that it is 
appropriate to conduct such a review and have already begun the process 
by reviewing our existing regulatory requirements regarding 
condominiums.
    VA estimates that H.R. 4884 would result in a cost savings of $8.1 
million in fiscal year 2008, but would cost the government $168.7 
million by fiscal year 2013, and $1.93 billion over 10 years.
H.R. 5664
    H.R. 5664 would amend 38 U.S.C. Sec. 2103 to require that the 
Secretary update VA's plans and specifications for suitable adapted 
housing at least once every 6 years. VA does not support enactment of 
this bill.
    Currently, section 2103 authorizes the Secretary to furnish, 
without cost, model plans and specifications of suitable housing units 
to eligible veterans. VA does this by providing our Handbook for 
Design: Specially Adapted Housing (VA Pamphlet 26-13) to all veterans 
who are eligible for Specially Adapted Housing (SAH) assistance. This 
handbook is intended to educate the veteran and his or her family on 
the types of adaptations that may improve the safety of the home, as 
well as increasing the veteran's independence. In addition, VA hopes to 
increase the architect's sensitivity to the needs of severely injured 
veterans and stimulate awareness of the design challenges he or she may 
face during the planning stage. On a practical level, this handbook 
provides model design assistance to our severely injured veteran 
population, as well as their architects to assist them in developing 
construction plans to provide the best possible homes for these 
veterans.
    We agree that it is important to maintain models that are current 
and that incorporate new technologies as they become available. VA 
believes this type of guidance should be kept modern and up-to-date in 
order to provide the most beneficial assistance to this special 
population of veterans. As such, we are now in the process of updating 
the current handbook, and we would anticipate updating it every 3 or 4 
years, or more frequently, as industry or veterans' needs require. We 
do not believe legislation is required to ensure that this handbook is 
updated and, therefore, do not support H.R. 5664.
    VA anticipates no costs associated with enactment of this provision 
during the first 5 years, but we estimate a cost of $122,000 over 10 
years.

                                Outreach

H.R. 3681
    H.R. 3681, the ``Veterans Benefits Awareness Act of 2007,'' would 
add a new section 532 to title 38, United States Code, to authorize the 
Secretary of Veterans Affairs to purchase advertising in national media 
outlets for the purpose of promoting awareness of benefits under laws 
administered by the Secretary. Madam Chairwoman, we do not believe 
enactment of this bill is needed. Current law provides sufficient 
authority for the Secretary to purchase such advertising, as 
appropriate. Therefore, we do not support enactment of this bill.
    Madam Chairwoman, this concludes my testimony. I would be pleased 
to respond to any questions you or other Members of the Subcommittee 
may have.

                                 
                                     CTIA, The Wireless Association
                                                    Washington, DC.
                                                     April 14, 2008

Rep. Stephanie Herseth Sandlin, Chairwoman
Rep. John Boozman, Ranking Member
House Veterans' Affairs
Subcommittee on Economic Opportunity
335 Cannon House Office Building
Washington, D.C. 20515

Re: H.R. 3298

Dear Chairwoman Herseth Sandlin and Ranking Member Boozman:
    On behalf of the members of CTIA--The Wireless 
Association' (``CTIA''), I am writing to share the wireless 
industry's views on H.R. 3298, the ``21st Century Servicemembers 
Protection Act.'' I respectfully request that this letter be included 
in the record of the Subcommittee on Economic Opportunity's April 16 
hearing on H.R. 3298.
    CTIA commends the Committee for its attention to this issue, and we 
thank the bill's sponsor, Representative Patrick Murphy, for his and 
his staff's willingness to work with the wireless industry to improve 
the legislation.
    CTIA's service provider members, as a matter of corporate policy, 
permit members of the U.S. armed forces facing deployment to terminate 
service without penalty. Additionally, many carriers (including the six 
largest, representing nearly 93 percent of ``post-paid'' consumers) 
have policies regarding contract suspension which offer the affected 
consumer an opportunity to stop service and reserve his or her existing 
telephone number for a set period of time. CTIA therefore does not 
oppose Representative Murphy's proposal to amend Title III of the 
Servicemembers Civil Relief Act (``SCRA'') to allow a servicemember to 
terminate his or her contract for wireless service upon either receipt 
of military orders for a deployment of more than 90 days or a change in 
permanent station to a location where service covered by the contract 
is not supported.
    Rep. Murphy's proposed amendment in the Nature of a Substitute 
(dated December 19, 2007) includes a number of improvements over the 
introduced version of H.R. 3298. Nonetheless, there are several 
provisions of the bill that still could be improved, and these are 
detailed below.

    Covered Contracts: The amendments to the SCRA proposed by H.R. 3298 
are intended to cover contracts for ``cellular phone service.'' Because 
``cellular phone service'' is not defined in either H.R. 3298 or the 
Communications Act 1934, as amended, CTIA recommends striking the term 
and replacing it with ``commercial mobile radio service'' as such term 
is defined by section 332(d) of the Communications Act 1934 (47 U.S.C. 
332(d)).

    Preservation of Existing Carrier Military Service Suspension 
Programs: In response to the needs of military personnel facing 
deployment, many carriers have implemented service suspension programs 
that allow individual consumers to place their account(s) on ``hold'' 
status for between 12 and 24 months, depending on the carrier. The 
suspension process generally allows consumers to reserve their existing 
wireless telephone number(s) without incurring any monthly or other 
recurring fees, and for many customers it offers an attractive option 
short of contract termination. Because the Murphy bill is silent on how 
suspension would work in any particular context, and since neither the 
bill nor the SCRA's definitions section define ``suspend'' or 
``suspension,'' it is unclear whether existing carrier suspension 
programs would continue to be permissible or require modification. 
Since efforts to define these terms or otherwise conform existing 
carrier suspension programs to a government-imposed standard could 
upset these pro-consumer carrier practices, CTIA recommends that the 
scope of the bill be narrowed to exclude all references to ``suspend'' 
or ``suspension.''

    Arrearages and Refunds: The vast majority of the more than 255 
million wireless subscribers in the United States purchase service on a 
``post-paid'' (as opposed to ``pre-paid'') basis, and nearly all 
``post-paid'' consumers subscribe to flat-rate ``bucket'' plans that 
allow them to use a fixed number of minutes per billing cycle for a 
flat fee. These flat fee plans have been an overwhelming consumer and 
competitive success and allow consumers a broad choice of plans to suit 
their widely varying calling needs. These plans do not make any 
distinction regarding whether the consumer uses all of the covered 
minutes on the first day or last day of the billing cycle, or whether 
the consumer distributes the minutes equally over all days covered in a 
particular billing cycle, and carriers employing this business model do 
not pro-rate a flat fee if a customer deactivates service in the middle 
of a billing cycle. Accommodating a pro-rating requirement would 
require an industrywide expenditure of millions of dollars for billing 
system modification and customer care retraining. Because of the 
magnitude of the compliance costs associated with this type of pro-
rating, CTIA recommends that the first sentence in the proposed 308(e) 
be expanded by adding at the end ``except that any such unpaid amounts 
shall be due in full for any contract period in which the servicemember 
utilized the service if the contract provides for service on a flat 
rate basis.''

    Penalties: CTIA remains concerned that the penalty provisions 
included in the proposed 308(h)(1) have the potential to be 
unreasonable in relation to the size of any harm that could accrue to a 
servicemember should a carrier representative fail to terminate a 
contract appropriately. While CTIA's members have individual corporate 
policies that provide for contract termination without penalty when a 
servicemember provides appropriate deployment orders, mistakes can 
happen. In the event of such a mistake, the limit of any customer harm 
is the imposition of an early termination fee, which generally is less 
than $200 (and increasingly is being pro-rated so as to decline across 
the term of the contract). Given this, and the equitable relief 
provisions in the proposed 308(i), the penalty provisions in the bill 
should be clarified and narrowed to cap fines at no more than $5,000. 
Additionally, CTIA asks that the legislative history accompanying the 
bill clarify that fines at that level should only be levied in cases 
where there is knowing and repeated violation of the law.
    The wireless industry recognizes the dedication of members of the 
U.S. armed forces and is pleased to work toward enactment of 
appropriate Federal legislation to benefit servicemen and servicewomen 
facing deployment. CTIA and its members look forward to working with 
the Committee and the bill's sponsor to improve H.R. 3298 as it moves 
through the legislative process.

            Sincerely,
                                              Jot D. Carpenter, Jr.
                                 Vice President, Government Affairs

                                 
                   Prepared Statement of Kerry Baker,
  Associate National Legislative Director, Disabled American Veterans
Mr. Chairman and Members of the Subcommittee:
    I am pleased to submit for the record, the views of the Disabled 
American Veterans (DAV) on the various bills under consideration today. 
In accordance with its congressional charter, the DAV's legislative 
mission is focused on benefits and services provided to veterans 
because of service-connected disabilities. We are therefore pleased to 
support the bills insofar as they fall within that scope.
    The DAV does not have mandates from its membership to support 
issues addressed within H.R. 4883, H.R. 4884, H.R. 3393, H.R. 3298, 
H.R. 3467, H.R. 3646, H.R. 4539, H.R. 4889, H.R. 5664, and H.R. 3798. 
The provisions of these bills are also mostly outside the scope of 
DAV's mission. Nonetheless, after reviewing the bills, we have no 
objection to their favorable consideration.

                               H.R. 3681

    The ``Veterans Benefits Awareness Act of 2007,'' or H.R. 3681, 
would authorize the Secretary of Veterans Affairs (Secretary) to 
advertise in the national media to promote awareness of benefits under 
laws administered by the Secretary. This is truly a novel undertaking, 
one that DAV does not oppose.
    We note that this legislation as currently written authorizes, but 
does not require, the Secretary to advertise various benefits in the 
media. This distinction is important. Advertising healthcare or 
compensation and pensions benefits in the media will attract an unknown 
number of new beneficiaries into the system--a purpose for which any 
positive outreach program is designed. These actions will increase VA's 
claims backlog as well as the demand for its medical services.
    There are currently over 800,000 claims pending in the Veterans 
Benefits Administration (VBA). This amount of backlogged claims is 
historic. However, the DAV has stated on the record that legislation 
benefiting veterans should never be withheld merely because of its 
effect on VA's claims backlog. We nonetheless believe that enhanced 
outreach efforts should focus on discharging and newly discharged 
service members.
    The newest generation of our veterans is also the most unfamiliar 
generation in relation to benefits earned through their service. This 
problem could be solved in part by enhanced outreach through 
improvements and expansion of the Transition Assistance Program (TAP), 
Disabled Transition Assistance Program (DTAP), and Benefits Delivery at 
Discharge Program (BDD).
    Many veterans of World War II, the Korean War and Vietnam War went 
years, if not decades, prior to becoming aware of their rightful 
benefits. Enhancing outreach to our newest veterans through these 
programs could help ensure these new generations receive timely 
benefits, rather than benefits decades after their service.

                               H.R. 3889

    House bill 3889 would require the Secretary to conduct a 
longitudinal study of the VA's vocational rehabilitation program. While 
DAV does do not oppose the intent of this bill, we do have concerns.
    The bill requires the study to begin during fiscal year 2008, which 
would require VA, or a contractor thereof, to begin gathering data in 
the arrears. The bill also requires the study to be conducted over the 
course of 20 years. We believe this length of time is unrealistic. A 
more logical timeframe would be no longer than 10 years, and a possible 
extension thereafter.
    Much of the reporting criteria is unknown, such as unemployment 
benefits received by veterans, the number of months such veteran was 
employed, starting and ending salaries, the average number of visits to 
VA medical facilities, etc. These statistics are not readily available 
to VA and would have to be gathered from the veteran, who would not be 
required to participate in such a study.
    If VA contracted this study privately, the cost of such a long-term 
project may outweigh the studies benefits to the Department. We believe 
the funds needed for such a potentially high-cost, long-term private 
contract would be better spent within the Department. There would also 
be certain logistical barriers to a private contractor obtaining access 
to the types of information requested by the study the bill requires.
    Therefore, while we do not oppose the intent of this bill, we ask 
that the Committee to consider these concerns.

                               H.R. 5684

    The ``Veterans Education Improvement Act of 2008'' would amend 
title 38, United States Code, to make certain improvements in the basic 
educational assistance program administered by the Secretary. While the 
DAV has no resolution specifically pertaining to this bill, we 
nevertheless support the bill since the Independent Budget Veterans 
Service Organizations have advocated for a GI Bill for the 21st century 
in the Independent Budget for FY 2009.
    Since the inception of the GI Bill, every generation of warriors 
has had this benefit to ease transition back into civilian life, which 
provided them an opportunity for education and served as an investment 
in the future of our nation. Today's GI Bill is not meeting the needs 
of our veterans, and skyrocketing education costs are forcing veterans 
to shoulder the bulk of college expenses.
    Moreover, young veterans are more likely to become unemployed and 
homeless. A new approach to veterans' transition, stabilization, and 
education is needed. The increasing cost of education is diminishing 
today's GI Bill as a veterans' education benefit. According to the 
Department of Education, the national average cost of undergraduate 
tuition, fees, room, and board charged to full-time students in degree-
granting institutions for the 2005-06 academic school year was $17,447. 
A veteran in receipt of the active duty fulltime GI Bill benefit for 
the same period received $9,306, approximately 53 percent of the total 
cost of education.
    While we agree the bill would certainly enhance educational 
benefits beyond what is currently provided, we suggest an amendment to 
the bill. Rather than setting a specified limit of tuition cost as the 
bill currently proposes, we suggest the bill cover the full cost of 
tuition plus books, fees, and expenses; but limited to an amount not to 
exceed the average cost of tuition for in-state colleges in the 
veterans' particular state wherein he/she attends college. 
Additionally, we suggest the bill also cover room and board at a rate 
equal to the average college dormitory for the applicable school, or 
the average dormitory rate for the applicable state if no dormitory 
exists at the veteran's school of choice.
    These minor changes would ensure that no veteran is prohibited from 
pursuing his or her desired course of higher education merely because 
of financial constraints. Despite our recommended changes, we 
nonetheless support the bill due to its obvious improvements in 
educational benefits for our nation's veterans.

                                 
                  National Cable and Telecommunications Association
                                                    Washington, DC.
                                                     April 16, 2008

The Honorable Stephanie Herseth Sandlin, Chairwoman
The Honorable John Boozman, Ranking Member
House Committee on Veteran's Affairs
Subcommittee on Economic Opportunity
335 Cannon House Office Building
Washington, DC 20515
Dear Chairwoman Herseth Sandlin and Ranking Member Boozman,
    On behalf of the National Cable & Telecommunications Association 
(NCTA), thank you for inviting the cable industry to comment on H.R. 
3298, the 21st Century Servicemembers Protection Act.
    NCTA is the principal trade association for the cable television 
industry in the United States, representing cable operators serving 
more than 90 percent of the nation's cable TV households and more than 
200 cable program networks. The cable industry is the nation's largest 
broadband provider of high speed Internet access after investing $110 
billion over 10 years to build out a two-way interactive network with 
fiber optic technology. Cable companies also provide state-of-the-art 
digital telephone service to millions of American consumers.
    The cable industry strongly supports H.R. 3298 which would ensure 
that military personnel who receive orders to deploy for military 
action or for a change of permanent station are given the absolute 
right to terminate contracts for telephone service, multichannel video 
service, Internet access or any utility without penalty, and to receive 
a refund for any services paid in advance. This legislation addresses 
one of the many financial issues faced by military personnel when they 
are deployed or mobilized. Military personnel should have the right to 
cancel or suspend service contracts when they are called to leave their 
homes and families to defend our nation. Quite simply, our troops 
should not be obligated to pay for services they will not be using 
while they serve our country, nor should they face penalties such as 
early termination fees during deployment.
    We also believe the measure could be strengthened to ensure that 
all providers of multichannel video service and all providers of 
Internet access service, as defined under existing law, are covered by 
the bill. In that regard, we would recommend the following clarifying 
language--

      On page 2, beginning on line 9, strike ``cable or 
satellite television service'' and insert ``video programming service 
provided by a multichannel video programming distributor (as such term 
is defined in section 602(13) of the Communications Act 1934 (47 U.S.C. 
522(13))''.
      On page 2, line 10, strike ``Internet service,'' and 
insert ``Internet access service (as such term is defined in section 
231(e)(4) of the Communications Act 1934 (47 U.S.C. 231(e)(4))''.

    Thank you again for giving us the opportunity to express our 
support for H.R. 3298. We applaud your leadership on this issue, and we 
commend Reps. Patrick Murphy and Tim Walz for introducing this 
important legislation which recognizes the commitment and sacrifice of 
our brave and heroic military personnel.

            Sincerely,
                                                     Kyle McSlarrow
                              President and Chief Executive Officer

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                   January 28, 2008

The Honorable Nancy Pelosi
Speaker
U.S. House of Representatives
Washington, DC 20515
Dear Madame Speaker:
    We are writing to alert you to an important improvement to the 
stimulus package that will greatly benefit America's veterans. This 
proposal, which has already been introduced, H.R. 4539, is at the 
center of one of the guiding principles for the overall package--to 
help provide relief to some subprime mortgage holders to refinance into 
federal insured loans; thereby helping to stabilize the economy. The 
proposal to increase the FHA loan limit is noble but we should also 
widen the availability of mortgage access in the country to provide 
incentives for our nation's veterans to participate and benefit as 
well.
    As you know, the stimulus package contains provisions to address 
the problems in the home loan market and will raise the Freddie Mac 
rate to over $720,000. Current law limits the maximum VA loan guaranty 
rate to the Freddie Mac maximum.
    We strongly suggest adding our bill, H.R. 4539, the VA Loan 
Guaranty Cost Reduction Act of 2007, to improve on the stimulus package 
for veterans. It is important to note that the Department of Veterans 
Affairs has estimated that our bill will actually save taxpayer dollars 
by increasing the overall fee revenue to VA while simultaneously making 
the program more attractive to lower-income veterans. A brief outline 
of our bipartisan bill includes the following:

      Raise the VA loan guaranty limit to 125 percent of the 
Freddie Mac limit.
      Cap the funding fees at today's maximum amounts. For 
example, a veteran who now pays a 3.35% funding fee on the current 
maximum $417,000 loan pays a fee of about $14,000. Under this bill, the 
veteran could borrow up to the new maximum loan of $521,250 but the 
funding fee would remain at $14,000. That is effectively a rate 
reduction of nearly 1% in that price range.
      Reduce the equity requirements for all refinance loans 
from the current 10% down to 0%. This reduction applies to both VA-
guaranteed and non-guaranteed loans. This will help some of the 
veterans experiencing difficulties in today's sub prime mortgage market 
to refinance their home loans through the VA program which also has a 
very aggressive program to avoid foreclosure.
      Promote the creation of ``affordable housing'' by 
increasing the loan guaranty amount to 30% for housing that meets 
``affordable housing'' qualifications (as determined by VA in 
consultation with HUD). This will encourage construction of more 
affordable housing units that offer entry to home ownership for 
veterans.
      Provide closing cost assistance paid to the borrower for 
affordable housing units. The amount would be determined by VA based on 
projections of the number of borrowers and the available negative 
subsidy created through the fee program. The subsidy cost may not 
exceed $14 million over 10 years.
    We urge you to include the provisions of H.R. 4539 in the stimulus 
package.

            Sincerely,
                                                    Michael Michaud
                                   Chairman, Subcommittee on Health
                               House Committee on Veterans' Affairs

                                                        Steve Buyer
                                                     Ranking Member
                               House Committee on Veterans' Affairs
cc: Chairwoman Slaughter
Ranking Member Dreier

[An identical letter was sent to Hon. John Boehner, Minority Leader, 
U.S. House of Representatives, on January 28, 2008.]

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                     April 30, 2008

Patrick Campbell
Legislative Director
Iraq and Afghanistan Veterans of America
308 Massachusetts Ave., NE.
Washington, DC 20002

Dear Mr. Campbell:

    In reference to the Subcommittee on Economic Opportunity hearing on 
Pending Legislation on April 16, 2008, I would appreciate it if you 
could answer the enclosed hearing question.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide answers consecutively on letter-size paper, single 
spaced. In addition, please restate the question in its entirety before 
the answer.
    Due to delay in receiving mail, please provide your response to 
Orfa Torres by fax at 202-225-2034. In the interest of time and the 
necessity to publish all responses please reply no later than May 30, 
2008. If you have any questions please call 202-226-4150.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
         Questions from the Honorable Stephanie Herseth Sandlin
            Chairwoman, Subcommittee on Economic Opportunity
                     Hearing on Pending Legislation
                             April 16, 2008
    Question 1: During our hearing you were requested to provide the 
Subcommittee on Economic Opportunity the reference for your data on the 
average cost of a public school education which you determine to be 
$17,336. Please provide your reference for your data and explain how 
you determined the average cost of a public school education to be 
$17,336.

    Response: In my testimony on April 16th, 2008, I stated that ``the 
average cost of a public school education [is] currently at $17,336/yr. 
according to the College Board.'' The reference for that statistic can 
be found on page 7 of the ``Trends in College Pricing 2007'', table 2, 
``Average Estimated Undergraduate Budgets 2007-8'' (see table below).

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]



    The statistic that the Chairwoman was using to estimate the cost of 
education at a public university was derived from page 6 of the same 
report, ``Average Published Charges for Undergraduates.''
    I think the real issue at hand is what numbers should be considered 
the ``full cost of education'' in determining benefits for veterans. 
According to the Department of Education the appropriate statistics to 
be using when determining the full cost of an education is the ``Cost 
of Attendance'' and that phrase is clearly defined by statute (20 
U.S.C. Sec. 1087II--Cost of Attendance) to include:

    1.  Tuition and fees
    2.  Allowance for Books, Supplies, Transportation and Miscellaneous 
Personal expenses
    3.  Room & Board Costs

    While the chart highlighting ``Avg. Published Charges'' 
incorporates Tuition, Fees and Room and Board, it also leaves out 
projections for ``Books, Supplies, Transportation and Miscellaneous 
Personal expenses.'' That is why IAVA adopts the average estimated 
undergraduate budgets as the true estimate of the cost of a public 
school education.
    We need a GI Bill that will cover the full cost of attendance and 
ensure veterans can make going to college their full time job.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                     April 30, 2008

The Honorable Charles S. Ciccolella
Assistant Secretary
Veterans' Employment and Training Service
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, D.C. 20210
Dear Secretary Ciccolella:
    In reference to the Subcommittee on Economic Opportunity hearing on 
Pending Legislation on April 16, 2008, please answer the enclosed 
hearing question.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for materials for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide answers consecutively on letter size-paper, single 
spaced. In addition, please restate the question in its entirety before 
the answer.
    Due to delay in receiving mail, please provide your response to 
Orfa Torres by fax at 202-225-2034. In the interest of time and the 
necessity to publish all responses please reply no later than May 30, 
2008. If you have any questions please call 202-226-4150.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman
                               __________
                                           U.S. Department of Labor
                                                    Washington, DC.
                                                      June 23, 2008

The Honorable Stephanie Herseth Sandlin
U.S. House of Representatives
331 Cannon House Office Building
Washington, DC 20515
Dear Chairwoman Herseth Sandlin:
    Thank you for the opportunity to appear before the House Committee 
on Veterans' Affairs' Subcommittee on Economic Opportunity on April 16, 
2008, to testify on pending legislation before the Committee. 
Subsequent to the hearing, the Subcommittee forwarded a question for 
the record to the U.S. Department of Labor. A response to that question 
is enclosed.
    Thank you for the opportunity to appear before the Subcommittee and 
for your continued support of employment services for America's 
veterans.

            Sincerely,
                                              Charles S. Ciccolella
                                            Assistant Secretary for
                                  Veterans' Employment and Training
Enclosure
                               __________
   Answer to a Question for the Record By Hon. Charles S. Ciccolella
    Assistant Secretary For Veterans' Employment and Training, U.S. 
                          Department of Labor
       For a Hearing of the Subcommittee On Economic Opportunity
 Committee On Veterans' Affairs, United States House of Representatives
                             April 16, 2008
    Question 1: In your written and oral testimony for the Subcommittee 
on Economic Opportunity hearing, your state that the U.S. Department of 
Labor (DOL) opposes H.R. 3646, To direct the Secretary of Veterans 
Affairs and the Secretary of Labor to conduct a joint study on the 
fields of employment for which the greatest need for employees exists 
in various geographic areas. You mentioned that DOL is opposed to this 
bill since the DOL Bureau of Labor Statistics already develops a ten-
year national level industry and employment projections, which is also 
published. These projections are provided to the state workforce 
agencies and the states also collect labor market information. Please 
provide the Subcommittee on Economic Opportunity the latest publication 
of this report and the available statistics.

    Response: As stated in my testimony, the Department of Labor's 
(DOL) Bureau of Labor Statistics (BLS) develops ten-year national-level 
industry and occupational employment projections and prepares and 
publishes career information based on those projections. These 
projections are available online at http://www.bls.gov/emp/home.htm.
    BLS provides the national projections data files through DOL's 
Employment and Training Administration (ETA) to state workforce 
agencies to use as a starting point for developing state and area 
projections. The information available from the state workforce 
agencies can be accessed though the DOL Web site CareerOneStop: http://

www.careerinfonet.org/acinet/
select_state.asp?from=&next=lmil&id=11,1&nodeid=13
&soccode=.

                                 

                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                     April 16, 2008

Dr. Curtis L. Gilroy
Director, Accession Policy
Office of the Undersecretary of Defense
for Personnel and Readiness
U.S. Department of Defense
1300 Defense Pentagon
Washington, DC 20301
Dear Mr. Gilroy:
    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Pending Legislation'' 
on April 16, 2008, I would appreciate it if you could answer the 
enclosed hearing questions as soon as possible. As you may know, we 
have a scheduled Subcommittee markup on April 23, 2008.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
                      Hearing Date: April 16, 2008
                             Committee: HVA
                 Member: Congresswoman Herseth Sandlin
                          Witness: Mr. Gilroy
                   Cost of Four-Year Public Education
    Question 1: One of the stake holders asserts that $1,101 to $1,450 
a month will not cover the average cost of a four-year public 
education. Do you disagree with their assertion that the average cost 
is $17,336 a year?

    Response: The National Center for Education Statistics (NCES), an 
element of the Department of Education, estimated that the average 
undergraduate tuition, fees, room, and board charged for full-time 
students at a public four-year school during school year 2006-2007 was 
$12,805. Based on the typical nine-month school term, this would equate 
to a monthly cost of $1,423.
    The $17,336 figure appears to be the school year 2007-2008 
enrollment weighted average cost for a public four-year school (in-
State) taken from a publication of the College Board, a private 
organization, and includes not only tuition, fees, room, and board, but 
also books, supplies, transportation, and other expenses. The tuition, 
fees, room, and board as estimated in this publication for school year 
2006-2007 was $12,837, only $32 more than the NCES average. The College 
Board estimate for school year 2007-2008 is $13,589 ($1,508 per month).

       Percentage of Active Duty Benefit Covered by Chapter 1606

    Question 2: Chapter 1606 now pays about 29 percent of the current 
GI Bill compared to about 47 percent when the GI Bill was first passed. 
What percentage of the active duty benefit would Chapter 1606 
recipients receive if H.R. 5684 were enacted into law? How can we amend 
H.R. 5684 to provide a similar benefit that was enacted in the original 
(47 percent) GI Bill?

    Response: Enactment of H.R. 5684 would increase the Montgomery GI 
Bill (MGIB) basic benefit rate in 2009 to $1,450 for a person who 
completes three years of service on active duty. The projected monthly 
benefit rate in 2009 for MGIB for the Selected Reserve (MGIB-SR) is 
$327. This is based on a projected Consumer Price Index (CPI) 
adjustment of 3.3 percent. The significant increase in the MGIB benefit 
provided in H.R. 5684 compared to the modest CPI adjustment for the 
MGIB-SR benefit would result in Guard and Reserve members receiving a 
benefit of just under 23 percent of the MGIB rate.
    To increase the MGIB-SR benefit rate in Fiscal Year (FY) 2009 to 47 
percent of the MGIB benefit rate proposed in H.R. 5684, the bill would 
have to include an amendment to chapter 1606 of title 10 specifying a 
basic monthly benefit rate of $682 (47 percent of $1,450) beginning in 
FY 2009. This would result in an increase to the Department of Defense 
budget of approximately one billion dollars over the five-year period 
beginning in FY 2009.

            Portability for 1607 Benefits for Ready Reserve

    Question 3: Can an individual called up from the Individual Ready 
Reserve obtain portability for their 1607 REAP benefits? If not, what 
section of the law should we amend to allow for this portability?

    Response: No, an individual cannot obtain portability for their 
1607 REAP benefits. The amendment made to section 16164 of title 10 by 
section 530 of Public Law 110-181, dated January 28, 2008, does not 
permit members of the Individual Ready Reserve to use the REAP benefit 
if they separate from the Ready Reserve. Section 16164 of title 10 
would have to be further amended to provide portability of the REAP 
benefit to Individual Ready Reserve members. The Department provided 
the attached amendment as a drafting service to both the House Armed 
Services Committee and the Senate Armed Services Committee.

    How to Simplify H.R. 5684 to Simplify Administration of Reserve 
                                Benefits

    Question 4: How can we simplify H.R. 5684 to ease the 
administration of Guard and Reserve benefits?

    Response: The amendments in H.R. 5684 to chapter 30 of title 38 
adequately cover National Guard and Reserve members who meet the active 
duty service requirement and any other eligibility requirements. 
However, the Committee is also considering a bill that would recodify 
chapter 1607 of title 10 as a new chapter in title 38--H.R. 4889, ``The 
Guard and Reserves are Fighting Too Act of 2008.''
    If Congress were to repeal chapter 1607 in favor of recodifying the 
provisions into title 38, as proposed in H.R. 4889, it would simplify 
administration of the Reserve Education Assistance Program (REAP) 
benefit. That is, if the REAP eligibility requirements were codified in 
chapter 30 of title 38 rather than recodifying all of chapter 1607 as a 
new chapter in title 38. The REAP benefit amounts are tied to the 
chapter 30 benefit. Furthermore, with the recent amendment to chapter 
1607 in the National Defense Authorization Act for Fiscal Year 2008 
(section 530 of Public Law 110-181, dated January 28, 2008), the REAP 
program is now virtually identical to the chapter 30 program, with the 
exception of the monthly benefit rate and the active service 
requirement. By amending chapter 30, rather than creating a new chapter 
in title 38 for REAP, any changes to the chapter 30 program would be 
applicable to National Guard and Reserve members who are eligible for 
educational assistance based on their contingency service without need 
to consider changes to another chapter in title 38 to maintain parity 
between the programs.

                                 
                                     Committee on Veterans' Affairs
                               Subcommittee on Economic Opportunity
                                                    Washington, DC.
                                                     April 16, 2008

Mr. Keith Pedigo
Associate Deputy Under Secretary
Policy and Program Management
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Pedigo:

    In reference to our House Committee on Veterans' Affairs 
Subcommittee on Economic Opportunity hearing on ``Pending Legislation'' 
on April 16, 2008, I would appreciate it if you could answer the 
enclosed hearing questions as soon as possible. As you may know, we 
have a scheduled Subcommittee markup on April 23, 2008.
    In an effort to reduce printing costs, the Committee on Veterans' 
Affairs, in cooperation with the Joint Committee on Printing, is 
implementing some formatting changes for material for all Full 
Committee and Subcommittee hearings. Therefore, it would be appreciated 
if you could provide your answers consecutively on letter-size paper, 
single-spaced. In addition, please restate the question in its entirety 
before the answer.
    Due to the delay in receiving mail, please provide your response to 
Ms. Orfa Torres by fax at (202) 225-2034. If you have any questions, 
please call (202) 225-3608.

            Sincerely,
                                          Stephanie Herseth Sandlin
                                                         Chairwoman

                               __________
                        Questions for the Record
          The Honorable Stephanie Herseth Sandlin, Chairwoman
                   Economic Opportunity Subcommittee
                    House Veterans Affairs Committee
                             April 16, 2008
                          Pending Legislation
    Question 1: You state that the transfer of benefits is a key 
priority. Could each Secretary of the Armed Forces (Army, Navy, Air 
Forces, etc.) do it today under Title 38 U.S.C. Sec. 3020?

    Response: Yes, however title 38, U.S.C. Sec. 3020 limits the 
authority for transferability of benefits to service members in 
critical skills who reenlist/extend for a period of 4 years or more. 
The Department of Defense (DoD) would like to see this authority 
expanded to include all career service members regardless of skill or 
specialty.

    Question 2: How many military branches are implementing the program 
under Title 38 U.S.C. Sec. 3020?

    Response: Currently, the Army is using the authority under title 38 
U.S.C. Sec. 3020 as an integral tool in its reenlistment program. No 
other Service is currently using the authority.

    Question 3: If the funding for the SAAs could not be secured, is VA 
prepared to take over the duties of the SAAs? How much would it cost VA 
to train and perform those duties?

    Response: Yes, the Department of Veterans Affairs (VA) is prepared 
(and required by law) to take over those duties. It is not possible to 
determine cost to train and perform these duties because the amount of 
work needed is dependent on how many (if any) State Approving Agencies 
(SAA) would no longer desire to contract with VA for the contract 
amounts offered.

    Question 4: Do you not support H.R. 3889 because you are already 
doing a study? Is it a one-year study or is it longer than one year?
    Response: Vocational Rehabilitation & Employment (VR&E) Service 
expects to award a contract for the VR&E Service participant research 
study in fiscal year (FY) 2008. This is a year long study to validate 
the findings of the veterans employability research study (VERS). 
Additionally, VR&E Service is developing plans to conduct a long-term 
study of VR&E outcomes.

    Question 5: How much do the VA home loan fees generate on an annual 
basis?

    Response: From FY 2002 through FY 2008, VA has collected over $3.12 
billion in funding fees.


--------------------------------------------------------------------------------------------------------------------------------------------------------
                          2002                                 2003            2004            2005            2006            2007           FY 2008
--------------------------------------------------------------------------------------------------------------------------------------------------------

$508,795,542-----------------------------------------------$629,446,827----$491,453,430----$405,108,773----$430,630,160----$417,005,212----$237,759,267-
--------------------------------------------------------------------------------------------------------------------------------------------------------


    Question 6: The income generated from the fees, do they fund other 
veteran programs or do they go back to the Treasury?

    Response: We assume that the income to which the question refers is 
the current negative subsidy estimate associated with the loan guaranty 
financing account. Funding fees collected from the VA loan guaranty 
program do not fund other veteran programs. VA holds the estimated 
amounts that are sufficient to fund all future expenses on loans 
guaranteed or made in a particular year. Any amount of funding fee 
collections in excess of these expenses (referred to as the `negative 
subsidy amount') is returned to Treasury at the end of the year. In FY 
2007, the amount of funding fees in excess of the future anticipated 
expenses totaled $87.1 million, which was returned to Treasury at the 
end of the fiscal year.