[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]



 
 U.S. DEPARTMENT OF VETERANS AFFAIRS BUDGET REQUEST FOR FY 2011 AND FY 
                                  2012

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



                                HEARING

                               before the

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

                     ONE HUNDRED ELEVENTH CONGRESS

                             SECOND SESSION

                               __________

                            February 4, 2010

                               __________

                           Serial No. 111-59

                               __________

       Printed for the use of the Committee on Veterans' Affairs




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                     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
DEBORAH L. HALVORSON, Illinois       BRIAN P. BILBRAY, California
THOMAS S.P. PERRIELLO, Virginia      DOUG LAMBORN, Colorado
HARRY TEAGUE, New Mexico             GUS M. BILIRAKIS, Florida
CIRO D. RODRIGUEZ, Texas             VERN BUCHANAN, Florida
JOE DONNELLY, Indiana                DAVID P. ROE, Tennessee
JERRY McNERNEY, California
ZACHARY T. SPACE, Ohio
TIMOTHY J. WALZ, Minnesota
JOHN H. ADLER, New Jersey
ANN KIRKPATRICK, Arizona
GLENN C. NYE, Virginia

                   Malcom A. Shorter, Staff Director

                                 ______

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

                               __________

                            February 4, 2010

                                                                   Page
U.S. Department of Veterans Affairs Budget Request for FY 2011 
  and FY 2012....................................................     1

                           OPENING STATEMENTS

Chairman Bob Filner..............................................     1
    Prepared statement of Chairman Filner........................    41
Hon. Steve Buyer, Ranking Republican Member......................     2
Hon. Corrine Brown, prepared statement of........................    41
Hon. Harry E. Mitchell, prepared statement of....................    42
Hon. John Boozman, prepared statement of.........................    43

                               WITNESSES

U.S. Department of Veterans Affairs, Hon. Eric K. Shinseki, 
  Secretary......................................................     4
    Prepared statement of Secretary Shinseki.....................    43

                                 ______

American Legion, Steve A. Robertson, Director, National 
  Legislative Commission.........................................    37
    Prepared statement of Mr. Robertson..........................    77
American Veterans (AMVETS), Raymond C. Kelley, National 
  Legislative Director...........................................    35
    Prepared statement of Mr. Kelley.............................    73
Disabled American Veterans, John L. Wilson, Assistant National 
  Legislative Director...........................................    32
    Prepared statement of Mr. Wilson.............................    53
Iraq and Afghanistan Veterans of America, Paul Rieckhoff, 
  Executive Director.............................................    39
    Prepared statement of Mr. Rieckhoff..........................    94
Paralyzed Veterans of America, Carl Blake, National Legislative 
  Director.......................................................    31
    Prepared statement of Mr. Blake..............................    51
Veterans for Common Sense, Paul Sullivan, Executive Director.....    38
    Prepared statement of Mr. Sullivan...........................    98
Veterans of Foreign Wars of the United States, Eric A. Hilleman, 
  Director, National Legislative Service.........................    34
    Prepared statement of Mr. Hilleman...........................    64
Vietnam Veterans of America, Richard F. Weidman, Executive 
  Director for Policy and Government Affairs.....................    38
    Prepared statement of Mr. Weidman............................    91

                   MATERIAL SUBMITTED FOR THE RECORD

Post-Hearing Questions and Responses for the Record:

Hon. Bob Filner, Chairman, Committee on Veterans' Affairs, to 
  Hon. Eric K. Shinseki, Secretary, U.S. Department of Veterans 
  Affairs, letter dated March 25, 2010, and VA responses.........   102
Hon. Steve Buyer, Ranking Republican Member, Committee on 
  Veterans' Affairs, to Hon. Eric K. Shinseki, Secretary, U.S. 
  Department of Veterans Affairs, letter dated February 12, 2010, 
  and VA responses...............................................   112


                  U.S. DEPARTMENT OF VETERANS AFFAIRS


                 BUDGET REQUEST FOR FY 2011 AND FY 2012

                              ----------                              


                       THURSDAY, FEBRUARY 4, 2010

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

    The Committee met, pursuant to notice, at 10:00 a.m., in 
Room 334, Cannon House Office Building, Hon. Bob Filner 
[Chairman of the Committee] presiding.
    Present: Representatives Filner, Brown of Florida, Snyder, 
Michaud, Mitchell, Hall, Halvorson, Perriello, Rodriguez, 
Donnelly, Space, Walz, Adler, Buyer, Stearns, Moran, Boozman, 
Bilbray, Bilirakis, and Roe.

              OPENING STATEMENT OF CHAIRMAN FILNER

    The Chairman. Good morning. Welcome to the hearing of the 
Committee on Veterans' Affairs of the House of Representatives 
on the U.S. Department of Veterans Affairs (VA) budget request 
for fiscal year 2011 and 2012.
    I want to be able to move fairly quickly at the beginning 
and hear the testimony of the Secretary because we have a 
series of votes, unfortunately, somewhere between 10:15 and 
10:30. We will be gone for 40 to 45 minutes, so I would like to 
get the Secretary's testimony in beforehand.
    I ask unanimous consent that all Members may have 5 
legislative days to revise and extend their remarks and that 
written statements be made part of the record. Hearing no 
objection, so ordered.
    Mr. Secretary, you and the President have requested a VA 
budget of $125 billion, roughly, including a total 
discretionary request of over $60 billion. The VA medical care 
budget represents 86 percent of the total discretionary budget.
    Also, for fiscal year 2011, the Administration is 
requesting over $51 billion in resources for VA medical care.
    Appropriated resources for fiscal year 2011 have already 
been provided in last year's consolidated appropriations act 
and the funding level is an increase of $4.1 billion or 8.6 
percent over 2010 levels.
    Rest assured that this Committee will be working closely 
with our counterparts in the Administration and in the Senate 
to make sure the process moves forward to ensure veterans have 
the medical care resources they need when fiscal year 2012 
begins.
    The veterans' groups that co-author The Independent Budget, 
and who will be testifying today, have recommended a total 
resource level for VA medical care of $52 billion and an 
overall discretionary funding level of $61.5 billion, which is 
$1.2 billion above the Administration's request.
    We are looking forward to their testimony and the testimony 
of the American Legion, the Vietnam Veterans of America, Iraqi 
and Afghanistan Veterans of America, and Veterans for Common 
Sense who will also testify today.
    Mr. Secretary, I am impressed by your robust budget request 
and your emphasis on funding many of the priorities of this 
Committee, including addressing the plague of homelessness, 
rural health care access, access of women veterans, and the 
mental health care needs of our veterans.
    The budget addresses problems faced by our newer veterans 
while not forgetting the sacrifices and service of veterans 
from previous conflicts.
    We are looking forward to your testimony today.
    Before I yield to our Ranking Member, I know I speak for 
our entire Committee, Mr. Buyer, that our thoughts and prayers 
are with your family, your wife, and yourself as you go through 
a very difficult time.
    I yield to Mr. Buyer.
    [The prepared statement of Chairman Filner appears on p. 
41.]

             OPENING STATEMENT OF HON. STEVE BUYER

    Mr. Buyer. Thank you very much, especially for your heart-
felt comments.
    Mr. Secretary, I apologize. I am going to make a quick 
opening statement. I had requested a hearing for a review of 
the Comcast/NBC merger. That hearing is now taking place this 
morning. They are doing opening statements. I plan to be here 
for your opening statement and then I need to go to that 
hearing.
    So what I will do is I will make a few comments here and 
then I am going to incorporate two questions that I would ask 
for you to answer even though I will not be here.
    With regard to your budget, I want to congratulate you on 
your agreed robust budget. There may be some differences we may 
have as we present the views and estimates to the Budget 
Committee with regard to where I would place some of those 
dollars.
    The most significant problem, which you also recognize, is 
the disability claims backlog. The application of the 21st 
century technology solutions are extremely important.
    I applaud you with the VA pilot programs reconfigured to 
modernize the claims process that are underway in Little Rock, 
Providence, Baltimore, and in Pittsburgh, and I look forward to 
their results.
    And I also want to congratulate you. You faced the 
challenges head on with regard to the GI Bill. And much of 
those challenges, Congress dropped those challenges right in 
your lap. And there was some politics of the moment that did 
override the substance and the problem was presented to you. 
You did not complain. You met them head on and you met the 
challenge. In that process, some veterans were hurt, but that 
was no fault of yours. You took a very difficult situation and 
you did the best you could and I applaud you for that.
    And for those veterans out there that did suffer and some 
of whom did not go back to school this fall because of their 
particular circumstance, my deepest apologies. But to those 
veterans out there across the country, please recognize that we 
have a VA Secretary that is off his heels, on his toes, and is 
leaning forward.
    I also want to commend you for your Consolidated Patient 
Account Center (CPAC), the expeditious rollout for which you 
are doing. You and I had a good conversation. I was more than 
impressed on how you accelerated the timeline and your decision 
to go with a single contract rather than moving in installments 
in a timeline as presented to you by your own advisors, even in 
contracting.
    And you have challenged them. You have challenged the 
system. But you recognize that as you challenge them, those are 
more VA dollars that will come into the system.
    And so I have always felt that I was the one that was 
always challenging. You out-challenged me. And it is 
unfortunate that whatever occurred, dollars were not placed 
there, it is a hiccup in the process, we want to work with you.
    If you could outline to the Committee kind of what has 
happened and what your way forward is on that and your over-
the-horizon view for success for the CPAC rollout, I think, is 
extremely important. And I look forward to that, your response 
to that.
    The other is with regard to the President proposing to use 
$30 billion in Troubled Asset Relief Program (TARP) funds to 
promote small business. I recognize that this will be a--it 
will be subject to political fodder here on Capitol Hill as to 
whether it is legitimate or whether that was an intent of 
Congress and we are in a political season.
    My only challenge to you, Mr. Secretary, is to 
incorporate--please send a message to the President. If he is 
going to do this, incorporate veterans in the process. So for 
the last year, I have been asking for that billion dollars in 
loan guarantees for small businesses for veterans and we are 
being left out.
    So if he is going to actually use those funds and find the 
legitimate or legal process in order to use those, I would ask 
you to ask of the President for veterans to be included in that 
$30 billion of the TARP funds for small business.
    The other point I would like to make, and I do not know why 
this occurs, maybe this is part of the gamesmanship over the 
years, but every time we do a budget, somebody likes to whack 
the Inspector General (IG). And we like the IG Office. We like 
the IG Office, I guess, as part of our oversight functions, 
especially Mr. Mitchell over here nodding his head.
    It is a multiplier. I think you probably learned that also 
when you were over in the U.S. Department of Defense (DoD). 
When those ombudsmen or the IG Office put their eyes on things, 
yeah, you can upset people at times, but good things result 
from what they are attempting to do.
    Also, when I talked about the added dollars for which you 
put in the budget, especially on the mandatory side, while I 
recognize that you have made some judgments with regard to the 
Agent Orange and for there to be presumptions, I want to make 
sure that we do not change the paradigm or the matrix with 
regard to outpacing science. We have always made science-based 
judgments with regard to causal connections and I want to make 
sure that we are not changing that paradigm.
    And at the same time, you know, I look at that and say all 
of a sudden, we have found this money for mandatory funding 
while at the same time, part of our values, we sort of pride 
ourselves when we talk about taking care of the widow and the 
orphans. But in reality, we are not. And that is why I combined 
with the Sergeant Major Walz to address and increase Dependency 
and Indemnity Compensation (DIC) and eliminate the offset of 
the Survivor Benefit Plan (SBP).
    So all of a sudden, we have found these funds, but we are 
still not taking care of the widows. And I just lay that out 
there as a challenge for all of us to come together somehow to 
take care of them.
    And with that, I am going to yield back my time, and I 
respect your efforts.
    The Chairman. Thank you, Mr. Buyer, and I agree with a lot 
of what you said. I hope the paragraphs on science-based 
decisions would be made to your caucus in regard to global 
warming. Okay?
    Just a little dig. Do not worry, Mr. Secretary.
    We welcome you, Mr. Secretary. You are accompanied by Dr. 
Gerald Cross, the Acting Under Secretary for Health; Mike 
Walcoff, the Acting Under Secretary for Benefits; Steve Muro, 
the Acting Under Secretary for Memorial Affairs; Todd Grams, 
the Acting Assistant Secretary for Management; and we have 
Roger Baker, the Assistant Secretary for Information and 
Technology.
    By the way, you might let us know when all these acting 
positions are going to be dealt with.
    You have the floor, Mr. Secretary, and we appreciate all 
your efforts on behalf of our veterans.

STATEMENT OF HON. ERIC K. SHINSEKI, SECRETARY, U.S. DEPARTMENT 
  OF VETERANS AFFAIRS; ACCOMPANIED BY GERALD M. CROSS, M.D., 
   FAAFP, ACTING UNDER SECRETARY FOR HEALTH, VETERANS HEALTH 
 ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; MICHAEL 
WALCOFF, ACTING UNDER SECRETARY FOR BENEFITS, VETERANS BENEFITS 
 ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; STEVE L. 
  MURO, ACTING UNDER SECRETARY FOR MEMORIAL AFFAIRS, NATIONAL 
 CEMETERY ADMINISTRATION, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
 W. TODD GRAMS, ACTING ASSISTANT SECRETARY FOR MANAGEMENT AND 
 CHIEF FINANCIAL OFFICER, U.S. DEPARTMENT OF VETERANS AFFAIRS; 
 AND HON. ROGER W. BAKER, ASSISTANT SECRETARY FOR INFORMATION 
  AND TECHNOLOGY, OFFICE OF INFORMATION AND TECHNOLOGY, U.S. 
                 DEPARTMENT OF VETERANS AFFAIRS

    Secretary Shinseki. Thank you, sir.
    Chairman Filner, Ranking Member Buyer, distinguished 
Members of the Committee, thank you as always for this 
opportunity to present the President's 2011 budget and 2012 
advanced appropriations requests for the Department of Veterans 
Affairs.
    I also appreciate the generosity of your time in meeting 
with me prior to this hearing. Those are always invaluable 
opportunities for me to gain insights.
    Let me also acknowledge the presence of representatives 
from our veterans service organizations (VSOs) in attendance 
today. Their insights have also been helpful to me personally 
and to the Department in helping meet our obligations to all of 
our veterans.
    Thank you, Mr. Chairman, for introducing the members of the 
panel today. I would just point out that Mike Walcoff sits to 
my left. Todd Grams here is our new Principal Deputy and Acting 
Assistant Secretary for Management. Dr. Cross to my right. To 
his right, Steve Muro and then Roger Baker, our Chief 
Information Officer (CIO), on the end.
    Mr. Chairman, I have a written statement, a longer written 
statement that I would ask be submitted for the record.
    The Chairman. Yes. So ordered.
    Secretary Shinseki. Okay. Thank you.
    This Committee's long-standing commitment to our Nation's 
veterans has always been unequivocal and unwavering. That has 
been clear. And such commitment on your part and then the 
President's own steadfast support for our veterans resulted in 
a 2010 budget that was quite remarkable in providing the 
Department the resources to begin renewing itself in 
fundamental and comprehensive ways.
    And that translates to the efforts, the transformation that 
we have been talking about. I report that we are well-launched 
on that effort and are determined to continue that 
transformation throughout this year, 2010, and carry over into 
2011 and 2012.
    We have crafted a new strategic framework around three 
governing principles that you have heard me espouse for the 
past year. It is about being people-centric. It is about being 
results-oriented. We want to measure what we say we are going 
to do and we want to be able to see what we got for the 
investment.
    And then, finally, we want to be forward-looking. We think 
that there is much yet to be gained out of the potential of 
this Department.
    This new strategic plan delivers on President Obama's 
vision for VA and is in the final stages of review. And we are 
prepared to share that plan with you once that review is done.
    The strategic goals we have established will do several 
things. First, continue to raise the bar on quality and 
accessibility of VA health care and benefits while optimizing 
value.
    The plan also improves our readiness to protect our people, 
both our clients as well as our workforce, and our assets day 
to day as well as in times of crisis.
    The plan enhances even more veteran satisfaction with our 
health, education, training, counseling, financial, and burial 
benefits and services.
    And, finally, the plan invests in our human capital, both 
in their well-being and then in their development as leaders.
    In order to attain the kind of excellence in our management 
and IT systems, as well as our support services, which I 
consider vital if we are going to achieve the kind of mission 
performance I have described you should expect out of this 
Department, we intend to be the model of governance in about 4 
years.
    These goals got our people to focus on producing the 
outcomes veterans expect and have earned through their service 
to our country.
    Now, to support VA's efforts, the President's budget 
provides $125 billion in 2011, as you have pointed out, Mr. 
Chairman, $125 billion, $60.3 billion in discretionary, $64.7 
billion in mandatory funding.
    Our discretionary budget request represents an increase of 
$4.2 billion and, as you have pointed out, it is 7.6 percent 
over the President's 2010 enacted budget.
    VA's 2011 budget focuses on three critical concerns that 
are of primary importance as I pick these up in speaking with 
veterans.
    First, better access to benefits and services.
    Second, reducing the disability claims backlog and wait 
time for receipt of earned benefits.
    And, third and finally, ending the downward spiral that 
often enough results in veteran homelessness, those three.
    Access, this budget provides the resources required to 
enhance access to our health care system and our national 
cemeteries. We will expand access to health care through 
activations of new or improved facilities, providing health 
care eligibility for more, primarily through Priority Group 8 
veterans, but others as well, and then making greater 
investments in telehealth, which I have described as sort of 
the next major step in delivery of health care. We will also 
increase access to our national cemeteries through the 
establishment of five new cemeteries.
    The backlog, we are requesting an unprecedented increase 
for staffing in the Veterans Benefits Administration (VBA)to 
address the growing increase in disability claims receipts even 
as we continue to reengineer our processes, develop a paperless 
system integrated with the VLER, the Virtual Lifetime 
Electronic Record.
    Ending homelessness, we are also requesting a substantial 
investment in our homelessness program as part of our plan to 
eliminate veterans' homelessness in 5 years through an 
aggressive approach that includes housing, education, jobs, and 
health care.
    In this effort, we partner with the U.S. Departments of 
Housing and Urban Development, probably our closest 
collaborator, but also with Labor, Education, Health and Human 
Services (HHS), Small Business Administration, among others. 
Taken together, we intend to meet veterans' expectations in 
each of these three areas to be successful in our mission in 
access, working the backlog, and in ending homelessness.
    We will achieve this by developing innovative business 
processes and delivery systems that not only better serve 
veterans' and families' needs for many years to come but will 
also dramatically improve the efficiency and cost control of 
our operations.
    Our budget and advanced appropriations requests for 2011 
and 2012 provide the resources necessary to continue our 
aggressive pursuit of the President's two overarching goals for 
the Department, to transform and to ensure client access to 
timely, high-quality care and benefits. We still have much work 
to accomplish--well-launched but still lots of room for work to 
be done.
    So, again, Mr. Chairman and Members of the Committee, 
thanks for this opportunity to appear before you, and I look 
forward to your continued unwavering support and I look forward 
to your questions.
    If I have time, I will address the question that was asked 
by Mr. Buyer. This budget allows VA to more than double the 
number of CPACs between 2010 and 2011, growing from three in 
2010 to seven in 2011.
    Moreover, this budget would allow VA to realize significant 
revenues from a 5-year deployment with a third-party 
collections increase of about $280 million through 2013 and 
about $1.6 billion increase to 2018.
    There is an opportunity to go faster and I am looking for 
ways to accelerate if those opportunities present themselves.
    Hopefully I have addressed the question, Mr. Buyer.
    [The prepared statement of Secretary Shinseki appears on p. 
43.]
    Mr. Buyer. Thank you.
    The Chairman. Thank you. Thank you, Mr. Secretary.
    Mr. Snyder, you are recognized for 5 minutes.
    Mr. Snyder. Thank you, Mr. Chairman.
    Thank you all for your service, Mr. Secretary.
    The issue of medical research is one that I generally ask 
about at the hearing. And I think the staff analysis is that 
your number on medical research does not keep pace with the 
medical research inflation rate which is higher. And the 
problem with that is research projects do best if researchers 
do not have to come and go and lay off staff.
    And may I ask you, Mr. Secretary or Dr. Cross, do you agree 
with that analysis that your number does not keep pace with the 
medical research inflation rate?
    Secretary Shinseki. Let me call on Dr. Cross, thank you for 
the question, to enter into the medical aspects of this and 
then I will pick up after him.
    Dr. Cross. Congressman, thank you for that question.
    Mr. Snyder. Is your microphone on, Dr. Cross?
    Dr. Cross. No.
    Mr. Snyder. Thank you.
    Dr. Cross. Thank you for that question, Congressman.
    And for 2011, comparing it to 2009, it is a 16 percent 
increase. We do value the----
    Mr. Snyder. No, no. My question is, the analysis does not 
keep pace with the rate of inflation of medical research in 
real medical research dollars. I know what the lines are, but 
do you agree with that analysis, it does not keep pace with the 
rate of medical research inflation?
    Dr. Cross. I agree that we are moving forward with a 
research budget that meets the needs of our veterans. I am not 
sure what the exact percentage increase is in the research 
budget. But the percentage increase that we are looking at for 
inflation medically is around four percent, four and a half.
    Mr. Snyder. Well, let us do this as a question for the 
record then. I believe that your budget does not keep pace with 
the increasing costs that occur in medical research, whether it 
is within the VA or outside of the VA. If I am right, then it 
means that your researchers are going to have to lay off people 
or cut back on projects.
    So why don't you get back to us on whether you think your 
budget number keeps pace with the actual real dollars in 
medical research. Can we do that that way?
    Secretary Shinseki. I will be happy to provide that for the 
record.
    [The VA provided the answer in Question #8 in the Post-
Hearing Questions and Responses for the Record, which appear on 
p. 107.]
    Mr. Snyder. Yeah. That would be great.
    The Chairman. Mr. Snyder, we looked at that and we are 
going to--I think our Views and Estimates work to reflect an 
increase.
    Mr. Snyder. An increase, yeah.
    The second thing, Mr. Secretary, in your--I do not remember 
if you mentioned it in your oral statement, but in your written 
statement, you referred to not just the number of claims but 
the complexity of claims.
    In the time you have been on the job, why do you believe, 
what is your conclusion about why claims are more complex? Why 
are they increasing in complexity?
    Secretary Shinseki. Let me call on Mike Walcoff.
    Mr. Snyder. Yes.
    Secretary Shinseki. He has a little better working 
knowledge of the claims.
    Mr. Walcoff. Congressman, I think this is a continuation of 
a trend that we have seen over a number of years. The increase 
in complexity deals with, first of all, the number of issues 
that are being filed with each claim.
    It used to be, 15 years ago or so, we would average between 
two and three issues per claim. Now that average on all of our 
claims is up over four, and the average on the claims that are 
coming out of our benefits delivery at discharge sites is over 
eleven.
    So when you have that many issues coming in on a claim, it 
does make it a lot more complex.
    Mr. Snyder. Do we know why that is occurring? Are people 
being advised by attorneys or advised by the internet or 
advised by advisors? I mean, what----
    Mr. Walcoff. I think part of it is. I think veterans are 
becoming more aware of what they are potentially entitled to. I 
think our outreach is better. I think service organizations are 
doing a good job in working with them. I think that it is a 
combination of a lot of things, and I do not necessarily think 
that is a bad thing.
    Mr. Snyder. Right.
    Mr. Walcoff. I think it is a good thing, but it does add to 
the complexity of the work.
    Mr. Snyder. Right. And then Dr.----
    Secretary Shinseki. I would add----
    Mr. Snyder. Yes.
    Secretary Shinseki [continuing]. In addition to complexity, 
it is also the volume of claims that is also part of this 
equation. Last year, VBA processed 977,000 claims and received 
a million new claims on top of that. So complexity and volume 
are part of the equation here.
    Mr. Snyder. Well, I think I will yield back given that I 
have only got 20 seconds left.
    Thank you, Mr. Chairman.
    Thank you all.
    The Chairman. Mr. Michaud, would you like to speak before 
we recess for our votes?
    Mr. Michaud. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for coming here today and for 
bringing us this budget.
    I appreciate your willingness and your concern about the 
issues you talked about today with homeless veterans, dealing 
with veterans in rural areas.
    And I also appreciate the fact that the different Veterans 
Integrated Services Networks (VISNs) are having their Mini-Mac 
meetings back in their individual States, which is actually 
very helpful for the veterans service organizations and they 
are very informative.
    That gets to my question as it relates to rural health. As 
you have heard, a lot of Members of this Committee on both 
sides of the aisle are very concerned about rural health 
issues, making sure that veterans have access to rural health.
    I just attended actually a Mini-Mac meeting in Maine and 
some of the same concerns I have heard throughout the country. 
And we had a hearing not too long ago where actually we were 
talking about the distribution of funding the Veterans 
Equitable Resource Allocation (VERA) model.
    Here is the concern, and it is not unique to Maine. The 
fact that rural veterans travel a lot of distance, we increased 
the mileage from 11 cents to 41 cents. What we are seeing in 
Maine, and I am sure other areas, is Maine funding was $1.5 
million that they have given to our veterans in rural areas. It 
actually cost over $5 million. There is a shortage.
    So what VA Togus is going to have to do, and I am sure it 
is the same in other areas because of the VERA model, is they 
are going to have to cut back on fee-for-service or not hire or 
lay off staff. They are getting penalized because they live in 
a rural area.
    And it gets right back to the VERA model is have you done a 
comprehensive analysis of the VERA model and what are the 
driving forces of that model because if they have to cut back 
on fee-for-service or cut doctors in rural areas, it actually 
is counterproductive in what we are actually not--what we are 
talking about not doing.
    The other issue is when you look at the Office of Rural 
Health, which has been great, they actually have funded good 
projects in different regions of the country relating to rural 
health, the problem being is these pilot projects that they are 
funding, once that money dries up, then that is put back on to 
the facilities which, here again, they will have to make those 
very tough choices.
    What do you plan on doing for some of these pilot projects 
that are currently working in the Office of Rural Health, 
whether they will have continuing operational funding versus 
forcing a rural medical facility to actually make these tough 
choices? Are they going to cut doctors or are they going to cut 
back fee-for-service, which is counterproductive?
    Secretary Shinseki. Mr. Michaud, I am going to call on Dr. 
Cross here in a minute, but let me just describe for you.
    This is one of the challenges I have wrestled with for the 
past year and I do not know that it is the VERA model, but I do 
not know that is not either. And we are, as you have pointed 
out, we are looking at this very closely to try to understand 
the dynamics here.
    When we talk about delivery of health care, as you know, we 
talk about everything from our medical centers to our 
community-based outpatient clinics (CBOCs) to our Vet Centers, 
fee service and contract and telemedicine. We spend a 
significant amount of money on fee basis.
    Mr. Chairman, do we have time for me to finish or----
    The Chairman. I think we should wait----
    Secretary Shinseki. Okay.
    The Chairman [continuing]. Because we have 5 minutes to 
vote. There are five or six votes. We will recess until 11:00 
a.m.
    Secretary Shinseki. Okay.
    [Recess.]
    The Chairman. I am sorry that the recess took so long. You 
never know with votes, and I apologize for holding everybody 
up. When we recessed, Mr. Michaud had asked a question and Mr. 
Shinseki was answering.
    Do you want to briefly rephrase your question, Mr. Michaud?
    Mr. Michaud. One of the driving forces as it relates to the 
VERA model getting funding back to rural, you know, medical 
facilities because some of the concerns I have heard not only 
in Maine but nationwide is the fact that you have got regional 
rural hospitals are actually going to have to cut back on fee 
services or eliminate positions in order to meet their balanced 
budget.
    Secretary Shinseki. Let me just say that your concerns 
about the VERA model, I have similar questions I have asked. We 
are taking a look at it. And the rural aspects of this will be 
part of the review.
    Let me ask Dr. Cross to address the specific issues you 
talk about there in Maine.
    Dr. Cross. Congressman, thank you for the question.
    First of all, in regard to any specific concerns in regard 
to Maine, Togus in particular, I and my staff are ready to come 
over on very short notice and provide you any details that you 
require and go through that very thoroughly.
    And the broad answer to your question, VERA has had nine 
external reviews thus far since it was created, by 
organizations like the U.S. Government Accountability Office 
(GAO). But VERA is also being supplemented because we recognize 
the needs in the rural community.
    One of those supplements that we are working with, I think 
this Committee and you and others were very instrumental in 
passing it and making it possible, and that relates to Public 
Law 110-387, Section 403 in particular. That puts $100 million 
in 2011 for contractual and fee-basis care in rural 
communities. And I think that would help in Maine as well.
    In addition, what we are doing with the rural health 
outreach is more CBOCs, more outreach clinics, more 
telemedicine. We anticipate that our telemedicine work in 2011 
will reach 100,000 veterans in rural communities to make a 
difference in their lives for the better.
    And I appreciate the work that the Committee has supported 
us with on this very important initiative because without your 
support, this would not have been possible.
    Secretary Shinseki. Mr. Michaud, let me just say the issue 
of rural resourcing comes up frequently enough. We will respond 
to you and also provide back to the Committee a response to 
that question.
    [The VA provided the answer in Question #7 in the Post-
Hearing Questions and Responses for the Record, which appear on 
p. 107.]
    Mr. Michaud. Thank you very much.
    My second question actually relates to State Veterans 
Nursing Home. As you know, we passed a law back in, I believe 
it was 2006, to deal with the per diems for State Veterans 
Nursing Homes. Ironically, since the VA has begun implementing 
the law, State Veterans Nursing Homes are being paid less, less 
than what they were being paid before.
    And some of the concerns that I have heard from Veterans 
Nursing Homes nationwide is the fact that they might be going 
out of business since they are not going to be able to sustain 
that, the reduction in costs. And this here really hits hard 
those that are Medicare, Medicaid certified Veterans Homes.
    We are having a hearing next week on H.R. 4241, which would 
allow for increased flexibility in payments to State Veterans 
Nursing Home.
    I would like to know, have you heard anything about this or 
what are your comments as it relates to payments and State 
Veterans Nursing Homes?
    Secretary Shinseki. Let me just say that we are working 
with the Department of Health and Human Services in looking at 
these rates. This goes beyond just VA. There is Medicare, 
Medicaid involvement here.
    Let me ask Dr. Cross to address this in detail.
    Dr. Cross. Sir, you asked if we have heard anything about 
this, absolutely, and we share your concerns. It is my 
intention, and I understand the Secretary's intention, to move 
forward with a resolution as cooperatively as possible.
    Let me say that we have 137 of these homes at the moment. 
They are very important to us and to our veterans. They do 
great work. They are run by the States and supported in part by 
the VA.
    There was a Public Law passed, 109-461, several years ago, 
about 2006. We understand that there were some unanticipated, 
perhaps technical, issues that have arisen and become clearer 
since then.
    We are going to have some upcoming hearings with you, and 
other sessions. We are going to bring forward our best experts 
to propose resolutions.
    Mr. Michaud. Great. Thank you very much, Dr. Cross and Mr. 
Secretary. Look forward to working with you as we move forward 
in making sure our veterans get the best quality care that they 
can regardless of where they live. So I appreciate both of you. 
Thank you.
    Secretary Shinseki. Thank you.
    Mr. Michaud. Thank you, Mr. Chairman.
    The Chairman. Thank you, Mr. Michaud.
    I will ask the Secretary that when your team offers to give 
a specific briefing to someone who asks a question that usually 
reflects something we are all interested in. I would ask that 
any briefing materials that you give to one that you please 
share with the whole Committee.
    If it was the other side, I would accuse them of a tactic 
of divide and conquer, but I would not accuse you of that.
    Secretary Shinseki. Happy to do that.
    The Chairman. Just make sure we all are briefed as well as 
the person who asked the question.
    Secretary Shinseki. I will do that.
    The Chairman. Thank you, sir.
    Mrs. Halvorson.
    Mrs. Halvorson. Thank you, Mr. Chairman.
    And thank you, Mr. Secretary, for being here.
    I, too, want to reiterate that if you are doing anything 
with regards to State Veteran Homes somewhere else, I would 
like to know about it. I have two of them, Manteno and La 
Salle, both in Illinois, in my district that I, too, want to 
make sure and keep up on and do something about.
    I also want to thank you for working out a date with my 
staff and I know we continue to do that so that you can come to 
the district which you have agreed to do sometime in March so 
that you can see firsthand the issues of the veterans that are 
going on and the things.
    And I would be remiss if I did not talk about Silver Cross 
Hospital in Joliet. And if I could get an update, I would love 
to hear from Dr. Cross or somebody with regards to what is 
going on with the medical facility in my district.
    Secretary Shinseki. Dr. Cross.
    Dr. Cross. Congresswoman, thank you for your support and 
for working with us on this very important issue in Illinois.
    We have a CBOC there and it is about 100 miles, as I 
understand, from Hines VA. That is quite a distance. And we 
think that that CBOC needs to be expanded.
    We are very interested in the proposal that I think you 
have been very instrumental in, with regard to a possible 
option for Silver Cross Hospital or a portion of it.
    And what we are doing is our engineers at Hines VA have 
already been out taking a look. The construction staff at the 
headquarters of VA here in Washington is getting ready to send, 
this month, a further assessment team out to look at it again.
    But I wanted to assure you, Congresswoman, that we are 
interested. We think that this is a possible option for us. No 
final decision has been made yet, but we are moving forward.
    Mrs. Halvorson. Thank you.
    The Chairman. Would the gentlelady yield?
    Mrs. Halvorson. Absolutely, Mr. Chairman.
    The Chairman. I have been to that facility and other 
buildings around the country. This one is one and there happens 
to be one in San Diego. I am sure there are others that may 
have outlived their usefulness for a given purpose but can fit 
in very nicely with your announced and wonderful policy of zero 
homelessness in 5 years.
    It seems to me that those buildings could be viewed as a 
shelter for those who are now homeless. Not only do the old 
hospital buildings have medical facilities, they have private 
room space for all kinds of other social service support 
programs, which would seem to be a very cost-effective way to 
serve our homeless population. They are generally in places 
that we do not have the NIMBY (not in my backyard) reaction to 
deal with.
    I would see this not just as an isolated use of a surplus 
building, but as a method to really help solve the problem. Mr. 
Secretary, you know how tough it is to build a facility, even 
for 30 homeless veterans, and to get the local permits, the 
zoning, and all that stuff. It seems to me we have some perfect 
places that could really help with the plan you have announced.
    I hope it would be seen in a very wide context and not just 
a surplus building, whether we need it or not. I thank Mrs. 
Halvorson for taking the leadership on that.
    Mrs. Halvorson. Thank you, Mr. Chairman.
    The Chairman. I yield back.
    Mrs. Halvorson. Thank you.
    And I do appreciate the time that you have taken and it is 
very, very important to our district because of the traffic and 
the amount of veterans that are in the area right there where 
that would serve. So, you know, I appreciate your diligence so 
that I do not have to keep making it, you know, a top priority 
for you also.
    Secretary Shinseki. We are happy to follow up, 
Congresswoman.
    And I would, in response to your comment and the Chairman's 
also, we are taking a strategic look at all of our facilities. 
We have 5,300 facilities in the system, and also looking at 
what is available to right size our footprint as we look 10 
years in the future where we think veterans are going to be, 
long-term care, homelessness, how do we accommodate all of 
this.
    So we are happy to----
    Mrs. Halvorson. Great.
    Secretary Shinseki [continuing]. Take a look at a facility 
like that.
    Mrs. Halvorson. And the only other thing I would like to 
add on that is just to hope that you do not get bogged down in 
bureaucracy. You know, that is something that sometimes happens 
with these sort of things, that we just move quickly.
    The only other thing that I would like to touch on is, you 
know, since 2007, the VA has increased its workforce by, I 
think, about 7,000 people in order to address our most favorite 
subject, the backlogs.
    However, the backlogs have continued to grow. And I know 
that in this budget, you have asked for 4,000 more employees. 
What I heard yesterday is even though we are asking and we hire 
more employees, it takes 2 years to train them.
    What is happening and what do we hope is going to come from 
continuing to hire more employees, taking time to train them? 
What is happening with regards to the backlog that does not 
seem to be getting under control?
    This is the thing that people call my office for over and 
over again and it is very, very frustrating, I think for all of 
us.
    Secretary Shinseki. Thank you.
    The backlog is something, a year ago when I arrived, I said 
I am going to go after. We spent effort on it last year, but 
not as much as I would have liked. The GI Bill came along and 
we needed to get that put in place.
    I would say we succeeded in the fall semester. We started 
with zero students in August, and we had 173,000 registered and 
being paid by December. So it was an effort that required that 
kind of attention.
    In the meantime, the attention that I wanted to devote to 
the disability claims process was deferred. This year is my 
year to spend time getting inside of all of our processes. It 
is a convoluted and complex process.
    What we have done with the claims process is pulled it 
apart and created four pilots. The pilots are running now, one 
in Pittsburgh, one in Little Rock, one in Providence, and one 
in Baltimore.
    The whole purpose here is to take apart the pieces, let us 
see what we can do to refine them, and then put them back in a 
way that gets us momentum in claims handling.
    Right now the inventory on claims is about 420,000. Of 
that, my guess day-to-day, is that we run about 150,000 to 
170,000 claims in backlog, and that is any claim that is longer 
than 125 days.
    The last several years we have taken the processing time on 
claims from about 190 days down to 180 and 178. Right now we 
are at 161 days moving towards 125 days. So there has been 
progress.
    I reported earlier that last year we processed 974,000 
claims, which is an eight or nine percent increase over our 
previous performance. At the same time, we got in a million new 
claims. So this is an area we are going to have to spend a good 
bit of effort on.
    I compounded the problem when we make a decision on Agent 
Orange. It is the right decision. It was long overdue, needed 
to be done, but it adds to this challenge.
    So as these four pilots are working to take the processing 
time of 161 days and moving it in the right direction, we have 
an Agent Orange decision here later this year that is going to 
come to play and it could increase processing time. It will 
certainly increase the inventory.
    We are looking at ways to fast track the Agent Orange 
decisions so we do not compound the problem here. What we are 
looking for in the Agent Orange claims is proof of presence in 
Vietnam to meet the rules. It does not matter whether it was 1 
day or 360 days. All we need to do is validate presence, 
validate the disease, which a competent medical authority does, 
and then adjudicate the extent to which the disease warrants a 
disability rating.
    We think getting to that kind of focused decision-making we 
can take these Agent Orange decisions and move them quickly, at 
the same time working on the normal disability claims process.
    My estimate is over the next year to 2 years, the inventory 
will grow and processing time may get longer. It probably will 
get longer, but by 2013, we will be back to where we are today 
at about 161 days.
    At that point, with the learning that comes out of the 
pilots already in the program and within a couple years, we 
expect to have eliminated the backlog. We are, although our 
incremental budgets talk about reducing, each year reducing the 
backlog, the plan is by 2015 for that backlog to be zero. That 
is what we are talking about.
    Mrs. Halvorson. Thank you. I yield back.
    The Chairman. Thank you, Mrs. Halvorson.
    Mr. Rodriguez.
    Mr. Rodriguez. Thank you very much, Mr. Chairman.
    Thank you very much, Mr. Secretary, also for coming by the 
district and reaching out throughout the country.
    Your budget provides $468 million for minor construction 
projects, which is $235 million or 33 percent below the amount 
provided in 2010. And the budget also requests for $85 million 
for grants for construction of State extended care facilities 
which is $15 million or 15 percent below what was provided in 
2010.
    We had some dialogue about the fact that there might be 
about $9 billion out there in terms of construction needs and 
we know that of the 153 hospitals that are out there, most are 
50 to 60 years old. We know we have some 70 or so clinics that 
are also in need of construction. And roughly, once again, I 
think that you had quoted in the past needing some $9 billion 
just to take care of some immediate needs.
    With this kind of budget, how do we expect to look at this 
and be able to come up to par with the existing facilities that 
we have when we only asked for this low amount?
    Secretary Shinseki. Congressman, let me just put into 
perspective the construction budget. And I may not have the 
details on the State construction that you describe. And if I 
do not, I will be happy to provide it for the record.
    For major construction, we are requesting in 2011 nearly 
the same level at which we requested in 2010, which was fairly 
significant, $1.19 billion in 2010 for major construction and 
2011 is 1.15 billion. And it will enable us to stay on track 
with constructing three medical facilities, design two new 
projects, and also expand cemeteries in three locations.
    Minor construction appears to be the concern. But in 2011, 
we have $468 million going to minor construction. It is the 
second largest minor construction budget ever requested. And 
the reason it seems to be a drop-off is because the largest 
minor construction budget ever requested is in this year, 2010, 
when we increased it significantly to $600 million. In 
comparison, this minor construction budget for 2011 is a very 
strong investment.
    On nonrecurring maintenance in 2011, our request is for 
$1.1 billion in nonrecurring maintenance. That is the largest 
nonrecurring maintenance request ever made by a President. 
Between 2000 and 2008, the average request for nonrecurring 
maintenance has been about $550 million. That has been the 
average across those 8 years.
    And so we think this nonrecurring maintenance investment 
is----
    Mr. Rodriguez. Is it accurate to say that there is a need 
of over $9 billion right now that is required?
    Secretary Shinseki. There is a backlog on maintenance that 
has accrued over many years. It is about $9 billion. You are 
correct. And so we are hopeful that if there is a job's bill 
that the VA will be seen as an appropriate----
    Mr. Rodriguez. And I would also support you in that. What 
better way to get Americans back to work than to look at 
redoing our hospitals and our clinics throughout the country 
for the veterans.
    And I think the Committee would also be supportive if there 
is a job's bill out there to move in that direction and try to 
get some job creation, at the same time we build up our 
infrastructure for those veterans.
    Secretary Shinseki. Thank you.
    Mr. Rodriguez. Thank you very much, sir.
    The Chairman. I just want to note, Mr. Rodriguez, that in 
our Views and Estimates to the Budget Committee, we are going 
to recommend a plus-up in that account----
    Mr. Rodriguez. Thank you, sir.
    The Chairman [continuing]. As one of the main items. Mr. 
Stearns?
    Mr. Stearns. Thank you, Mr. Chairman.
    And I thank Mr. Boozman for the opportunity. I will have to 
leave here to go to another hearing.
    Mr. Secretary, it is always a pleasure and an honor to have 
you to testify before us and thank you for what you do.
    I think all of us will agree that this time, the Veterans 
Administration is experiencing an increase in the number of 
disabled veterans. I think that is a given. But it appears the 
decision to cut the Vocational Rehabilitation and Employment 
staff by nine while at the same time increasing the 
Compensation and Pension (C&P) staff by almost 4,000 seems to 
be puzzling to us.
    The vocational rehabilitation employment counselors all 
have at least a Master's Degree. They are obviously highly 
qualified and capable of rendering services almost from day 
one.
    On the other hand, the nearly 4,000 new C&P staff will 
require, and that is according to the VA, 2 to 3 years to 
become effective claims adjustors. Thus, the roughly 4,000 new 
C&P staff will have little or no impact on the claims backlog 
while the VA will lose 18,000 hours, in our estimate, of 
rehabilitation counseling.
    So I guess the logic of this is somewhat puzzling to us and 
we would like your comment.
    Secretary Shinseki. Thank you, Congressman.
    Let me call on Mike Walcoff to sort of frame this issue and 
then I will add if anything is necessary.
    Mr. Stearns. Is the information we have correct?
    Secretary Shinseki. In terms of the Voc Rehab----
    Mr. Stearns. Yes.
    Secretary Shinseki [continuing]. Adjustment? I think that 
is correct.
    Mr. Stearns. Yes. Yes.
    Secretary Shinseki. The specific numbers I will turn to 
Mike on, but there is an increase authorized in this budget of 
4,000 to VBA. We have increased the resourcing of VBA by 27 
percent in this budget to go after long-standing issues about 
the backlog and to address Agent Orange requirements that are 
coming on.
    But the voc rehab question is an important one and let me 
ask Mike to address that.
    Mr. Walcoff. Certainly we recognize the importance of the 
Voc Rehab Program, but let me just explain a couple of things.
    The decrease of 9 positions off of 1,155 is totally a 
result of the reallocation of management overhead. We use a 
formula to allocate that by business line. And the addition of 
such a large number of new employees just when we applied the 
formula resulted in a loss in that overhead category of nine 
for voc rehab. There will not be one person taken out of direct 
services to veterans in terms of voc rehab.
    Number two, I want to point out that we have added $8.3 
million to the contracting budget for voc rehab. That money 
gives us flexibility to either use this for contracting or to 
go ahead and turn it into a full-time equivalent (FTE). That 
money would buy 130 FTE if we decide to use it for that. So 
that is the second thing.
    And the third thing is that, yes, right now we are talking 
about 4,000 additional claims examiners. In managing both 
programs as we evaluate the workload that is coming into Voc 
Rehab, we have the ability to move FTE from C&P to Voc Rehab. 
We will certainly do that if it appears that----
    Mr. Stearns. So money is fungible that you can take it from 
one----
    Mr. Walcoff. That money is, yes.
    Mr. Stearns. What is the average vocational rehabilitation 
employment caseload for 2011 compared to 2010?
    Mr. Walcoff. I do not have that.
    Mr. Stearns. Okay.
    Mr. Walcoff. I can get back to you on that.
    [The VA subsequently provided the following information:]

      LVA anticipates a 10 percent increase in the 12-month 
average caseload for Vocational Rehabilitation and Employment 
services, with an increase from approximately 111,000 in FY 
2010 to 122,100 in FY 2011.

    Mr. Stearns. The budget my staff tells me has indicated it 
is a 10 percent increase in the budget in caseload.
    Mr. Walcoff. We are projecting a 10 percent increase. But, 
frankly, that is something that at this point we are estimating 
because we are still trying to evaluate the impact that the 
Chapter 33, the new GI Bill, is having on the voc rehab 
program.
    At one point, we anticipated that there would be possibly a 
decrease in participants because they would be going over to 
the GI Bill benefit which is financially a little bit greater. 
We do not see that at this point, but it is still early. We put 
a 10 percent increase in there as an estimate, but we are going 
to be keeping an eye on it.
    I think we have enough flexibility in this budget that we 
can address the additional work. If it winds up coming to Voc 
Rehab, we are in a position to be able to adjust to it.
    Mr. Stearns. So the basic thrust to my question is, and I 
think you agree then, that we really do not want to be cutting 
back the Vocational Rehabilitation and Employment staff 
considering the number of disabled veterans that are coming 
into there. And so that is, you know, what I think our main 
point is.
    Mr. Walcoff. Yes. I think we agree. We both recognize how 
important this program is and we are going to make sure that as 
we monitor the workload that, if necessary, we will move FTE 
into that program.
    Mr. Stearns. Okay.
    Thank you, Mr. Chairman, for the courtesy.
    The Chairman. Mr. Walz.
    Mr. Walz. Thank you, Mr. Chairman.
    Mr. Secretary, thank you for being here as always and, of 
course, the work you do. And to each and every one of your 
staff, thank you for your continued service to our country.
    And I would like to say how much I appreciate, Mr. 
Secretary, your thanking those VSOs, those folks that literally 
have your back right behind you right now. They are there every 
step of the way.
    We have held some wonderful roundtables with the Chairman 
and the Ranking Member to get their priorities out and it is 
that collaboration through The Independent Budget, the things 
that are being brought to our attention by those on the front 
line of this, and I am appreciative. You have clearly 
understood that from your beginning of your tenure. So I 
appreciate that.
    Just a quick followup. I think Mr. Stearns asked a very 
good question and it is one I am hearing quite a bit about. I 
absolutely understand your answer on this and understand that 
you are addressing it and agreeing with the living allowance 
and the new GI Bill, how that would affect.
    I am hearing a lot, though, of the need to do something 
more with the voc rehab. So it is starting to percolate up. It 
is there. Mr. Stearns' question was well put and I am 
appreciative that you are on to that and looking at it from 
that regard.
    So, Mr. Walcoff, I do not know if there is any response, 
but that is what I was going to ask.
    Mr. Walcoff. No. I appreciate what you are saying.
    Mr. Walz. Yeah. Well, thank you for addressing it and we 
will stay tightly on it.
    Just two things. The Chairman started out talking about it. 
I am, too, a big fan of the IG. I am concerned. One of my 
biggest concerns as we increase budgets, if we do not increase 
that oversight and we know for many years as the IG budget was 
sinking, we did not have that there. The worst crime I think we 
can commit is, are how dollars allocated by the taxpayers meant 
for our veterans do not end up there.
    And so I am really sensitive to that and I would like to, 
Mr. Secretary, just whatever we can do and know what your plan 
is on that.
    Something that was brought up in our roundtable by the 
Vietnam Veterans of America (VVA), they, too, agree that the IG 
is wonderful on fraud and abuse. It is the waste part they are 
a little concerned with we may not catch.
    And I think all of us together have to figure out a way to 
make sure that these newly allocated dollars get to where they 
are supposed to go.
    Secretary Shinseki. Congressman, you and I come from a 
background where the IG is an important part of the 
organization. It is almost cultural and I----
    Mr. Walz. Yeah.
    Secretary Shinseki [continuing]. Would assure you that IG 
and the Department of Veterans Affairs have the same status and 
respect.
    On the budget, I would say if you looked at 2010 to 2011, 
you would probably be concerned about it being flat. But if you 
looked at from 2009 to 2010 to 2011, you will see a 25 percent 
increase in the VA's budget over 2 years.
    VA's funding of its IG operations is second or third across 
the Federal Government and----
    Mr. Walz. Are you comfortable, Mr. Secretary? They are your 
eyes and ears. Are you comfortable that they are there?
    Secretary Shinseki. I am comfortable with where we are. 
And, you know, this is dialogue that, you know, I have from 
time to time with the IG himself. And so I am comfortable with 
where we are.
    Mr. Walz. Okay.
    Secretary Shinseki. But, again, if you take a 2-year look 
across government, 25 percent, VA has done well in resourcing 
our IG operation.
    Mr. Walz. Well, I think it is everyone's desire here to hit 
that sweet spot on providing the resources that are necessary 
in providing the checks and oversight. I am not going to hit on 
it.
    But just, again, it--I would not call it a red flag. It is 
a yellow flag on the information technology (IT) budgeting as 
the Virtual Lifetime Electronic Record goes forward to make 
sure you have the ability to do that.
    This is one that every one of you, everybody behind you, 
and everybody up here is frustrated. There is very little 
confidence right now and I think it is important that we give 
you that, that we give you this opportunity to fix this.
    And I would segue to my final point that, I cannot ever 
leave this room without saying it, this idea of seamless 
transition to get to the systemic problem. I think medical 
records, personnel records are a start, but I think all of us 
know seamless transition is truly leadership and cultural.
    And I guess my question to you, Mr. Secretary, would be is 
if you could give just a brief update on that, that Office of 
Seamless Transition, because that is another one of these 
issues. There are some pretty gray-haired folks behind you that 
said I have been fighting this since I was a young strapping 
troop and it is still not done. Why is this different this 
time?
    Secretary Shinseki. It is difficult. I think, Congressman, 
you bring up a good point. I would tell you that between VA and 
DoD, you have the two largest Departments in government. You 
also have the two Departments who have led the way nationally 
in developing the most comprehensive electronic records maybe 
in the world, certainly in this country, between VistA and 
AHLTA. And so culturally two large institutions are going to 
have to put their heads together and bring some harmony out of 
this.
    Part of the reason I worked so hard to get Secretary Baker 
to be part of our team is because he comes with the expertise 
that, you know, has the skills, knowledge, and attributes to 
drive this forward.
    I would just say that we are not there yet. The Virtual 
Lifetime Electronic Record is where we are headed and when that 
happens, all of what we are talking about is going to be 
facilitated.
    But, as you say, seamless transition is not technology. It 
is leadership. And I would offer that Secretary Gates and I are 
partners in this and working it very hard.
    Between the two Departments, we are already able to share 
86 million standard ambulatory data records, 76 million lab 
results, 78 million pharmacy records, 12 million radiology 
reports, 3.5 million consultations, and I could go on.
    So the technology is beginning to arrive. And I will let 
Mr. Baker talk about probably one of our more promising steps 
and that was a visit here to San Diego where we demonstrated we 
could also share this electronically.
    Mr. Baker. So just briefly, because we believe it is quite 
important, we have incorporated the private sector into the 
VLER vision as well and working with HHS now on a national 
standard for information exchange with the private sector. And 
we will move to that standard for the way we exchange 
information with the DoD as well.
    Much of the services we provide for veterans or many of the 
services provided veterans are done by the private sector and 
that ability to incorporate the information that they generate 
into our electronic record and the ability to deliver to them 
what we have in our electronic record to let them provide 
better care to the veteran is representative of the Secretary's 
view of VA as the veteran's advocate. It is do whatever we can 
do, including delivering our information to the private sector 
under appropriate privacy controls to provide better service to 
the veteran even if it is us not providing it.
    Mr. Walz. Well, I know that many of us feel that this time 
might be different. We have had our hearts broken many times, 
but I am a Vikings fan and I keep coming back for more. So on 
this one, I will keep--we are going to do it one of these 
years. So thank you, Mr. Secretary.
    Secretary Shinseki. I got you, Congressman. And let me just 
add here, I realize that I am out of time here, but leadership, 
technology, but it is broader than just medical. DoD and VA 
just held a joint mental health conference. We just met 
together in a national forum on suicides. VA has hosted a 
homeless summit as well.
    But it goes to the whole spectrum of ways and reasons we 
have to be better at this. It is about benefits delivery at 
discharge. That program has to work. It is about DES and being 
better at that. We have expanded it, e-benefits portals and we 
have to be better at demobilization briefings with the Guard 
and the Reserve when they come back so that this seamless 
transition is not just technology. It is all the ways in which 
we quickly, safely, accurately get youngsters who wear the 
uniform 1 day picked up in our system rapidly.
    The Chairman. Thank you, Mr. Walz.
    Mr. Space.
    Mr. Space. Thanks, Mr. Chairman.
    Just let me start by thanking you, Mr. Secretary, for the 
extraordinary leadership that you have displayed in the last 
year. And certainly that is beginning to make its way to the 
veterans on the street and in our district. And I am very 
grateful for your leadership.
    I would like to thank Dr. Cross also for working with us in 
the past. He has actually been to our district for a field 
hearing and helped us accentuate some of the special challenges 
that veterans in rural America face.
    And I am grateful for you, Mr. Secretary, in being mindful 
of that as well.
    The budget expands eligibility of Priority 8 veterans for 
health care in 2011 by almost 100,000 new enrollees. And if you 
compound that with the fact that we have got, given the current 
recession, many Priority 8 veterans who are because of 
financial circumstances becoming eligible per se for benefits, 
one of the problems, however, we face is in creating awareness 
of that eligibility. And we face some special challenges in 
reaching out to those folks back in rural Ohio.
    My question to you, Mr. Secretary, is, what does this 
budget or, more generally, what is the Administration doing 
right now to reach out to those Priority 8 veterans who are 
going to be newly eligible for health care services?
    Secretary Shinseki. Congressman, you mentioned two things 
here, Priority Group 8s and the rural issues. And in some ways, 
they bump into each other.
    Our efforts to reach out to rural veterans, eight million 
veterans enrolled with us, three million of them are in rural 
or highly rural areas, and so the challenge is not just getting 
health care to their locations, which we are doing a lot, it is 
also the outreach to find them, inform them, and make sure that 
we are meeting needs.
    That also addresses some of the challenges with Priority 
Group 8s. We program by the end of this first year 266,000 
Priority Group 8s. We are a little slow getting started. But at 
this point, we started in July enrolling them, we are about 7 
months into that program and we have probably 30,000 
registered.
    We anticipate that part of this is the Priority Group 5 and 
7 veterans who have enrolled with us as well. This is part of 
this mix. Taken together, we are probably at this point about 
74,000 total unique veterans between 5, 7s, and 8s.
    We still expect that by the end of this year, 2010, we will 
be at 190,000 or so with another 99,000 in 2011 Priority Group 
8s, which will put us about 290,000, a little bit off, but 
still on a track that we think the 500,000 estimate for 2013 is 
still valid. We are not ready to come off of that just yet. But 
as I say, we are a little slow getting started, but we are 7 
months here.
    And if you had questions on rural, I am happy to go----
    Mr. Space. Well, you know, given the time constraints, we 
will not be able to get into everything I would like to talk to 
you about. And you have been kind enough to meet with us 
personally on some of these issues and I appreciate that.
    I do want to, however, reference one issue and that is 
telehealth and the importance that that issue or that approach 
has to helping to overcome some of the challenges that we have 
in accessing health care in rural Ohio.
    One of the dilemmas, however, with regards to telehealth is 
that the places where it can do the most good oftentimes lack 
the technological resources to take advantage of it. And access 
to broadband is certainly a big part of that. It has been a 
very important initiative that I have been trying to lead in 
southeastern Ohio.
    And the question I have is, have you had an opportunity or 
do you plan on working with other Federal agencies, such as the 
National Telecommunication and Information Administration, for 
example, to experience an expansive or an expansive access to 
broadband for purposes of telehealth medicine?
    Secretary Shinseki. Congressman, let me just up front tell 
you that we have $42 million increased in 2011 for telehealth, 
telemedicine.
    And then let me call on Secretary Baker to address the more 
technical aspects of the question.
    Mr. Baker. So briefly the answer is yes. We are talking 
primarily with the Federal Communications Commission and their 
broadband expansion initiative, trying to get them to focus on 
areas that we believe are going to have the most benefit for 
veterans.
    As you can imagine, other folks have other things they 
would like them to focus on as well. But we think that is key.
    I will tell you that there is a substantial telehealth 
effort inside of VA right now that is based on what we 
technically call POTS, which is a plain old telephone system, 
and communications that way. And those devices are pretty 
helpful for the people that have those in their homes at this 
point. I do not know the exact number of homes those are in, 
but it is, you know, certainly hundreds of thousands that are 
in right now.
    The Chairman. What did you call that?
    Mr. Baker. It is the plain old telephone system.
    The Chairman. Oh, I thought you were telling us the VA was 
giving out pot there.
    Mr. Space. We are not going to go there.
    Thank you, gentlemen. Again, Mr. Secretary, thank you for 
your fine leadership.
    Secretary Shinseki. Thank you, Congressman.
    The Chairman. Thank you, Mr. Space.
    Mr. Bilbray.
    Mr. Bilbray. Thank you, Mr. Chairman.
    On just an editorial note, it is interesting that you go 
around the world to third-world countries and have internet 
connections through satellite connections and everything else 
which is something that I think too often some of us in the 
first world ought to go look around to see how other people 
have been able to connect into the network. And it is 
extraordinary how innovative a lot of people have been when 
they cannot just plug into the system.
    Mr. Secretary, you know that there is one big concern I 
have and that is the fact that we have for almost a decade had 
a joint co-partnership on this electronic records issue. I 
still believe strongly that we need to give you the lead agency 
status on this issue.
    And you may disagree with that, and I appreciate that 
your--especially your diplomatic approach with cooperation with 
other departments, but I really think that we need to either 
talk to the executive, or the Chairman needs to lead the battle 
legislatively to give you lead status so somebody has the lead 
responsibility to close this circle down the line.
    And I think that is not just critical for veterans, not 
just critical for active-duty military, I think it is 
absolutely essential for this country to finally start moving 
towards that electronic system that the President keeps talking 
about and all the great benefits it could bring with it.
    But I think it really comes down to us having the 
leadership to give you the leadership authority and the 
responsibility to close the circle.
    Do you have any comments about that approach?
    Secretary Shinseki. Congressman, thank you very much. 
Thanks for the compliments, first of all.
    I would offer to you that electronic health records at VA 
have been around about a dozen years, but there were many years 
of hard learning before that until we sort of worked it out. 
And all the benefits that come from that, we have realized now 
for the last 12 years and others are benefitting from it. And 
we share what we know, we share what we learn with others.
    We worked this very hard with DoD and VA. As I mentioned 
earlier, two very large departments and two very good 
departments in terms of electronic health records and now we 
are working on bringing the culture together.
    The San Diego demonstration is where we were able to pass 
electronic records with Kaiser Permanente, a civilian health 
care system. Huge step. And we think this will bode well for 
offering to Health and Human Services a model to look at. It 
does not have to be the one they settle on, but a model to look 
at of where we have come as they think about the 
responsibilities of creating electronic health records for all 
Americans.
    Part of it is cost, affordability out in the civilian 
sector. We have invested heavily in it. I think there will be 
some savings to others as a result. We will continue to work 
this hard. We think we have some great capability here and 
intend to keep that lead in this area of electronic health 
records.
    It is because of that experience that we are so confident 
that we need to make the same inroads into VBA, which is still 
paper-bound. We do that, we are going to realize the 
efficiencies, the power, and the capabilities that we have been 
enjoying for the last 12 years.
    Let me turn to the CIO to address some of the technical 
aspects of this, Secretary Baker.
    Mr. Baker. I think, Congressman, to respond, it has got to 
be a partnership no matter who is in the lead on this. And, you 
know, the partnership is good. As the Secretary points out, 
they are two large organizations and DoD has a mission to fight 
wars.
    You know, we continue to move down the path. We have lots 
of great statistics on the amount of information that is 
exchanged. And remember that DoD and VA certainly lead the 
Nation in exchanging the electronic health information. We get 
a lot of benefits information from them as well.
    We are far from where we would like to be and we will 
continue to move it forward, continue to move current systems 
and the VLER system forward for exchanging more and more 
information.
    Mr. Bilbray. And, look, my concerns are not anti-DoD, but 
the DoD more than anybody else knows how essential chain of 
command is. And the fact is there was a big reason why, you 
know, even Rome abandoned the twin governance concept of chain 
of command.
    I just think that in reality, I think we all agree that it 
may be a very high profile for them, I mean, a very high 
priority. But the fact is there is a lot on their plate. There 
is a lot on your plate.
    I think that when it comes down to a discussion between our 
Chairman and, you know, my cousin Ike over in Armed Services 
that you can agree that I think even the Chairman here is 
probably more aware, more sensitive to this than anybody in the 
system. And that should be reflected in the command structure.
    So, again, I will continue to raise this issue. I think 
giving you the authority and the responsibility is the fastest 
way to move forward and, again, not just to serve our active 
duty and our veterans, but to create that prototype that the 
rest of America is waiting for you to deliver.
    So thank you very much. I appreciate it, and yield back, 
Mr. Chairman.
    The Chairman. Thank you, Mr. Bilbray.
    Ms. Brown.
    Ms. Brown of Florida. Thank you, Mr. Chairman. And first of 
all, let me thank you for calling this hearing today so we can 
hear about the 2011 and 2012 fiscal year budget.
    I want to thank you, Mr. Secretary, for your decades of 
service defending the freedom in this Nation and thank you for 
your commitments to the veterans that have also served this 
Nation.
    I am very pleased under your leadership, Mr. Filner, that 
we passed the largest VA budget increase in the history of the 
United States. So I am very proud of that and I want to thank 
you for that.
    I am also very pleased with the increase in the health care 
funding and other priorities. And I am very pleased that more 
Priority 8 veterans will be back in the fold. These men and 
women have served their country, paid their dues. They deserve 
the health care. However, we need to speed up the time table. I 
see that we are looking at about 100,000 a year. I am 
interested in seeing what we could do to get additional 
veterans back in the fold.
    And I am also concerned about the increase in the waiting 
time veterans are being subject to. I know we have been working 
it, but I would like to know what kind of plans you have to 
speed it up.
    And on a personal note, I want to thank you and the VA for 
what we are doing as far as the VA medical center in Orlando. 
If the figures do not add up, if there are some problems, I 
want to know up front so we can fix it.
    I always think of the first President of the United States, 
George Washington, and I always like to repeat what he said: 
``The willingness with which our young people are likely to 
serve in any war, no matter how justified, shall be directly 
proportional as to how they perceive the veterans of earlier 
wars are treated and appreciated by their country.''
    And with that, I was very pleased that we passed the new GI 
Bill for the 21st Century. I think, you know, we should have 
gotten a lot of good press, but there were a few problems with 
it. I want to know the status of the program and how we worked 
it out because for veterans, with this economic downturn, the 
best thing to do is get additional training and education.
    So with that, thank you.
    Secretary Shinseki. Thank you, Congresswoman.
    Let me just say on the Priority Group 8s, it is a 5-year 
program, 500,000 is the target. We estimated that the 1st year 
would be 266,000. We began last July. We are really in about 
the 7th month here. It is a little slow picking up.
    Part of that is that we may not be reaching all the 
Priority Group 8 veterans as we need to. And we have attacked 
that issue in lots of ways in terms of outreach, through 
contacts that we have, through advertising using, I think they 
call it, social media as well now.
    We still expect, by the end of this year, to have something 
around 190,000 Priority Group 8 veterans enrolled with us. By 
the end of 2011, we have enough funds that we expect about 
290,000 Priority Group 8 veterans will be enrolled with us as 
well.
    As we go through this year, understanding we made an 
estimate at 266,000, if it does not look like we are keeping 
pace, then we will look at perhaps opening the aperture a 
little bit so we let people who would be in the next phase of 
enrollment to begin to creep forward so we get momentum going.
    On the backlog, I would just inform that this is my year to 
focus on the backlog. Last year was Post-9/11 GI Bill, which 
required getting students into school and we successfully did 
that. We are well on our way in the spring semester. We have 
automated tools coming, one April, one July. By the end of the 
year, we should be fully automated and that program will 
continue to get better.
    Backlog requires attention this year. Four pilots. We are 
working those hard. And at some point, we will harvest. We will 
not let this run for years. We will harvest what we learned out 
of that and put together a virtual regional office of the 
future that begins to take advantage of quality claims, new 
relationships between VA and veterans and our VSOs, a sense of 
advocacy that I am pushing, and we all are, reengineered 
business processes, and the automation tools that will 
accelerate all of this. We expect a lot of work to be done this 
year and we will go after the backlog.
    Having said that, Agent Orange decisions made last year 
will increase the number of claims. We are going to have to 
manage and shape that. Inventory will grow for the next year, 
maybe 2 years. Maybe even processing time will increase from 
the 161 days we have today.
    But the intent is to fast track Agent Orange claims and 
also to work on the backlog through the pilots I described and 
shape that so that by 2013, we are back to where we are today, 
about 161 days, but at that point moving towards eliminating 
the backlog by 2014, 2015 time frame.
    Post-9/11, I think I mentioned we are in good shape there. 
Again, zero students enrolled in August of last year, 173,000 
enrolled and being paid on 31 December. No carryover of a 
backlog into the spring semester. Zero in August. At this 
point, we have 153,000 enrolled, so that is a huge change 
between the semesters of which on 1 February, 131,000 checks 
were being distributed to those 153,000 students.
    The difference here, the claims that have come in since the 
19th of January, we are processing those at about 7,000 a day. 
So we will have that caught up here very shortly.
    Ms. Brown of Florida. Thank you, Mr. Secretary.
    The Chairman. Thank you, Mr. Secretary, and thank you for 
your leadership.
    I just want to bring up two points, if I may. One is the 
backlog that you just talked about. I mean, it seems to me that 
we have hired over 7,000 new claims processors and Mr. Walcoff 
said another 4,000 are coming. I do not know if that number 
includes claims processors that were there temporarily or these 
are new hires. That is a lot of people.
    What you are promising is that in a couple years, we may be 
back to where we are in terms of time when you took over and 
then you promised it will go to zero, but I do not believe it.
    As we talked many times, you are trying to use brute force 
to deal with this. We know the training times and the 
attrition, and we end up treading water.
    I would like for you to briefly explain the four pilot 
programs in place to try to speed this up. I am not sure how 
those programs are doing or what is different about them than 
what we are doing. As you know, I favor just cutting through 
this bureaucracy as did the Internal Revenue Service (IRS).
    There is a whole model from Professor Bilmes, which says 
basically to accept the claim when it comes in and send out a 
check. Audit it in whatever time frame it takes.
    I have tried to build in some protections against trivial 
or fraudulent claims by requiring that the VSOs that are 
certified around the Nation that help develop the claim that we 
should accept it. That would reduce your time to zero. You send 
out the check, or we pick a minimal 30-percent rating and send 
out the check. Audit that later.
    I think you have to break through this bureaucracy of which 
we have now added 11,000 new positions and we do not see any 
results. The backlog number seems to grow everyday.
    And, I hope you will tell me what the four models are doing 
differently than what we are doing now, but I think you need to 
try the Bilmes model. Deputy Secretary Gould is pretty familiar 
with it. I do not think you are going to get this by brute 
force. I just cannot see it.
    Secretary Shinseki. Fair enough. You and I have discussed 
this, Mr. Chairman, and thanks for your leadership in this area 
because, you know, as I admitted before, I did not grow up in 
the VA. I am not a clinician. So there is lots here that I have 
learned.
    Let me just very quickly summarize the four pilots. The 
process of disability claims is complex enough that we have had 
to pull it apart, sort of try to get the goodness on each of 
those parts, and then put it back together again and try to get 
momentum out of the processing.
    First is in Pittsburgh. That model is designed to address 
the quality of the claim, show me how to write or prepare the 
best quality claim that will pass through the system with a 
high probability potential for the best outcome for the veteran 
one time. That is part of the backlog issue.
    To do that, we have created a relationship that the veteran 
and VA work together. We are advocates here. Veterans, VA, and 
VSOs sit down in an effort to put together the best quality 
claim.
    The Chairman. By the way, in that model or----
    Secretary Shinseki. The pilot.
    The Chairman [continuing]. Pilot. I have heard some of the 
problems. We have some artificial or arbitrary caseload 
standards or expectations. In order to meet them, some of the 
analysts may not be as accurate as they should in order to meet 
the pressure of the quotas. This then leads to even further 
problems.
    Does the pilot include not using these arbitrary quotas or 
do you still have that in there?
    Secretary Shinseki. Well, part of your concern and part of 
my concern is getting to the quality claim and the quality 
outcome. And right now we have, you know, 11,400 good folks 
trying to put together the claims.
    And usually when we talk about claims, it is a stack of 
paper with lots of personnel and lots of medical records. And 
what we are trying to create here, what are the essential 
elements of information that go into establishing that high-
quality claim so that the majority of the effort is creating 
that quality claim and then reserving to a fewer number of 
highly experienced adjudicators who have the best outcome for 
both accuracy and, you know, and processing time to then make 
the adjudication.
    So it is changing the relationship between VA and the 
veteran. That is the pilot number one. It is sort of like 
trying to put together the best legal brief to win an argument 
in court. How do we put together the best argument possible.
    The second pilot in Little Rock is business process 
reengineering and it is the issue of a claim arrives, who 
touches it first, how many people get to touch it, have to 
touch it, how long is the claim here, and what is the 
relationship of the members of the team, how long does it take 
to pass that around and how do they work together. So it is 
business process.
    The third pilot is in Providence and it is automation, the 
automation tools that would accelerate all of this. The reason 
we pulled it apart was to assure ourselves that we were not 
automating bad processes and getting bad outcomes faster. So 
sort of a discrete look.
    And the fourth pilot in Baltimore was how to put all of 
these together in a regional office with, you know, better 
relation, new relationships, reengineered processes, higher 
quality claims with automation, and try to get us a better 
outcome here.
    You and I have talked about the IRS model. We have 
investigated it and we will continue to look at that.
    The Chairman. We do not have enough time here for you to 
develop it enough so that I can really understand it, but it 
sounds to me that what you are doing in these models is 
breaking up the process and just examining them. You are not 
really trying a new way to do it. You are monitoring who is 
touching what, how that is done, or how the relationship is 
handled between the veteran and the VA. It is just taking parts 
of it and just looking at it more closely, probably to see 
where there are efficiencies of time or motion or whatever.
    However, it is not really a new model as to the Bilmes 
model. You are just looking at how you can do the current 
process faster. It is simply more efficient brute force, 
perhaps. Again, I do not know enough about your four pilots, 
but it does not sound like you are trying a different way, and 
that is what I think we have to do.
    It is an insult to the veterans to take years to resolve 
these claims. These are your comrade. You feel that, I am sure. 
I think we have to try a new way, not just break down what we 
are doing and try to make it more efficient.
    That is just my sense of looking at it for so many years, 
and we keep trying new idea and the claims keep building. We 
have 11,000 new claims adjusters. But I do not know how many 
thousands of people we have got now doing claims and the 
backlog keeps building.
    Secretary Shinseki. It is not 11,000 new, it is 11,000 that 
we have today. The new budget adds 4,000 and that is--most of 
that----
    The Chairman. I thought the previous budgets added 7,000 in 
the last few years.
    Secretary Shinseki. I think our numbers are 11,000 today 
and 4,000 in the 2011 budget to address Agent Orange. But I 
will get you more accurate numbers?
    The Chairman. Thank you. Maybe we will talk about it 
further in another forum, but I do not see us trying something 
different. I think you need a whole revolutionary approach.
    Let me just mention one other thing that we have talked 
about. We live in both an age and a country where there is 
incredible development of new technologies. In very small, 
organizations, they are great for inventions for medical 
treatment technology and for internal operations, whether it is 
automation for the GI Bill or improvements for third-party 
collections.
    The technology really moves fast. Bureaucracies by 
definition, move slowly. There are people who come to me and my 
colleagues every day that have new ideals or inventions and 
they cannot get access to the VA. It just takes forever to 
break through this bureaucracy.
    We have to figure out a way to be better in touch. I do not 
think the existing structure is working because somebody will 
look at new technology and then they have to go through a whole 
new bureaucracy.
    Maybe you need an Office of Revolution or something like 
that where people have a chance to really demonstrate their 
ideas. People need guidance to figure out how to introduce 
their products to one of the biggest systems in our Nation.
    Whatever we talk about from prosthetics to post-traumatic 
stress disorder (PTSD) to third-party billing, I have talked to 
people who claim, they have new technologies. We try to get the 
VA to look at them and it is like butting up against a stone 
wall because every one of the people who work for you is 
already working very hard. They say, uh-oh, a new idea. Rather 
than see it as a way to really strengthen the whole 
organization, it means a heavier workload for them.
    You have a deputy who comes from IBM who is used to 
introducing new technology into a static environment. I think 
we need to figure this out and I think it would be a boon to 
every agency in the government if we figured out how to get new 
technology quicker.
    I just go crazy when I hear something that could help 
improve brain injury by 50 percent more than what we are doing 
now and nobody will listen. I cannot tell if they are right or 
wrong, but they cannot even get someone to listen. I mentioned 
to you a new kind of textile for our soldiers that is a million 
times better than what we use now. What would that save us in 
treatment if we have ways to protect our soldiers?
    It is just a thought. I hope you will start thinking about 
it. I think we have to find a new way to break through the 
bureaucracy. It is an inevitable tendency of bureaucracy to say 
that we have enough work to do, do not bring us something else.
    Mr. Bilbray. Mr. Chairman, may I----
    The Chairman. Yes, please.
    Mr. Bilbray. Just to reinforce or it is sort of classic 
that a lot of civilians realize that the outdoor community had 
a product called Gortex for over a decade before Armed Services 
actually included it into the process. They were so wrapped up 
with leather, leather.
    And here was a new break-through material that was very 
user friendly or whatever and the bureaucracy had that. And so 
you are right. There is this and that is why, I guess, we are 
supposed to go around to help sensitize it and encourage them 
along.
    I yield back.
    Ms. Brown of Florida. Mr. Chairman.
    The Chairman. Please, Ms. Brown?
    Ms. Brown of Florida. You know, I think that we should 
think out of the box in many, many different ways, but keeping 
in mind the Secretary inherited an agency that has been 
underfunded for years. It is a big agency and it is just like 
government. It turns slowly.
    And I want to commend him. I think the Secretary is doing a 
good job. I have been here for 18 years and I have listened to 
several Secretaries and this is one that when he says 
something, he is going to try do it and I really think we 
should salute him.
    The Chairman. I second----
    Ms. Brown of Florida. And I know you are doing it, but----
    The Chairman. I second your comments. I just want to make 
us----
    Ms. Brown of Florida. I want to be clear.
    The Chairman [continuing]. Move a little faster.
    Ms. Brown of Florida. Yeah, I know.
    The Chairman. Thank you for clarifying this.
    Ms. Brown of Florida. But we are dealing with an old, I 
mean, not an old agency, but one that has been underfunded for 
years.
    The Chairman. Thank you, Ms. Brown.
    Secretary Shinseki. Mr. Chairman, may I respond. And my 
thanks to Congresswoman Brown here for her very kind comments 
and also her leadership in much of this area where we talk 
about health care.
    Mr. Chairman, I think you know I come from a background 
with a lot of contact with research and development. And I 
share your impatience here and I think we ought to go faster. I 
will look for ways to go faster, smart and fast.
    Right now I am trying to put into place an Assistant 
Secretary for Acquisition, Logistics, and Construction to 
address many of the issues that you are describing.
    Like you, I get a lot of calls about good ideas or things 
that if we would take aboard right now would solve many of our 
problems. And like you, my frustration is I do not know enough 
about it to make that judgment.
    But having an office that is equipped with the right 
skills, right number of people that can take these on, address 
them and very, very quickly, turning them around, I think, 
would be helpful.
    And that is part of my request is support for considering 
an Assistant Secretary with the appropriate number of Deputies 
to provide us that kind of innovative, thoughtful, and yet 
responsible action, reaction to these good ideas, I think, 
would be very helpful to the Department.
    The Chairman. Thank you.
    I echo what Ms. Brown said, that we have confidence that 
you will.
    Let me just conclude by thanking you for this budget. I 
think the Administration and your Department have produced a 
great blueprint for the future unlike other departments that 
are not subject to cuts. You have fought hard both personally 
and institutionally. I thank you for bringing us a budget that 
we can be proud of and that will do what has to be done for our 
Nation's veterans. We thank you and all of your team for being 
here today.
    Secretary Shinseki. Great. Thank you very much, Mr. 
Chairman.
    The Chairman. Thanks so much.
    We look forward to panel number two. Please come forward. 
Panel two consists of the major organizations that have put 
together The Independent Budget which I carry around as my 
Bible.
    We will bring forward Carl Blake, National Legislative 
Director for the Paralyzed Veterans of America (PVA); John 
Wilson, the Assistant National Legislative Director for 
Disabled American Veterans (DAV); Eric Hilleman, the Director, 
National Legislative Service of the Veterans of Foreign Wars 
(VFW); and Raymond Kelley, National Legislative Director for 
AMVETS.
    Mr. Blake, you have the floor.

   STATEMENTS OF CARL BLAKE, NATIONAL LEGISLATIVE DIRECTOR, 
   PARALYZED VETERANS OF AMERICA; JOHN L. WILSON, ASSISTANT 
NATIONAL LEGISLATIVE DIRECTOR, DISABLED AMERICAN VETERANS; ERIC 
 A. HILLEMAN, DIRECTOR, NATIONAL LEGISLATIVE SERVICE, VETERANS 
 OF FOREIGN WARS OF THE UNITED STATES; AND RAYMOND C. KELLEY, 
   NATIONAL LEGISLATIVE DIRECTOR, AMERICAN VETERANS (AMVETS)

                    STATEMENT OF CARL BLAKE

    Mr. Blake. Thank you, Mr. Chairman.
    On behalf of the coauthors of The Independent Budget, 
Paralyzed Veterans of America is pleased to be here today to 
present our views from The Independent Budget regarding the 
funding requirements for the Department of Veterans Affairs' 
health care system for fiscal year 2011.
    Let me say up front that we are pleased that on balance, 
this budget is as good as any budget we have seen and we are 
pleased to see that the VA looks like they are moving in a very 
positive direction.
    Despite the fact that Congress has already provided 
advanced appropriations for fiscal year 2011, the IB chose to 
still present budget recommendations for the medical care 
account specifically for fiscal year 2011.
    Included in Public Law 111-117 was advanced appropriations 
for fiscal year 2011. Congress provided approximately $48.2 
billion in discretionary funding combined with $3.3 billion 
projected for medical care collections, leading to a total of 
$51.5 billion for the operating budget authority.
    Accordingly, for fiscal year 2011, The Independent Budget 
recommends approximately $52 billion for total medical care, an 
increase of $4.5 billion over the fiscal year 2010 operating 
budget level established by the consolidated Appropriations 
Act.
    We believe that this estimation validates the advanced 
projections that the Administration developed last year and has 
carried forward into this year.
    Furthermore, we remain confident that the Administration is 
headed in a positive direction that will ultimately benefit the 
veterans who rely on the VA health care system to receive their 
care.
    For fiscal year 2011, The Independent Budget recommends 
approximately $40.9 billion for medical services. Our medical 
services recommendation includes approximately $39 billion to 
maintain current services, $1.3 billion to address our 
projected increase in patient workload, $275 million to address 
the significant increase in prosthetics expenditures that is 
projected, and, lastly, a $375 million initiative to restore 
the VA's long-term care average daily census to the level 
mandated by Public Law 106-117, the Veterans Millennium Health 
Care and Benefits Act.
    Finally, for medical support and compliance, the IB 
recommends $5.3 billion and for medical facilities $5.7 
billion.
    The Independent Budget recommendation also includes a 
significant increase in funding for information technology. For 
fiscal year 2011, we recommend that the VA IT account be funded 
at approximately $3.55 billion. This amount includes 
approximately $130 million for an information systems 
initiative to be carried out by the Veterans Benefits 
Administration.
    We are concerned that the Administration is short-changing 
this account for fiscal year 2011 in a budget in which the VA 
and the Department of Defense are called on to jointly 
implement the Virtual Lifetime Electronic Record and in which 
the Administration proposes to automate claims processing to 
improve the accuracy and timeliness of veterans' benefits, 
particularly for disability compensation and the new Post-9/11 
GI Bill.
    Public Law 111-81 requires the President's budget 
submission to include estimates of appropriations for the 
medical care accounts for fiscal year 2012 and the VA Secretary 
provide detailed estimates of the funds necessary for these 
medical care accounts in his budget documents submitted to 
Congress.
    Consistent with the advocacy by The Independent Budget, the 
law also requires a thorough analysis and public report of the 
Administration's advanced appropriations projections by the 
Government Accountability Office to determine if that 
information is sound and accurately reflects expected demand 
and costs to be incurred in fiscal year 2012 and subsequent 
years.
    We are pleased to see that the Administration has followed 
through on its responsibility to provide a detailed estimate 
for the medical care accounts for the VA for fiscal year 2012. 
It is important to note that this is the first year that the 
budget documents have included advanced appropriations 
estimates.
    The Independent Budget looks forward to examining all of 
this new information and incorporating it into our future 
budget estimates.
    In the end, it is easy to forget that the people who are 
ultimately affected by wrangling over the budget are the men 
and women who have served and sacrificed so much for this 
Nation.
    We hope that you will consider these men and women when you 
develop your budget Views and Estimates and we ask that you 
join us in adopting the recommendations of The Independent 
Budget.
    Mr. Chairman, this concludes my statement. I will be happy 
to answer any questions that you might have.
    [The prepared statement of Mr. Blake appears on p. 51.]
    The Chairman. Thank you.
    Mr. Wilson.

                  STATEMENT OF JOHN L. WILSON

    Mr. Wilson. Thank you, Mr. Chairman and Members of the 
Committee.
    I am glad to be here today on behalf of the DAV, AMVETS, 
PVA, and VFW to present our collective budget and policy views 
for the 2011 Independent Budget.
    My testimony focuses primarily on the variety of VA 
benefits programs available to veterans. Preparing this 24th 
IB, the IBVSOs draw upon our experience with veterans' 
programs, our knowledge of the needs of America's veterans, and 
the information gained from monitoring workload demands, and 
performance of the veterans benefits and services system.
    This Committee has previously acted favorably on many of 
our recommendations to improve services to veterans and their 
families. We ask that you give our recommendations serious 
consideration again this year.
    My oral testimony today focuses on four items. One, 
concurrent receipt of VA disability compensation and military 
longevity retired pay; two, the survivor benefit plan offset of 
dependency indemnity compensation; three, automobile grants; 
and, four, the disability claims process.
    First, concurrent receipt. Current law still provides that 
service-connected veterans rated less than 50 percent who 
retire from the Armed Forces on length of service will not 
receive both their VA disability compensation and full military 
retired pay. The IBVSOs recommend Congress enact legislation to 
repeal this inequitable requirement.
    Second, the offset of survivor benefit plan or SBP 
compensation by an amount equal to the dependency indemnity 
compensation benefits. Under current law, as you know, 
recipients SBP income is reduced by an amount equal to any DIC 
for which they are otherwise eligible.
    This offset is also inequitable because no duplication of 
benefits is involved. It penalizes survivors of military 
retirees, of veterans whose deaths are under circumstances 
warranting the government to provide compensation for such 
loss. It is the recommendation of the IBVSOs that Congress 
repeal the offset between DIC and SBP.
    Third, automobile grants. The current $11,000 automobile 
grant is only 39 percent of the average cost of a new car. To 
restore equity, the allowance should be set at a minimum of 80 
percent of today's average new cost for a vehicle which is 
$22,800. It is the recommendation of IBVSOs that Congress enact 
legislation to increase the automobile allowance to at least 80 
percent of the average cost of a new automobile.
    Fourth and finally, the disability claims process. To 
illustrate my point regarding the claims process, let me 
recount a story. Between August 25th and September 2nd of last 
year, the Roanoke VA Regional Office was visited by the VA's 
Office of Inspector General. They found the office did not meet 
6 of 14 important operational areas. Inspectors found 29 of 
those 118 claims that they reviewed contained errors, a 25 
percent error rate. And they found nearly 11,000 folders 
sitting on top of full file cabinets. An engineer stated the 
load on floors 10, 11, and 12, of this 14-story building, is 
double what is considered safe and heavy enough to cause a 
potential collapse.
    This story provides a timely illustration of the need to 
reform the veterans benefits approval system before the very 
weight of it destroys the structural integrity of the system 
and it collapses in upon itself.
    Today, too many disabled veterans and their survivors must 
wait too long for disability compensation and pension rating 
decisions that are too often wrong or inaccurate. VBA must 
develop a work culture that emphasizes quality at all steps of 
the process.
    It must begin with the development of a management culture 
that measures and rewards the quality of results, not just the 
quantity, and which provides sufficient training of both VA's 
management and workforce in order to achieve accurate outcomes.
    VBA must modernize its IT infrastructure and optimize its 
business processes. The current paper heavy system must be 
replaced with a secure and accessible paperless system that 
readily moves and organizes information necessary to help 
rating specialists reach correct decisions. The new system must 
optimize both the workflow and the business processes.
    Finally, VBA must implement a simpler and more transparent 
benefits application and approval process. There should be a 
universal and simple application procedure that provides 
veterans with regular updates on the progress of their claims 
and allows them to access the records in a pending claim 
securely from any location.
    It has been a pleasure to appear before this honorable 
Committee today. I would be happy to answer any questions you 
may have.
    [The prepared statement of Mr. Wilson appears on p. 53.]
    The Chairman. Thank you, Mr. Wilson. That is a pretty apt 
metaphor that the system is going to collapse under its own 
weight, I mean, literally.
    Mr. Wilson. Yes, sir.
    The Chairman. Mr. Hilleman.

                 STATEMENT OF ERIC A. HILLEMAN

    Mr. Hilleman. Thank you, Mr. Chairman, Members of the 
Committee.
    On behalf of the 2.1 million men and women of the Veterans 
of Foreign Wars and our auxiliaries, it is my pleasure to 
testify and present our views before you today.
    The VFW works side by side with AMVETS, the Disabled 
American Veterans, Paralyzed Veterans of America to produce a 
policy and budget recommendation document known as The 
Independent Budget. The VFW is responsible for the construction 
portion of the IB, so I will limit my remarks to that portion 
of the budget.
    VA's infrastructure, particularly within its health care 
system, is at a crossroads. The system is facing many 
challenges, including the average age of buildings 60 years or 
more, significant funding needs for routine maintenance, 
upgrades, modernization and construction.
    VA is beginning a patient-centered information reformation 
in the way it delivers care and manages infrastructure to meet 
the needs of sick and disabled veterans in the 21st century.
    Regardless of what the VA health care system of the future 
looks like, our focus must remain on the lasting and accessible 
VA health care system that is dedicated to unique needs of 
veterans.
    VA manages a wide portfolio of capital assets throughout 
the Nation. According to its latest capital asset plan, VA is 
responsible for 5,500 buildings and almost 34,000 acres of 
land. This vast network of facilities requires significant 
time, attention from the capital asset managers.
    Capital Asset Realignment for Enhanced Services (CARES), a 
VA data-driven assessment of their current and future 
construction needs, gave VA a long-term road map and has helped 
guide its capital planning process over past fiscal years. 
CARES showed a large number of significant construction 
priorities that would be necessary to fulfill the needs of VA 
in the future and Congress has made significant end roads into 
funding these priorities. It has been a huge but necessary 
undertaking and VA has made slow and steady process in these 
critical areas.
    The challenge for VA in the post-CARES era is that there 
are still numerous projects that need to be carried out and the 
current backlog of partially funded projects that CARES has 
identified is large. This means that VA is going to continue to 
require significant appropriations for major and minor 
construction accounts to live up to the promises of CARES.
    VA's most recent asset management plan provides an update 
of the status of CARES projects, including those in the 
planning and acquisition process. The top 10 major construction 
projects in queue require $3.25 billion in appropriations. This 
is just the tip of the iceberg. There are 82 additional ongoing 
or partially funded projects that demonstrate the continued 
need for VA to upgrade and repair its aging infrastructure and 
that continuous funding is necessary to address the backlog of 
projects.
    A November 17th, 2008, letter to the Senate Veterans 
Affairs' Committee, Secretary Peake said that the Department, 
``Estimates that the total funding requirement for major 
medical facility projects over the next 5 years would be in 
excess of $6.5 billion.''
    It is clear that the VA needs a significant infusion of 
cash for its construction priorities. VA's own words and 
studies state this.
    The total major construction request that the IB estimates 
is $1.295 billion. The minor request is $785 million.
    The IB recognizes that money was provided for military and 
veterans' construction in the American Recovery and 
Reinvestment Act of 2009 (ARRA). The IB is not requesting plus-
ups of funds in those accounts. However, we recognize that the 
Administration numbers are below the IB recommendation.
    We would ask that this Committee examine the amounts 
remaining in the construction accounts, left over from the 
American Recovery and Reinvestment Act. Thank you. I look 
forward to your questions.
    [The prepared statement of Mr. Hilleman appears on p. 64.]
    The Chairman. Thank you.
    Mr. Kelley.

                 STATEMENT OF RAYMOND C. KELLEY

    Mr. Kelley. Chairman Filner, thank you for inviting AMVETS 
to testify on behalf of The Independent Budget today.
    As a partner of The Independent Budget, AMVETS devotes a 
majority of its time with the concerns of the National Cemetery 
Administration (NCA) and I would like to speak directly to 
these issues and concerns surrounding NCA.
    In fiscal year 2009, $230 million was appropriated for the 
operations and maintenance of NCA, $49 million over the 
Administration's request.
    NCA has awarded 49 of 56 minor construction projects that 
were in the operating plan.
    The State Grant Cemetery Service awarded $40 million in 
grants for 10 projects.
    The Independent Budget partners also want to recognize NCA 
for their foresight in reducing the population threshold for 
the establishment of new cemeteries as well as understanding 
this policy needs to be flexible to take into account areas 
that do not easily fit into this model due to urban or 
geographical phenomena.
    The Independent Budget requests an operating budget of 
$274.5 million for NCA for fiscal year 2011. The Independent 
Budget is encouraged that $25 million was set aside for the 
National Shrine commitment for fiscal year 2007 and 2008.
    In 2006, only 67 percent of headstones and markers in 
national cemeteries were at a proper height and alignment. By 
2009, proper alignment, height and alignment was increased to 
76 percent.
    NCA has also identified 153 historic monuments and 
memorials that need repair and/or restoration. With funding 
from the American Recovery and Reinvestment Act, NCA will make 
repairs to 32 percent of these monuments and memorials.
    The Independent Budget supports the NCA's operational 
standards and measures outlined in the National Shrine 
commitment and in the past, The Independent Budget advocated 
for a 5-year, $250 million National Shrine initiative to assist 
NCA in achieving those performance goals.
    However, over the past few years, NCA has made marked 
improvements in the National Shrine commitment by earmarking a 
portion of its operations and maintenance budget for the 
commitment and pending receipts of funding from the ARRA.
    Therefore, The Independent Budget no longer believes that 
it is necessary to implement the National Shrine Initiative 
Program at $50 million a year for 5 years, but rather proposes 
an increase in NCA's operating and maintenance budget by $25 
million per year until the operational standards and measure 
goals are reached.
    The State Cemeteries Grants Program faces the challenges of 
meeting a growing interest from States and provide burial 
services in areas that are not currently served by national 
cemeteries. Currently, there are 60 States and tribal 
government cemetery construction grant pre-applications, 36 of 
which have the required State matching funds totaling $121 
million.
    The Independent Budget recommends that Congress appropriate 
$51 million for the State Grant Program for fiscal year 2011. 
This funding level will allow the Grant Program to establish 13 
new State cemeteries.
    Based on accessibility and the need to provide quality 
burial benefits, The Independent Budget recommends that VA 
separate burial benefits into two categories, veterans who live 
inside the VA accessibility threshold model and those who live 
outside the threshold.
    For those veterans who live outside the threshold, the 
service-connected burial benefit would be increased to $6,160. 
Nonservice-connected veterans' burial benefits would increase 
to $1,918. And the plot allowance would increase to $1,150 to 
match the original value of the benefit.
    For the veterans who live inside the threshold, the benefit 
for service-connected burial would be $2,793. The amount 
provided for nonservice-connected burial would be $854. And the 
plot allowance would be $1,150.
    This will provide a burial benefit at equal percentages, 
but based on the average cost for the VA funeral and not on the 
private funeral cost that will be provided for those veterans 
who do not have access to a State or national cemetery.
    The new model will provide a meaningful benefit for those 
veterans whose access to a State or national cemetery is 
restricted as well as provides an improved benefit for eligible 
veterans who opt for private burial.
    Congress should also enact legislation to adjust these 
burial benefits for inflation annually.
    This concludes my testimony and I will be happy to answer 
any questions that you may have.
    [The prepared statement of Mr. Kelley appears on p. 73.]
    The Chairman. We thank you very much for all the work you 
do each year on this Independent Budget. As you know, I use it 
as my Bible.
    We have a lot of questions, but because of the votes that 
are present, we are going to submit them to you. We thank you 
so much.
    I am going to recognize panel three. You have been sitting 
here all morning. If each of you could just stand up or take 
your microphone for 30 seconds and tell us what your first 
priority is? We are going to recess to go vote and I do not 
want to have to have you all waiting here again.
    Steve Robertson, Director of the National Legislative 
Commission, the American Legion; Rick Weidman, Executive 
Director for Policy and Government Affairs for VVA; Paul 
Rieckhoff, Executive Director for the Iraq and Afghanistan 
Veterans of America (IAVA); and Paul Sullivan, Executive 
Director for Veterans for Common Sense. If you would just take 
a minute and state what is your top priority and what is 
missing from this budget that we ought to be correcting.
    Mr. Robertson, I apologize for doing it this way. We have 
all of your statements for the record. We will start with you.

     STATEMENTS OF STEVE A. ROBERTSON, DIRECTOR, NATIONAL 
 LEGISLATIVE COMMISSION, AMERICAN LEGION; RICHARD F. WEIDMAN, 
 EXECUTIVE DIRECTOR FOR POLICY AND GOVERNMENT AFFAIRS, VIETNAM 
 VETERANS OF AMERICA; PAUL RIECKHOFF, EXECUTIVE DIRECTOR, IRAQ 
    AND AFGHANISTAN VETERANS OF AMERICA; AND PAUL SULLIVAN, 
         EXECUTIVE DIRECTOR, VETERANS FOR COMMON SENSE

                STATEMENT OF STEVE A. ROBERTSON

    Mr. Robertson. Mr. Chairman, I just have one request that 
we be allowed to add additional comments as we had a very short 
window to review the budget and there are a lot of legislative 
proposals that we want to flush out before----
    The Chairman. Yes. Of course, you will have that extra 
time, Mr. Robertson.
    Mr. Robertson. And we are very pleased with the budget. It 
is very rare that we get to come to a Congressional hearing 
where we do not have to beat up on somebody to make sure we get 
the benefits that we believe are earned benefits for America's 
veterans.
    Thank you.
    [The oral and prepared statements of Mr. Robertson appear 
on pp. 77 and 78.]
    The Chairman. Where is your hat?
    Mr. Robertson. It is in my pocket.
    The Chairman. I did not know you had hair.
    Mr. Weidman.

                STATEMENT OF RICHARD F. WEIDMAN

    Mr. Weidman. I have no hat, Mr. Chairman.
    The Chairman. No hair either.
    Mr. Weidman. And no hair either. That is right.
    The Chairman. The only order that we put you in is 
increasing baldness. You can see it goes from Robertson to 
Rieckhoff in a stepped up way.
    Mr. Weidman. Wow. I am trying to think about how to put 
this into one single thing. It is to let VA be VA. And what we 
mean by that is to start taking a military history. They are 
now exporting the VistA system to the private sector all over 
the country and it still does not have a military history in 
the damn medical record.
    And what it says to people is it is unimportant for future 
health care risk where Tim Walz served in the Guard when he was 
on active duty during his 30 years in service. And that is a 
crock.
    We need to be educating. Where 80 percent of American 
veterans get their health care is not at the VA and VA does 
nothing in terms of educating either its own people properly, 
never mind the rest of American medicine, and what are the 
wounds, maladies, and injuries of war that we need to start to 
address.
    Part of that let VA be VA is $590 million in set-aside for 
research. Of that, almost none of it is going to research in 
the wounds, maladies, and injuries of war.
    Mr. Buyer talked about science. Well, you do not get 
science, if you do not put out money for research in order to 
get the science. And nobody is putting out the research for 
Agent Orange, for Gulf War I, never mind other conditions, and 
that is what we need to do in that regard.
    And, last, but by no means least, has to do with the issue 
of transparency and partnership. And there was a lot of 
rhetoric about it, but the transparency at VA needs to go back 
to where it was prior to 2002, particularly at the Veterans 
Health Administration. They do too much stuff in secret. And, 
frankly, they screwed it up in secret because they did not 
consult with the veterans service organizations or the Hill 
properly before they headed off in the wrong direction.
    So that is part and parcel of listen to the individual 
veterans and to the individual veteran and military service 
organizations and Members of Congress and then they will start 
to let VA be VA and get it right, sir.
    [The prepared statement of Mr. Weidman appears on p. 91.]
    The Chairman. Thank you. Thank you for your eloquence and 
your succinctness.
    Mr. Sullivan.

                   STATEMENT OF PAUL SULLIVAN

    Mr. Sullivan. Mr. Chairman, thank you.
    In 30 seconds, Veterans for Common Sense urges Congress to 
require VA that they develop more accurate casualty estimates 
and implement a long-range strategic casualty plan.
    Right now VA is treating a half million Iraq and 
Afghanistan veterans. They have almost as many claims. This is 
far above any worst case scenario we could have predicted.
    For VA's 2012 budget, VA estimated less than 500,000 
patients. That is low. That is wrong. A more realistic estimate 
of cumulative patients treated by 2012 would be closer to 
800,000 new patients and claims from the two wars. And what is 
exacerbating that is the claims for PTSD and traumatic brain 
injury.
    And, finally, Mr. Chairman, you mentioned in your 
conversations with the Secretary about a Department of 
Revolution that got some giggles in the back of the room among 
us bald people.
    Disney set up Pixar and Mr. Cameron did Avatar. That is 
because they had new ideas and they thought outside of the box 
and they are very highly successful.
    Mr. Chairman, VBA's Veterans Benefits Management System, 
you are right, is nothing more than putting a brand new logo on 
a broken down, rundown car.
    In our view, we would ask that Congress fund a high 
priority task force independent of VA with one mission, 
overhaul VBA within 1 year and put them in a little box in a 
room somewhere and say here is the veteran, here is the check. 
Let us shorten the distance between the two and let us quit 
trying to improve on what we know is an absolutely totally 
broken model at VBA.
    [The oral and prepared statements of Mr. Sullivan appear on 
pp. 98 and 99.]
    The Chairman. Thank you, Mr. Sullivan.
    Mr. Rieckhoff.

                  STATEMENT OF PAUL RIECKHOFF

    Mr. Rieckhoff. Thank you, Mr. Chairman. Thank you to the 
Committee.
    I am from New York, so I will try to talk fast. We 
appreciate you having IAVA here to present our views. And we 
are an online-centric organization. So since I am cut for time, 
I would encourage you to go to our Web site, iava.org, where 
you can see my entire testimony.
    We are pleased to see the budget submission for 2011 and 
2012. It has all the right ingredients to transform VA and it 
is a message to our veterans that we really do have their back.
    Our number one priority is modernizing the benefits 
delivery. The VA benefits system must be brought into the 21st 
century. Right now our veterans are receiving benefits under a 
system that was outdated years before most of them were born.
    So facing this mountain of bureaucratic red tape and 
lengthy wait times, we join with the chorus of other veterans' 
groups in recommending that VA modernize their claims process 
system by digitizing records, holding processors accountable 
for the accuracy of the work, and by removing unnecessary steps 
in the evaluation process. It is cost effective. It will save 
the taxpayer money.
    But disability reform is our number one priority for 2010. 
And we will be here all next week with dozens of veterans from 
around the country for our annual Storm the Hill trip. We look 
forward to meeting with you and we strongly support this budget 
and appreciate your time. Check out the Web site.
    [The prepared statement of Mr. Rieckhoff appears on p. 94.]
    The Chairman. Thank you.
    I apologize for having you rush. You all have very 
important things to say and we will read the testimony. If you 
want to augment it as Mr. Robertson said, try to do it within 
the next 5 days so we can get the record complete.
    We thank all of you for your testimony and we must adjourn 
this meeting.
    [Whereupon, at 1:03 p.m., the Committee was adjourned.]



                            A P P E N D I X

                              ----------                              

            Prepared Statement of Hon. Bob Filner, Chairman,
                     Committee on Veterans' Affairs

    Welcome to the hearing on the Department of Veterans Affairs Budget 
Request for Fiscal Year 2011 and Fiscal Year 2012.
    The President has requested a budget for VA of $125 billion, 
including a total discretionary resource request of $60.3 billion. VA 
medical care represents 86 percent of the total discretionary request. 
For fiscal year 2011, the Administration is requesting $51.5 billion in 
resources for VA medical care. Appropriated resources for medical care 
for fiscal year 2011 have already been provided in last year's 
Consolidated Appropriations Act. This funding level is an increase of 
$4.1 billion, or 8.6 percent over fiscal year 2010 levels.
    In accordance with the Veterans Health Care Budget Reform and 
Transparency Act, enacted last year with the support of this 
Administration and the bipartisan support of this Congress, the VA has 
requested $50.6 billion in appropriated dollars and a total resource 
level of $54.3 billion, a $2.8 billion, or 5.3 percent increase over 
fiscal year 2011 levels. We understand this level is consistent with 
the VA's actuarial model.
    Rest assured that this Committee will be working closely with our 
counterparts in Congress and with the Administration as the process 
moves forward to ensure that veterans have the medical care resources 
they need when fiscal year 2012 begins on October 1, 2011.
    The veterans' groups that co-author The Independent Budget, who 
will be testifying on our second panel today, have recommended for 
fiscal year 2011, a total resource level for VA medical care of $52 
billion, and an overall discretionary funding level of $61.5 billion, 
$1.2 billion above the Administration's requested increase of $4.3 
billion. We are looking forward to their testimony and the testimony of 
The American Legion, VVA, IAVA, and Veterans for Common Sense which are 
on our third panel.
    Mr. Secretary, I am impressed by your robust budget request and 
your emphasis on funding many of the priorities of this Committee, 
including addressing the plague of homelessness, rural health care 
access, and the mental health care needs of our veterans. This budget 
addresses the problems faced by our newer veterans while not forgetting 
the sacrifices and service of veterans from previous conflicts.
    I note that you are requesting additional funding for more claims 
processors and I am looking forward to you providing this Committee 
with a roadmap on how we reform the claims process. More money and more 
FTE will not solve this broken process and it won't provide us with a 
system that is fair to veterans and efficient.
    We look forward to hearing about your successes this year, your 
frustrations, and how you plan to use the resources in this request to 
meet the needs of our veterans. We look forward to working with you to 
ensure that you have the money to do the job, and we look forward to 
working closely with you to assist you in your goal of creating a 21st 
Century VA.

                                 
                Prepared Statement of Hon. Corrine Brown

    Thank you, Mr. Chairman, for calling this hearing today. This will 
allow the Secretary to testify in support of his budget request for the 
2011 and 2012 fiscal years.
    Thank you, Mr. Secretary, for your decades of service defending the 
freedom of this Nation. Thank you for your commitment to the veterans 
who also served this Nation.
    I am pleased with the budget you have submitted earlier this week.
    Over the last few years, this Congress, and especially Chairman 
Filner has overseen the largest funding increase in the history of the 
VA.
    That being said, I am pleased with the current increase in funding 
for health care and other priorities.
    I applaud that you plan to bring more Priority 8 veterans back into 
the fold. These men and women have, by serving their country, paid 
their dues and earned their right to health care from the VA. However, 
maybe you could speed the timeline up further than just the 99,000 you 
estimate would additionally use the VA next year.
    I am concerned about the increase in the wait times veterans are 
being subjected to, and I look forward to hearing how you plan on 
reducing the time our veterans have to wait for appointments.
    I am pleased that so many contracts are being signed for the new VA 
Medical Center in Orlando. The VAMC should be fully funded and I want 
to hear about it ahead of time if the numbers are not matching up. We 
will fix it, if we know.
    I believe the words of the first President of the United States, 
George Washington, are also worth repeating at this time:
    ``The willingness with which our young people are likely to serve 
in any war, no matter how justified, shall be directly proportional as 
to how they perceive the veterans of earlier wars were treated and 
appreciated by their country.''

                                 
              Prepared Statement of Hon. Harry E. Mitchell

    Thank you Chairman Filner, and thanks to Secretary Shinseki and the 
Veterans Service Organizations (VSOs) for coming to participate in the 
hearing today.
    Among the many important issues that this Congress and 
Administration must address in the 111th Congress, I wish to highlight 
two today.
    First, I believe we need to do more to prevent veteran's suicide.
    As we all know, many of our newest generation of veterans, as well 
as those who served previously, bear wounds that cannot be seen and are 
hard to diagnose.
    Proactively bringing the VA to our veterans, as opposed to waiting 
for veterans to find the VA, is a critical part of delivering the care 
they have earned in exchange for their brave service.
    At my behest, Secretary Peake overturned VA's self-imposed ban on 
television advertising as a method of outreach. Since then, the VA 
rolled out a public service announcement and outreach campaign to 
inform veterans and their families about the suicide prevention 
hotline.
    What began as a limited DC area pilot program has been expanded 
nationally, and it has been effective. Since its inception in July of 
2007, nearly 225,000 calls were received from veterans. And the hotline 
has been credited with saving 7,000 lives.
    While I applaud the VA and Secretary Shinseki for expanding and 
extending outreach, I believe we need to do more. We need to expand and 
extend outreach efforts, including the use of twitter, facebook and new 
media, to let veterans know where they can get help.
    Additionally, I believe the VA needs to aggressively reduce the 
claims backlog. The VA must deliver these earned benefits in a timely 
manner.
    As many have noted, there is a backlog of disability claims that 
stretches hundreds of thousands of veterans long. I am pleased that the 
Administration has requested funding for more than 4,000 new claims 
processors in their FY 2011 request. However, I believe that the VA 
needs more than additional manpower to reduce the backlog.
    The VA needs a long-term strategy and plan.
    Doing so, I believe will provide better services to our veterans 
and increase their morale and confidence in the VA.
    Finally, I want to say that I am encouraged by Secretary Shinseki's 
commitment to reform the VA, and I look forward to working with him, 
with my colleagues in Congress, to bring the VA and its services to our 
veterans in an effective and efficient manner.
    Thank you again to all of our witnesses. I look forward to hearing 
your perspective on the budget outlook for the VA in the coming fiscal 
year.

                                 
                Prepared Statement of Hon. John Boozman

    Thank you Mr. Chairman. I would agree with the remarks made by the 
Ranking Member. This is certainly a generous budget considering the 
economic crisis facing the Nation.
    Mr. Secretary, I have one major budget concern and that is how VA 
proposes to allocate the over 4,000 new VBA employees among the various 
business lines. I believe that adding 3,919 FTE to C&P while cutting 9 
employees from the Voc Rehab Service needs to be rethought.
    The budget documents show a 10 percent increase in the total VR&E 
caseload so cutting counseling staffs when more resources are needed to 
bring the average caseload down does not reflect a focus on 
rehabilitating disabled veterans.
    I hope you will revisit this staffing issue and consider shifting 
some of the new staffing resources to increase the VR&E staffing to 
reduce the average caseload to not more than 100.
    I yield back.

                                 
        Prepared Statement of Hon. Eric K. Shinseki, Secretary,
                  U.S. Department of Veterans Affairs
    Chairman Filner, Ranking Member Buyer, Distinguished Members of the 
House Committee on Veterans' Affairs:
    Thank you for this opportunity to present the President's Fiscal 
Year 2011 Budget and Fiscal Year 2012 Advance Appropriations Request 
for the Department of Veterans Affairs (VA). Our budget provides the 
resources necessary to continue our aggressive pursuit of the 
President's two overarching goals for the Department--to transform VA 
into a 21st Century organization and to ensure that we provide timely 
access to benefits and high quality care to our veterans over their 
lifetimes, from the day they first take their oaths of allegiance until 
the day they are laid to rest.
    We recently completed development of a new strategic framework that 
is people-centric, results-driven, and forward-looking. The path we 
will follow to achieve the President's vision for VA will be presented 
in our new strategic plan, which is currently in the final stages of 
review. The strategic goals we have established in our plan are 
designed to produce better outcomes for all generations of veterans:

      Improve the quality and accessibility of health care, 
benefits, and memorial services while optimizing value;
      Increase veteran client satisfaction with health, 
education, training, counseling, financial, and burial benefits and 
services;
      Protect people and assets continuously and in time of 
crisis; and,
      Improve internal customer satisfaction with management 
systems and support services to achieve mission performance and make VA 
an employer of choice by investing in human capital.

    The strategies in our plan will guide our workforce to ensure we 
remain focused on producing the outcomes veterans expect and have 
earned through their service to our country.
    To support VA's efforts, the President's budget provides $125 
billion in 2011--almost $60.3 billion in discretionary resources and 
nearly $64.7 billion in mandatory funding. Our discretionary budget 
request represents an increase of $4.3 billion, or 7.6 percent, over 
the 2010 enacted level.
    VA's 2011 budget also focuses on three concerns that are of 
critical importance to our veterans--easier access to benefits and 
services; reducing the disability claims backlog and the time veterans 
wait before receiving earned benefits; and ending the downward spiral 
that results in veterans' homelessness.
    This budget provides the resources required to enhance access in 
our health care system and our national cemeteries. We will expand 
access to health care through the activations of new or improved 
facilities, by expanding health care eligibility to more veterans, and 
by making greater investments in telehealth. Access to our national 
cemeteries will be increased through the implementation of new policy 
for the establishment of additional facilities.
    We are requesting an unprecedented increase for staffing in the 
Veterans Benefits Administration (VBA) to address the dramatic increase 
in disability claim receipts while continuing our process-reengineering 
efforts, our development of a paperless claims processing system, and 
the creation of a Virtual Lifetime Electronic Record.
    We are also requesting a substantial investment for our 
homelessness programs as part of our plan to ultimately eliminate 
veterans' homelessness through an aggressive approach that includes 
housing, education, jobs, and health care.
    VA will be successful in resolving these three concerns by 
maintaining a clear focus on developing innovative business processes 
and delivery systems that will not only serve veterans and their 
families for many years to come, but will also dramatically improve the 
efficiency of our operations by better controlling long-term costs. By 
making appropriate investments today, we can ensure higher value and 
better outcomes for our veterans. The 2011 budget also supports many 
key investments in VA's six high priority performance goals (HPPGs).
                  HPPG I: Reducing the Claims Backlog
    The volume of compensation and pension rating-related claims has 
been steadily increasing. In 2009, for the first time, we received over 
one million claims during the course of a single year. The volume of 
claims received has increased from 578,773 in 2000 to 1,013,712 in 2009 
(a 75 percent increase). Original disability compensation claims with 
eight or more claimed issues have increased from 22,776 in 2001 to 
67,175 in 2009 (nearly a 200 percent increase). Not only is VA 
receiving substantially more claims, but the claims have also increased 
in complexity. We expect this level of growth in the number of claims 
received to continue in 2010 and 2011 (increases of 13 percent and 11 
percent were projected respectively even without claims expected under 
new presumptions related to Agent Orange exposure), which is driven by 
improved access to benefits through initiatives such as the Benefits 
Delivery at Discharge Program, increased demand as a result of nearly 
10 years of war, and the impact of a difficult economy prompting 
America's Veterans to pursue access to the benefits they earned during 
their military service.
    While the volume and complexity of claims has increased, so too has 
the productivity of our claims processing workforce. In 2009, the 
number of claims processed was 977,219, an increase of 8.6 percent over 
the 2008 level of 899,863. The average time to process a rating-related 
claim fell from 179 to 161 days in 2009, an improvement of 11 percent.
    The progress made in 2009 is a step in the right direction, but it 
is not nearly enough. My goal for VA is an average time to process a 
claim of no more than 125 days. Reaching this goal will become even 
more challenging because of additional claims we expect to receive 
related to veterans' exposure to Agent Orange. Adding Parkinson's 
disease, ischemic heart disease, and B-cell leukemias to the list of 
presumptive disabilities is projected to significantly increase claims 
inventories in the near term, even while we make fundamental 
improvements to the way we process disability compensation claims.
    We expect the number of compensation and pension claims received to 
increase from 1,013,712 in 2009 to 1,318,753 in 2011 (a 30 percent 
increase). Without the significant investment requested for staffing in 
this budget, the inventory of claims pending would grow from 416,335 to 
1,018,343 and the average time to process a claim would increase from 
161 to 250 days. If Congress provides the funding requested in our 
budget, these increases are projected to be 804,460 claims pending with 
an average processing time of 190 days. Through 2011, we expect over 
228,000 claims related to the new presumptions and are dedicated to 
processing this near-term surge in claims as efficiently as possible.
    This budget is based on our plan to improve claims processing by 
using a three-pronged approach involving improved business processes, 
expanded technology, and hiring staff to bridge the gap until we fully 
implement our long-range plan. We will explore process and policy 
simplification and contracted service support in addition to the 
traditional approach of hiring new employees to address this spike in 
demand. We expect these transformational approaches to begin yielding 
significant performance improvements in fiscal year 2012 and beyond; 
however, it is important to mitigate the impact of the increased 
workload until that time.
    The largest increase in our 2011 budget request, in percentage 
terms, is directed to the Veterans Benefits Administration as part of 
our mitigation of the increased workload. The President's 2011 budget 
request for VBA is $2.149 billion, an increase of $460 million, or 27 
percent, over the 2010 enacted level of $1.689 billion. The 2011 budget 
supports an increase of 4,048 FTEs, including maintaining temporary FTE 
funded through ARRA. In addition, the budget also includes $145.3 
million in information technology (IT) funds in 2011 to support the 
ongoing development of a paperless claims processing system.
               HPPG II: Eliminating Veteran Homelessness
    Our Nation's veterans experience higher than average rates of 
homelessness, depression, substance abuse, and suicides; many also 
suffer from joblessness. On any given night, there are about 131,000 
veterans who live on the streets, representing every war and 
generation, including those who served in Iraq and Afghanistan. VA's 
major homeless-specific programs constitute the largest integrated 
network of homeless treatment and assistance services in the country. 
These programs provide a continuum of care for homeless veterans, 
providing treatment, rehabilitation, and supportive services that 
assist homeless veterans in addressing health, mental health and 
psychosocial issues. VA also offers a full range of support necessary 
to end the cycle of homelessness by providing education, jobs, and 
health care, in addition to safe housing. We will increase the number 
and variety of housing options available to homeless veterans and those 
at risk of homelessness with permanent, transitional, contracted, 
community-operated, HUD-VASH provided, and VA-operated housing.
    Homelessness is primarily a health care issue, heavily burdened 
with depression and substance abuse. VA's budget includes $4.2 billion 
in 2011 to prevent and reduce homelessness among veterans--over $3.4 
billion for core medical services and $799 million for specific 
homeless programs and expanded medical programs. Our budget includes an 
additional investment of $294 million in programs and new initiatives 
to reduce the cycle of homelessness, which is almost 55 percent higher 
than the resources provided for homelessness programs in 2010.
    VA's health care costs for homeless veterans can drop in the future 
as the Department emphasizes education, jobs, and prevention and 
treatment programs that can result in greater residential stability, 
gainful employment, and improved health status.
            HPPG III: Automating the GI Bill Benefits System
    The Post-9/11 GI Bill creates a robust enhancement of VA's 
education benefits, evoking the World War II Era GI Bill. Because of 
the significant opportunities the Act provides to veterans in 
recognition of their service, and the value of the program in the 
current economic environment, we must deliver the benefits in this Act 
effectively and efficiently, and with a client-centered approach. In 
August 2009, the new Post-9/11 GI Bill program was launched. We 
received more than 397,000 original and 219,000 supplemental 
applications since the inception of this program.
    The 2011 budget provides $44.1 million to complete the automated 
solution for processing Post-9/11 GI Bill claims and to begin the 
development and implementation of electronic systems to process claims 
associated with other education programs. The automated solution for 
the Post-9/11 GI Bill education program will be implemented by December 
2010.
    In 2011, we expect the total number of all types of education 
claims to grow by 32.3 percent over 2009, from 1.70 million to 2.25 
million. To meet this increasing workload and complete education claims 
in a timely manner, VA has established a comprehensive strategy to 
develop an end-to-end solution that utilizes rules-based, industry-
standard technologies to modernize the delivery of education benefits.
       HPPG IV: Establishing a Virtual Lifetime Electronic Record
    Each year, more than 150,000 active and reserve component 
servicemembers leave the military. Currently, this transition is 
heavily reliant on the transfer of paper-based administrative and 
medical records from the Department of Defense (DoD) to the veteran, 
the VA or other non-VA health care providers. A paper-based transfer 
carries risks of errors or oversights and delays the claim process.
    In April 2009, the President charged me and Defense Secretary Gates 
with building a fully interoperable electronic records system that will 
provide each member of our armed forces a Virtual Lifetime Electronic 
Record (VLER). This virtual record will enhance the timely delivery of 
high-quality benefits and services by capturing key information from 
the day they put on the uniform, through their time as veterans, until 
the day they are laid to rest. The VLER is the centerpiece of our 
strategy to better coordinate the user-friendly transition of 
servicemembers from their service component into VA, and to produce 
better, more timely outcomes for veterans in providing their benefits 
and services.
    In December 2009, VA successfully exchanged electronic health 
record (EHR) information in a pilot program between the VA Medical 
Center in San Diego and a local Kaiser Permanente hospital. We 
exchanged EHR information using the Nationwide Health Information 
Network (NHIN) created by the Department of Health and Human Services. 
Interoperability is key to sharing critical health information. 
Utilizing the NHIN standards allows VA to partner with private sector 
health care providers and other Federal agencies to promote better, 
faster, and safer care for veterans. During the second quarter of 2010, 
the DoD will join this pilot and we will announce additional VLER 
health community sites.
    VA has $52 million in IT funds in 2011 to continue the development 
and implementation of this Presidential priority.
                  HPPG V: Improving Mental Health Care
    The 2011 budget continues the Department's keen focus on improving 
the quality, access, and value of mental health care provided to 
veterans. VA's budget provides over $5.2 billion for mental health, an 
increase of $410 million, or 8.5 percent, over the 2010 enacted level. 
We will expand inpatient, residential, and outpatient mental health 
programs with an emphasis on integrating mental health services with 
primary and specialty care.
    Post-Traumatic Stress Disorder (PTSD) is the mental health 
condition most commonly associated with combat, and treating veterans 
who suffer from this debilitating disorder is central to VA's mission. 
Screening for PTSD is the first and most essential step. It is crucial 
that VA be proactive in identifying PTSD and intervening early in order 
to prevent chronic problems that could lead to more complex disorders 
and functional problems.
    VA will also expand its screening program for other mental health 
conditions, most notably traumatic brain injury (TBI), depression, and 
substance use disorders. We will enhance our suicide prevention 
advertising campaign to raise awareness among veterans and their 
families of the services available to them.
    More than one-fifth of the veterans seen last year had a mental 
health diagnosis. In order to address this challenge, VA has 
significantly invested in our mental health workforce, hiring more than 
6,000 new workers since 2005.
    In October 2009, VA and DoD held a mental health summit with mental 
health experts from both departments, and representatives from Congress 
and more than 57 non-government organizations. We convened the summit 
to discuss an innovative, wide-ranging public health model for 
enhancing mental health for returning servicemembers, veterans, and 
their families. VA will use the results to devise new innovative 
strategies for improving the health and quality of life for veterans 
suffering from mental health problems.
      HPPG VI: Deploying a Veterans Relationship Management System
    A key component of VA's transformation is to employ technology to 
dramatically improve service and outreach to veterans by adopting a 
comprehensive Veterans' Relationship Management System to serve as the 
primary interface between veterans and the Department. This system will 
include a framework that provides veterans with the ability to:

      Access VA through multiple methods;
      Uniformly find information about VA's benefits and 
services;
      Complete multiple business processes within VA without 
having to re-enter identifying information; and,
      Seamlessly access VA across multiple lines of business.

    This system will allow veterans to access comprehensive online 
information anytime and anywhere via a single consistent entry point. 
Our goal is to deploy the Veterans Relationship Management System in 
2011. Our budget provides $51.6 million for this project.
    In addition to resources supporting these high-priority performance 
goals, the President's budget enhances and improves services across the 
full spectrum of the Department. The following highlights funding 
requirements for selected programs along with the outcomes we will 
achieve for veterans and their families.
                  Delivering World-Class Medical Care
    The Budget provides $51.5 billion for medical care in 2011, an 
increase of $4 billion, or 8.5 percent, over the 2010 level. This level 
will allow us to continue providing timely, high-quality care to all 
enrolled veterans. Our total medical care level is comprised of funding 
for medical services ($37.1 billion), medical support and compliance 
($5.3 billion), medical facilities ($5.7 billion), and resources from 
medical care collections ($3.4 billion). In addition to reducing the 
number of homeless veterans and expanding access to mental health care, 
our 2011 budget will also achieve numerous other outcomes that improve 
veterans' quality of life, including:

      Providing extended care and rural health services in 
clinically appropriate settings;
      Expanding the use of home telehealth;
      Enhancing access to health care services by offering 
enrollment to more Priority Group 8 veterans and activating new 
facilities; and,
      Meeting the medical needs of women veterans.

    During 2011, we expect to treat nearly 6.1 million unique patients, 
a 2.9 percent increase over 2010. Among this total are over 439,000 
veterans who served in Operation Enduring Freedom and Operation Iraqi 
Freedom, an increase of almost 57,000 (or 14.8 percent) above the 
number of veterans from these two campaigns that we anticipate will 
come to VA for health care in 2010.
    In 2011, the budget provides $2.6 billion to meet the health care 
needs of veterans who served in Iraq and Afghanistan. This is an 
increase of $597 million (or 30.2 percent) over our medical resource 
requirements to care for these veterans in 2010. This increase also 
reflects the impact of the recent decision to increase troop size in 
Afghanistan. The treatment of this newest generation of veterans has 
allowed us to focus on, and improve treatment for, PTSD as well as TBI, 
including new programs to reach veterans at the earliest stages of 
these conditions.
    The FY 2011 Budget also includes funding for new patients resulting 
from the recent decision to add Parkinson's disease, ischemic heart 
disease, and B-cell leukemias to the list of presumptive conditions for 
veterans with service in Vietnam.
Extended Care and Rural Health
    VA's budget for 2011 contains $6.8 billion for long-term care, an 
increase of 858.8 million (or 14.4 percent) over the 2010 level. In 
addition, $1.5 billion is included for non-institutional long-term 
care, an increase of $276 million (or 22.9 percent) over 2010. By 
enhancing veterans' access to non-institutional long-term care, VA can 
provide extended care services to veterans in a more clinically 
appropriate setting, closer to where they live, and in the comfort and 
familiar settings of their homes.
    VA's 2011 budget also includes $250 million to continue 
strengthening access to health care for 3.2 million enrolled veterans 
living in rural and highly rural areas through a variety of avenues. 
These include new rural health outreach and delivery initiatives and 
expanded use of home-based primary care, mental health, and telehealth 
services. VA intends to expand use of cutting edge telehealth 
technology to broaden access to care while at the same time improve the 
quality of our health care services.
Home Telehealth
    Our increasing reliance on non-institutional long-term care 
includes an investment in 2011 of $163 million in home telehealth. 
Taking greater advantage of the latest technological advancements in 
health care delivery will allow us to more closely monitor the health 
status of veterans and will greatly improve access to care for veterans 
in rural and highly rural areas. Telehealth will place specialized 
health care professionals in direct contact with patients using modern 
IT tools. VA's home telehealth program cares for 35,000 patients and is 
the largest of its kind in the world. A recent study found patients 
enrolled in home telehealth programs experienced a 25 percent reduction 
in the average number of days hospitalized and a 19 percent reduction 
in hospitalizations. Telehealth and telemedicine improve health care by 
increasing access, eliminating travel, reducing costs, and producing 
better patient outcomes.
Expanding Access to Health Care
    In 2009 VA opened enrollment to Priority 8 veterans whose incomes 
exceed last year's geographic and VA means-test thresholds by no more 
than 10 percent. Our most recent estimate is that 193,000 more veterans 
will enroll for care by the end of 2010 due to this policy change.
    In 2011 VA will further expand health care eligibility for Priority 
8 veterans to those whose incomes exceed the geographic and VA means-
test thresholds by no more than 15 percent compared to the levels in 
effect prior to expanding enrollment in 2009. This additional expansion 
of eligibility for care will result in an estimated 99,000 more 
enrollees in 2011 alone, bringing the total number of new enrollees 
from 2009 to the end of 2011 to 292,000.
Meeting the Medical Needs of Women Veterans
    The 2011 budget provides $217.6 million to meet the gender-specific 
health care needs of women veterans, an increase of $18.6 million (or 
9.4 percent) over the 2010 level. The delivery of enhanced primary care 
for women veterans remains one of the Department's top priorities. The 
number of women veterans is growing rapidly and women are increasingly 
reliant upon VA for their health care.
    Our investment in health care for women veterans will lead to 
higher quality of care, increased coordination of care, enhanced 
privacy and dignity, and a greater sense of security among our women 
patients. We will accomplish this through expanding health care 
services provided in our Vet Centers, increasing training for our 
health care providers to advance their knowledge and understanding of 
women's health issues, and implementing a peer call center and social 
networking site for women combat veterans. This call center will be 
open 24 hours a day, 7 days a week.
            Advance Appropriations for Medical Care in 2012
    VA is requesting advance appropriations in 2012 of $50.6 billion 
for the three medical care appropriations to support the health care 
needs of 6.2 million patients. The total is comprised of $39.6 billion 
for Medical Services, $5.5 billion for Medical Support and Compliance, 
and $5.4 billion for Medical Facilities. In addition, $3.7 billion is 
estimated in medical care collections, resulting in a total resource 
level of $54.3 billion. It does not include additional resources for 
any new initiatives that would begin in 2012.
    Our 2012 advance appropriations request is based largely on our 
actuarial model using 2008 data as the base year. The request continues 
funding for programs that we will continue in 2012 but which are not 
accounted for in the actuarial model. These initiatives address 
homelessness and expanded access to non-institutional long-term care 
and rural health care services through telehealth. In addition, the 
2012 advance appropriations request includes resources for several 
programs not captured by the actuarial model, including long-term care, 
the Civilian Health and Medical Program of the Department of Veterans 
Affairs, Vet Centers, and the state home per diem program. Overall, the 
2012 requested level, based on the information available at this point 
in time, is sufficient to enable us to provide timely and high-quality 
care for the estimated patient population. We will continue to monitor 
cost and workload data throughout the year and, if needed, we will 
revise our request during the normal 2012 budget cycle.
    After a cumulative increase of 26.4 percent in the medical care 
budget since 2009, we will be working to reduce the rate of increase in 
the cost of the provision of health care by focusing on areas such as 
better leveraging acquisitions and contracting, enhancing use of 
referral agreements, strengthening DoD/VA joint ventures, and expanding 
applications of medical technology (e.g. telehome health).
                    Investments in Medical Research
    VA's budget request for 2011 includes $590 million for medical and 
prosthetic research, an increase of $9 million over the 2010 level. 
These research funds will help VA sustain its long track record of 
success in conducting research projects that lead to clinically useful 
interventions that improve the health and quality of life for veterans 
as well as the general population.
    This budget contains funds to continue our aggressive research 
program aimed at improving the lives of veterans returning from service 
in Iraq and Afghanistan. This focuses on prevention, treatment, and 
rehabilitation research, including TBI and polytrauma, burn injury 
research, pain research, and post-deployment mental health research.
          Sustaining High Quality Burial and Memorial Programs
    VA remains steadfastly committed to providing access to a dignified 
and respectful burial for veterans choosing to be buried in a VA 
national cemetery. This promise to veterans and their families also 
requires that we maintain national cemeteries as shrines dedicated to 
the memory of those who honorably served this Nation in uniform. This 
budget implements new policy to expand access by lowering the veteran 
population threshold for establishing new national cemeteries and 
developing additional columbaria to better serve large urban areas.
    VA expects to perform 114,300 interments in 2011 or 3.8 percent 
more than in 2010. The number of developed acres (8,441) that must be 
maintained in 2011 is 4.6 percent greater than the 2010 estimate, while 
the number of gravesites (3,147,000) that will be maintained is 2.6 
percent higher. VA will also process more than 617,000 Presidential 
Memorial Certificates in recognition of veterans' honorable military 
service.
    Our 2011 budget request includes $251 million in operations and 
maintenance funding for the National Cemetery Administration. The 2011 
budget request provides $36.9 million for national shrine projects to 
raise, realign, and clean an estimated 668,000 headstones and markers, 
and repair 100,000 sunken graves. This is critical to maintaining our 
extremely high client satisfaction scores that set the national 
standard of excellence in government and private sector services as 
measured by the American Customer Satisfaction Index. The share of our 
clients who rate the quality of the memorial services we provide as 
excellent will rise to 98 percent in 2011. The proportion of clients 
who rate the appearance of our national cemeteries as excellent will 
grow to 99 percent. And we will mark 95 percent of graves within 60 
days of interment.
    The 2011 budget includes $3 million for solar and wind power 
projects at three cemeteries to make greater use of renewable energy 
and to improve the efficiency of our program operations. It also 
provides $1.25 million to conduct independent Facility Condition 
Assessments at national cemeteries and $2 million for projects to 
correct safety and other deficiencies identified in those assessments.
                   Leveraging Information Technology
    We cannot achieve the transformation of VA into a 21st Century 
organization capable of meeting veterans' needs today and in the years 
to come without leveraging the power of IT. The Department's IT program 
is absolutely integral to everything we do, and it is vital we continue 
the development of IT systems that will meet new service delivery 
demands and modernize or replace increasingly fragile systems that are 
no longer adequate in today's health care and benefits delivery 
environment. Simply put, IT is indispensable to achieving VA's mission.
    The Department's IT operations and maintenance program supports 
334,000 users, including VA employees, contractors, volunteers, and 
researchers situated in 1,400 health care facilities, 57 regional 
offices, and 158 national cemeteries around the country. Our IT program 
protects and maintains 8.5 million vital health and benefits records 
for veterans with the level of privacy and security mandated by both 
statutes and directives.
    VA's 2011 budget provides $3.3 billion for IT, the same level of 
funding provided in 2010. We have prioritized potential IT projects to 
ensure that the most mission-critical projects for improving service to 
veterans are funded. For example, the resources we are requesting will 
fund the development and implementation of an automated solution for 
processing education claims ($44.1 million), the Financial and 
Logistics Integrated Technology Enterprise project to replace our 
outdated, non-compliant core accounting system ($120.2 million), 
development and deployment of the paperless claims processing system 
($145.3 million), and continued development of HealtheVet, VA's 
electronic health record system ($346.2 million). In addition, the 2011 
budget request includes $52 million for the advancement of the Virtual 
Lifetime Electronic Record, a Presidential priority that involves our 
close collaboration with DoD.
                Enhancing Our Management Infrastructure
    A critical component of our transformation is to create a reliable 
management infrastructure that expands or enhances corporate 
transparency at VA, centralizes leadership and decentralizes execution, 
and invests in leadership training. This includes increasing investment 
in training and career development for our career civil service and 
employing a suitable financial management system to track expenditures. 
The Department's 2011 budget provides $463 million in General 
Administration to support these vital corporate management activities. 
This includes $23.6 million in support of the President's initiative to 
strengthen the acquisition workforce.
    We will place particular emphasis on increasing our investment in 
training and career development--helping to ensure that VA's workforce 
remain leaders and standard-setters in their fields, skilled, 
motivated, and client-oriented. Training and development (including a 
leadership development program), communications and team building, and 
continuous learning will all be components of reaching this objective.
                         Capital Infrastructure
    VA must provide timely, high-quality health care in medical 
infrastructure which is, on average, over 60 years old. In the 2011 
budget, we are requesting $1.6 billion to invest in our major and minor 
construction programs to accomplish projects that are crucial to right 
sizing and modernizing VA's health care infrastructure, providing 
greater access to benefits and services for more veterans, closer to 
where they live, and adequately addressing patient safety and other 
critical facility deficiencies.
Major Construction
    The 2011 budget request for VA major construction is $1.151 
billion. This includes funding for five medical facility projects in 
New Orleans, Louisiana; Denver, Colorado; Palo Alto and Alameda, 
California; and Omaha, Nebraska.
    This request provides $106.9 million to support the Department's 
burial program, including gravesite expansion and cemetery improvement 
projects at three national cemeteries--Indiantown Gap, Pennsylvania; 
Los Angeles, California; and Tahoma, Washington.
    Our major construction request includes $51.4 million to begin 
implementation of a new policy to expand and improve access to burial 
in a national cemetery. Most significantly, this new policy lowers the 
veteran population threshold to build a new national cemetery from 
170,000 to 80,000 veterans living within 75 miles of a cemetery. This 
will provide access to about 500,000 additional veterans. Moreover, it 
will increase our strategic target for the percent of veterans served 
by a burial option in a national or state veterans cemetery within 75 
miles of their residence from 90 percent to 94 percent.
    VA's major construction request also includes $24 million for 
resident engineers that support medical facility and national cemetery 
projects. This represents a new source of funding for the resident 
engineer program, which was previously funded under General Operating 
Expenses.
Minor Construction
    The $467.7 million request for 2011 for minor construction is an 
integral component of our overall capital program. In support of the 
medical care and medical research programs, minor construction funds 
permit VA to realign critical services; make seismic corrections; 
improve patient safety; enhance access to health care; increase 
capacity for dental care; enhance patient privacy; improve treatment of 
special emphasis programs; and expand our research capability. Minor 
construction funds are also used to improve the appearance of our 
national cemeteries. Further, minor construction resources will be used 
to comply with energy efficiency and sustainability design 
requirements.
                                Summary
    Our job at the VA is to serve veterans by increasing their access 
to VA benefits and services, to provide them the highest quality of 
health care available, and to control costs to the best of our ability. 
Doing so will make VA a model of good governance. The resources 
provided in the 2011 President's budget will permit us to fulfill our 
obligation to those who have bravely served our country.
    The 298,000 employees of the VA are committed to providing the 
quality of service needed to serve our veterans and their families. 
They are our most valuable resource. I am especially proud of several 
VA employees that have been singled out for special recognition this 
year.
    First, let me recognize Dr. Janet Kemp, who received the ``2009 
Federal Employee of the Year'' award from the Partnership for Public 
Service. Under Dr. Kemp's leadership, VA created the Veterans National 
Suicide Prevention Hotline to help veterans in crisis. To date, the 
Hotline has received almost 225,000 calls and rescued about 6,800 
people judged to be at imminent risk of suicide since its inception.
    Second, we are also very proud of Nancy Fichtner, an employee at 
the Grand Junction Colorado Medical Center, for being the winner of the 
President's first-ever SAVE (Securing Americans Value and Efficiency) 
award. Ms. Fichtner's winning idea is for veterans leaving VA hospitals 
to be able to take medication they have been using home with them 
instead of it being discarded upon discharge.
    And thirdly, we are proud of the VA employees at our Albuquerque, 
New Mexico Clinical Research Pharmacy Coordinating Center, including 
the Center Director, Mike R. Sather, for excellence in supporting 
clinical trials targeting current veteran health issues. Their 
exceptional and important work garnered the center's recognition as the 
2009 Malcolm Baldrige National Quality Award Recipient in the nonprofit 
category.
    The VA is fortunate to have public servants that are not only 
creative thinkers, but also able to put good ideas into practice. With 
such a workforce, and the continuing support of Congress, I am 
confident we can achieve our shared goal of accessible, high-quality 
and timely care and benefits for veterans.

                                 
         Prepared Statement of Carl Blake, National Legislative
                Director, Paralyzed Veterans of America
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee, as one of the four co-authors of The Independent Budget 
(IB), Paralyzed Veterans of America (PVA) is pleased to present the 
views of The Independent Budget regarding the funding requirements for 
the Department of Veterans Affairs (VA) health care system for FY 2011.
    When looking back on 2009, it is fair to say that the 111th 
Congress took an historic step toward providing sufficient, timely, and 
predictable funding, and yet it still failed to complete its 
appropriations work prior to the start of the new fiscal year on 
October 1. The actions of Congress last year generally reflected a 
commitment to maintain a viable VA health care system. More important, 
Congress showed real interest in reforming the budget process to ensure 
that the VA knows exactly how much funding it will receive in advance 
of the start of the new fiscal year.
    As you know, for more than a decade, the Partnership for Veterans 
Health Care Budget Reform (hereinafter ``Partnership''), made up of 
nine veterans service organizations, including the four co-authors of 
The Independent Budget, advocated for reform in the VA health care 
budget formulation process. By working with the leadership of the House 
and Senate Committees on Veterans' Affairs, the Military Construction 
and Veterans Affairs Appropriations Subcommittees, and key members of 
both parties, we were able to move advance appropriations legislation 
forward. Congress ultimately approved and the President signed into law 
P.L. 111-81, the ``Veterans Health Care Budget Reform and Transparency 
Act.'' A review of recent budget cycles made it evident that even when 
there was strong support for providing sufficient funding for veterans 
medical care programs, the systemic flaws in the budget and 
appropriations process continued to hamper access to and threaten the 
quality of the VA health care system. Now, with enactment of advance 
appropriations the VA can properly plan to meet the health care needs 
of the men and women who have served this Nation in uniform.
    In February 2009, the President released a preliminary budget 
submission for the Department of Veterans Affairs for FY 2010. This 
submission only projected funding levels for the overall VA budget. The 
Administration recommended an overall funding authority of $55.9 
billion for the VA, approximately $5.8 billion above the FY 2009 
appropriated level and nearly $1.3 billion more than The Independent 
Budget had recommended.
    In May, the Administration released its detailed budget blueprint 
that included approximately $47.4 billion for medical care programs, an 
increase of $4.4 billion over the FY 2009 appropriated level and 
approximately $800 million more than the recommendations of The 
Independent Budget. The budget also included $580 million in funding 
for Medical and Prosthetic Research, an increase of $70 million over 
the FY 2009 appropriated level. By the end of the year, Congress 
enacted P.L. 111-117, the ``Consolidated Appropriations Act for FY 
2010,'' that provided funding for the VA to virtually match the 
recommendations of the Administration. While the importance of these 
historic funding levels coupled with the enactment of advance 
appropriations legislation cannot be overstated, it is important for 
Congress and the Administration to continue this commitment to the men 
and women who have served and sacrificed for this country.
Funding for FY 2011
    Despite the fact that Congress has already provided advance 
appropriations for FY 2011, The Independent Budget has chosen to still 
present budget recommendations for the medical care accounts 
specifically for FY 2011. Included in P.L 111-117 was advance 
appropriations for FY 2011. Congress provided approximately $48.2 
billion in discretionary funding for VA medical care. When combined 
with the $3.3 billion Administration projection for medical care 
collections in 2010, the total available operating budget provided by 
the appropriations bill is approximately $51.5 billion. Accordingly for 
FY 2011, The Independent Budget recommends approximately $52.0 billion 
for total medical care, an increase of $4.5 billion over the FY 2010 
operating budget level established by P.L. 111-117, the ``Consolidated 
Appropriations Act for FY 2010.'' We believe that this estimation 
validates the advance projections that the Administration developed 
last year and has carried forward into this year. Furthermore, we 
remain confident that the Administration is headed in a positive 
direction that will ultimately benefit the veterans who rely on the VA 
health care system to receive their care.
    The medical care appropriation includes three separate accounts--
Medical Services, Medical Support and Compliance, and Medical 
Facilities--that comprise the total VA health care funding level. For 
FY 2011, The Independent Budget recommends approximately $40.9 billion 
for Medical Services. Our Medical Services recommendation includes the 
following recommendations:

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

------------------------------------------------------------------------
Current Services Estimate                                $38,988,080,000
------------------------------------------------------------------------
Increase in Patient Workload                              $1,302,874,000
------------------------------------------------------------------------
Policy Initiatives                                          $650,000,000
------------------------------------------------------------------------
Total FY 2011 Medical Services                           $40,940,954,000
------------------------------------------------------------------------

    Our growth in patient workload is based on a projected increase of 
approximately 117,000 new unique patients--Priority Group 1-8 veterans 
and covered non-veterans. We estimate the cost of these new unique 
patients to be approximately $926 million. The increase in patient 
workload also includes a projected increase of 75,000 new Operation 
Enduring Freedom and Operation Iraqi Freedom (OEF/OIF) veterans at a 
cost of approximately $252 million.
    Finally, our increase in workload includes the projected enrollment 
of new Priority Group 8 veterans who will use the VA health care system 
as a result of the Administration's plan to incrementally increase the 
enrollment of Priority Group 8 veterans by 500,000 enrollments by FY 
2013. We estimate that as a result of this policy decision, the number 
of new Priority Group 8 veterans who will enroll in the VA will 
increase by 125,000 in each of the next four years. Based on the 
Priority Group 8 empirical utilization rate of 25 percent, we estimate 
that approximately 31,250 of these new enrollees will become users of 
the system. This translates to a cost of approximately $125 million.
    As we have emphasized in the past, the VA must have a clear plan 
for incrementally increasing this enrollment. Otherwise, the VA risks 
being overwhelmed by significant new workload. The Independent Budget 
is committed to working with the VA and Congress to implement a 
workable solution to allow all eligible Priority Group 8 veterans who 
desire to do so to begin enrolling in the system.
    Our policy initiatives have been streamlined to include immediately 
actionable items with direct funding needs. Specifically, we have 
limited our policy initiatives recommendations to restoring long-term 
care capacity (for which a reasonable cost estimate can be determined 
based on the actual capacity shortfall of the VA) and centralized 
prosthetics funding (based on actual expenditures and projections from 
the VA's prosthetics service). In order to restore the VA's long-term 
care average daily census (ADC) to the level mandated by P.L. 106-117, 
the ``Veterans Millennium Health Care Act,'' we recommend $375 million. 
Finally, to meet the increase in demand for prosthetics, the IB 
recommends an additional $275 million. This increase in prosthetics 
funding reflects the significant increase in expenditures from FY 2009 
to FY 2010 (explained in the section on Centralized Prosthetics 
Funding) and the expected continued growth in expenditures for FY 2011. 
The funding for prosthetics is particularly important because it 
reflects current services and represents a demonstrated need now; 
whereas, our funding recommendations for long-term care reflect our 
desire to see this capacity expanded beyond the current services level.
    For Medical Support and Compliance, The Independent Budget 
recommends approximately $5.3 billion. Finally, for Medical Facilities, 
The Independent Budget recommends approximately $5.7 billion. Our 
recommendation once again includes an additional $250 million for non-
recurring maintenance (NRM) provided under the Medical Facilities 
account. This would bring our overall NRM recommendation to 
approximately $1.26 billion for FY 2011. While we appreciate the 
significant increases in the NRM baseline over the last couple of 
years, total NRM funding still lags behind the recommended two to four 
percent of plant replacement value. Based on that logic, the VA should 
actually be receiving at least $1.7 billion annually for NRM (Refer to 
Construction section article ``Increase Spending on Nonrecurring 
Maintenance).
    For Medical and Prosthetic Research, The Independent Budget 
recommends $700 million. This represents a $119 million increase over 
the FY 2010 appropriated level, and approximately $110 million above 
the Administration's request. We are particularly pleased that Congress 
has recognized the critical need for funding in the Medical and 
Prosthetic Research account in the last couple of years. Research is a 
vital part of veterans' health care, and an essential mission for our 
national health care system. We are extremely disappointed in the 
Administration's decision to virtually flat line the research budget. 
VA research has been grossly underfunded in contrast to the growth rate 
of other federal research initiatives. At a time of war, the government 
should be investing more, not less, in veterans' biomedical research 
programs.
    The Independent Budget recommendation also includes a significant 
increase in funding for Information Technology (IT). For FY 2011, we 
recommend that the VA IT account be funded at approximately $3.553 
billion. This amount includes approximately $130 million for an 
Information Systems Initiative to be carried out by the Veterans 
Benefits Administration. This initiative is explained in greater detail 
in the policy portion of The Independent Budget.
    This represents an increase of $246 million over the FY 2010 
appropriated level as well as the Administrations request. We are 
greatly concerned that the Administration is shortchanging this account 
in a budget in which the VA and the Department of Defense are called on 
to jointly implement the Virtual Lifetime Electronic Record, and in 
which the Administration proposes to automate claims processing to 
improve the accuracy and timeliness of veterans' benefits, particularly 
disability compensation and the new Post-9/11 GI Bill.
    As explained in The Independent Budget, there is a significant 
backlog of major and minor construction projects awaiting action by the 
VA and funding from Congress. We have been disappointed that there has 
been inadequate follow-through on issues identified by the Capital 
Asset Realignment for Enhanced Services (CARES) process. In fact, we 
believe it may be time to revisit the CARES process all together. For 
FY 2011, The Independent Budget recommends approximately $1.295 billion 
for Major Construction and $785 million for Minor Construction. The 
Major Construction recommendation includes approximately $100 million 
for research infrastructure and the Minor Construction recommendation 
includes approximately $200 million for research facility construction 
needs.
    We note that the Budget Request reduces funding for Major 
Construction and slashes funding for Minor Construction. Despite 
additional funding that has been provided in recent years to address 
the construction backlog and maintenance needs facing VA, a great deal 
remains to be done. We cannot comprehend what policy decisions could 
justify such a steep decrease in funding for Minor Construction and we 
look forward to reviewing the detailed explanation in the President's 
Budget Request.
Advance Appropriations for FY 2012
    Public Law 111-81 required the President's budget submission to 
include estimates of appropriations for the medical care accounts for 
FY 2012 and the VA Secretary to provide detailed estimates of the funds 
necessary for these medical care accounts in his budget documents 
submitted to Congress. Consistent with advocacy by The Independent 
Budget, the law also requires a thorough analysis and public report of 
the Administration's advance appropriations projections by the 
Government Accountability Office (GAO) to determine if that information 
is sound and accurately reflects expected demand and costs to be 
incurred in FY 2012 and subsequent years.
    We are pleased to see that the Administration has followed through 
on its responsibility to provide an estimate for the Medical Care 
accounts of the VA for FY 2012. It is important to note that this is 
the first year the budget documents have included advance 
appropriations estimates. This will also be the first time that the GAO 
examines the budget submission to analyze its consistency with VA's 
Enrollee Health Care Projection Model, and what recommendations or 
other information the GAO report will include. The Independent Budget 
looks forward to examining all of this new information and 
incorporating it into future budget estimates.
    In the end, it is easy to forget, that the people who are 
ultimately affected by wrangling over the budget are the men and women 
who have served and sacrificed so much for this Nation. We hope that 
you will consider these men and women when you develop your budget 
views and estimates, and we ask that you join us in adopting the 
recommendations of The Independent Budget.
    This concludes my testimony. I will be happy to answer any 
questions you may have.

                                 
        Prepared Statement of John L. Wilson, Assistant National
            Legislative Director, Disabled American Veterans
    Mr. Chairman and Members of the Committee:
    I am pleased to have this opportunity to appear before you on 
behalf of the Disabled American Veterans (DAV), one of four national 
veterans' organizations that create the annual Independent Budget (IB) 
for veterans programs, to summarize our recommendations for fiscal year 
(FY) 2011.
    As you know Mr. Chairman, the IB is a budget and policy document 
that sets forth the collective views of DAV, AMVETS, Paralyzed Veterans 
of America (PVA), and Veterans of Foreign Wars of the United States 
(VFW). Each organization accepts principal responsibility for 
production of a major component of our IB--a budget and policy document 
on which we all agree. Reflecting that division of responsibility, my 
testimony focuses primarily on the variety of Department of Veterans 
Affairs (VA) benefits programs available to veterans.
    In preparing this 24th IB, the IB Veterans Service Organizations 
(IBVSOs) draw upon our extensive experience with veterans' programs, 
our firsthand knowledge of the needs of America's veterans, and the 
information gained from continuous monitoring of workloads and demands 
upon, as well as the performance of, the veterans benefits and services 
system. This Committee has acted favorably on many of our 
recommendations to improve services to veterans and their families. We 
ask that you give our recommendations serious consideration again this 
year. My testimony today will focus on three areas: Benefits; General 
Operating Expenses; and Judicial Review.
    Within the Benefits arena, the first area to address is concurrent 
receipt of compensation and military longevity retired pay. It has been 
and continues to be the perspective of the IBVSOs that all military 
retirees should be permitted to receive military longevity retired pay 
and VA disability compensation concurrently, regardless of the level of 
their disability rating.
    Many veterans, retired from the armed forces based on longevity of 
service, must forfeit a portion of their retired pay earned through 
faithful performance of military service before they receive VA 
compensation for service-connected disabilities. This is inequitable. 
Military retired pay is earned by virtue of a veteran's career of 
service on behalf of the Nation, careers of no less than 20 years.
    Entitlement to disability compensation, on the other hand, is paid 
solely because of disabilities resulting from military service, 
regardless of the length of service. Most nondisabled military retirees 
pursue second careers after serving in order to supplement their 
income, thereby justly enjoying a full reward for completion of a 
military career with the added reward of full civilian employment 
income. In contrast, service-connected disabled military longevity 
retirees do not enjoy the same full earning potential. Instead their 
earning potential is reduced commensurate with the degree of service-
connected disability.
    While Congress has made progress in recent years in correcting this 
injustice, current law still provides that service-connected veterans 
rated less than 50 percent who retire from the Armed Forces on length 
of service will not receive both their VA disability compensation and 
full military retired pay.

        The IBVSOs recommend Congress enact legislation to repeal the 
        inequitable requirement that veterans' military retired pay be 
        offset by an amount equal to their rightfully earned VA 
        disability compensation.

    The next area to address is repeal of the current requirement that 
the amount of an annuity under the Survivor Benefit Plan (SBP) be 
reduced on account of and by an amount equal to Dependency and 
Indemnity Compensation (DIC).
    Career members of the armed forces earn entitlement to retired pay 
after 20 or more years' service. Unlike many retirement plans in the 
private sector, survivors have no entitlement to any portion of the 
member's retired pay after his or her death. Under the SBP, deductions 
are made from the member's retired pay to purchase a survivors' 
annuity. Upon the veteran's death, the annuity is paid monthly to 
eligible beneficiaries under the plan. If the veteran died of other 
than service-connected causes or was not totally disabled by service-
connected disability for the required time preceding death, 
beneficiaries receive full SBP payments. However, if the veteran's 
death was due to service or followed from the requisite period of total 
service-connected disability, the SBP annuity is reduced by an amount 
equal to the DIC payment. If the monthly DIC rate is equal to or 
greater than the monthly SBP annuity, then beneficiaries lose all 
entitlement to the SBP annuity.
    This offset is inequitable because no duplication of benefits is 
involved. The offset penalizes survivors of military retired veterans 
whose deaths are under circumstances warranting indemnification from 
the government separate from the annuity funded by premiums paid by the 
veteran from his or her retired pay.

        It is the recommendation of the IBVSOs that Congress repeal the 
        offset between DIC and SBP.

    The last area to address within the Benefits section of the IB is 
the topic of automobile grants and adaptive equipment. The automobile 
and adaptive equipment grants need to be increased and automatically 
adjusted annually to cover increases in costs.
    The VA provides certain severely disabled veterans and 
servicemembers' grants for the purchase of automobiles or other 
conveyances. VA also provides grants for adaptive equipment necessary 
for the safe operation of these vehicles. Veterans suffering from 
service-connected ankylosis of one or both knees or hips are eligible 
for the adaptive equipment only. This program also authorizes 
replacement or repair of adaptive equipment.
    Congress initially fixed the amount of the automobile grant to 
cover the full cost of the automobile. However, because sporadic 
adjustments have not kept pace with increasing costs, over the past 53 
years the value of the automobile allowance has been substantially 
eroded. In 1946 the $1,600 allowance represented 85 percent of the 
average retail cost and was sufficient to pay the full cost of 
automobiles in the ``low-price field.''
    The Federal Trade Commission cites National Automobile Dealers 
Association data that indicate that the average price of a new car in 
2009 was $28,400. The current $11,000 automobile allowance represents 
62 percent of the 1946 benefit when adjusted for inflation by the CPI; 
however, it is only 39 percent of the average cost of a new automobile. 
To restore equity between the cost of an automobile and the allowance, 
the allowance, based on 80 percent of the average new vehicle cost, 
would be $22,800.

        It is the recommendation of the IBVSOs that Congress enact 
        legislation to increase the automobile allowance to 80 percent 
        of the average cost of a new automobile in 2009 and then 
        provide for automatic annual adjustments based on the rise in 
        the cost of living. Congress should also consider increasing 
        the automobile allowance to cover 100 percent of the average 
        cost of a new vehicle and provide for automatic annual 
        adjustments based on the actual cost of a new vehicle, not the 
        CPI.

    Within the General Operating Expenses arena, the IBVSOs offer 
Congress and the Administration many opportunities for improvement. The 
first topic of consideration has to do with the Veterans Benefits 
Administration (VBA) disability claims process.
    While simultaneously enhancing training and increasing individual 
and managerial accountability, Congress and the VA must take definitive 
steps to reduce delays in the disability claims process caused by 
policies and practices that were developed in a disjointed and 
haphazard manner.
    The adjudication of compensation claims is complex and time 
consuming. Failure to develop evidence correctly requires serial 
redevelopment, which delays claims resolution and increases 
opportunities for mistakes. Further, inadequately trained employees may 
fail to recognize when claims development is inadequate for rating 
purposes. The lack of effective on-the-job training, as well as the 
failure to involve program expertise of senior Veterans Service 
Representatives (VSRs) and Rating Veterans Service Representatives 
(RVSRs) earlier in the process are critical failures. As a consequence, 
VA routinely continues to develop many claims rather than making timely 
rating decisions.
    Processing policy should be changed to get claims into the hands of 
experienced technicians (Journey-level VSRs/RVSRs) earlier in the 
process. This way, issues with sufficient evidence can be evaluated, 
while development of other outstanding issues continues as directed by 
those more experienced technicians.
    It is understandable that VA wants to be deliberative as it 
determines the next best course of action to address how to improve the 
claims process. After all, the VA estimates it will manage as many as 
946,000 total claims this fiscal year and provide more than $30 billion 
in compensation and pension benefits. The IBVSOs recognize that VA has 
a responsibility to administer these programs according to the law.
    There is virtually no in-process quality control that could detect 
errors before they create undue delays, and provide real-time feedback 
to technicians. The claims process is a series of steps VA goes through 
to identify necessary evidence, obtain that evidence, and then make 
decisions based on the law and the evidence gathered. What fails here 
is the execution. While the rules are fairly clear, it is the 
overwhelming quantity of the work, inadequate training, lack of 
adequate accountability, and pressure to cut corners to produce numbers 
that result in an 18 percent substantive error rate (by VA's own 
admission). It is difficult to maintain quality control when individual 
performance reviews are limited to 5 cases per month, and when there is 
virtually no oversight on the propriety of end product closures.
    There is ample room to improve the law in a manner that would bring 
noticeable efficiency to VA's claims process, such as when VA issues a 
Veterans Claims Assistance Act (VCAA) notice letter. These notice 
letters, in their current form, do not inform the claimant of what 
elements render private medical opinions adequate for VA rating 
purposes.
    In FY 2007, the Board of Veterans' Appeals (BVA) remanded more than 
12,000 cases to obtain a medical opinion. In 2008, that number climbed 
to more than 16,000. In the view of the IBVSOs, many of these remands 
could have been avoided if VA had accepted sufficient medical opinions 
already provided by veterans. While recent court decisions have 
indicated that VA should accept private medical opinions that are 
credible and acceptable for rating purposes, we have seen no evident 
reduction in remands to obtain medical opinions.
    To correct this deficiency, we recommend that when VA issues 
proposed regulations to implement the recent amendment of title 38, 
United States Code Sec. 5103, its proposed regulations contain a 
provision that will require it to inform a claimant, in a VCAA notice 
letter, of the basic elements that make medical opinions adequate for 
rating purposes.
    Congress should also consider amending title 38, United States Code 
Sec. 5103A(d)(1), to provide that when a claimant submits private 
medical evidence, including a private medical opinion, that is 
competent, credible, probative, and otherwise adequate for rating 
purposes, the Secretary shall not request such evidence from a VA 
health care facility. The language we suggest adding to section 
5103A(d)(1), would not, however, require VA to accept private medical 
evidence if, for example, VA finds that the evidence is not credible 
and therefore not adequate for VA rating purposes.
    Modifying regional office jurisdiction regarding supplemental 
statements of the case (SSOCs) will improve the timeliness of the 
appeals process. This proposal is addressed in H.R. 4121, which seeks 
to amend title 38, United States Code, to improve the appeals process 
of the VA and was introduced by Representative John Hall on November 
19, 2009.
    In the current process, when an appeal is not resolved, the VA 
regional office will issue a statement of the case (SOC) along with a 
VA Form 9, to the claimant, who concludes, based on the title of the 
Form 9 (Appeal to the BVA) that the case is now going to the VA. 
Consequently, the veteran may feel compelled to submit additional or 
repetitive evidence in the mistaken belief that his or her appeal will 
be reviewed immediately by BVA. But the VARO issues another SSOC each 
time new evidence is submitted. This continues until VA finally issues 
a VAF-8, Certification of Appeal, which actually transfers the case to 
the BVA.
    H.R. 4121 would amend this process so that evidence submitted after 
the appeal has been certified to the BVA will be forwarded directly to 
the BVA and not considered by the regional office unless the appellant 
or his or her representative elects to have additional evidence 
considered by the regional office. This opt-out clause merely reverses 
the standard process without removing any rights from an appellant. The 
IBVSOs believe this change should result in reduced appellant lengths, 
much less appellant confusion, and nearly 100,000 reduced VA work hours 
by eliminating in many cases the requirement to issue SSOCs.
    It is the IBVSOs' recommendation that:

        Congress should modify current ``duty to assist'' requirements 
        that VA undertake independent development of the case, 
        including gathering new medical evidence, when VA determines 
        the claim already includes sufficient evidence to award all 
        benefits sought by the veteran.

        Congress should allow the BVA to directly hear new evidence in 
        cases certified to it, rather than require VA's regional 
        offices to hear the evidence and submit SSOCs.

        Congress pass H.R. 4121 to amend the process so that evidence 
        submitted after the appeal and certified to the BVA be 
        forwarded directly to the BVA and not considered by the 
        regional office unless the appellant or his or her 
        representative elects to have additional evidence considered by 
        the regional office.

    The next area to address is VBA training. Although the VA has 
improved its training programs to some extent, more needs to be done to 
ensure decision makers and adjudicators are held accountable to 
training standards.
    The IBVSOs have consistently maintained that VA must invest more in 
training adjudicators in order to hold them accountable for accuracy. 
VA has made improvements to its training programs in the past few 
years; nonetheless, much more improvement is required in order to meet 
quality standards that disabled veterans and their families deserve.
    Training, informal instruction as well as on-the-job training, has 
not been a high enough priority in VA. The IBVSOs have consistently 
asserted that proper training leads to better quality decisions, and 
that quality is the key to timeliness of VA decision-making. VA will 
achieve such quality only if it devotes adequate resources to perform 
comprehensive and ongoing training and imposes and enforces quality 
standards through effective quality assurance methods and 
accountability mechanisms. The Administration and Congress should 
require mandatory and comprehensive testing designed to hold trainees 
accountable. This requirement should be the first priority in any plan 
to improve training. VA should not advance trainees to subsequent 
stages of training until they have successfully demonstrated that they 
have mastered the material.
    One of the most essential resources is experienced and 
knowledgeable personnel devoted to training. More management devotion 
to training and quality requires a break from the status quo of 
production goals above all else. In a 2005 report from the VA Office of 
Inspector General, VBA employees were quoted as stating: ``Although 
management wants to meet quality goals, they are much more concerned 
with quantity. An RVSR is much more likely to be disciplined for 
failure to meet production standards than for failing to meet quality 
standards,'' and ``there is a lot of pressure to make your production 
standard. In fact, your performance standard centers around production 
and a lot of awards are based on it. Those who don't produce could miss 
out on individual bonuses, etc.'' \1\ Little if anything has changed 
since the Inspector General issued this report.\2\ VBA employees 
continue to report that they receive minimal time for training, whether 
it is self-study, training broadcasts, or classroom training. They 
report that management remains focused on production over quality.
---------------------------------------------------------------------------
    \1\ Department of Veterans Affairs Office of Inspector General, 
Rep. No. 05-00765-137, Review of State Variances in VA Disability 
Compensation Payments 61 (May 19, 2005).
    \2\ A survey conducted by the Center for Naval Analysis Corporation 
for the Veterans' Disability Benefits Commission found that ``some 
raters felt that they were not adequately trained or that they lacked 
enough experience.'' Veterans' Disability Benefits Commission, October 
2007, Honoring the Call to Duty: Veterans' Disability Benefits in the 
21st Century. p. 12.
---------------------------------------------------------------------------
    The Veterans' Benefits Improvement Act of 2008 mandated some 
testing for claims processors and VBA managers, which is an 
improvement; however, it does not mandate the type of testing during 
the training process as explained herein. Measurable improvement in the 
quality of and accountability for training will not occur until such 
mandates exist.
    Training will only be effective if the VBA training board, or a 
more robust oversight entity, can ensure communication and coordination 
between the Office of Employee Development and Training, Technical 
Training and Evaluation, Veterans Benefits Academy and the five 
business lines. Feedback should be collected from ROs to assess the 
effectiveness of their training, which can be incorporated into revised 
lesson plans as necessary. Communication and close, continued 
coordination by each of these offices is essential to the establishment 
of a comprehensive, responsive training program.
    For a culture of quality to thrive in the VBA, VA leaders must be 
the change agents to achieve this important goal. Training is an 
essential component to transforming the organization from a production-
at-all-costs focus to one of decisions based quality products which are 
delivered in a timely manner.
    It is the IBVSOs' recommendation that:

        VA should undertake an extensive training program to educate 
        its adjudicators on how to weigh and evaluate medical evidence 
        and require mandatory and comprehensive testing of the claims 
        process and appellate staff. To the extent that VA fails to 
        provide adequate training and testing, Congress should require 
        mandatory and comprehensive testing, under which VA will hold 
        trainees accountable.

        VA should hold managers accountable to ensure that the 
        necessary training and time is provided to ensure all personnel 
        are adequately trained. Feedback should be collected from ROs 
        on the effectiveness of the training. The Office of Employee 
        Development and Training, Technical Training and Evaluation, 
        Veterans Benefits Academy and the five business lines should 
        incorporate any emerging trends into revised training plans.

    The next topic of consideration is VBA's current accountability and 
quality mechanisms. It is the IBVSOs' position that VBA must overhaul 
these outdated and ineffective mechanisms.
    This can be accomplished through the development and deployment of 
a robust new electronic document management system, capable of 
converting all claims-related paperwork into secure, official 
electronic documentation that is easily accessible and searchable by 
all official personnel involved in the process and has built-in 
accountability and quality management process management tools.
    ``Sixty Minutes'' ran a story on January 3, 2010, entitled ``Delay, 
Deny and Hope I Die,'' which addressed the issue of the VA's claims 
backlog and veterans' frustrations. The VA Deputy Under Secretary for 
Benefits, Michael Walcoff, was interviewed for the story. When asked if 
VA had a focus on quantity over quality, he stated, ``I don't believe 
that they're being pressured to produce claims at the expense of 
quality. We stress over and over again to our employees that quality is 
our number one indicator, that that's absolutely a requirement for 
successful performance.''
    While he and others in leadership positions may stress quality, 
what employees are compensated for is quantity based on a work credit 
system.
    In March 2009, the VA's Inspector General discovered that the VA 
was making more mistakes than it reported. The internal investigation 
found that nearly one out of four files had errors. That is 200,000 
claims that ``may be incorrect.''
    Although quality may be emphasized and measured in limited ways, as 
it currently stands, almost everything in the VBA is production driven. 
Employees naturally will work towards those things that enhance 
compensation and currently that is production. Performance awards are 
based on production alone. They should also be based on demonstrated 
quality. However, in order for this to occur, the VBA must implement 
stronger accountability quality assurance measures.
    What does VBA do to assess the quality of the product it delivers? 
The quality assurance tool used by the VA for compensation and pension 
claims is the Systematic Technical Accuracy Review (STAR) program. 
Under the STAR program, VA reviews a sampling of decisions from 
regional offices and bases its national accuracy measures on the 
percentage with errors that affect entitlement, benefit amount, and 
effective date. However, samples as small as 20 cases per month per 
office are inadequate to determine individual quality.
    With STAR samples far too small to allow any conclusions concerning 
individual quality, rating team coaches who are charged with reviewing 
a sample of ratings for each RVSR each month. This review, if conducted 
properly, should identify those employees with the greatest success as 
well as those with problems. In practice, however, most rating team 
coaches have insufficient time to review what could be 100 or more 
cases each month. As a result, individual quality is often 
underevaluated and employees performing successfully may not receive 
the recognition they deserve and those employees in need of extra 
training and individualized mentoring may not get the attention they 
need to become more effective.
    The problems related to the quality of decisions, the timeliness of 
decisions, workload management, and safeguarding case files can be 
significantly improved by incorporating a robust IT solution. VA should 
establish systems that rapidly and securely convert paper documents 
into electronic formats, and establish new electronic information 
delivery systems that provide universal searchability and connectivity. 
This would increase the ability of veterans who have the means and 
familiarity with digital approaches to file electronic claims using 
VONAPP (Veterans On Line Application) or other future digital claims 
filing options. Lost or incorrectly destroyed records must become a 
problem of the past, as should the need to transfer thousands of case 
files from one location to the next.
    The Veterans' Benefits Improvement Act of 2008 (section 226) 
required VA to conduct a study on the effectiveness of the current 
employee work-credit system and work-management system. In carrying out 
the study, VA is required to consider, among other things:

    1.  Measures to improve the accountability, quality, and accuracy 
for processing claims for compensation and pension benefits;
    2.  Accountability for claims adjudication outcomes; and
    3.  The quality of claims adjudicated. The legislation requires VA 
to submit the report to Congress, which must include the components 
required to implement the updated system for evaluating VBA employees, 
no later than October 31, 2009. This report was not delivered on time.

    This study is a historic opportunity for VA to implement a new 
methodology--a new philosophy--by developing a new system with a 
primary focus of quality through accountability. Properly undertaken, 
the outcome would result in a new institutional mind-set across the 
VBA--one that focuses on the achievement of excellence--and change a 
mind-set focused mostly on quantity-for-quantity's sake to a focus of 
quality and excellence. Those who produce quality work are rewarded and 
those who do not are finally held accountable.
    It is the recommendation of the IBVSOs that:

        The VA Secretary's upcoming report focus on how the Department 
        will establish a quality assurance and accountability program 
        that will detect, track, and hold responsible those VA 
        employees who commit errors while simultaneously providing 
        employee motivation for the achievement of excellence.

        VA should generate the report in consultation with veterans 
        service organizations most experienced in the claims process.

        The performance management system for claims processors should 
        be adjusted to allow managers to greater flexibility and 
        enhanced tools to acknowledge and reward staff for higher 
        levels of performance.

    The IBVSOs urge VA to identify new funding for the purposes 
enumerated in this section and to ensure that new VBA personnel are 
properly supported with necessary IT resources. With restored 
investments in these initiatives, the VBA could complement staffing 
adjustments for increased workloads with a supportive infrastructure to 
improve operational effectiveness. The VBA could resume an adequate 
pace in its development and deployment of IT solutions, as well as to 
upgrade and enhance training systems for staff to improve operations 
and service delivery to veterans. It is vital to the VBA that many of 
their unique needs are met in a timely manner, including the following: 
expansion of web-based technology and deliverables, such as a web 
portal and Training and Performance Support System (TPSS); ``Virtual 
VA'' paperless processing; enhanced veteran self-service access to 
benefit application, status, and delivery; data integration across 
business lines; use of the corporate database; information exchange; 
quality assurance programs and controls; and employee skills 
certification and training.
    It is imperative that TEES and WINRS develop common architecture 
designs that maximize data sharing between the new GI Bill and the 
Vocational Rehabilitation programs. These programs share common 
information about programs of education, school approvals, tuition & 
fees, and other similar data which their processing systems should 
share more effectively. TEES provides for electronic transmission of 
applications and enrollment documentation along with automated expert 
processing.
    Also, the IBVSOs believe the VBA should continue to develop and 
enhance data-centric benefits integration with ``Virtual VA'' and 
modification of The Imaging Management System (TIMS). All these systems 
serve to replace paper-based records with electronic files for 
acquiring, storing, and processing claims data.
    Virtual VA supports pension maintenance activities at three VBA 
pension maintenance centers. Further enhancement would allow for the 
entire claims and award process to be accomplished electronically. TIMS 
is the Education Service system for electronic education claims files, 
storage of imaged documents, and workflow management. The current VBA 
initiative is to modify and enhance TIMS to make it fully interactive 
and allow for fully automated claims and award processing by the 
Education Service and VR&E nationwide.
    VA's TPSS is a multimedia, multimethod training tool that applies 
the instructional systems development methodology to train and support 
employee performance of job tasks. These TPSS applications require 
technical updating to incorporate changes in laws, regulations, 
procedures, and benefit programs. In addition to regular software 
upgrades, a help desk for users is needed to make TPSS work 
effectively.
    VBA initiated its skills certification instrument in 2004. This 
tool helps the VBA assess the knowledge base of veterans' service 
representatives. VBA intends to develop additional skills certification 
modules to test rating veteran service representatives, decision review 
officers, field examiners, pension maintenance center employees, and 
veterans' claims examiners in the Education Service.
    By providing veterans regionalized telephone contact access from 
multiple offices within specified geographic locations, VA could 
achieve greater efficiency and improved customer service. Accelerated 
deployment of virtual information centers will more timely accomplish 
this beneficial effect.
    It is the IBVSOs' recommendation that:

        VA complete the replacement of the antiquated and inadequate 
        Benefits Delivery Network (BDN) with the Veterans Service 
        Network (VETSNET), or a successor system, that creates a 
        comprehensive nationwide information system for claims 
        development, adjudication, and payment administration.

        VA enhance the Education Expert System (TEES) for the Education 
        Service to support the new GI Bill recently enacted by Congress 
        in Public Law 110-181.

        VA update the corporate WINRS (CWINRS) to support programs of 
        the Vocational Rehabilitation and Employment (VR&E) Service. 
        CWINRS is a case management and information system allowing for 
        more efficient award processing and sharing of information 
        nationwide.

        Congress provide VBA adequate funding for its information 
        technology initiatives to improve multiple information and 
        information-processing systems and to advance ongoing, 
        approved, and planned initiatives such as those enumerated in 
        this section. These IT programs should be increased annually by 
        a minimum of 5 percent or more.

        VBA revise its training programs to stay abreast of IT program 
        changes and modern business practices.

        VA ensure that recent funding specifically designated by 
        Congress to support the IT needs of the VBA, and of new VBA 
        staff authorized in FY 2009, are provided to VBA as intended, 
        and on an expedited basis.

        The Chief Information Officer and Under Secretary for Benefits 
        should give high priority to the review and report required by 
        Public Law 110-389 and redouble their efforts to ensure these 
        ongoing VBA initiatives are fully funded and accomplish their 
        stated intentions.

        The VA Secretary examine the impact of the current level of IT 
        centralization under the chief information officer on these key 
        VBA programs and, if warranted, shift appropriate 
        responsibility for their management, planning, and budgeting 
        from the chief information officer to the Under Secretary for 
        Benefits.

        Congress require the Secretary to establish a quality assurance 
        and accountability program that will detect, track, correct and 
        prevent future errors and, by creating a work environment that 
        properly aligns incentives with goals, holds both VBA employees 
        and management accountable for their performance.

    The next topic to address in the area of General Operating Expenses 
is staffing. It is the IBVSOs' position that recent staffing increases 
in the VBA may now be sufficient to reduce the backlog of pending 
claims, once new hires complete training. However, any move by Congress 
to reduce VBA staffing in the foreseeable future will guarantee a 
return to unacceptably high backlogs.
    VA began making some progress in reducing pending rating claims in 
FY 2008. At the end of FY 2009, over 940,000 claims had been processed, 
well above the 940,000 that had been projected. Over 388,000 
compensation claims were pending rating decisions, which is above the 
386,000 of FY 2008.\3\
---------------------------------------------------------------------------
    \3\ Monday Morning Workload Report, October 3, 2009, pg. 1.
---------------------------------------------------------------------------
    During FY 2008, VA hired nearly 2,000 staff authorized by Congress. 
The total number of new hires since 2007 now stands at over 4,200. 
Historically, it takes at least two years for new nonrating claims 
processors to acquire sufficient knowledge and experience to be able to 
work independently with both speed and quality. Those selected to make 
rating decisions require a separate period of at least two years of 
training before they have the skills to accurately complete most rating 
claims.
    It would be interesting to know the attrition rate of these 4,200 
new hires. How many have successfully completed training? How many 
current employees have retired or terminated employment in comparison? 
Answers to these questions and other questions would be useful in 
discussions on the adequacy of the number of new hires and their 
current and future ability to substantially affect the claims backlog.
    Once everyone is fully trained and reductions in the backlog are 
seriously under way, it would be a mistake of monumental proportions if 
Congress were to allow staffing levels to decline. The IBVSOs do not 
suggest that VBA staffing remain off limits to Congressional budget 
considerations. What we believe, however, is that staffing reductions 
should occur only after the VBA has demonstrated, through technological 
innovation and major management and leadership reforms, that it has the 
right people and the right tools in place to ensure that claims can be 
processed both timely and correctly. As with backlog reductions, these 
changes will also not occur overnight. Congressional oversight, 
therefore, is critical to buttress any real improvements in claims 
processing and quality decisions.
    It is the recommendation of the IBVSOs that:

        Congress require the VA to report the attrition rate for the 
        4,200 new hires; how many successfully completed training; how 
        many current employees have retired or terminated employment in 
        comparison.

        Congress continue to monitor current staffing levels and ensure 
        that they remain in place until such time as the backlog is 
        eliminated.

        Once the backlog is eliminated, Congress consider staffing 
        reductions in the VBA but only after ensuring that quality 
        problems are fully and adequately addressed.

        Congress ensure through oversight that management and 
        leadership reforms in the VBA are completed and permanent.

    The next topic of consideration is Vocational Rehabilitation and 
Employment, a program that continues to provide critical resources to 
service-connected disabled veterans despite inadequate staffing levels. 
To meet its ongoing workload demands and to implement new initiatives 
recommended by the Secretary's Vocational Rehabilitation and Employment 
(VR&E) Task Force, VR&E needs to increase its staffing.
    The cornerstone among several new initiatives is VR&E's Five-Track 
Employment Process, which aims to advance employment opportunities for 
disabled veterans. Integral to attaining and maintaining employment 
through this process, the employment specialist position was changed to 
employment coordinator and was expanded to incorporate employment 
readiness, marketing, and placement responsibilities. In addition, 
increasing numbers of severely disabled veterans from Operations 
Enduring and Iraqi Freedom (OEF/OIF) benefit from VR&E's Independent 
Living Program, which empowers such veterans to live independently in 
the community to the maximum extent possible. Independent living 
specialists provide the services required for the success of severely 
disabled veterans participating in this program. VR&E needs 
approximately 200 additional full-time employees (FTEs) to offer these 
services nationally.
    Given its increased reliance on contract services, VR&E needs 
approximately 50 additional FTEs dedicated to management and oversight 
of contract counselors and rehabilitation and employment service 
providers. As a part of its strategy to enhance accountability and 
efficiency, the VA VR&E Task Force recommended creation and training of 
new staff positions for this purpose. Other new initiatives recommended 
by the task force also require an investment of personnel resources.
    Finally, VA has a pilot program at the University of Southern 
Florida entitled ``Veteran Success on Campus'' that places a qualified 
Vocational Rehabilitation Counselor on the campus to assist veterans in 
Vocational Rehabilitation as well as veterans enrolled in the Post-9/11 
or other VA educational programs. The pilot has garnered high praise 
from the University, the American Council on Education, and the press. 
VA should be authorized to expand the program significantly in the next 
fiscal year.
    In FY 2009, VR&E was authorized 1,105 FTEs. The IBVSOs have been 
informed that this number has been ``frozen'' due to the unknown impact 
the implementation of chapter 33 benefits will have on the VR&E 
program. Last year, we recommended that total staffing be increased to 
manage the current and anticipated workload as stated in the 
Secretary's VR&E Task Force. We believe that this increase is still 
warranted. VA currently has approximately 106,000 enrollees in Chapter 
31. The IBVSOs believe that a ratio of 1:96 (which includes 
administrative support) is inadequate to provide the level of 
counseling and support that our wounded and disabled veterans need to 
achieve success in their employment goals.
    It is the recommendation of the IBVSOs that Congress should 
authorize 1,375 total FTEs for the Vocational Rehabilitation and 
Employment Service for FY 2010.
    The last area of the IB that I wish to address is Judicial Review. 
From its creation in 1930, decisions of the Veterans Administration, 
now the Department of Veterans Affairs, could not be appealed outside 
VA except on rare Constitutional grounds. This was thought to be in the 
best interests of veterans, in that their claims for benefits would be 
decided solely by an agency established to administer veteran friendly 
laws in a paternalistic and sympathetic manner. At the time, Congress 
also recognized that litigation could be very costly and sought to 
protect veterans from such expense.
    For the most part, VA worked well. Over the course of the next 50 
years, VA made benefit decisions in millions of claims, providing 
monetary benefits and medical care to millions of veterans. Most 
veterans received the benefits to which they were entitled.
    Congress eventually came to realize that without judicial review, 
the only remedy available to correct VA's misinterpretation of laws, or 
the misapplication of laws to veterans claims, was through the unwieldy 
hammer of new legislation.
    In 1988, Congress thus enacted legislation to authorize judicial 
review and created the United States Court of Appeals for Veterans 
Claims (CAVC) to hear appeals from BVA.
    Today, the VA's decisions on claims are subject to judicial review 
in much the same way as a trial court's decisions are subject to review 
on appeal. This review process allows an individual to challenge not 
only the application of law and regulations to an individual claim, but 
more importantly, contest whether VA regulations accurately reflect the 
meaning and intent of the law. When Congress established the CAVC, it 
added another beneficial element to appellate review by creating 
oversight of VA decision-making by an independent, impartial tribunal 
from a different branch of government. Veterans are no longer without a 
remedy for erroneous BVA decisions.
    Judicial review of VA decisions has, in large part, lived up to the 
positive expectations of its proponents. Nevertheless, based on past 
recommendations in the IB, Congress has made some important adjustments 
to the judicial review process based on lessons learned over time. More 
precise adjustments are still needed to conform judicial review to 
Congressional intent. Accordingly, IBVSOs make the following 
recommendations to improve the processes of judicial review in 
veterans' benefits matters.
    In the area of scope of review, the IBVSOs believe that to achieve 
the law's intent that the CAVC enforce the benefit-of-the-doubt rule on 
appellate review, Congress must enact more precise and effective 
amendments to the statute setting forth the Court's scope of review.
    Title 38, United States Code, section 5107(b) grants VA claimants a 
statutory right to the ``benefit of the doubt'' with respect to any 
benefit under laws administered by the Secretary of Veterans Affairs 
when there is an approximate balance of positive and negative evidence 
regarding any issue material to the determination of a matter. Yet, the 
CAVC has affirmed many BVA findings of fact when the record contains 
only minimal evidence necessary to show a ``plausible basis'' for such 
finding. The CAVC upholds VA findings of ``material fact'' unless they 
are clearly erroneous and has repeatedly held that when there is a 
``plausible basis'' for the BVA factual finding, it is not clearly 
erroneous.
    This makes a claimant's statutory right to the ``benefit of the 
doubt'' meaningless because claims can be denied and the denial upheld 
when supported by far less than a preponderance of evidence. These 
actions render Congressional intent under section 5107(b) meaningless.
    To correct this situation, Congress amended the law with the 
enactment of the Veterans Benefits Improvement Act of 2008 to expressly 
require the CAVC to consider whether a finding of fact is consistent 
with the benefit-of-the doubt rule; however this intended effect of 
section 401 of the Veterans Benefits Act of 2008 has not been used in 
subsequent Court decisions.
    Prior to the Veterans Benefits Act, the Court's case law provided 
(1) that the Court was authorized to reverse a BVA finding of fact when 
the only permissible view of the evidence of record was contrary to 
that found by the BVA and (2) that a BVA finding of fact must be 
affirmed where there was a plausible basis in the record for the 
Board's determination.
    As a result of Veterans Benefits Act section 401 amendments to 
section 7261(a)(4), the CAVC is now directed to ``hold unlawful and set 
aside or reverse'' any ``finding of material fact adverse to the 
claimant. . . if the finding is clearly erroneous.'' \4\ Furthermore, 
Congress added entirely new language to section 7261(b)(1) that 
mandates the CAVC to review the record of proceedings before the 
Secretary and the BVA pursuant to section 7252(b) of title 38 and 
``take due account of the Secretary's application of section 5107(b) of 
this title. . . .'' \5\
---------------------------------------------------------------------------
    \4\ 38 U.S.C. Sec. 7261(a)(4). See also 38 U.S.C. Sec. 7261(b)(1).
    \5\ 38 U.S.C. Sec. 7261(b)(1).

    The Secretary's obligation under section 5107(b), as referred to in 
---------------------------------------------------------------------------
section 7261(b)(1), is as follows:

        (b)  BENEFIT OF THE DOUBT--The Secretary shall consider all 
        information and lay and medical evidence of record in a case 
        before the Secretary with respect to benefits under laws 
        administered by the Secretary. When there is an approximate 
        balance of positive and negative evidence regarding any issue 
        material to the determination of a matter, the Secretary shall 
        give the benefit of the doubt to the claimant.\6\
---------------------------------------------------------------------------
    \6\ 38 U.S.C. Sec. 5107(b).

    Congress wanted for the Court to take a more proactive and less 
deferential role in its BVA fact-finding review, as detailed in a joint 
explanatory statement of the compromise agreement contained in the 
legislation:\7\
---------------------------------------------------------------------------
    \7\ 148 Congressional Record S11337, H9007.

        [T]he Committees expect the Court to reverse clearly erroneous 
        findings when appropriate, rather than remand the case. The new 
        subsection (b) [of section 7261] would maintain language from 
        the Senate bill that would require the Court to examine the 
        record of proceedings before the Secretary and BVA and the 
        special emphasis during the judicial process on the benefit-of-
        doubt provisions of section 5107(b) as it makes findings of 
        fact in reviewing BVA decisions... The combination of these 
        changes is intended to provide for more searching appellate 
        review of BVA decisions, and thus give full force to the 
        ``benefit-of-doubt'' provision.\8\
---------------------------------------------------------------------------
    \8\ 148 Congressional Record S11337, H9003 (daily ed. November 18, 
2002) (emphasis added). (Explanatory statement printed in Congressional 
Record as part of debate in each body immediately prior to final 
passage of compromise agreement.)

    With the foregoing statutory requirements, the Court should no 
longer uphold a factual finding by the Board solely because it has a 
plausible basis, inasmuch as that would clearly contradict the 
requirement that the CAVC's decision must take due account whether the 
factual finding adheres to the benefit-of-the-doubt rule. Yet such CAVC 
decisions upholding BVA denials because of the ``plausible bases'' 
standard continue as if Congress never acted.
    It is the IBVSOs' recommendation that:

        Congress clearly intended a less deferential standard of review 
        of the Board's application of the benefit-of-the-doubt rule 
        when it amended title 38, United States Code, section 7261 in 
        2002, yet there has been no substantive change in the Court's 
        practices. Therefore, to clarify the less deferential level of 
        review that the Court should employ, Congress should amend 
        title 38, United States Code, section 7261(a) by adding a new 
        section, (a)(5), that states: ``(5) In conducting review of 
        adverse findings under (a)(4), the Court must agree with 
        adverse factual findings in order to affirm a decision.''

        Congress should also require the Court to consider and 
        expressly state its determinations with respect to the 
        application of the benefit-of-the-doubt doctrine under title 
        38, United States Code, section 7261(b)(1), when applicable.

    The next topic to address is the appointment of judges to the CAVC. 
The CAVC received well over 4,000 cases during FY 2008. According to 
the Court's annual report, the average number of days it took to 
dispose of cases was nearly 450. This period has steadily increased 
each year over the past four years, despite the Court having recalled 
retired judges numerous times over the past two years specifically 
because of the backlog.
    Veterans' law is an extremely specialized area of the law that 
currently has fewer than 500 attorneys nationwide whose practices are 
primarily in veterans law. Significant knowledge and experience in this 
practice area would reduce the amount of time necessary to acclimate a 
new judge to the Court's practice, procedures, and body of law.
    A reduction in the time to acclimate would allow a new judge to 
begin a full caseload in a shorter period, thereby benefiting the 
veteran population. The Administration should therefore consider 
appointing new judges to the Court from the selection pool of current 
veterans law practitioners.

        The IBVSOs urge the Administration to consider that any new 
        judges appointed to the CAVC be selected from the knowledgeable 
        pool of current veterans law practitioners.

    The last topic to address in this area is in reference to Court 
facilities. During the 21 years since the CAVC was formed in accordance 
with legislation enacted in 1988, it has been housed in commercial 
office buildings. It is the only Article I court that does not have its 
own courthouse.
    The ``Veterans Court'' should be accorded at least the same degree 
of respect enjoyed by other appellate courts of the United States. 
Congress has finally responded by allocating $7 million in FY 2008 for 
preliminary work on site acquisition, site evaluation, preplanning for 
construction, architectural work, and associated other studies and 
evaluations. The issue of providing the proper court facility is now 
moving forward.

        It is the recommendation of the IBVSOs that Congress should 
        provide all funding as necessary to construct a courthouse and 
        justice center in a location befitting the CAVC.

    We hope the Committee will review these recommendations and give 
them consideration for inclusion in your legislative plans for FY 2011. 
Mr. Chairman, thank you for inviting the DAV and other member 
organizations of the IB to testify before you today.

                                 
       Prepared Statement of Eric A. Hilleman, Director, National
   Legislative Service, Veterans of Foreign Wars of the United States
    MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE:
    On behalf of the 2.1 million men and women of the Veterans of 
Foreign Wars of the U.S. (VFW) and our Auxiliaries, I would like to 
thank you for the opportunity to testify today. The VFW works alongside 
the other members of The Independent Budget (IB)--AMVETS, Disabled 
American Veterans and Paralyzed Veterans of America--to produce a set 
of policy and budget recommendations that reflect what we believe would 
meet the needs of America's veterans. The VFW is responsible for the 
construction portion of the IB, so I will limit my remarks to that 
portion of the budget.
    VA's infrastructure--particularly within its health-care system--is 
at a crossroads. The system is facing many challenges, including the 
average age of buildings (60 years) and significant funding needs for 
routine maintenance, upgrades, modernization and construction. VA is 
beginning a patient-centered reformation and transformation of the way 
it delivers care and new ways of managing its infrastructure plan based 
on needs of sick and disabled veterans in the 21st Century. Regardless 
of what the VA health care system of the future looks like, our focus 
must remain on a lasting and accessible VA health-care system that is 
dedicated to their unique needs and one that can provide high quality, 
timely care when and where they need it.
    VA manages a wide portfolio of capital assets throughout the 
Nation. According to its latest Capital Asset Plan, VA is responsible 
for 5,500 buildings and almost 34,000 acres of land. It is a vast 
network of facilities that requires significant time and attention from 
VA's capital asset managers.
    CARES--VA's data-driven assessment of VA's current and future 
construction needs gave VA a long-term roadmap and has helped guide its 
capital planning process over the past few fiscal years. CARES showed a 
large number of significant construction priorities that would be 
necessary for VA to fulfill its obligation to this Nation's veterans 
and over the last several fiscal years, the administration and Congress 
have made significant inroads in funding these priorities. Since FY 
2004, $4.9 billion has been allocated for these projects. Of these 
CARES-identified projects, VA has completely five and another 27 are 
currently under construction. It has been a huge, but necessary 
undertaking and VA has made slow, but steady progress on these critical 
projects.
    The challenge for VA in the post-CARES era is that there are still 
numerous projects that need to be carried out, and the current backlog 
of partially funded projects that CARES has identified is large, too. 
This means that VA is going to continue to require significant 
appropriations for the major and minor construction accounts to live up 
to the promise of CARES.
    VA's most recent Asset Management Plan provides an update of the 
state of CARES projects--including those only in the planning of 
acquisition process. Table 4-5: (page 7.4-49) shows a need of future 
appropriations to complete these projects of $3.25 billion.

------------------------------------------------------------------------
                                            Future Funding Needed  ($ In
                  Project                            Thousands)
------------------------------------------------------------------------
Denver                                                           492,700
------------------------------------------------------------------------
San Juan                                                         122,920
------------------------------------------------------------------------
New Orleans                                                      370,000
------------------------------------------------------------------------
St. Louis                                                        364,700
------------------------------------------------------------------------
Palo Alto                                                        478,023
------------------------------------------------------------------------
Bay Pines                                                         80,170
------------------------------------------------------------------------
Seattle                                                           38,700
------------------------------------------------------------------------
Seattle                                                          193,830
------------------------------------------------------------------------
Dallas                                                            80,100
------------------------------------------------------------------------
*Louisville                                                    1,100,000
------------------------------------------------------------------------
TOTAL                                                          3,246,143
------------------------------------------------------------------------

    This amount represents just the backlog of current construction 
projects. It does reflect the administration's FY 2011 proposed 
appropriation toward Denver, New Orleans, and Palo Alto. (*Louisville's 
cost estimate is found on table 5-6, on Page 7.5-93).
    Meanwhile, VA continues to identify and reprioritize potential 
major construction projects. These priorities, which are assessed using 
the rigorous methodology that guided the CARES decisions are released 
in the Department's annual Five Year Capital Asset Plan, which is 
included in the Department's budget submission. The most recent one was 
included in Volume IV and is available on VA's Web site: http://
www4.va.gov/budget/docs/summary/Fy2011_Volume_4-
Construction_and_5_Year_Cap_Plan.pdf.
    Table 4-5 shows a long list of partially funded major construction 
projects. These 82 ongoing projects demonstrate the continued need for 
VA to upgrade and repair its aging infrastructure, and that continuous 
funding is necessary for not just the backlog of projects, but to keep 
VA viable for today's and future veterans.
    In a November 17, 2008 letter to the Senate Veterans Affairs 
Committee, Secretary Peake said that ``the Department estimates that 
the total funding requirement for major medical facility projects over 
the next 5 years would be in excess of $6.5 billion.''
    It is clear that VA needs a significant infusion of cash for its 
construction priorities. VA's own words and studies show this.

------------------------------------------------------------------------
               Major Construction Account Recommendations
-------------------------------------------------------------------------
                                                Recommendation  ($ in
                 Category                            Thousands)
------------------------------------------------------------------------
VHA Facility Construction                                     $1,000,000
------------------------------------------------------------------------
NCA Construction                                                 $60,000
------------------------------------------------------------------------
Advance Planning                                                 $40,000
------------------------------------------------------------------------
Master Planning                                                  $15,000
------------------------------------------------------------------------
Historic Preservation                                            $20,000
------------------------------------------------------------------------
Medical Research Infrastructure                                 $100,000
------------------------------------------------------------------------
Miscellaneous Accounts                                           $58,000
------------------------------------------------------------------------
TOTAL                                                         $1,295,000
------------------------------------------------------------------------


      VHA Facility Construction--this amount would allow VA to 
continue digging into the $3.25 billion backlog of partially funded 
construction projects. Depending on the stages and ability to complete 
portions of the projects, any additional money could be used to fund 
new projects identified by VA as part of its prioritization methodology 
in the Five-Year Capital Plan.
      NCA Construction's Five-Year Capital Plan details 
numerous potential major construction projects for the National 
Cemetery Association throughout the country. This level of funding 
would allow VA to begin construction on at least three of its scored 
priority projects.
      Advance Planning--helps develop the scope of the major 
construction projects as well as identifying proper requirements for 
their construction. It allows VA to conduct necessary studies and 
research similar to planning processes in the private sector.
      Master Planning--a description of our request follows 
later in the text.
      Historic Preservation--a description of our request 
follows later in the text.
      Miscellaneous Accounts--these include the individual line 
items for accounts such as asbestos abatement, the judgment fund and 
hazardous waste disposal. Our recommendation is based upon the historic 
level for each of these accounts.


------------------------------------------------------------------------
               Minor Construction Account Recommendations
-------------------------------------------------------------------------
                 Category                     Funding  ($ in Thousands)
------------------------------------------------------------------------
Veterans Health Administration                                  $450,000
------------------------------------------------------------------------
Medical Research Infrastructure                                 $200,000
------------------------------------------------------------------------
National Cemetery Administration                                $100,000
------------------------------------------------------------------------
Veterans Benefits Administration                                 $20,000
------------------------------------------------------------------------
Staff Offices                                                    $15,000
------------------------------------------------------------------------
TOTAL                                                           $785,000
------------------------------------------------------------------------


      Veterans Health Administration--Page 7.8-138 of VA's 
Capital Plan reveals hundreds of already identified minor construction 
projects. These projects update and modernize VA's aging physical plant 
ensuring the health and safety of veterans and VA employees. 
Additionally, a great number of minor construction projects address 
FCA-identified maintenance deficiencies; the backlog of 216 projects in 
FY 2010 with over $1 billion that has yet to be funded.
      Medical Research Infrastructure--a description of our 
request follows later in the text.
      National Cemetery Administration of the Capital Plan 
identifies numerous minor construction projects throughout the country 
including the construction of several columbaria, installation of 
crypts and landscaping and maintenance improvements. Some of these 
projects could be combined with VA's new NCA nonrecurring maintenance 
efforts.
      Veterans Benefits Administration--Page 7.6-106 of the 
Capital Plan lists several minor construction projects in addition to 
the leasing requirements VBA needs.
      Staff Offices--Page 7.8-134 lists numerous potential 
minor construction projects related to staff offices.

             Increase Spending on Nonrecurring Maintenance
The deterioration of many VA properties requires increased spending on 
                        nonrecurring maintenance
    For years, The Independent Budget Veteran Service Organizations 
(IBVSOs) have highlighted the need for increased funding for the 
nonrecurring maintenance (NRM) account. NRM consists of small projects 
that are essential to the proper maintenance of and preservation of the 
lifespan of VA's facilities. NRM projects are one-time repairs such as 
maintenance to roofs, repair and replacement of windows and flooring or 
minor upgrades to the mechanical or electrical systems. They are a 
necessary component of the care and stewardship of a facility.
    These projects are so essential because if left unrepaired, they 
can really take their toll on a facility, leading to more costly 
repairs in the future, and the potential of a need for a minor 
construction project. Beyond the fiscal aspects, facilities that fall 
into disrepair can create access difficulties and impair patient and 
staff health and safety, and if things do develop into a larger 
construction projection because early repairs were not done, it creates 
an even larger inconvenience for veterans and staff.
    The industry standard for medical facilities is for managers to 
spend from 2 percent-4 percent of plant replacement value (PRV) on 
upkeep and maintenance. The 1998 PriceWaterhouseCoopers study of VA's 
facilities management practices argued for this level of funding and 
previous versions of VA's own Asset Management Plan have agreed that 
this level of funding would be adequate.
    The most recent estimate of VA's PRV is from the FY 08 Asset 
Management Plan. Using the standards of the Federal Government's 
Federal Real Property Council (FRPC), VA's PRV is just over $85 billion 
(page 26).
    Accordingly, to fully maintain its facilities, VA needs a NRM 
budget of at least $1.7 billion. This number would represent a doubling 
of VA's budget request from FY 2009, but is in line with the total NRM 
budget when factoring in the increases Congress gave in the 
appropriations bill and the targeted funding included in the 
supplemental appropriations bills.
    Increased funding is required not to just to fill current 
maintenance needs and levels, but also to dip into the extensive 
backlog of maintenance requirements VA has. VA monitors the condition 
of its structures and systems through the Facility Condition Assessment 
(FCA) reports. VA surveys each medical center periodically, giving each 
building a thorough assessment of all essential systems. Systems are 
assigned a letter grade based upon the age and condition of various 
systems, and VA gives each component a cost for repair or replacement.
    The bulk of these repairs and replacements are conducted through 
the NRM program, although the large increases in minor construction 
over the last few years have helped VA to address some of these 
deficiencies.
    VA's 5-Year Capital Plan discusses FCAs and acknowledges the 
significant backlog the number of high priority deficiencies--those 
with ratings of D or F--had replacement and repair costs of over $9.4 
billion, found on page 7.1-18. VA estimates that 52 percent of NRM 
dollars are obligated to toward this cost.
    VA uses the FCA reports as part of its Federal Real Property 
Council (FRPC) metrics. The department calculates a Facility Condition 
Index, which is the ratio of the cost of FCA repairs to the cost of 
replacement. According to the FY 08 Asset Management Plan, this metric 
has gone backwards from 82 percent in 2006 to just 68 percent in 2008. 
VA's strategic goal is 87 percent, and for it to meet that, it would 
require a sizeable investment in NRM and minor construction.
    Given the low level of funding the NRM account has historically 
received, the IBVSOs are not surprised at the metrics or the dollar 
cost of the FCA deficiencies. The 2007 ``National Roll Up of 
Environment of Care Report,'' which was conducted in light of the 
shameful maintenance deficiencies at Walter Reed further prove the need 
for increased spending on this account. Maintenance has been neglected 
for far too long, and for VA to provide safe, high-quality health care 
in its aging facilities, it is essential that more money be allocated 
for this account.
    We also have concerns with how NRM funding is actually apportioned. 
Since it falls under the Medical Care account, NRM funding has 
traditionally been apportioned using the Veterans Equitable Resource 
Allocation (VERA) formula. This model works when divvying up health-
care dollars, targeting money to those areas with the greatest demand 
for health care. When dealing with maintenance needs, though, this same 
formula may actually intensify the problem, moving money away from 
older hospitals, such as in the northeast, to newer facilities where 
patient demand is greater, even if the maintenance needs are not as 
high. We were happy to see that the conference reports to the VA 
appropriations bills required NRM funding to be apportioned outside the 
VERA formula, and we would hope that this continues into the future.
    Another issue related to apportionment of funding came to light in 
a May 2007 Government Accountability Office (GAO) report. They found 
that the bulk of NRM funding is not actually apportioned until 
September, the final month of the fiscal year. In September 2006, GAO 
found that VA allocated 60 percent of that year's NRM funding. This is 
a shortsighted policy that impairs VA's ability to properly address its 
maintenance needs, and since NRM funding is year-to-year, it means that 
it could lead to wasteful or unnecessary spending as hospital managers 
rushed in a flurry to spend their apportionment before forfeiting it 
back. We cannot expect VA to perform a year's worth of maintenance in a 
month. It is clearly poor policy and not in the best interest of 
veterans. The IBVSOs believe that Congress should consider allowing 
some NRM money to be carried over from one fiscal year to another. 
While we would hope that this would not resort to hospital managers 
hording money, it could result in more efficient spending and better 
planning, rather than the current situation where hospital managers 
sometimes have to spend through a large portion of maintenance funding 
before losing it at the end of the fiscal year.
Recommendations:
    VA must dramatically increase funding for nonrecurring maintenance 
in line with the 2 percent-4 percent total that is the industry 
standard so as to maintain clean, safe and efficient facilities. VA 
also requires additional maintenance funding to allow the department to 
begin addressing the substantial maintenance backlog of FCA-identified 
projects.
    Portions of the NRM account should be continued to be funded 
outside of the VERA formula so that funding is allocated to the 
facilities that actually have the greatest maintenance needs.
    Congress should consider the strengths of allowing VA to carry over 
some maintenance funding from one fiscal year to another so as to 
reduce the temptation some VA hospital managers have of inefficiently 
spending their NRM money at the end of a fiscal year for fear of losing 
it.
          Inadequate Funding and Declining Capital Asset Value
   VA must protect against deterioration of its infrastructure and a 
                     declining capital asset value
    The last decade of underfunded construction budgets has meant that 
VA has not adequately recapitalized its facilities. Recapitalization is 
necessary to protect the value of VA's capital assets through the 
renewal of the physical infrastructure. This ensures safe and fully 
functional facilities long into the future. VA's facilities have an 
average age approaching 60 years, and it is essential that funding be 
increased to renovate, repair and replace these aging structures and 
physical systems.
    As in past years, the IBVSOs cite the Final Report of the 
President's Task Force to Improve Health Care Delivery for Our Nation's 
Veterans (PTF). It found that from 1996-2001, VA's recapitalization 
rate was just 0.64 percent. At this rate, VA's structures would have an 
assumed life of 155 years.
    The PTF cited a PriceWaterhouseCoopers study of VA's facilities 
management programs that found that to keep up with industry standards 
in the private sector and to maintain patient and employee safety and 
optimal health care delivery, VA should spend a minimum of 5 to 8 
percent of plant replacement value (PRV) on its total capital budget.
    The FY 08 VA Asset Management Plan provides the most recent 
estimate of VA's PRV. Using the guidance of the Federal Government's 
Federal Real Property Council (FRPC), VA's PRV is just over $85 billion 
(page 26).
    Accordingly, using that 5 to 8 percent standard, VA's capital 
budget should be between $4.25 and $6.8 billion per year in order to 
maintain its infrastructure.
    VA's capital budget request for FY 2009--which includes major and 
minor construction, maintenance, leases and equipment--was just $3.6 
billion. We greatly appreciate that Congress increased funding above 
that level with an increase over the administration request of $750 
million in major and minor construction alone. That increased amount 
brought the total capital budget in line with industry standards, and 
we strongly urge that these targets continue to be met and we would 
hope that future VA requests use these guidelines as a starting point 
without requiring Congress to push them past the target.
Recommendation:
    Congress and the Administration must ensure that there are adequate 
funds for VA's capital budget so that VA can properly invest in its 
physical assets to protect their value and to ensure that the 
Department can continue to provide health care in safe and functional 
facilities long into the future.
                 Maintain VA's Critical Infrastructure
    The IBVSOs are concerned with VA's recent attempts to back away 
from the capital infrastructure blueprint laid out by CARES and we are 
worried that its plan to begin widespread leasing and contracting for 
inpatient services might not meet the needs of veterans.
    VA acknowledges three main challenges with its capital 
infrastructure projects. First, they are costly. According to a March 
2008 briefing given to the VSO community, over the next five years, VA 
would need $2 billion per year for its capital budget. Second, there is 
a large backlog of partially funded construction projects. That same 
briefing claimed that the difference in major construction requests 
given to OMB was $8.6 billion from FY 03 through FY 09, and that they 
have received slightly less than half that total. Additionally, there 
is a $2 billion funding backlog for projects that are partially but not 
completely funded. Third, VA is concerned about the timeliness of 
construction projects, noting that it can take the better part of a 
decade from the time VA initially proposes a project until the doors 
actually open for veterans.
    Given these challenges, VA has floated the idea of a new model for 
health care delivery, the Health Care Center Facility (HCCF) leasing 
program. Under the HCCF, VA would begin leasing large outpatient 
clinics in lieu of major construction. These large clinics would 
provide a broad range of outpatient services including primary and 
specialty care as well as outpatient mental health services and 
ambulatory surgery.
    On the face of it, this sounds like a good initiative. Leasing has 
the advantage of being able to be completed quickly, as well as being 
adaptable, especially when compared to the major construction process. 
Leasing has been particularly valuable for VA as evidenced by the 
success of the Community Based Outpatient Clinics (CBOCs) and Vet 
Centers.
    Our concern rests, however, with VA's plan for inpatient services. 
VA aims to contract for these essential services with affiliates or 
community hospitals. This program would privatize many services that 
the IBVSOs believe VA should continue to provide. We lay out our 
objections to privatization and widespread contracting for care 
elsewhere in The Independent Budget.
    Beyond those objections, though, is the example of Grand Island, 
Nebraska. In 1997, the Grand Island VA Medical Center closed its 
inpatient facilities, contracting out with a local hospital for those 
services. Recently, the contract between the local facility and VA was 
canceled, meaning veterans in that area can no longer receive inpatient 
services locally. They must travel great distances to other VA 
facilities such as the Omaha VA Medical Center. In some cases, when 
Omaha is unable to provide specialized care, VA is flying patients at 
its expense to faraway VA medical centers, including those in St. Louis 
and Minneapolis.
    Further, with the canceling of that contract, St. Francis no longer 
provides the same level of emergency services that a full VA Medical 
Center would provide. With VA's restrictions on paying for emergency 
services in non-VA facilities, especially for those who may have some 
form of private insurance, this amounts to a cut in essential services 
to veterans. Given the expenses of air travel and medevac services, the 
current arrangement in Grand Island has likely not resulted in any cost 
savings for VA. Ferrying sick and disabled veterans great distances for 
inpatient care also raises patient safety and quality concerns.
    The HCCF program raises many concerns for the IBVSOs that VA must 
address before we can support the program. Among these questions, we 
wonder how VA would handle governance, especially with respect to the 
large numbers of non-VA employees who would be treating veterans. How 
would the non-VA facility deal with VA directives and rule changes that 
govern health-care delivery and that ensure safety and uniformity of 
the quality of care? Will VA apply its space planning criteria and 
design guides to non-VA facilities? How will VA's critical research 
activities, most of which improve the lives of all Americans and not 
only veterans, be affected if they are being conducted in shared 
facilities, and not a traditional part of VA's first-class research 
programs? What would this change mean for VA's electronic health 
record, which many have rightly lauded as the standard that other 
health-care systems should aim to achieve? Without the electronic 
health record, how would VA maintain continuity of care for a veteran 
who moves to another area?
    But most importantly, CARES required years to complete and consumed 
thousands of hours of effort and millions of dollars of study. We 
believe it to be a comprehensive and fully justified roadmap for VA's 
infrastructure as well as a model that VA can apply periodically to 
assess and adjust those priorities. Given the strengths of the CARES 
process and the lessons VA learned and has applied from it, why is the 
HCCF model, which to our knowledge has not been based on any sort of 
model or study of the long-term needs of veterans, the superior one? We 
have yet to see evidence that it is and until we see more convincing 
evidence that it will truly serve the best needs of veterans, the 
IBVSOs will have a difficult time supporting it.
Recommendation:
    VA must resist implementing the HCCF model without fully addressing 
the many questions the IBVSOs have and VA must explain how the program 
would meet the needs of veterans, particularly as compared to the 
roadmap CARES has laid out.
                    Research Infrastructure Funding
The Department of Veterans Affairs must have increased funding for its 
  research infrastructure to provide a state-of-the-art research and 
 laboratory environment for its excellent programs, but also to ensure 
     that VA hires and retains the top scientists and researchers.
VA Research Is a National Asset
    Research conducted in the Department of Veterans Affairs has led to 
such innovations and advances as the cardiac pacemaker, nuclear 
scanning technologies, radioisotope diagnostic techniques, liver and 
other organ transplantation, the nicotine patch, and vast improvements 
in a variety of prosthetic and sensory aids. A state-of-the-art 
physical environment for conducting VA research promotes excellence in 
health professions education and VA patient care as well as the 
advancement of biomedical science. Adequate and up-to-date research 
facilities also help VA recruit and retain the best and brightest 
clinician scientists to care for enrolled veterans.
VA Research Infrastructure Funding Shortfalls
    In recent years, funding for the VA Medical and Prosthetics 
Research Program has failed to provide the resources needed to 
maintain, upgrade, and replace VA's aging research facilities. Many VA 
facilities have exhausted their available research space. Along with 
space reconfiguration, ventilation, electrical supply, and plumbing 
appear frequently on lists of needed upgrades in VA's academic health 
centers. In the 2003 Draft National Capital Asset Realignment for 
Enhanced Services (CARES) plan, VA included $142 million designated for 
renovation of existing research space and build-out costs for leased 
researched facilities. However, these capital improvement costs were 
omitted from the Secretary's final report. Over the past decade, only 
$50 million has been spent on VA research construction or renovation 
nationwide, and only 24 of the 97 major VA research sites across the 
Nation have benefited.
    In House Report 109-95 accompanying the FY 2006 VA appropriations, 
the House Appropriations Committee directed VA to conduct ``a 
comprehensive review of its research facilities and report to the 
Congress on the deficiencies found and suggestions for correction of 
the identified deficiencies.'' In FY 2008, the VA Office of Research 
and Development initiated a multiyear examination of all VA research 
infrastructure for physical condition and capacity for current 
research, as well as program growth and sustainability of the space 
needed to conduct research.
Lack of a Mechanism to Ensure VA's Research Facilities Remain 
        Competitive
    In House Report 109-95 accompanying the FY 2006 VA appropriations, 
the House Appropriations Committee expressed concern that ``equipment 
and facilities to support the research program may be lacking and that 
some mechanism is necessary to ensure the Department's research 
facilities remain competitive.'' A significant cause of research 
infrastructure's neglect is that there is no direct funding line for 
research facilities.
    The VA Medical and Prosthetic Research appropriation does not 
include funding for construction, renovation, or maintenance of 
research facilities. VA researchers must rely on their local facility 
managements to repair, upgrade, and replace research facilities and 
capital equipment associated with VA's research laboratories. As a 
result, VA research competes with other medical facilities' direct 
patient care needs--such as medical services infrastructure, capital 
equipment upgrades and replacements, and other maintenance needs--for 
funds provided under either the VA Medical Facilities appropriation 
account or the VA Major or Minor Medical Construction appropriations 
accounts.
Recommendations:
    The Independent Budget veterans service organizations anticipate 
VA's analysis will find a need for funding significantly greater than 
VA had identified in the 2004 Capital Asset Realignment for Enhanced 
Services report. As VA moves forward with its research facilities 
assessment, the IBVSOs urge Congress to require the VA to submit the 
resulting report to the House and Senate Committees on Veterans' 
Affairs no later than October 1, 2009. This report will ensure that the 
Administration and Congress are well informed of VA's funding needs for 
research infrastructure so they may be fully considered at each stage 
of the FY 2011 budget process.
    To address the current shortfalls, the IBVSOs recommend an 
appropriation in FY 2010 of $142 million, dedicated to renovating 
existing VA research facilities in line with the 2004 CARES findings.
    To address the VA research infrastructure's defective funding 
mechanism, the IBVSOs encourage the Administration and Congress to 
support a new appropriations account in FY 2010 and thereafter to 
independently define and separate VA research infrastructure funding 
needs from those related to direct VA medical care. This division of 
appropriations accounts will empower VA to address research facility 
needs without interfering with the renovation and construction of VA 
direct health-care infrastructure.
                Program for Architectural Master Plans:
    Each VA medical facility must develop a detailed master plan.
    The delivery models for quality health care are in a constant state 
of change. This is due to many factors including advances in research, 
changing patient demographics, and new technology.
    The VA must design their facilities with a high level of 
flexibility in order to accommodate these new methods of patient care. 
The department must be able to plan for change to accommodate new 
patient care strategies in a logical manner with as little effect as 
possible on other existing patient care programs. VA must also provide 
for growth in already existing programs.
    A facility master plan is a comprehensive tool to look at potential 
new patient care programs and how they might affect the existing health 
care facility. It also provides insight with respect to possible 
growth, current space deficiencies, and other facility needs for 
existing programs and how VA might accommodate these in the future.
    In some cases in the past, VA has planned construction in a 
reactive manner. After funding, VA would place projects in the facility 
in the most expedient manner--often not considering other projects and 
facility needs. This would result in shortsighted construction that 
restricts, rather than expands options for the future.
    The IBVSOs believe that each VA medical Center should develop a 
comprehensive facility master plan to serve as a blueprint for 
development, construction, and future growth of the facility. Short and 
long-term CARES objectives should be the basis of the master plan.
    Four critical programs were not included in the CARES initiative. 
They are long-term care, severe mental illness, domiciliary care, and 
Polytrauma. VA must develop a comprehensive plan addressing these needs 
and its facility master plans must account for these services.
    VA has undertaken master planning for several VA facilities; most 
recently Tampa, Florida. This is a good start, but VA must ensure that 
all facilities develop a master plan strategy to validate strategic 
planning decisions, prepare accurate budgets, and implement efficient 
construction that minimizes wasted expenses and disruption to patient 
care.
Recommendation:
    Congress must appropriate $20 million to provide funding for each 
medical facility to develop a master plan.
    Each facility master plan should include the areas left out of 
CARES; long-term care, severe mental illness, domiciliary care, and 
Polytrauma programs as it relates to the particular facility.
    VACO must develop a standard format for these master plans to 
ensure consistency throughout the VA health care system.
                      Empty or Underutilized Space
    VA must not use empty space inappropriately and must continue 
disposing of unnecessary property where appropriate Studies have 
suggested that the VA medical system has extensive amounts of empty 
space that the Department can reuse for medical services. Others have 
suggested that unused space at one medical center may help address a 
deficiency that exists at another location. Although the space 
inventories are accurate, the assumption regarding the feasibility of 
using this space is not.
    Medical facility planning is complex. It requires intricate design 
relationships for function, but also because of the demanding 
requirements of certain types of medical equipment. Because of this, 
medical facility space is rarely interchangeable, and if it is, it is 
usually at a prohibitive cost. For example, VA cannot use unoccupied 
rooms on the eighth floor to offset a deficiency of space in the second 
floor surgery ward. Medical space has a very critical need for inter- 
and intra- departmental adjacencies that must be maintained for 
efficient and hygienic patient care.
    When a department expands or moves, these demands create a domino 
effect of everything around it. These secondary impacts greatly 
increase construction expense, and they can disrupt patient care.
    Some features of a medical facility are permanent. Floor-to-floor 
heights, column spacing, light, and structural floor loading cannot be 
altered. Different aspects of medical care have different requirements 
based upon these permanent characteristics. Laboratory or clinical 
spacing cannot be interchanged with ward space because of the needs of 
different column spacing and perimeter configuration. Patient wards 
require access to natural light and column grids that are compatible 
with room-style layouts. Labs should have long structural bays and 
function best without windows. When renovating empty space, if the area 
is not suited to its planned purpose, it will create unnecessary 
expenses and be much less efficient.
    Renovating old space rather than constructing new space creates 
only a marginal cost savings. Renovations of a specific space typically 
cost 85 percent of what a similar, new space would. When you factor in 
the aforementioned domino or secondary costs, the renovation can end up 
costing more and produce a less satisfactory result. Renovations are 
sometimes appropriate to achieve those critical functional adjacencies, 
but it is rarely economical.
    Many older VA Medical Centers that were rapidly built in the 1940s 
and 1950s to treat a growing veteran population are simply unable to be 
renovated for modern needs. Most of these Bradley-style buildings were 
designed before the widespread use of air conditioning and the floor-
to-floor heights are very low. Accordingly, it is impossible to 
retrofit them for modern mechanical systems. They also have long, 
narrow wings radiating from a small central core, which is an 
inefficient way of laying out rooms for modern use. This central core, 
too, has only a few small elevator shafts, complicating the vertical 
distribution of modern services.
    Another important problem with this unused space is its location. 
Much of it is not located in a prime location; otherwise, VA would have 
previously renovated or demolished this space for new construction. 
This space is typically located in outlying buildings or on upper floor 
levels, and is unsuitable for modern use.
               VA Space Planning Criteria/Design Guides:
    VA must continue to maintain and update the Space Planning Criteria 
and Design Guides to reflect state-of-the-art methods of health care 
delivery.
    VA has developed space-planning criteria it uses to allocate space 
for all VA health care projects. These criteria are organized into 
sixty chapters; one for each health care service provided by VA as well 
as their associated support services. VA updates these criteria to 
reflect current methods of health care delivery.
    In addition to updating these criteria, VA has utilized a computer 
program called VA SEPS (Space and Equipment Planning System) it uses as 
a tool to develop space and equipment allocation for all VA health care 
projects. This tool is operational and VA currently uses it on all VA 
health care projects.
    The third component used in the design of VA health care projects 
is the design guides. Each of the sixty space planning criteria 
chapters has an associated design guide. These design guides go beyond 
the allocation of physical space and outline how this space is 
organized within each individual department, as well as how the 
department relates to the entire medical facility.
    VA has updated several of the design guides to reflect current 
patient delivery models. These include those guides that cover Spinal 
Cord Injury/Disorders Center, Imaging, Polytrauma Centers, as well as 
several other services.
Recommendation:
    The VA must continue to maintain and update the Space Planning 
Criteria and the VA SEPS space-planning tool. It also must continue the 
process of updating the Design Guides to reflect current delivery 
models for patient care. VA must regularly review and update all of 
these space-planning tools as needed, to reflect the highest level of 
patient care delivery.
               Design-build Construction Delivery System
    The VA must evaluate use of the Design-build construction delivery 
system.
    For the past 10 years, VA has embraced the design-build 
construction delivery system as a method of project delivery for many 
health care projects. Design-build attempts to combine the design and 
construction schedules in order to streamline the traditional design-
bid-build method of project delivery. The goal is to minimize the risk 
to the owner and reduce the project delivery schedule. Design-build, as 
used by VA, places the contractor as the design builder.
    Under the contractor-led design build process, VA gives the 
contractor a great deal of control over how he or she designs and 
completes the project. In this method, the contractor hires the 
architect and design professionals. With the architect as a 
subordinate, a contractor may sacrifice the quality of material and 
systems in order to add to his own profits at the expense of the owner.
    Use of design-build has several inherent problems. A short-cut 
design process reduces the time available to provide a complete design. 
This provides those responsible for project oversight inadequate time 
to review completed plans and specifications. In addition, the 
construction documents may not provide adequate scope for the project, 
leaving out important details regarding the workmanship and/or other 
desired attributes of the project. This makes it difficult to hold the 
builder accountable for the desired level of quality. As a result, a 
project is often designed as it is being built, which often compromises 
VA's design standards.
    Design-build forces the owner to rely on the contractor to properly 
design a facility that meets the owner's needs. In the event that the 
finished project is not satisfactory to the owner, the owner may have 
no means to insist on correction of work done improperly unless the 
contractor agrees with the owner's assessment. This may force the owner 
to go to some form of formal dispute resolution such as litigation or 
arbitration.
Recommendation:
    VA must evaluate the use of Design-build as a method of 
construction delivery to determine if design-build is an appropriate 
method of project delivery for VA health care projects.
    The VA must institute a program of ``lessons learned''. This would 
involve revisiting past projects and determining what worked, what 
could be improved, and what did not work. VA should compile and use 
this information as a guide to future projects. VA must regularly 
update this document to include projects as they are completed.
               Preservation of VA's Historic Structures:
    The VA must further develop a comprehensive program to preserve and 
protect its inventory of historic properties.
    The VA has an extensive inventory of historic structures that 
highlight America's long tradition of providing care to veterans. These 
buildings and facilities enhance our understanding of the lives of 
those who have worn the uniform, and who helped to develop this great 
Nation. Of the approximately 2,000 historic structures, many are 
neglected and deteriorate year after year because of a lack of funding. 
These structures should be stabilized, protected and preserved because 
they are an integral part our Nation's history.
    Most of these historic facilities are not suitable for modern 
patient care. As a result, a preservation strategy was not included in 
the CARES process. For the past six years, the IBVSOs have recommended 
that VA conduct an inventory of these properties; classifying their 
physical condition and their potential for adaptive reuse. VA has been 
moving in that direction and historic properties are identified on 
their Web site. VA has placed many of these buildings in an ``Oldest 
and Most Historic'' list and these buildings require immediate 
attention.
    At least one project has received funding. The VA has invested over 
$100,000 in the last year to address structural issues at a unique 
round structure in Hampton, VA. Built in 1860, it was originally a 
latrine and the funding is allowing VA to convert it into office space.
    The cost for saving some of these buildings is not very high 
considering that they represent a part of history that enriches the 
texture of our landscape that once gone cannot be recaptured. For 
example, VA can restore the Greek Revival Mansion in Perry Point, MD, 
which was built in the 1750's, to use as a training space for about 
$1.2 million. VA could restore the 1881 Milwaukee Ward Memorial Theater 
for use as a multi-purpose facility at a cost of $6 million. This is 
much less than the cost of a new facility.
    As part of its adaptive reuse program, VA must ensure that the 
facilities that it leases or sells are maintained properly. VA's legal 
responsibilities could, for example, be addressed through easements on 
property elements, such as building exteriors or grounds.
    We encourage the use of P.L. 108-422, the Veterans Health Programs 
Improvement Act, which authorized historic preservation as one of the 
uses of a new capital assets fund that receives funding from the sale 
or lease of VA property.
Recommendation:
    VA must further develop a comprehensive program to preserve and 
protect its inventory of historic properties.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions that you or the Members of the Committee may have.

                                 
     Prepared Statement of Raymond C. Kelley, National Legislative
                  Director, American Veterans (AMVETS)
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee:
    AMVETS is honored to join our fellow veterans service organizations 
and partners at this important hearing on the Department of Veterans 
Affairs budget request for fiscal year 2011. My name is Raymond C. 
Kelley, National Legislative Director of AMVETS, and I am pleased to 
provide you with our best estimates on the resources necessary to carry 
out a responsible budget for VA.
    AMVETS testifies before you as a co-author of The Independent 
Budget. This is the 24th year AMVETS, the Disabled American Veterans, 
the Paralyzed Veterans of America, and the Veterans of Foreign Wars 
have pooled our resources to produce a unique document, one that has 
stood the test of time.
    In developing The Independent Budget, we believe in certain guiding 
principles. Veterans should not have to wait for benefits to which they 
are entitled. Veterans must be ensured access to high-quality medical 
care. Specialized care must remain the focus of VA. Veterans must be 
guaranteed timely access to the full continuum of health care services, 
including long-term care. And, veterans must be assured accessible 
burial in a state or national cemetery in every state.
    The VA health care system is the best in the country and 
responsible for great advances in medical science. VHA is uniquely 
qualified to care for veterans' needs because of its highly specialized 
experience in treating service-connected ailments. The delivery care 
system provides a wide array of specialized services to veterans like 
those with spinal cord injuries, blindness, traumatic brain injury, and 
post traumatic stress disorder.
    As a partner of The Independent Budget, AMVETS devotes a majority 
of its time with the concerns of the National Cemetery Administration 
(NCA) and I would like to speak directly to the issues and concerns 
surrounding NCA.
The National Cemetery Administration
    The Department of Veterans Affairs National Cemetery Administration 
(NCA) currently maintains more than 2.9 million gravesites at 130 
national cemeteries in 39 states and Puerto Rico. Of these cemeteries, 
70 will be open to all interments; 20 will accept only cremated remains 
and family members of those already interred; and 40 will only perform 
interments of family members in the same gravesite as a previously 
deceased family member. NCA also maintains 33 soldiers' lots and 
monument sites. All told, NCA manages 19,000 acres, half of which are 
developed.
    VA estimates that about 27 million veterans are alive today. They 
include veterans from World War I, World War II, the Korean War, the 
Vietnam War, the Gulf War, the conflicts in Afghanistan and Iraq, and 
the Global War on Terrorism, as well as peacetime veterans. With the 
anticipated opening of the new national cemeteries, annual interments 
are projected to increase from approximately 111,000 in 2009 to 114,000 
in 2010. Historically, 12 percent of veterans opt for burial in a state 
or national cemetery.
    The most important obligation of the NCA is to honor the memory of 
America's brave men and women who served in the armed forces. 
Therefore, the purpose of these cemeteries as national shrines is one 
of the NCA's top priorities. Many of the individual cemeteries within 
the system are steeped in history, and the monuments, markers, grounds, 
and related memorial tributes represent the very foundation of the 
United States. With this understanding, the grounds, including 
monuments and individual sites of interment, represent a national 
treasure that deserves to be protected and cherished.
    The Independent Budget veterans service organizations (IBVSOs) 
would like to acknowledge the dedication and commitment of the NCA 
staff who continue to provide the highest quality of service to 
veterans and their families. We call on the Administration and Congress 
to provide the resources needed to meet the changing and critical 
nature of NCA's mission and fulfill the Nation's commitment to all 
veterans who have served their country honorably and faithfully.
    In FY 2009, $230 was million appropriated for the operations and 
maintenance of NCA, $49 million over the administration's request, with 
$2.7 million in carryover. NCA awarded 49 of the 56 minor construction 
projects that were in the operating plan. The State Cemetery Grants 
Service awarded $40 million in grants for 10 projects.
    NCA has done an exceptional job of providing burial options for 90 
percent of all veterans who fall within the 170,000 veterans within a 
75-mile radius threshold model. However, under this model, no new 
geographical area will become eligible for a National Cemetery until 
2015. St. Louis, Mo. will, at that time, meet the threshold due to the 
closing of Jefferson Barracks National Cemetery in 2017. Analysis shows 
that the five areas with the highest veteran population will not become 
eligible for a National Cemetery because they will not reach the 
170,000 threshold.
    NCA has spent years developing and maintaining a cemetery system 
based on a growing veteran population. In 2010 our veteran population 
will begin to decline. Because of this downward trend, a new threshold 
model must be developed to ensure more of our veterans will have 
reasonable access to their burial benefits. Reducing the mile radius to 
65 miles would reduce the veteran population that is served from 90 
percent to 82.4 percent, and reducing the radius to 55 miles would 
reduce the served population to 74.1 percent. Reducing the radius alone 
to 55 miles would only bring two geographical areas in to 170,000 
population threshold in 2010, and only a few areas into this revised 
model by 2030.
    Several geographical areas will remain unserved if the population 
threshold is not reduced. Lowering the population threshold to 100,000 
veterans would immediately make several areas eligible for a National 
Cemetery regardless of any change to the mile radius threshold. A new 
threshold model must be implemented so more of our veterans will have 
access to this earned benefit.
National Cemetery Administration (NCA) Accounts
    The Independent Budget recommends an operations budget of $274.5 
million for the NCA for fiscal year 2011 so it can meet the increasing 
demands of interments, gravesite maintenance, and related essential 
elements of cemetery operations.
    The NCA is responsible for five primary missions: (1) to inter, 
upon request, the remains of eligible veterans and family members and 
to permanently maintain gravesites; (2) to mark graves of eligible 
persons in national, state, or private cemeteries upon appropriate 
application; (3) to administer the state grant program in the 
establishment, expansion, or improvement of state veterans cemeteries; 
(4) to award a presidential certificate and furnish a United States 
flag to deceased veterans; and (5) to maintain national cemeteries as 
national shrines sacred to the honor and memory of those interred or 
memorialized.
    The national cemetery system continues to be seriously challenged. 
Though there has been progress made over the years, the NCA is still 
struggling to remove decades of blemishes and scars from military 
burial grounds across the country. Visitors to many national cemeteries 
are likely to encounter sunken graves, misaligned and dirty grave 
markers, deteriorating roads, spotty turf and other patches of decay 
that have been accumulating for decades. If the NCA is to continue its 
commitment to ensure national cemeteries remain dignified and 
respectful settings that honor deceased veterans and give evidence of 
the Nation's gratitude for their military service, there must be a 
comprehensive effort to greatly improve the condition, function, and 
appearance of all our national cemeteries.
    The IBVSOs is encouraged that $25 million was set aside for the 
National Shrine Commitment for FY 07 and 08. The NCA has done an 
outstanding job thus far in improving the appearance of our national 
cemeteries, but we have a long way to go to get us where we need to be. 
In 2006 only 67 percent of headstones and markers in national 
cemeteries were at the proper height and alignment. By 2009 proper 
height and alignment increased to 76 percent. The NCA has also 
identified 153 historic monuments and memorials that need repair and/or 
restoration. With funding from The American Recovery and Reinvestment 
Act (ARRA), the NCA will make repairs on 32 percent of these monuments 
and memorials.
    The IBVSOs support the NCA's operational standards and measures 
outlined in the National Shrine Commitment, and in the past The 
Independent Budget advocated for a five-year, $250 million National 
Shrine Initiative to assist the NCA in achieving its performance goals. 
However, over the past few years, the NCA has made marked improvements 
in the National Shrine Commitment by earmarking a portion of its 
operations and maintenance budget for the commitment and pending 
receipt of funding from the ARRA. Therefore, the IBVSOs no longer 
believe it is necessary to implement the National Shrine Initiative 
program at $50 million per year for five years but, rather, propose an 
increase in the NCA's operations and maintenance budget by $25 million 
per year until the operational standards and measures goals are 
reached.
    In addition to the management of national cemeteries, the NCA is 
responsible for the Memorial Program Service. The Memorial Program 
Service provides lasting memorials for the graves of eligible veterans 
and honors their service through Presidential Memorial Certificates. 
Public Laws 107-103 and 107-330 allow for a headstone or marker for the 
graves of veterans buried in private cemeteries who died on or after 
September 11, 2001. Prior to this change, the NCA could provide this 
service only to those buried in national or state cemeteries or to 
unmarked graves in private cemeteries. Public Law 110-157 gives VA 
authority to provide a medallion to be attached to the headstone or 
marker of veterans who are buried in a private cemetery. This benefit 
is available to veterans in lieu of a government-furnished headstone or 
marker. The IBVSOs call on the Administration and Congress to provide 
the resources required to meet the critical nature of the NCA mission 
and fulfill the Nation's commitment to all veterans who have served 
their country so honorably and faithfully.
The State Cemetery Grants Program
    The State Cemeteries Grant Program faces the challenge of meeting a 
growing interest from states to provide burial services in areas that 
are not currently served. The intent of the SCGP is to develop a true 
complement to, not a replacement for, our federal system of national 
cemeteries. With the enactment of the Veterans Benefits Improvements 
Act of 1998, the NCA has been able to strengthen its partnership with 
states and increase burial service to veterans, especially those living 
in less densely populated areas not currently served by a national 
cemetery. Currently there are 60 state and tribal government cemetery 
construction grant pre-applications, 36 of which have the required 
state matching funds necessary totaling $121 million.
    The Independent Budget recommends that Congress appropriate $51 
million for SCGP for FY 2011. This funding level would allow SCGP to 
establish 13 new state cemeteries that will provide burial options for 
veterans who live in a region that currently has no reasonably 
accessible state or national cemetery.
Burial Benefits
    In 1973 NCA established a burial allowance that provided partial 
reimbursements for eligible funeral and burial costs. The current 
payment is $2,000 for burial expenses for service-connected (SC) death, 
$300 for non-service-connected (NSC) deaths, and $300 for plot 
allowance. At its inception, the payout covered 72 percent of the 
funeral cost for a service-connected death, 22 percent for a non-
service-connected death, and 54 percent of the burial plot cost. In 
2007 these benefits eroded to 23 percent, 4 percent, and 14 percent 
respectively. It is time to bring these benefits back to their original 
value.
    Burial allowance was first introduced in 1917 to prevent veterans 
from being buried in potters' fields. In 1923 the allowance was 
modified. The benefit was determined by a means test, and then in 1936 
the allowance was changed again, removing the means test. In its early 
history, the burial allowance was paid to all veterans, regardless of 
the service-connectivity of their death. In 1973 the allowance was 
modified to reflect the relationship of their death as service 
connected or not.
    The plot allowance was introduced in 1973 as an attempt to provide 
a plot benefit for veterans who did not have reasonable access to a 
national cemetery. Although neither the plot allowance nor the burial 
allowances were intended to cover the full cost of a civilian burial in 
a private cemetery, the increase in the benefit's value indicates the 
intent to provide a meaningful benefit by adjusting for inflation.
    The national average cost for a funeral and burial in a private 
cemetery has reached $8,555, and the cost for a burial plot is $2,133. 
At the inception of the benefit the average costs were $1,116 and $278 
respectively. While the cost of a funeral has increased by nearly seven 
times the burial benefit has only increased by 2.5 times. To bring both 
burial allowances and the plot allowance back to its 1973 value, the SC 
benefit payment will be $6,160, the NSC benefit value payment will be 
$1,918, and the plot allowance will increase to $1,150. Readjusting the 
value of these benefits, under the current system, will increase the 
obligations from $70.1 million to $335.1 million per year.
    Based on accessibility and the need to provide quality burial 
benefits, The Independent Budget recommends that VA separate burial 
benefits into two categories: veterans who live inside the VA 
accessibility threshold model and those who live outside the threshold. 
For those veterans who live outside the threshold, the SC burial 
benefit should be increased to $6,160, NSC veteran's burial benefit 
should be increased to $1,918, and plot allowance should increase to 
$1,150 to match the original value of the benefit. For veterans who 
live within reasonable accessibility to a state or national cemetery 
that is able to accommodate burial needs, but the veteran would rather 
be buried in a private cemetery the burial benefit should be adjusted. 
These veterans' burial benefits will be based on the average cost for 
VA to conduct a funeral. The benefit for a SC burial will be $2,793, 
the amount provided for a NSC burial will be $854, and the plot 
allowance will be $1,150. This will provide a burial benefit at equal 
percentages, but based on the average cost for a VA funeral and not on 
the private funeral cost that will be provided for those veterans who 
do not have access to a state or national cemetery.
    The recommendations of past legislation provided an increased 
benefit for all eligible veterans but it currently fails to reach the 
intent of the original benefit. The new model will provide a meaningful 
benefit to those veterans whose access to a state or national cemetery 
is restricted as well as provides an improved benefit for eligible 
veterans who opt for private burial. Congress should increase the plot 
allowance from $300 to $1,150 for all eligible veterans and expand the 
eligibility for the plot allowance for all veterans who would be 
eligible for burial in a national cemetery, not just those who served 
during wartime. Congress should divide the burial benefits into two 
categories: veterans within the accessibility model and veterans 
outside the accessibility model. Congress should increase the service-
connected burial benefit from $2,000 to $6,160 for veterans outside the 
radius threshold and $2,793 for veterans inside the radius threshold. 
Congress should increase the non-service-connected burial benefit from 
$300 to $1,918 for veterans outside the radius threshold and $854 for 
veterans inside the radius threshold. Congress should enact legislation 
to adjust these burial benefits for inflation annually.
    The NCA honors veterans with a final resting place that 
commemorates their service to this Nation. More than 2.8 million 
soldiers who died in every war and conflict are honored by burial in a 
VA national cemetery. Each Memorial Day and Veterans Day we honor the 
last full measure of devotion they gave for this country. Our national 
cemeteries are more than the final resting place of honor for our 
veterans; they are hallowed ground to those who died in our defense, 
and a memorial to those who survived.
    Mr. Chairman, this concludes my testimony. I thank you again for 
the privilege to present our views, and I would be pleased to answer 
any questions you might have.

                                 
          Prepared Statement of Steve A. Robertson, Director,
            National Legislative Commission, American Legion
                             Oral Statement
    Mr. Chairman and Members of the Committee, thank you for the 
opportunity for The American Legion to comment on the President's 
budget request for FY 2011. I ask that my written statement be included 
in the record and that The American Legion be allow to submit 
additional written comments if necessary.
    First, The American Legion would like to express its appreciation 
for the timely enactment of Public Law 111-81 that authorized advance 
appropriations for the Department of Veterans Affairs medical care 
accounts.
    After reviewing the President's budget request, The American Legion 
shares the President's vision to continue VA's transform into a 21st 
Century organization. It is a bold paradigm shift to VA's approach to 
veterans' care; as a lifetime initiative, from the day the oath is 
taken until the day they are laid to rest.
    Clearly, the budget request appears to direct funding to assure 
veterans and their families would receive timely access to the highest 
quality benefits and services provided by VA. The American Legion sees 
these benefits and services as earned through honorable military 
service.
    Secretary Shinseki explained that this budget request focuses on 
three specific concerns that are of critical importance to the 
veterans' community:

      easier access to benefits and services;
      reducing the disability claims backlog and the wait 
before veterans receive earned benefits; and
      ending the downward spiral that results in veterans' 
homelessness.

    The American Legion is pleased with the President's budget request 
of $125 billion for the Department of Veterans Affairs. This budget 
request would meet or exceed most of the funding recommendations 
offered by The American Legion National Commander Clarence Hill last 
September during the joint hearing of the Committees on Veterans' 
Affairs.
    VA has identified ``six high priority performance goals'' which 
this budget request must support:

      Reducing the Claims Backlog,
      Eliminating Veteran Homelessness,
      Automating the GI Bill Benefits System,
      Establishing a Virtual Lifetime Electronic Record,
      Improving Mental Health Care, and
      Deploying a Veterans Relationship Management System.

    These are priorities shared by The American Legion.
    There are other areas addressed in the budget request supported by 
The American Legion such as expanding health care eligibility, meeting 
the needs of women veterans, timely access to quality health care for 
veterans in rural and highly rural areas, and expanding access to 
burial in a VA National Cemetery.
    In reviewing this budget request, it is obvious that Information 
Technology is going to play an enormous role in achieving the 
President's vision and many of these goals and objectives.
    Mr. Chairman, thank you for the opportunity to participate in this 
review of the President's budget request.
    This concludes my oral remarks and I welcome any questions you or 
your colleagues may have for The American Legion.

                               __________
                           Prepared Statement
    Mr. Chairman and Members of the Committee:
    The American Legion welcomes this opportunity to comment on the 
President's budget request for Fiscal Year 2011/2012. The American 
Legion is pleased by the $125 billion total appropriations for the 
Department of Veterans Affairs (VA) in FY 2010 and the projected $64.7 
billion in mandatory appropriations and $60.3 billion in discretionary 
appropriations.
    As a Nation at war, America has a moral, ethical and legal 
commitment to the men and women of the Armed Forces of the United 
States and their survivors. These current defenders of democracy will 
eventually join the ranks of their 23.1 million comrades, we refer to 
as veterans. The active-duty, Reserve Components and veterans continue 
to make up the Nation's best recruiters for the Armed Forces. Young men 
and women across the country see servicemembers and veterans as role 
models. Chances are, before enlisting in the Armed Forces, these young 
people will seek the advice of those they see in uniform or family 
members who have served for their recommendations on military service.
    Therefore, it is absolutely critical that the entire veterans' 
community (active-duty, Reserve Component, and veterans) continue to 
remain supportive of honorable military service. No servicemember 
should ever be in doubt about:

      the quality of health care he or she will receive if 
injured;
      the availability of earned benefits for honorable 
military service upon discharge; or
      the quality of survivors' benefits should he or she pay 
the ultimate sacrifice.

    The American Legion and many other veterans' and military service 
organizations are united in advocating enactment of timely, predictable 
and sufficient budgets for VA medical care. The American Legion greatly 
appreciated the leadership of this Committee in passing Public Law 111-
81 authorizing advance appropriations for VA medical care accounts. 
With the decision for advance appropriations behind us, The American 
Legion continues to urge Congress to pass the VA budget for FY 2011 
before the start of the new fiscal year.
    After reviewing the proposed President's budget request for VA in 
FY 2011/2012, The American Legion renders its support as follows:

      Increases funding for VA in FY 2011 by $11 billion above 
FY 2010.
      Increases funding for VA's medical care by $4 billion in 
FY 2011 and a projected $2.8 billion increase in FY 2012 to $54.3 
billion.
      Expands enrollment for 500,000 additional Priority Group 
8 veterans by FY 2013.
      Enhances outreach and services related to mental health 
care and cognitive injuries, including post-traumatic stress disorder 
and traumatic brain injury, with a focus on access for veterans in 
rural and highly rural areas.
      Invests in better technology to deliver services and 
benefits to veterans with the quality and efficiency they deserve.
      Full concurrent receipt of military retirement pay and VA 
disability compensation without offsets.
      Combats homelessness by safeguarding vulnerable veterans. 
Facilitates timely implementation of the comprehensive education 
benefits that veterans earn through their dedicated military service.

    When National Commander Clarence Hill testified on September 10, 
2009 before a Joint Session of the Committees on Veterans' Affairs, he 
clearly outlined the funding recommendations for FY 2011. This 
testimony will re-emphasize that support for certain specific areas.
                              Medical Care
    The American Legion fully supports funding ``the best health care 
anywhere'' in FY 2011 at $51.5 billion and in FY 2012 at $54.3 billion. 
VA reports that 6.1 million veterans will receive timely access to 
quality health care in FY 2011. This represents an anticipated increase 
of 168,904 new patients who will ``vote with their feet'' in making VA 
their health care provider of choice. VA medical care is still 
America's best investment in quality health care delivery--the right 
care, at the right time, in the right facility.
                     Medical Care Collections Fund
    The Balanced Budget Act of 1997, Public Law (P.L.) 105-33, 
established the VA Medical Care Collections Fund (MCCF), requiring 
amounts collected or recovered from third-party payers after June 30, 
1997, be deposited into this fund. The MCCF is a depository for 
collections from third-party insurance, outpatient prescription co-
payments and other medical charges and user fees. Funds collected may 
only be used to provide VA medical care and services, as well as VA 
expenses for identification, billing, auditing and collection of 
amounts owed the Federal Government.
    The American Legion supported legislation to allow VA to bill, 
collect, and reinvest all third-party reimbursements and co-payments. 
The American Legion adamantly opposes the scoring of MCCF as an offset 
to the annual discretionary appropriations since the majority of these 
funds come from the treatment of nonservice-connected medical 
conditions. VA's ability to capture these funds is critical to its 
ability to provide quality and timely care to veterans. Miscalculations 
of VA required funding levels result in real budgetary shortfalls.
    The American Legion continues to oppose offsetting annual VA 
discretionary funding by the MCCF goal.
                        Medicare Reimbursements
    As do most American workers, veterans pay into the Medicare system, 
without choice, throughout their working lives, including while on 
active duty or as active service Reservists in the Armed Forces. A 
portion of each earned dollar is allocated to the Medicare Trust Fund 
and, although veterans must pay into the Medicare system, VA is 
prohibited from collecting any Medicare reimbursements for the 
treatment of allowable, nonservice-connected medical conditions. Since 
over half of VA's enrolled patient population is Medicare-eligible, 
this prohibition constitutes a multi-billion dollar annual subsidy to 
the Medicare Trust Fund.
    The American Legion continues to support a legislative initiative 
to allow VHA to bill, collect and reinvest third-party reimbursements 
from the Centers for Medicare and Medicaid Services for the treatment 
of allowable, nonservice-connected medical conditions of enrolled 
Medicare-eligible veterans.
                    Medical and Prosthetics Research
    The American Legion believes VA's focus in research must remain on 
understanding and improving treatment for medical conditions that are 
unique to veterans. Servicemembers are surviving catastrophically 
disabling blast injuries due to the superior armor they are wearing in 
the combat theater and the timely access to quality combat medical 
care. The unique injuries sustained by the new generation of veterans 
clearly demand particular attention. It has been reported that VA does 
not have state-of-the-art prostheses like DoD and that the fitting of 
prostheses for women has presented problems due to their smaller 
stature.
    There is a need for adequate funding of other VA research 
activities, including basic biomedical research and bench-to-bedside 
projects. Congress and the Administration should continue to encourage 
acceleration in the development and initiation of needed research on 
conditions that significantly affect veterans, such as prostate cancer, 
addictive disorders, trauma and wound healing, post-traumatic stress 
disorder, rehabilitation, and other research that is conducted jointly 
with DoD, the National Institutes of Health (NIH), other Federal 
agencies, and academic institutions.
    The American Legion recommends $700 million for Medical and 
Prosthetics Research in FY 2011.
                           Major Construction
    The CARES process identified approximately 100 major construction 
projects throughout the VA Medical Center System, the District of 
Columbia, and Puerto Rico. Construction projects are categorized as 
major if the estimated cost is over $10 million. Now that VA has 
disclosed the plan to deliver health care through 2022, Congress has 
the responsibility to provide adequate funds. The FY 2011 President's 
budget request calls for ongoing construction of a new medical facility 
in Denver, CO; New Orleans, LA; and Palo Alto, CA. Also work is to 
begin on new medical facilities in Omaha, NE and Alameda Point, CA.
    The American Legion supports these projects; however, we feel the 
President's budget request for $864 million in FY 2011 for Major 
Construction is inadequate and should be increased to $2 billion to 
provide for additional facilities particularly Community-Based 
Outpatient Clinics in rural and highly rural areas and additional Vet 
Centers.
                           Minor Construction
    VA's minor construction program has also suffered significant 
neglect over the past several years. Maintaining the infrastructure of 
VA's buildings is no small task, due to the age of these buildings, 
continuous renovations, relocations and expansions. When combined with 
the added cost of the CARES program recommendations, it is easy to see 
that a major increase over the previous funding level is crucial and 
overdue. The President's budget request for FY 2011 would fund Minor 
Construction at only $468 million.
    The American Legion recommends $1.5 billion for Minor Construction 
in FY 2011.
        State Extended Care Facility Construction Grants Program
    Since 1984, nearly all planning for VA inpatient nursing home care 
has revolved around State Veterans' Homes (SVHs) and contracts with 
public and private nursing homes. Under the provisions of Title 38, 
U.S.C., VA is authorized to make payments to states to assist in the 
construction and maintenance of SVHs. Today, there are 133 SVHs in 47 
states with over 27,000 beds providing nursing home, hospital, and 
domiciliary care. Grants for Construction of State Extended Care 
Facilities provide funding for 65 percent of the total cost of building 
new veterans' homes. Recognizing the growing Long-Term Care needs of 
veterans, it is essential the State Veterans' Homes Program be 
maintained as an important alternative health care provider for the VA 
integrated health care delivery system.
    The American Legion opposes attempts to place a moratorium on new 
SVH construction grants. State authorizing legislation has been enacted 
and state funds have been committed. Delaying projects will result in 
cost overruns and may result in states deciding to cancel these much 
needed facilities.

    The American Legion supports:

      increasing the amount of authorized per diem payments to 
50 percent for nursing home and domiciliary care provided to veterans 
in State Veterans' Homes;
      providing prescription drugs and over-the-counter 
medications to State Homes Aid and Attendance patients along with the 
payment of authorized per diem to State Veterans' Homes; and
      allowing full reimbursement of nursing home care to 70 
percent or higher service-connected disabled veterans, if those 
veterans reside in a State Veterans' Home.

    The American Legion strongly recommends $275 million for the State 
Extended Care Facility Construction Grants Program in FY 2011.
                           Rural Health Care
    Research conducted by VA indicates that veterans residing in rural 
and highly rural areas have poorer health than their urban 
counterparts. It was further reported that one in five veterans live in 
a rural setting. Providing quality health care to veterans living in 
rural and highly rural areas has proven to be an extreme challenge.
    The American Legion recommends construction of Community-Based 
Outpatient Clinics in areas such as Alaska, Montana, Nebraska, Nevada, 
South Dakota, Utah, Vermont and Wyoming.
                     Information Technology Funding
    Since the data theft occurrence in May 2006, the VA has implemented 
a complete overhaul of its Information Technology (IT) division 
nationwide. The American Legion is hopeful VA takes the appropriate 
steps to strengthen its IT security to regain the confidence and trust 
of veterans who depend on VA for the benefits they have earned.
    Within VA Medical Center Nursing Home Care Units, it was discovered 
there was conflict with IT and each respective VAMC regarding provision 
of Internet access to veteran residents. VA has acknowledged the 
Internet would represent a positive tool in veteran rehabilitation. The 
American Legion believes Internet access should be provided to these 
veterans without delay for time is of the essence in the journey to 
recovery. In addition, veterans should not have to suffer due to VA's 
gross negligence in the matter.
    The American Legion hopes Congress will not attempt to fund the 
solution to this problem with scarce fiscal resources allocated to the 
VA for health care delivery. With this in mind, The American Legion is 
encouraged by the fact that IT is its own line item in the budget 
recommendation.
    The American Legion believes there should be a complete review of 
IT security government wide. VA isn't the only agency within the 
government requiring an overhaul of its IT security protocol. The 
American Legion urges Congress to exercise its oversight authority and 
review each Federal agency to ensure that the personal information of 
all Americans is secure.
    The American Legion supports the centralization of VA's IT. The 
amount of work required to secure information managed by VA is immense. 
The American Legion urges Congress to maintain close oversight of VA's 
IT restructuring efforts and fund VA's IT to ensure the most rapid 
implementation of all proposed security measures.
    The American Legion disagrees with freezing funding at the FY 2009 
level of $3.3 billion for Information Technology, as recommended in the 
President's budget request; therefore, The American Legion recommends 
$3.8 billion in FY 2011.
                              Homelessness
    The American Legion notes there are approximately 154,000 homeless 
veterans on the street each night. This number, compounded with 300,000 
servicemembers entering the civilian sector each year since 2001 with 
at least a third of them potentially suffering from mental illness, 
indicates that programs to prevent and assist homeless veterans are 
needed. The American Legion applauds VA's continued emphasis as one of 
its priority items the elimination of homelessness among America's 
veterans.
    The American Legion fully supports the $294 million in the FY 2011 
President's budget request to help eliminate homelessness among 
veterans.
                    National Cemetery Administration
    The mission of the National Cemetery Administration (NCA) is to 
honor veterans with final resting places in national shrines and with 
lasting tributes that commemorate their service to this Nation. The 
American Legion recognizes the NCA's excellent record in providing 
timely and dignified burials to all veterans who opt to be buried in a 
National Cemetery. Further the American Legion applauds the new VA 
guidelines reducing the required population base for creating a 
National Cemetery from 175,000 to 85,000. This will allow 90 percent of 
all veterans a realistic option within 75 miles of their home.
    The American Legion feels that the President's budget request for 
$251 million for NCA and $46 million for the State Cemetery 
Construction Grants program is not enough to carry out this hallowed 
mission. Therefore, The American Legion recommends $260 million be 
allocated to the National Cemetery Administration and further that $50 
million be provided for State Cemetery Construction Grants Programs in 
FY 2011.
     Homeless Providers Grant and Per Diem Program Reauthorization
    In 1992, VA was given authority to establish the Homeless Providers 
Grant and Per Diem Program under the Homeless Veterans Comprehensive 
Service Programs Act of 1992, P.L. 102-590. The Grant and Per Diem 
Program, offered annually (as funding permits) by the VA, funds 
community agencies providing services to homeless veterans.
    VA can provide grants and per diem payments to help public and 
nonprofit organizations establish and operate supportive housing and/or 
service centers for homeless veterans. Funds are available for: 
assistance in the form of grants to provide transitional housing (up to 
24 months) with supportive services; supportive services in a service 
center facility for homeless veterans not in conjunction with 
supportive housing; or to purchase vans.
    The American Legion recommends $200 million for the Grant and Per 
Diem Program for FY 2011.
                    Veterans Benefits Administration
    Clearly, the current VA claims backlog is a major concern to The 
American Legion and the rest of the veterans' community. Aggressively 
addressing this growing problem will require actions from an array of 
approaches. The President's budget request proposes to add both 
increases in funding ($460 million) and in personnel (4,048 new FTE). 
These increases will be helpful, but The American Legion believes more 
will be required to ``turn the tide.'' The American Legion will 
continue to work with VA, Congress and the veterans' community to 
transform the current process into a more timely and accurate process. 
The American Legion applauds the $13.4 billion in supplemental funding 
to address the newly approved Agent Orange claims.
   Summary of Legislation Proposed in the FY 2011 President's Budget 
                                Request
    In reviewing the proposed legislation in the President's budget 
request, The American Legion would like to address several of them in 
detail:
Compensation and Pensions_Proposed Legislation

      Compensation Cost of Living Adjustment (COLA): 
Legislation will be proposed to provide a cost of living increase to 
all Compensation beneficiaries, including DIC spouses and children, 
effective December 1, 2010. The percent increase will align with 
increases in the Consumer Price Index and the increase for Social 
Security benefits. However, current estimates suggest that the CPI will 
not increase; therefore, no COLA may be enacted.

    The American Legion has no official position on this proposal.

      Expansion of Concurrent Receipt of Department of Defense 
Retirement Pay: Legislation will be proposed by the Administration to 
expand the veteran eligibility for concurrent receipt of military 
retirement pay and VA disability benefits to veterans who are medically 
retired from service by the Department of Defense. Eligibility will be 
phased in over five years based on the degree of disability assigned by 
VA. While the primary impact will be on Title 10 and the Department of 
Defense, VA estimates that the cost to VA of concurrent receipt 
expansion will be $47 million in 2011 and $254 million over the five-
year period.

    The American Legion supports this proposal. Since the offset comes 
from military retirement pay, The American Legion is somewhat surprised 
that VA would incur any costs.

      Use of Health and Human Services (HHS) Data for Purposes 
of Adjusting VA Benefits: Public Law 110-157 requires independent 
verification of HHS data for purpose of adjusting VA benefits based on 
economic need. This proposal seeks to remove the expiration date of 9/
30/11 and extend through 2020. Benefit costs are estimated to be $2.0 
million in 2012 with a net savings in later years.

    The American Legion has no official position on this proposal.

      Special Monthly Pension for Wartime Veterans 65 years of 
age and older: This proposal amends Section 1513 of Title 38 and 
repeals the Court of Appeals for Veterans Claims (CAVC) rendered 
decision in Hartness v. Nicholson. The decision affected the 
qualifications for the special monthly pension (SMP) awarded to 
veterans who are housebound (H/B). The court decision excluded the SMP 
requirement of being permanently and totally disabled for veterans 65 
years of age and older. By repealing the court decision, a veteran will 
once again only be eligible for SMP if, in addition to basic pension 
qualifications, the veteran shows proof of being permanently and 
totally disabled. Once a veteran reaches age 65, the requirements for 
H/B pension will require a single disability rated at 100 percent, and 
a disability or combined disabilities (separate and distinct from the 
100 percent disability) independently ratable to at least 60 percent. 
This proposal will provide for more equitable treatment of veterans 
under the pension program; currently, veterans with lower disability 
ratings may receive larger benefits than veterans who are permanently 
and totally disabled. The 2011 estimated savings is $3.2 million with 
an anticipated caseload of 506,000.

    The American Legion strongly opposes this proposal. The American 
Legion believes this proposal would take away a needed benefit provided 
to disabled elderly wartime veterans as allowed by statute and 
confirmed in a precedential decision of the United States Court of 
Appeals for Veterans Claims.

      VA Pension Limitations for Medicaid-covered Veterans 
Without Spouse or Children: This provision limits the amount of pension 
payable to a veteran who has neither spouse nor child (or a surviving 
spouse with no child) and who is covered by a Medicaid plan for 
services furnished by a nursing facility. Title 38, U.S.C. section 
5503(d) will expire on September 30, 2011. This proposal seeks to 
extend the expiration date an additional five years. Elimination of 
this provision would result in increased pension expenditures but money 
available to veterans and survivors would actually decrease. The 
maximum pension entitlement is not sufficient to cover the normal cost 
of nursing home care but receipt of that amount would result in the 
termination of Title XVI Medicaid benefits which currently cover 
nursing care costs in excess of the projected amount ($90) that is 
payable to the veteran under this provision. This is likely to result 
in veterans and surviving spouses being unable to afford nursing care. 
This proposal will result in VA benefit cost savings of $559.4 million 
and net government-wide savings of $246 million in 2012. Mandatory VA 
savings through 2015 are estimated at $2.3 billion.

    The American Legion has no official position on this proposal.

      IRS Income Data Matching for VA Eligibility 
Determinations: Section 6103 (I) (7) of the Internal Revenue Code of 
1986 (26 U.S.C. Section 6103 (I) (D)) requires the Secretary of the 
Treasury and the Commissioner of Social Security to disclose certain 
income information to any governmental agency administering certain 
programs, including VA's pension, dependency and indemnity 
compensation, and health-care programs. Section 5317 of Title 38, 
U.S.C., governs VA's use of that information. The duty of the Secretary 
of the Treasury and the Social Security Commissioner to disclose that 
information and VA's authority to obtain it from them will expire 9/30/
2011. This proposal seeks to extend the expiration date for five years. 
While this proposal will result in net mandatory and discretionary 
savings of $20 million in 2012, it will result in net mandatory costs 
of $20 million in 2012. However, the proposal will result in net 
mandatory savings beginning in 2013 and net mandatory savings between 
2011-2016 are estimated at $21.9 million.

    The American Legion has no official position on this proposal.

      Clarification of Monthly Payment Option for the Month of 
Death for Compensation or Pensions: This proposal will amend Title 38 
U.S.C. 5310 and 5111 (c) (1) to clarify that all surviving spouses are 
entitled to receive payment in the amount of the veteran's compensation 
or pension rate for the month of the veteran's death, and to simplify 
administration of the month-of-death benefit.

    The American Legion supports this proposal. There has been much 
confusion and misinterpretation of the law by VA regarding the month-
of-death benefit that has deprived thousands of beneficiaries of the 
benefits to which they are entitled, causing additional heartache 
during an already painful period following the death of a loved one.

      Extension for Contract Physicians to Perform Disability 
Evaluations: P.L. 108-183, Section 704, provides authority under which 
examinations with respect to medical disability of applicants for 
compensation and pension benefits are carried out by persons not 
employed by the VA. These examinations are funded through discretionary 
funds, and there is no limitation to the number of VA regional offices 
involved. This authority, extended by P.L. 110-329, Section 105, will 
expire December 31, 2010. The proposal would extend the authority by 
two additional years to December 31, 2012.

    The American Legion has no official position on this proposal.
Readjustment Benefits_Proposed Legislation

      Change of Terminology for the Administration of the New 
GI Bill: Title 38 U.S.C. uses the term ``institution of higher 
learning'' throughout chapter 36. For consistency, this proposal would 
adjust the administrative language of the new Chapter 33 benefit from 
the use of ``institution of higher education'' to ``institution of 
higher learning.''

    The American Legion has no official position on this proposal.

      Change in VA Authority to Approve Educational Programs: 
This proposal would amend 38 U.S.C. Chapter 36 to expand VA's authority 
regarding approval of courses for the enrollment of veterans (and other 
eligible persons) that are in receipt of educational assistance under 
the programs VA administers.

    The American Legion has no official position on this proposal.

      Extend the Delimiting Date for Caregivers Use of 
Education Benefits: This proposal would amend Title 38 U.S.C. 
Sec. 3031(d) and Title 38 U.S.C. Sec. 3512, to permit the extension of 
delimiting dates for eligible individuals who could not pursue, or had 
to interrupt, a program of education while acting as the primary 
caretaker for a veteran or servicemember seriously injured while on 
active duty in a contingency operation after September 10, 2001.

    The American Legion has no official position on this proposal.

      Expand Employer Support Eligibility: This proposal would 
amend Title 38, U.S.C., Section 3116 to expand eligibility for 
incentives paid to employers who provide on-job training and employment 
opportunities for veterans with service-connected disabilities who may 
be difficult to place in suitable jobs.

    The American Legion supports this proposal. If enacted this 
legislative proposal would give employers a greater incentive to hire 
injured veterans who are trying to obtain gainful employment. The 
unemployment rate for veterans is above the national average, 
particularly for those between the ages of 18 to 24. The American 
Legion believes this legislation will greatly assist servicemembers in 
their transition into the civilian workforce and allow them to use 
their expertise and military training to fill desirable positions 
within high potential industries.
Housing_Proposed Legislation

      Authority to Pool Loans: Legislation will be proposed to 
extend the authority to pool loans for two years to December 2013. This 
will allow the VA to obtain the best pricing for the pooled and 
securitized loans and to continue selling loans at a greater return 
without any additional risk. VA estimates additional revenue of $87 
million in 2012 and overall increased revenue of $190 million over the 
2012-2014 period.

    The American Legion has no official position on this proposal.

      Permission of Occupancy of Veteran's Child/Children: 
Legislation will be proposed to allow occupancy by a dependent child to 
satisfy occupancy requirements of VA home loans. This will permit a 
veteran who is unable to occupy a property as his/her primary residence 
due to active duty status or overseas employment, to use his/her earned 
Loan Guaranty benefit. No significant costs are anticipated.

    The American Legion has no official position on this proposal.

      First Lien Exemption for Public Entities: Legislation 
will be proposed to extend first lien exemption to public entities as 
well as private entities during disaster relief situations only. This 
will allow disaster relief agencies and veterans to have more options 
in the type of assistance available. No significant costs are 
anticipated.

    The American Legion has no official position on this proposal.
Insurance_Proposed Legislation

      VGLI Increased Coverage Act: This proposal would provide 
an opportunity for veterans to increase VGLI coverage in increments of 
$25,000 without medical underwriting. The opportunity will be available 
every 5 years with a total coverage not to exceed current legislated 
maximum SGLI. Current law limits the amount of VGLI allowed to the 
amount of SGLI at discharge and as a result, many service-disabled VGLI 
insured, have no opportunity to increase coverage to meet current 
family needs. This proposed change would allow veterans, including 
service-disabled veterans, to purchase adequate amounts of life 
insurance to protect their families. There are no PAYGO costs 
associated with this proposal and it does not impact the budget.

    The American Legion strongly supports this proposal. The American 
Legion would welcome such an addition to the VGLI program. This 
addition would permit veterans who separated from service prior to the 
latest increases in SGLI coverage, and who are thus restricted by 
current law to a lower maximum amount of life insurance coverage than 
those veterans who separated from service after September 1, 2005, when 
SGLI maximum coverage was raised from $250,000 to the current $400,000, 
a periodic opportunity to increase their VGLI coverage consonant with 
changes in their family situation and the needs of their beneficiaries. 
This increases program flexibility and fairness, and provides a greater 
benefit to this portion of the veteran population. The American Legion 
would like to comment further, however, that in the cases of severely 
service-disabled veterans, a federally subsidized premium relief or 
waiver element should be included to lessen the financial burden of 
VGLI's high premium costs, particularly in the older age groups.

      SGLI Two Year Total Disability Extension Retention Act: 
Under current law and procedures, if an insured servicemember is 
totally disabled at the time of separation from service, the member's 
SGLI coverage may be continued for up to two years, for free, following 
separation from service. Effective October 1, 2011, this provision 
expires and the SGLI extension period will be reduced from two years to 
18-months. The SGLI Two Year Total Disability Extension Retention Act 
will allow for the indefinite retention of the two-year total 
disability extension period. By maintaining the SGLI Total Disability 
Extension period at two years, this will maximize the opportunity for 
totally disabled veterans, who have no hope of obtaining commercial 
insurance, to make informed decisions regarding their life insurance 
needs and options. It also guarantees that those most in need, who have 
been traumatized by their disabilities, will be fully covered under the 
SGLI program during this transition period with no action or cost on 
their part. There are no PAYGO costs associated with this proposal and 
it does not impact the budget.

    The American Legion strongly supports this proposal. It is obvious 
that veterans who separate from service with such extensive 
disabilities as to render them totally disabled often require a 
substantial period of time to bring their personal and financial 
affairs into order, due to the debilitating nature of such disabilities 
and the resulting period of family adjustment, and so to assist them in 
later meeting the premium costs of VGLI coverage as the program's 
structure does not provide for any disability waiver of premiums as 
other federal and many private life insurance programs do. The American 
Legion further believes the process for this extension, which requires 
application by the veteran to the OSGLI center for such, be streamlined 
and automated so that veterans leaving active duty in a totally 
disabled status are automatically granted the extension shortly after 
separation.
Medical Care_Proposed Legislation

      Homeless Providers Grant and Per Diem Program: 
Legislation will be proposed to amend legislative authority in Title 38 
U.S.C., Subchapter VII, section 2061, to obtain statutory authority to 
offer both capital grants and enhanced per diem payments to eligible 
community-based entities who serve special needs veterans including 
female homeless veterans, homeless veterans diagnosed with a chronic 
mental illness, and those veterans who are failing and/or terminally 
ill. This proposal would grant VA permanent authority to offer capital 
grants and per diem to agencies that create transitional housing and 
supportive services for homeless veterans with special needs; allow for 
enhancement of the current per diem rate for transitional housing 
services; and remove the requirement to provide grants to VA health 
care facilities.

    The American Legion supports this proposal. If enacted, this 
legislative proposal would provide resources for public and private 
sector agencies and organizations who serve special needs veterans, 
including female homeless veterans, homeless veterans diagnosed with 
chronic mental illness and those veterans who are failing and/or 
terminally ill. With the VA and other homeless care service providers 
continuing to focus on the various needs (i.e., health issues, economic 
issues, lack of safe/affordable housing, and lack of family and social 
support networks) of homeless veterans, and the enactment of this 
legislation, The American Legion believes that homelessness rates will 
continue to drop among the veterans' community. The American Legion 
strongly supports taking the necessary means to combat and aid in 
ending veterans' homelessness.

      Reinstate the Health Professional Scholarship Program 
(HPSP): Legislation will be proposed to reauthorize the HPSP. The 
authority to provide the financial assistance will be established by 
extending the expiration date of the Department of Veterans Affairs 
Health Professional Scholarship Program described in Title 38, U.S.C., 
Sections 7611-7618. The HPSP, established by Public Law 96-330, awarded 
scholarships from 1982 through 1995 to 4,650 students earning 
baccalaureate and masters degrees. Authority for the program expired in 
1998. It is recommended that the Health Professional Scholarship 
Program be reauthorized and funded because there is no other 
scholarship program with a VA service obligation available to the 
public at this time. This program, if reauthorized, will provide 
financial assistance to competitively selected scholarship recipients 
in exchange for 2-year VA service obligations upon graduation and 
licensing.

    The American Legion supports this proposal. The Health Professional 
Scholarship Program maintains the Department of Veterans Affairs 
presence in the competitive medical professional market, as well as 
helps to lower the attrition rate amongst medical professionals 
employed at VA Medical Centers (VAMC).

      Remove Requirement that VA Reimburse Certain Employees 
for Professional Education: Legislation will be proposed to eliminate 
Title 38, U.S.C., section 7411 that states ``The Secretary shall 
reimburse any full-time board certified physician or dentist appointed 
under section 7401 (1) of this Title for expenses incurred, up to 
$1,000 per year, for continuing professional education.'' VHA has a 
long history of providing educational and training support to all 
clinical and administrative staff. The Employee Education System and VA 
Learning University offer a large course catalog with opportunities for 
physicians and dentists, as well as other occupations, to obtain 
continuing professional education at VA expense. VHA will continue to 
manage training and education funding within long-standing parameters 
in conjunction with published policies at the national and local 
levels. Continuance of the entitlement in section 7411 is no longer 
necessary, given the improved competitive recruitment position 
resulting from the new pay system.

    The American Legion has no official position on this proposal.

      Provide Care for Newborns as Part of the Uniform Benefits 
Package: Legislation will be proposed to amend Title 38, U.S.C., to 
authorize VA to provide care to newborns of enrolled women veterans who 
are receiving maternity care through the Department of Veterans 
Affairs. This proposal is to cover costs of newborn hospitalization and 
is not to exceed 96 hours after delivery. Longer hospitalization or 
outpatient costs for the newborn, beyond 96 hours post-delivery, would 
not be authorized in this maternity benefit.

    The American Legion has no official position on this proposal.

      Civilian Health and Medical Program of the Department of 
Veterans Affairs (CHAMPVA) Coverage for Caregivers: Legislation will be 
proposed to provide health care coverage through CHAMPVA for any 
caregiver without entitlement to other health insurance or coverage. 
Caregivers for severely wounded veterans are in most cases impacted by 
their inability to sustain employment related health coverage. CHAMPVA 
health care coverage will help relieve the financial burden of health 
care costs incurred by the caregiver of severely wounded veterans and 
allow them the reassurance that their medical care needs will be met 
while they care for the medical needs of the veteran. This in turn will 
reduce veterans' stress as they will not need to worry about how their 
caregivers health related needs are met.

    The American Legion supports this proposal. This legislative 
proposal would adequately provide timely access to quality health care 
for those who are unselfishly caring for the Nation's veterans.

      Travel Expenses, including Lodging and Subsistence, for 
Caregivers: Legislation will be proposed to provide travel, incidental 
expenses [e.g., per diem (inclusive of lodging allowance), tolls etc.] 
and subsistence for a caregiver of qualifying veterans receiving care 
for service-related conditions at a VA or VA authorized facility. The 
Department does not have authority to provide lodging expenses to an 
attendant if the veteran is not lodging with the attendant. Since the 
veteran's caregiver in most cases is a close family member, providing 
travel expenses for the caregiver assures the veteran has the 
appropriate support while traveling to a VA health care facility. This 
will allow the veteran's health care provider to communicate directly 
to the veteran's caregiver about the needs of the veteran. This will 
also ensure continuity of the veteran's care and help the caregiver 
better understand the needs of the patient.

    The American Legion supports this proposed. This legislative 
proposal would help to ensure veterans receive complete and 
uninterrupted care.

      Education and Training for Caregivers: Legislation will 
be proposed to allow VA to develop caregiver education materials for 
caregivers and individuals who support caregivers. In addition, VA 
would provide outreach to veterans and their caregivers to inform them 
of the support available through VA as well as public, private, and 
non-profit agencies. VA currently provides education and training for 
veterans and their caregivers regarding medical issues. This proposal 
would codify and expand those efforts. These programs generally 
demonstrate significant reduction in caregiver burden and the impact of 
depressive symptoms on their daily life. This proposal provides VA with 
the opportunity to implement a formal approach to educating and 
training caregivers so they are better prepared to care for the 
veteran.

    The American Legion supports this proposal.

      Survey of Caregiver Needs: Legislation will be proposed 
to conduct a caregiver survey every 3 years to determine the number of 
caregivers, the types of services they provide to veterans, and 
information about the caregiver (age, employment status, and health 
care coverage). Currently, VA does not have adequate information on the 
number of caregivers, the number of family caregivers, and the number 
of veterans receiving caregiver services from caregivers and family 
caregivers, including the era in which each veteran served in the Armed 
Forces.

    A survey of veteran caregivers will allow VA to gather needed 
information that will be used to better understand the population of 
caregivers and to identify and understand their specific needs. This 
information will allow VA to appropriately develop education, training, 
and support programs for veteran caregivers.

    The American Legion supports this proposal.

      Nonprofit Corporations: Legislation will be proposed to 
establish a Central Nonprofit Corporation for VA research. Currently, 
there are 88 of these VA affiliated Non-Profit Corporations (NPC). Each 
NPC is required to report annually a detailed statement of their 
operations, activities and accomplishments during the previous year. 
The purpose of the central Non-Profit Corporation will be to: (1) carry 
out national medical research and education projects under cooperative 
arrangements with VA, (2) serve as a focus for interdisciplinary 
interchange and dialogue between VA medical research personnel and 
researchers from other federal and non-federal entities, and (3) 
encourage the participation of the medical, dental, nursing, 
veterinary, and other biomedical sciences in the work of the central 
NPC for the mutual benefit of VA and non-VA medicine. The central NPC 
would enable facility directors or the Under Secretary for Health to 
have an alternative to individual medical-center-based NPCs in those 
facilities in which the volume of research and education does not 
enable the resources to assure adequate management controls.

    The American Legion has no official position on this proposal.

      Clarify Breach of Agreement under the Employee Incentive 
Scholarship Program (EISP): Legislation will be proposed to amend Title 
38, U.S.C., chapter 76, section 7675, subchapter VI, to provide that 
full-time student participants in the EISP would have the same 
liability as part-time students for breaching an agreement by leaving 
VA employment. The current statute clearly limits liability to part-
time student status participants who leave VA employment prior to 
completion of their education program. This allows a scholarship 
participant who meets the definition of full-time student to leave VA 
employment prior to completion of the education program, breaching the 
agreement with no liability. This proposal would require liability for 
breaching the agreement by leaving VA employment for both full- and 
part-time students. All other employee recruitment/retention incentive 
programs have a service obligation and liability component. This 
proposal would result in cost savings for the Department by recovering 
the education funds provided to employees who leave VA employment prior 
to fulfilling their agreement.

    The American Legion has no official position on this proposal.

      Consider VA a Participating Provider for Purpose of 
Reimbursement (revenues): Legislation will be proposed that would allow 
VA to be treated as a participating provider, whether or not an 
agreement is in place with a health insurer or third-party payer, thus 
preventing the effect of excluding coverage or limiting payment of 
charges for care. With the enactment of the Balanced Budget Act of 1997 
(BBA), Congress changed the health insurer and third-party program into 
one designed to supplement VA's medical care appropriations by allowing 
VA to retain all collections and some other copayments. VA can use 
these funds to provide medical care to Veterans and to pay for its 
medical care collection expenses. This law also granted VA authority to 
begin billing reasonable charges versus reasonable costs for care. 
Reasonable charges are based on the amounts that health insurers and 
third-party payers pay for the same care provided by non-government 
health care providers in a given geographic area. This proposal would 
prevent a health insurer or third-party payer from denying or reducing 
payment, absent an existing agreement between VA and any health 
maintenance organization, competitive medical plan, health care 
prepayment plan, preferred provider organization, or other similar 
plan, based on the grounds that VA is not a participating provider.

    The American Legion supports this proposal.

      Military Surgeon Association: This proposal would make 
the Department of Veterans Affairs (VA) an Incorporated Member of the 
Association of Military Surgeons of the United States (AMSUS). As a 
result, VA would be authorized to participate in AMSUS activities to 
the same extent as the military services.

    The American Legion has no official position on this proposal.

      Technical Changes to Fee Basis Authority: This proposal 
would amend Title 38 U.S.C. 1703(a) by adding language similar to the 
language found in Title 38 U.S.C. Sec. 8123, Procurement of prosthetic 
appliances, which will strengthen the Department's interpretation of 
legal authority to purchase health care on an individual basis when 
needed.

    The American Legion supports this proposal. This legislative 
proposal would seek to ensure veterans receive adequate and timely 
care, to include medical appliances.

      Mandatory Disclosure of Social Security Number (SSN) and 
3rd Party Health Insurance: The provision would deny access to hospital 
care, nursing home care, or medical services that may be provided to 
any person under the provisions of Title 38 U.S.C. chapter 17 unless 
that person has disclosed his/her social security number and the social 
security number of any dependent or beneficiary and furnish VA with 
current, accurate third-party health insurance information.

    The American Legion has no official position on this proposal.

      Permanent Authority for Co-Pays: The provision would 
amend Title 38 U.S.C. Sec. 1710 (f)(2)(B) to make permanent VA 
authority to collect an amount equal to $2 or $10 for every day the 
veteran receives hospital care for a veteran who is required to agree 
to pay to the United States the applicable amount determined under 
paragraph (2) or (4) or this subsection. This current authority expires 
September 30, 2010.

    The American Legion has no official position on this proposal.

      Permanent Authority for Collections: The provision would 
amend Title 38 U.S.C. Sec. 1729 to make permanent VA authority to 
recover reasonable charges for care or services for care of nonservice-
connected conditions from a third party to the extent that the veteran 
who has a service-connected disability would be eligible to receive 
payment for care or services from a third party if the care or services 
were not provided by VA. This current authority expires October 1, 
2010.

    The American Legion has no official position on this proposal.

      Eliminate and Change Dates for Certain Congressional 
Reports: This proposal would eliminate the Report on Pay for Nurses and 
Other Heath Care Personnel (Title 38, U.S.C., Section 7451(f)) and 
Report on Long-Range Health Planning (Title 38, U.S.C., Section 8107) 
and modify the due date and limit the duration of the Annual Report on 
Federally Sponsored Gulf War Research Activity.

    The American Legion has no official position on this proposal.

      Codify Rules on Billing of Veterans in CHAMPVA: This 
proposal would modify Title 38 U.S.C. Sec. 1781 to codify, consistent 
with regulations, that the VA determined allowable amount for 
reimbursement of medical services represents payment in full and the 
health care provider may not impose additional charges on the 
beneficiary above the VA-determined allowable amount.

    The American Legion has no official position on this proposal.
Other Legislative Proposals

      Staying of Claims: This proposal would amend Title 38, 
U.S.C., to permit the Secretary of Veterans Affairs (VA) to delay 
adjudications as needed to preserve program integrity and to clarify 
that the Board of Veterans' Appeals (Board) may decide certain cases 
out of docket order.

    The American Legion opposes this proposal. The American Legion 
would oppose VA from initiating stays involving implementation of 
precedential federal court decisions pending the appeal of the decision 
without seeking permission of such a stay from the court as is the 
current practice. The current procedure for initiating stays in claims 
adjudication in such instances allows for VA to preserve program 
integrity but also provides a check by not allowing VA to circumvent 
the court's authority.

      Revise Time Limits and Dates for Herbicide and Gulf War 
Presumptions: This proposal would modify statutory time limits to the 
review and rule-making process.

    The American Legion has no official position on this proposal.

      Repeal Obsolete Ethics Provision: This proposal would 
eliminate the blanket prohibition against VA employees having interests 
in, or receiving income or services from, certain for-profit 
educational institutions.

    The American Legion has no official position on this proposal.

      Notice of Disagreement Filing Period: This proposal would 
amend Title 38 U.S.C. Sec. 7105(b)(1) to reduce the time period for 
filing of a notice of disagreement (NOD) following the issuance of a 
rating decision from one year to 180 calendar days.

    The American Legion strongly opposes this proposal. Claimants 
currently have one year to initiate the appeals process following the 
issuance of a VA rating decision by filing a notice of disagreement. 
Arbitrarily reducing this period from 1 year to 6 months for the sake 
of expediency serves no purpose other than to adversely impact 
appellants who miss the 6 month cut off. If the percentage of 
appellants who file after 6 months is large, then a large group of 
appellants would be denied their appellant rights. If the percentage of 
those who file after 6 months is small, then there can be no great 
benefit to timeliness by implementing this change.

      Automatic Waiver of Agency of Original Jurisdiction 
Review of New Evidence: This proposal would amend Title 38 U.S.C. 
Sec. 7105 to specifically incorporate an automatic waiver of agency of 
original jurisdiction (AOJ) consideration for any evidence submitted to 
VA by the appellant or his or her representative following VA's receipt 
of a VA Form 9 substantive appeal, unless the appellant or his or her 
representative expressly chooses in writing not to waive such 
jurisdiction.

    The American Legion supports this proposal. The American Legion 
believes the automatic waiver of agency of original jurisdiction (AOJ) 
review in instances where the claims file has already been certified 
and transferred to the Board of Veterans' Appeals (BVA). However, as it 
takes an average of approximately 600 days for the regional offices 
(RO) to transfer an appeal to the BVA after the substantive appeal has 
been filed, an automatic waiver of AOJ review and or submission of the 
evidence directly to the BVA after the substantive appeal has been 
received would cause additional delay if the claims file is still at 
the regional office. It is also in the best interest of the appellant 
for the RO to review evidence and issue a decision, after the appeal 
has been perfected, in instances where the claims file is still at the 
RO and the evidence submitted would allow a grant of the benefit 
sought. As it now takes a year or more, depending on docket date, for 
the BVA to make a decision after it has received the claims file, 
automatically waiving AOJ review in such instances would cause 
unnecessary delay.

    The American Legion also suggests the consideration of legislation 
addressing the inordinate amount of time it takes the AOJ to certify 
and transfer the appeal to the BVA after a substantive appeal is 
received.

      Board of Veterans' Appeals Video Hearings: This proposal 
would amend Title 38 U.S.C. Sec. 7107(d)(1) and (e)(2) to allow the 
Board to determine the most expeditious type of hearing to afford an 
appellant (i.e. an in-person hearing or a video conference hearing), 
restricting the appellant to the hearing selected by the Board unless 
good cause or special circumstances are shown to warrant another type 
of hearing.

    The American Legion opposes this proposal. The American Legion does 
not support a denial of the appellant's right to choose the type of 
Board of Veterans' Appeals (BVA) hearing he or she desires. The 
majority of BVA appellants do not opt to have a personal hearing and 
taking away their right to choose their preferred option serves no good 
purpose.

      Board of Veterans' Appeals'--Rationale in Decisions: This 
proposal would amend Title 38 U.S.C. Sec. 7104(d)(1), to define 
``reasons or bases'' to mean ``a plausible statement of the reasons for 
the Board's ultimate findings of fact and conclusions of law.''

    The American Legion has no official position on this proposal.

      Definition of Prevailing Party for the Equal Access of 
Justice Act (EAJA) and Veterans Benefits Appeals: This proposal would 
amend the definition of ``prevailing party'' for purposes of 
establishing eligibility to receive attorney fees and expenses fees 
under Title 28 U.S.C. Sec. 2412 of the Equal Access of Justice Act 
(EAJA) for cases handled by the United States Court of Appeals for 
Veterans Claims (Court).

    The American Legion has no official position on this proposal.

      Filing of Substantive Appeals: This proposal would amend 
Title 38, U.S.C., Sec. 7105(d)(3), to establish a clear time period for 
filing a substantive appeal in order to perfect an appeal to the Board 
of Veterans' Appeals (Board), to make the filing of a timely 
substantive appeal a jurisdictional requirement for Board review, and 
to establish that finality attaches to any matter in which a timely 
substantive appeal is not filed, all for the purpose of promoting 
efficiency in the adjudication process.

    The American Legion is deeply concerned about the potential impact 
this proposal will have, but without reviewing the exact statutory 
language we are unable to provide specific comment.

      Advisory Committee on Homeless Veterans: This proposal 
would extend the Congressional authority to continue the Advisory 
Committee for Homeless Veterans (ACHV) for an additional three years 
until 2014.

    The American Legion supports this proposal. VA's new initiative to 
eliminate homelessness among the veterans' population in five years 
will require this Committee's insight and guidance to making this 
endeavor a reality.

      Title 38 Pay Authority To Maintain On-Call Pay for 
Information Technology (IT) Specialists in VA OI&T: This proposal would 
amend Title 38 to continue to allow Title 5 IT Specialists authority to 
serve in an ``on-call'' status and receive ``on-call'' pay because of 
the requirement to support VA's health care mission 24 hours a day, 7 
days a week.

    The American Legion has no official position on this proposal.

      Title 38 Pay Authority To Recruit and Retain Health Care 
Professionals in VA OI&T: Legislation will be proposed to allow the 
Office of Information and Technology (OI&T) Title 38 Pay Authority. 
This will enable OI&T to recruit and retain health care professionals 
in leadership positions.

    The American Legion has no official position on this proposal.

      Office of Small Business Programs: This proposal would 
change the name of the Office of Small and Disadvantaged Business 
Utilization to the Office of Small Business Programs. This change will 
bring VA into alignment with DoD's name change in accordance with the 
National Defense Authorization Act for Fiscal Year 2006 (Public Law 
109-163, Section 904).

    The American Legion has no official position on this proposal.

      Real Property Enhanced Use Leases (EUL): Legislation will 
be proposed to extend the current EUL authority from its expiration 
date of December 31st, 2011 for five years, until December 31st, 2016.

    The American Legion has no official position on this proposal.

      Franchise Fund: This proposal would modify Public Law 
109-114, Military Quality of Life and Veterans Affairs Appropriations 
Act of 2006, to provide a better financial procedure for the VA 
Franchise fund to more quickly return refunds to customers when 
improper payments are inadvertently made by the fund on the customer's 
behalf.

    The American Legion has no official position on this proposal.

      VA Police Uniform Allowances: This proposal would update 
Title 38 U.S.C. Sec. 903-Uniform Allowance for Department Police 
Officers to make the uniform allowance paid to Department police 
officers consistent with current Federal statute and regulations.

    The American Legion has no official position on this proposal.
                               CONCLUSION
    Mr. Chairman and Members of the Committee, The American Legion will 
continue to review the President's budget request. The American Legion 
had less than 24 hours to review the President's budget request and 
prepare this written testimony.
    Once again, The American Legion supports:

      Increases funding for VA in FY 2011 by $11 billion above 
the FY 2010.
      Increases funding for VA's medical care by $4 billion in 
FY 2011 and a projected $2.8 billion increase in FY 2012 to $54.3 
billion.
      Expands enrollment for 500,000 additional Priority Group 
8 veterans by FY 2013.
      Enhances outreach and services related to mental health 
care and cognitive injuries, including post-traumatic stress disorder 
and traumatic brain injury, with a focus on access for veterans in 
rural and highly rural areas.
      Invests in better technology to deliver services and 
benefits to veterans with the quality and efficiency they deserve.
      Full concurrent receipt of military retirement pay and VA 
disability compensation without offsets.
      Combats homelessness by safeguarding vulnerable veterans. 
Facilitates timely implementation of the comprehensive education 
benefits that veterans earn through their dedicated military service.

    The American Legion welcomes the opportunity to work with this 
Committee and the Administration on the enactment of a timely, 
predictable and sufficient budget for the Department of Veterans 
Affairs.
    Mr. Chairman, this concludes my testimony and The American Legion 
would welcome any questions you or your colleagues may have.

                                 
               Prepared Statement of Richard F. Weidman,
         Executive Director for Policy and Government Affairs,
                      Vietnam Veterans of America
    Good morning, Mr. Chairman, Ranking Member Buyer, and distinguished 
Members of the committee. Thank you for giving Vietnam Veterans of 
America (VVA) the opportunity to offer our comments on the President's 
Budget Request for FY 2011. All of us at Vietnam Veterans of America 
(VVA) wish to thank the leadership shown by this committee, by the 
leadership of the Budget Committee and of the Appropriations Committee, 
as well as the Speaker and the leadership of the House of 
Representatives for your vision in leading the struggle to enact 
Advance Appropriations. Further, your extraordinary vision in securing 
the dramatic increases in funding for Department of Veterans Affairs 
(VA) in both the medical system and in the Veterans Benefits 
Administration in the last three years has been nothing short of 
laudatory, and we applaud you for it.
    First let me note that Vietnam Veterans of America (VVA) is one of 
the many organizations that has endorsed The Independent Budget of the 
Veterans Service Organizations (IBVSO). We commend our colleagues at 
the Veterans of Foreign Wars, AMVETS, Paralyzed Veterans of America, 
and the Disabled American Veterans for their excellent work on this 
major undertaking, and thank them for the strenuous effort it takes to 
produce this excellent document each year.
    Further, VVA commends President Obama and his Administration for 
submitting a budget request that continues to move us toward the goal 
of full funding of the health care and benefits earned by virtue of 
military service. It is a relatively ``lean year'' in regard to the 
Federal Budget request, yet the President has recognized that caring 
for ``he--or she--who hath borne the battle'' and their survivors is 
both part of the cost of war as well as the duty of the nation and our 
citizenry. Therefore the President has exempted programs that serve 
veterans from the projected budget freeze along with the Department of 
Defense, Department of Homeland Security, and other programs vital to 
protecting the country.
    While VVA does endorse the IBVSO in the main, and lauds the 
President's Budget Request, there are a few areas that we must comment 
where we see some needs that are not included in either the IBVSO or in 
the President's Budget Request for VA.
    First, VVA strongly supports the need to indicate where some of the 
appropriations increases need to be focused by VA managers, such as 
Post Traumatic Stress Disorder (PTSD) services. The reason for this is 
that all too often in the past Congress has appropriated additional 
funds to deal with specific needs, and the money has been redirected at 
other areas of operation. The well documented instance of money 
specifically directed by the Congress to start to more properly address 
the scourge of Hepatitis C a decade ago is one glaring incident of this 
behavior by VA. Even after being pressed hard by the Congress and the 
General Accountability Office (GAO), VA could not account for the 
majority of the funds that were supposedly directed toward correcting 
the deficiencies of the VA health care system in diagnosing and 
treating Hepatitis C. There is therefore a natural inclination to 
ensure that this type of thing does not happen again, both on the part 
of top managers in the Executive branch and in the Congress.
    However, because so much of the funding was centrally directed from 
Washington, VISN Directors and VA Medical Center Directors reported to 
us last tear that they could not meet certain needs because they only 
got a small increase of funds from FY 2008 to FY 2009 and/or FY 2009 to 
FY 2010. Usually those reported increases were from 1 percent to 3 
percent. This of course caused VVA to ask how this could be, given that 
there was a much larger increase than that in the appropriation of the 
medical operations account? Where did the money go? We were told that 
it was in the special accounts, such as for PTSD. However, some of the 
unmet needs that local VA managers said they could not meet because of 
tight budgets were for additional clinicians to deal with PTSD problems 
of young soldiers returned from the current conflicts.
    The argument against making medical care part of the mandatory side 
of the budget as opposed to keeping it where it is now, in the 
discretionary side of domestic spending was that Congress would not 
have adequate control over how the funds were spent. That was 
persuasive to the veterans' community, so all agreed that we should go 
to advance appropriations. With the strong leadership here in the 
House, and Senator Akaka and his colleagues in the Senate, as well as 
President Obama, we have achieved this important milestone. As you 
know, VVA's top legislative agenda item for the 11th Congress was 
Advance Appropriations for VA health care. Now that this has been 
achieved, our top legislative agenda item is to assist the Congress in 
securing much greater accountability in both the efficiency and 
effectiveness of how each appropriated dollar is spent. What we are 
saying is that the Director of each Veterans' Integrated Service 
Network (VISN) and of each VA Medical Center (VAMC) must be given funds 
to be able to handle the increased costs of everything from electricity 
to salary to supplies, and then held accountable for how well they use 
those dollars to deliver high quality medical care to every eligible 
veteran. VVA suggest that several billion be added to the pool of funds 
that is sent out to the VISNs under the allocation model. VVA further 
suggest that Congress direct VA to re-examine the Veterans Equitable 
Resource Allocation (VERA) model to make it a more finely tuned 
instrument for allotting resources. At present the VA medical 
facilities in the north are being shortchanged because the veterans who 
have resources move south, leaving generally the veterans who are 
poorer, sicker, and in need of more medical services than the more 
affluent ones who move to warmer climates. The two tiered system 
currently employed does not sufficiently account for this phenomena, 
thereby leaving those VISNs in the north without adequate resources to 
meet the needs of the veterans in their catchment area.
    This does not mean that the President's request should not ask for 
targeted dollars (e.g., for PTSD, for increased services to homeless 
veterans, etc.), but that as this is passed down to the local level for 
actual delivery of services, how much goes where needs to be 
transparent. VVA National President wrote to VA on April 9, 2009 asking 
for the allocation by VSN and by VAMC of medical care dollars. While it 
was partly answered within 30 days, the only information provided was 
for the previous (FY 2008) Fiscal Year. It is now almost halfway 
through the second quarter of FY 2010, and we are still waiting for 
that answer, despite having made repeated efforts to secure same. This 
is just not acceptable.
Need for Much Greater Transparency in VHA
    It is clear to us that mechanisms to achieve a much higher degree 
of transparency in all parts of the Veterans Health Administration 
(VHA) needs to be restored, and the trend toward secretiveness that 
started in 2003-2004 needs to be sharply reversed. There is no better 
way of securing the undivided attention of the permanent managers 
employed in the VHA than to make such mandates part of the 
appropriations process/language, both in the text of the law and in the 
report language. VVA encourages the Committee to suggest possible 
language to the Budget and Appropriations Committees in your views and 
estimates statement.
    Further, there needs to be much more consultation and sharing of 
information between key officials in the VHA and leaders of the 
veterans' community. The fact that much of the meetings of the 
Seriously Mentally Ill Advisory Committee now meets in secret, and the 
Advisory Committee on PTSD meets totally in secret should give everyone 
pause, particularly after the missteps and serious problems with these 
services at VA over the last four or five years.
Outreach and Education to Open the System to ALL Eligible Veterans
    VVA encourages the Congress to continue and accelerate the lifting 
of the restrictions imposed in January 2003, and to allow so-called 
Priority 8 veterans to register and use the system. As a key element in 
this effort, VVA strongly urges the Congress to mandate that there be a 
line item in each division of VA specifically for outreach and 
education, and that all of these efforts be coordinated through the 
Office of the Assistant Secretary for Intergovernmental and Public 
Affairs. Having been turned away one or more times by the VA, many of 
the veterans who they are trying to reach are very skeptical (to say 
the least) about responding to any letters that VA may send them to ask 
them to come in and register for health care services.
    If it is to be successful, this effort must be coordinated, done on 
a media market by media market basis, and involve the Veterans Service 
Organizations and other key players if it is to be successful in 
drawing these veterans back to VA.
Veterans Economic Opportunity
    While VVA supports adding additional claims processors to the 
Compensation and Pension system, it is equally important to add 
additional staff to the rolls of VA Vocational Rehabilitation. VVA 
strongly favors reorganizing VA to create a fourth element of VA that 
would be known as the Veterans Economic Opportunity Administration, 
giving the current Secretary the opportunity to establish a new 
corporate culture in the VEOA that focuses on helping veterans to be as 
autonomous and as independent as possible. Frankly, getting, and 
keeping, veterans who are homeless off of the street a major goal of VA 
should make expansion of the VA Vocational Rehabilitation program a top 
priority, both for adding rehabilitation specialists, and for adding 
more employment placement specialists. There are currently less than 
100 employment placement specialists for the entire nation. We have 
excellent leadership at the top of VA Vocational Rehabilitation Service 
now. It is time to give her the staff and the resources needed to 
assist veterans to obtain and sustain meaningful employment at a living 
wage. It is important that we add at least 400 staff members to the VA 
Voc Rehab staff, with many of those being placement specialist. If we 
can add 4,000 new staff members to process claims, then we should be 
able to add 400 staff to help veterans return to work.
VA Research
    While VVA supports the request for $590 million for VA Research & 
Development, we hope that all recognize that this is not nearly enough 
for the tasks at hand. Frankly, much of these funds go to research 
projects that keep the medical ``stars'' at VA in the VAMC that are 
affiliated with a medical school. This is fine, and a useful function. 
However, there is a glaring need for funding into the wounds, maladies, 
injuries, illnesses, and medical conditions that stem from service by 
American citizens in our Armed Forces. The National Institutes of 
Health (NIH) does virtually no specific veteran related research. 
Similarly, the same is largely true of the Center for Disease Control 
(CDC), the National Academies for the Advancement of Sciences (NAAS), 
and the Agency for Health Research Quality (AHRQ). While VVA strongly 
supports the work of all of these fine institutions as the only VSO to 
be a member of the ``Research America!'' coalition, we also know that 
there is an immediate and pressing need for veteran specific research. 
This vitally needed research would include, but not be limited to, 
projects such as research into the genochromosonal effects of Agent 
Orange and other toxins across multiple generations, possibly causing 
health anomalies in grandchildren and great-grandchildren of veterans 
exposed. Or, similarly, the consequences in regard to MS or MS-like 
conditions in veterans or the possible birth defects of children of 
those exposed to the cloud of chemical and biological weapons detonated 
in Iraq at the end of Gulf War I.
    If it is necessary to create a new branch of VA that would be 
called the Division of Extramural research in order to make it possible 
to have such directed research grants available to those inside and 
outside of VA on a competitive basis, then VVA recommend that we move 
in that direction, and fund these activities to the level of at least 
$2 Billion by the year 2015, with commensurate increases of $260 + 
million each year to reach that level. Frankly this is important both 
for the health of current and future veterans already exposed, but also 
as a force health protection activity that will assist in preventing 
such maladies in the future, which makes it necessary for our national 
security.
    In this regard in the short term, VVA strongly urges the Congress 
to allocate an additional $30 million for VA to begin to analyze and 
study the mountains of epidemiological evidence that it has on veterans 
of every generation, to meet Secretary Shinseki's desire that we not 
``wait for an Army to die'' but rather get answers about patterns of 
health care problems now, without waiting for prospective studies in 
the future.
Automating VA IT Functions and Outreach
    VA has an ambitious set of proposals to bring the department into 
the 21st century, and VVA enthusiastically supports these initiatives. 
However, we are still troubled that VA wants an electronic medical 
record system that can communicate with the Department of Defense and 
the private sector, but which will still not be able to communicate 
with the Compensation & Pension Service.
    Further, while we can all be proud that the VA's electronic health 
care record ``VistA'' is so popular that it is now being exported to 
the private sector, VVA is still troubled that this is occurring 
without a field being added for military history, thereby sending an 
implicit false message to the private sector that exposures and 
experiences in military service have no significant impact on the long-
term health care risks for veterans. I think it is safe to say that 
most know this to not be the case for all too many veterans.
    Mr. Chairman, thank you for this opportunity to share our thinking 
and recommendations on these matters.

                                 
       Prepared Statement of Paul Rieckhoff, Executive Director,
                Iraq and Afghanistan Veterans of America
    Chairman Filner and Ranking Member Buyer, thank you for the 
opportunity to testify on behalf of Iraq and Afghanistan Veterans of 
America (IAVA) regarding the ``VA's Budget Request for Fiscal Years 
2011 and 2012.'' IAVA is the Nation's first and largest non-partisan, 
nonprofit organization representing veterans of the wars in Iraq and 
Afghanistan, and we are honored to be invited here today.
    We've come a long way since 2004, when my infantry platoon and I 
first got home from Iraq. The era of rationing health care for our 
Nation's veterans, due to late and insufficient funding, has finally 
ended. Nearly two decades ago veterans' advocates began demanding 
``sufficient, timely and predictable'' funding for the Department of 
Veterans Affairs. Last year, this Congress and Administration finally 
delivered. With record increases for the third year in a row, the VA 
budget was more than just ``sufficient.'' And although the budget was 
passed 2 months after the start of the new fiscal year, by providing 
funding for fiscal years 2010 and 2011 we finally had a ``timely'' and 
``predictable'' VA budget. IAVA didn't exist when this campaign began, 
but we were proud to be a part of the battle and advance appropriations 
was our top priority last year. We are sincerely grateful for the work 
that the Members of this Committee and the veterans groups seated here 
today did to make advance appropriations possible.
    I'm sure the Members of this Committee agree that our work is far 
from over. Right now, thousands of veterans are unemployed, more than 
100,000 are homeless, and hundreds of thousands are desperately waiting 
months, and sometimes years, for their well-earned VA benefits. 
Veterans, like former Army Specialist and IAVA member Casey Elder, who 
suffered a Traumatic Brain Injury when her Humvee struck a roadside 
bomb in Baghdad in 2004. After nearly a year of waiting, and despite 
clear evidence for a disability rating from the VA's own neurologist, 
Casey's initial claim has been denied. She has since appealed the 
decision, but it could take up to two years for Casey to receive 
compensation--if she receives it at all.
    VA employees are highly-dedicated, and we're extremely appreciative 
of their service to veterans. However, the Department of Veterans 
Affairs must do better. It must do better for Casey Elder, and for 
veterans of all generations. IAVA believes that this year's VA budget 
request of $125 billion for fiscal year 2011 and $50 billion in advance 
appropriations for health care in 2012 signals the beginning of this 
new era. One might even be tempted to call this the ``advance 
appropriations era,'' but we will borrow a term from VA Secretary 
Shinseki, and call it the ``Transformation Era.'' Government budgets 
are the clearest expression of a Nation's priorities. IAVA believes 
that this VA budget and all future budgets, during this transformative 
era, should be evaluated on the following four principles:

      Guarantee the Best Care Anywhere
      Modernize Benefits Delivery
      Recruit Veterans and their Families into the VA system
      Support Female Veterans

    True VA transformation will mean building a VA capable of handling 
the care of veterans and their families recovering from multiple 
injuries. Transformation means satisfying the expectations of an 
internet generation who can track a package anywhere in the world, but 
have no idea what happens to their VA claims once they are mailed. 
Transformation means treating a rapidly increasing number of female 
veterans using VA facilities. Transformation means providing top 
quality care for the surge home of veterans of Iraq and Afghanistan. 
And transformation means realigning resources to accommodate a steadily 
declining national veterans population. Transformation will not be 
easy. But working together, we can make it a reality by focusing on the 
following areas:
I. Guarantee the Best Care Anywhere for Veterans
The VA Funding Levels Must Match the Independent Budget Recommendations
    To continue to provide the best care anywhere for our veterans the 
VSO Independent Budget (IB) recommendations should be the standard for 
future VA budgets. The IB budget is a blueprint for constructing a VA 
budget that meets the needs of our Nation's veterans. IAVA fully 
endorses it. We are grateful that VA funding levels have matched and 
sometimes exceeded the IB recommendations over the past three years. 
And we are pleased that the President's VA budget request for 2011 
appears to have also met the IB's recommendations. We hope to see this 
convention for years to come.
The VA Must Collaborate with All Stakeholders to Successfully Implement 
        Advance Appropriations
    In addition to sufficiently funding the VA we must ensure the 
responsible and successful implementation of advance appropriations for 
veterans' health care. Successful implementation hinges on the VA's 
ability to accurately project their financial needs two years in 
advance. Everyone here knows this is no small task. I know from 
personal experience running a dynamic organization that projecting 
needs one year in advance is difficult. Tackling the budget for the 
largest health care provider in the United States two years in advance 
will require a herculean collaborative effort involving the VA, 
Congress and the veterans' community.
    Successful collaboration on this scale requires complete 
transparency throughout the entire budgeting process. Previous 
Presidential VA budget submissions were developed using projection 
models based on proprietary data and political scrubbing at OMB that 
were not made public. The VA must eschew this closed door approach and 
embrace a fully transparent budgeting process where all stakeholders 
have access to the core budget data and the projection models being 
used. While it may not make for great ratings on C-Span, opening the 
budgeting process to review and critique will allow the VA to harness 
the full expertise of Congress and the veterans' community.
    VA's implementation of the new GI Bill last year was another 
transformative program that required an extraordinary effort. Arguably, 
one of the most valuable lessons learned during that process is that 
when the VA reaches out and involves Congress and the veterans' 
community in their decision-making process the overall implementation 
runs more smoothly. For example, The VA held three town hall meetings 
to develop their implementation regulations for the New GI Bill. After 
these meetings they issued rules that students, schools and veterans 
groups accepted and generally understood. This was a successful 
collaboration. Alternatively, when the VA did not collaborate, and 
acted unilaterally, the GI Bill veered off course. This resulted in 
unacceptable delays and widespread confusion. The message to the VA 
from IAVA and the VSO community is clear: we are here to help. But you 
have to answer the phone and listen to what we are hearing from our 
Members.
II. Modernize Benefits Delivery
    It's long overdue to bring our benefits system into the 21st 
Century. Iraq and Afghanistan veterans, like Casey Elder, the wounded 
veteran I described earlier, are receiving benefits under a VA 
disability system that was outdated years before most of them were 
born. This antiquated system, which focuses on quantity over quality, 
leads to frequent errors, mountains of bureaucratic red tape, and a 
lengthy wait for benefits. With the VA benefits backlog nearing 1 
million claims, the need for transformation has never been greater. We 
therefore join with the chorus of other veterans groups in recommending 
that the VA modernize their claims processing system by digitizing 
records, holding processors accountable for the accuracy of their work, 
and removing unnecessary steps in the evaluation process. This issue is 
of the utmost importance and urgency so IAVA has made disability reform 
our number one legislative priority for 2010. These issues are further 
described in IAVA's groundbreaking issue report, ``Red Tape: Veterans 
Fighting New Battles for Care and Benefits,'' available outside the 
door today and at www.IAVA.org/reports.
    The greatest obstacle to the VA's modernization of benefits 
delivery is its archaic IT system, which cannot exchange electronic 
health records between DoD and VA and does not allow veterans to track 
the processing of their benefits claims. The DoD still relies on a 
paper-based system for military service records, and as troops 
transition from the DoD to the VA, medical records and military service 
records regularly get lost in the shuffle. Hundreds of thousands of 
wounded troops and veterans are forced to wait months, and sometimes 
years, for disability compensation because of these IT deficiencies. VA 
and DoD have been working on the ability to seamlessly share veterans 
health records for over a decade, but progress has been slow and 
transparency limited.
    In April 2009, the Administration announced a bold initiative to 
create the Lifetime Verification Electronic Record (LVER), integrating 
health and service data into a format usable between DoD, VA and the 
private sector. If successful, benefits processing time will be cut by 
months and veterans will receive higher quality health care across the 
board. A project of this magnitude is something in our world akin to 
landing a man on the moon, and should be given all the resources and 
attention necessary to ensure success. Like advance appropriations and 
the GI Bill, this initiative will require a truly collaborative effort 
on all of our parts.
    IAVA is pleased to see that the President's budget submission 
contained $52 million for the development of the LVER. We look forward 
to seeing regular progress reports from the VA on the strategic goals 
to have the LVER up at 3 pilot sites by the end of the year and to have 
developed a working prototype by 2012. And we encourage VA to work with 
Congress and the veterans' community to ensure that adequate resources 
are being provided to guarantee the success of this critical 
initiative.
    Upgrading these systems better serves our veterans and also makes 
the system more efficient. Efficiency results in significant cost 
savings, low hanging fruit in a time of historic national deficits. We 
are glad to see the VA bringing in one of IAVA's Board members, Craig 
Newmark--the Craig in Craigslist. VA leadership will certainly benefit 
from his technological expertise and strategic vision. And we also hope 
that they will learn from his incredible focus on customer service. 
Craig's business card famously reads ``Customer Service 
Representative,'' and Craig is not joking. He is committed to providing 
Craigslist's users with the best possible experience, and he literally 
spends hours a day personally answering customer service emails. This 
commitment to customer service has made Craigslist a dynamic, 
responsive company that is in close touch with its customers. This has 
allowed Craigslist to build an extremely strong and trusted brand. 
Changing the culture and processing claims quickly and accurately will 
make VA that same kind of trusted brand for veterans.
III. Recruit Veterans and their Families into the VA system
Innovative and Aggressive Outreach is a Must
    The Department of Veterans Affairs must shed its passive persona, 
by adopting a customer-centered approach, and by recruiting veterans 
and their families more aggressively into VA programs. This means 
developing a relationship with the servicemember, while they are still 
in the service. They can learn from successful college alumni 
associations who greet students at orientation and hold student 
programs throughout their time in college. And once a veteran leaves 
the military, the VA should create a regular means of communicating 
with veterans about events, new programs and opportunities. If I got 
half as many letters and emails from the VA as I do from my College 
Alumni Association, we would be in great shape. The VA must also reach 
out to those veterans who have yet to access their VA benefits and 
aggressively promote VA programs.
    In order to accomplish this phase of transformation, IAVA believes 
that the VA must prioritize outreach efforts and include a distinct 
line item for outreach within each VA appropriation account. These line 
item should help fund successful outreach programs such as the OEF/OIF 
Outreach Coordinators, Mobile Vet Centers and the VA's new social media 
presence on Facebook and Twitter. Right now, these outreach programs 
are still too small and under-resourced to make a transformative 
difference. IAVA was disappointed that there were only a few brief 
mentions of outreach activities throughout the President's VA budget 
submission. Not one of these mentions described a dedicated outreach 
campaign.
    Based on experience with our own historic Public Service 
Announcement (PSA) campaign with the Ad Council, we have learned a 
thing or two about veteran outreach campaigns. Hopefully by now you've 
seen our iconic PSAs, like the one featuring two young veterans shaking 
hands in an empty New York City street. I know Chairman Filner has seen 
the ad, because he encouraged us to reenact that scene with the actual 
vets on the steps of the Capitol last year.
    These TV ads are just one component of this groundbreaking 
campaign. That famous ad is complimented by billboards, radio 
commercials, and web banners that have blanketed the country and 
touched millions of Americans. In just the first year of the campaign, 
IAVA has already received $50 million dollars in donated media, and 
reached millions of veterans.
    This entire campaign directs veterans to an exclusive online 
community that strongly demonstrates to our Nation's new veterans that 
``We've Got Your Back.'' It also directs them to a wide range of mental 
health, employment and educational resources--operated by both private 
non-profits AND the VA. This campaign is an example of the type of 
innovation coming out of the VSO and non-profit community that can help 
guide the VA. Innovative, aggressive outreach programs like this should 
become part of the new VA culture, and can fuel-inject desperately 
needed outreach efforts. We are learning what works, and we are happy 
to share our knowledge with anyone.
We Must End the Suicide Epidemic
    IAVA's outreach efforts are also designed to make a dent in the 
suicide epidemic ripping through the military and veterans' community. 
During the first eight days of this new year, eight servicemembers have 
already taken their own lives. And in 2009, a record 334 servicemembers 
committed suicide. Last year, more servicemembers died due to suicide 
than combat in Iraq. These numbers do not even include the veterans who 
commit suicide after their service is complete--whose fatalities are 
tragically insufficiently tracked. Untreated mental health problems can 
and do lead to substance abuse, homelessness, suicide, and difficulties 
at home.
    In 2008 a RAND study reported that almost 20 percent of Iraq and 
Afghanistan veterans screened positive for Post Traumatic Stress 
Disorder (PTSD) or major depression. A recent study by Stanford 
University found that this number may be closer to 35 percent. Less 
than half of those suffering from mental health injuries are receiving 
sufficient treatment. Exacerbating the problem of inadequate treatment 
is the heavy stigma associated with receiving mental health care. More 
than half of the soldiers and Marines in Iraq who test positive for a 
psychological injury, report concerns that they will be seen as weak by 
their fellow servicemembers. One in three of these troops worry about 
the effect of a mental health diagnosis on their career. As a result, 
those most in need of treatment may never seek it out.
    In order to end the suicide epidemic and forever eliminate combat 
stress stigma we believe that VA and DoD must declare war on this 
dangerous stigma by launching a nationwide campaign to combat stigma 
and to promote the use of DoD and VA services such as Vet Centers and 
the Suicide Prevention Hotline. This campaign must be well-funded, 
research-tested and able to integrate key stake-holders within Veterans 
Service Organizations and community-based non-profits like the members 
of the Coalition to Support Iraq and Afghanistan Veterans (CIAV). 
Furthermore, the VA should develop and aggressively disseminate combat 
stress injury training programs for civilian behavioral health 
professionals that treat veterans outside of the VA (e.g., college 
counselors, rural providers, behavioral health grad students and 
professional associations).
    IAVA is pleased to see that the VA has allocated $5.2 billion 
toward the treatment of hidden injuries such as PTSD and TBI, a 
sizeable 8.5 percent increase over last year's budget. However, the VA 
must allocate specific resources towards battling this dangerous stigma 
or we will never see the critical mass of veterans coming into the VA 
to seek help.
End Veterans' Homelessness
    The VA estimates there are 131,000 homeless veterans on any given 
night and nearly twice as many veterans experience homelessness at some 
point during the year. New veterans are especially at risk. At the 
height of the housing crisis, foreclosure rates in military towns were 
increasing at four times the national average, and already more than 
3,700 Iraq and Afghanistan veterans have been seen in the Department of 
Veterans Affairs' homeless outreach programs. Unlike previous 
generations of veterans, Iraq and Afghanistan veterans are often 
appearing in the Nation's homeless shelters within two years of 
separation from the military, and a significant percentage of the 
homeless are female veterans and their children.
    In 2009, the VA laid out a bold vision to fully eradicate 
homelessness among veterans within the next 5 years. This ambitious 
plan will require a new model for serving veterans and extensive 
collaboration between government agencies, traditional Veterans Service 
Organizations (VSOs), and the new breed of grassroots and 
nontraditional nonprofit organizations. This partnership between the 
public and private sector must also be utilized to smooth the 
transition home for all veterans. IAVA believes the VA should be 
granted discretion to match the Grant and Per Diem (GPD) program 
payment rates to the actual cost of helping a homeless veteran. We must 
also expand the HUD-VA Supportive Housing (HUD-VASH) voucher program, 
to include the funding of 30,000 additional housing vouchers, will 
transform the lives of tens of thousands of homeless veterans.
    IAVA applauds the VA's goal to cut in half the number of veterans 
sleeping on our streets by the end of this year and we believe that the 
additional $294 million for joint VA-HUD programs in the President's 
budget request will go a long way towards accomplishing that goal.
IV. Support Female Veterans
    While it has made strides in recent years, the VA is still 
underprepared to provide adequate care to the surge of female veterans 
coming to its hospitals and clinics. Women veterans are the fastest 
growing segment of the veteran population, and their enrollment in the 
VA is expected to more than double in the next 15 years. Women veterans 
make up 15 percent of IAVA's membership, and still face several 
barriers when seeking care at the VA, including fragmentation of 
services, health care and service providers with poor understanding of 
women's unique health issues, lack of knowledge regarding eligibility 
for benefits, an unwelcoming VA culture, inadequate privacy and safety 
practices at facilities, and no access to childcare. IAVA supports the 
President's request to increase funding for female health by an 
additional 9.4 percent, bringing the total up to $217.6 million.
    IAVA also believes that in addition to increased funding, Congress 
must establish a firm deadline for the VA to meet its own goal of 
providing comprehensive health care to women and require the VA to 
layout clear steps and benchmarks for all VA facilities. We also 
recommend increasing funding for Vet Centers and VA medical facilities 
to hire female practitioners, especially those who specialize in 
women's physical and mental health. Lastly, the VA should provide 
health care services to a newborn child of a female veteran who is 
receiving maternity care furnished by the Department.
    These issues are further described in IAVA's groundbreaking issue 
report, ``Women Warriors: Supporting `She Who Has Borne the Battle,''' 
available outside the door today and at www.IAVA.org/reports.
V. Conclusion
    The President's budget submission for 2011 and 2012 has all the 
right ingredients for transforming the VA. It is a message to veterans, 
like Casey Elder, that ``We've got their back.''
    IAVA strongly supports this budget request, and looks forward to 
collaborating with the VA, Congress and the rest of the veterans' 
community to see this budget and the priorities listed above realized.
    Next week, IAVA will be bringing dozens of our members, from across 
the country, to Capitol Hill for our annual ``Storm the Hill'' 
legislative trip. Our highly-motivated veterans already have over a 
hundred meetings scheduled to share their stories and our 2010 
Legislative Agenda. We look forward to meeting with your offices to 
discuss these priorities in more detail.
    Thank you.

                                 
                  Prepared Statement of Paul Sullivan,
             Executive Director, Veterans for Common Sense
                             Oral Statement
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee, thank you for inviting Veterans for Common Sense to testify 
about the Department of Veterans Affairs' proposed budget for 2011.
    VCS strongly endorses President Obama's $125 billion VA budget, 
especially the new $300 million in funding to end homelessness by the 
end of 2014.
    However, we do have some concerns about two cohorts of veterans: 
first, our Iraq and Afghanistan veterans, and, second, our Gulf War 
veterans.
    VCS urges Congress to require VA to develop more accurate casualty 
estimates as well as implement a long-range strategic casualty plan.
    As of June 2009, VA reported 480,000 veteran patients and 442,000 
disability claims from the Iraq and Afghanistan wars. This is far above 
any worst case scenario for casualties.
    VA treats nearly 9,000 new patients per month from the two wars. 
For VA's 2012 budget, VA estimated less than 500,000 patients. A more 
realistic estimate for 2012, based on VA data, is as high as 800,000 
new patients and claims from Iraq and Afghanistan veterans.
    One factor that may increase health care use and claims activity is 
multiple deployments, as Stanford University researchers estimated 35 
percent of new war veterans may return with post traumatic stress 
disorder--PTSD.
    VA's failure to accurately forecast demand is serious because one-
in-four patients wait more than 1 month to see a doctor. According to 
the Veterans Benefits Administration, more than one million veterans 
are now waiting 161 days for an initial answer for a disability claim.
    We are alarmed VA's 2011 budget request shows VBA taking a 
staggering 190 days to process an initial claim. That's one more month 
of waiting for our veterans.
    While we support hiring additional VBA staff to process the one-
million claim backlog, VBA must also work smarter. VCS urges Congress 
to fund development of a one-page claim form plus new, simpler 
regulations VBA staff can learn in 6 months, not 2-to-3 years currently 
required. VCS urges Congress to fund a specific program to implement 
the proposed lifetime electronic record to end the epidemic of lost and 
difficult-to-find military service and military medical records.
    VCS supports the Veterans' Benefits Improvement Act of 2008 as a 
strong move by Congress to improve quality at VBA. We urge Congress to 
hold accountable those VBA leaders who openly flaunted the law by 
failing to provide several reports and implement sections of the new 
law designed to overhaul VBA's broken claims system.
    Specifically, VBA has not created temporary disability rating 
systems or reports required under Title II, Modernization of VA's 
Disability Compensation System, Subtitle A, Benefits Matters, Section 
211.
    VCS remains deeply concerned that funding for the Board of Veterans 
Appeals only increased three percent when there is a backlog of 200,000 
unprocessed appeals, and where veterans wait four years for a decision.
    VCS also urges Congress to fund full-time, permanent VBA claims 
staff at every military discharge location plus every VHA medical 
center and clinic.
    Here are some VCS budget recommendations for our Gulf War veterans.
    First, VCS urges Congress to create and fund a robust Gulf War 
veteran advocacy committee to provide advice directly to VA Secretary 
Shinseki on Gulf War illness, treatments, and benefits.
    Second, VCS urges Congress to fully fund the Congressionally 
Directed Medical Research Program, that identifies ``off the shelf'' 
treatments.
    Third, VCS encourages VA to restore funding for Dr. Robert Haley's 
research at the University of Texas Southwestern Medical Center. VA's 
IG confirms that VA Central Office employees ``impeded the ability of 
the contracting officers . . . to effectively administer the 
contract.'' In our view, a few VA staff sabotaged Dr. Haley's research.
    Finally, Mr. Chairman, you are correct that VBA's Veterans Benefits 
Management System is nothing more than a new name for several existing 
broken VBA computer systems.
    Disney has Pixar studios, and James Cameron has his movie Avatar 
that thought outside the box. VCS urges Congress to fund a high-
priority task force to overhaul VBA immediately, from application to 
payment and access to health care.
    Essentially, if the VBA claims process can be described as a 
bridge, then the current one-lane obsolete wooden structure lacks the 
capacity to handle the millions of veterans now using it. There are 
traffic jams trying to cross, and veterans constantly fall over the 
side or through the cracks and plunge into the icy waters below.
    An entirely new concrete and steel high-capacity bridge needs to be 
built as a replacement. The more time spent adding timber, changing the 
name, and applying paint to the wooden bridge only means more delays 
for our veterans seeking health care and benefits.
    Thank you. I will be glad to answer your questions.
                              ----------                              

                           Prepared Statement
    Chairman Filner, Ranking Member Buyer, and Members of the 
Committee, thank you for inviting Veterans for Common Sense to testify 
about the Department of Veterans Affairs' proposed budget for 2011.
    VCS strongly endorses VA's $125 billion budget. Specifically, we 
thank the President Barack Obama and VA Secretary Eric Shinseki for 
increasing funding by nearly $300 million to end homelessness by the 
end of 2014.
    Our testimony today focuses on two cohorts of veterans that require 
additional funding: first, our new Iraq and Afghanistan veterans, and, 
second, our Gulf War veterans.
Our 2.2 Iraq and Afghanistan Servicemembers
    More than seven years ago, Veterans for Common Sense voiced 
concerns regarding the lack of a funding request by VA to care for 
casualties for the impending invasion of Iraq. The Congressional Budget 
Office had no cost estimate for health care and benefits for veterans. 
This was an oversight of enormous magnitude--an oversight still 
haunting this country and veterans today with long delays accessing 
health care and benefits.
    Tragically, the scope of the Iraq and Afghanistan war casualties 
reached far above any worst case scenario. As of June 2009, VA reported 
480,000 veteran patients from the two wars. VA also reported 442,000 
disability claims filed. Nearly 300 first-time Iraq and Afghanistan war 
veterans flood into VA medical facilities every day.
    VCS is disappointed that VA does not have an accurate casualty 
estimate and a long-range strategic casualty plan. Two months ago, VA 
estimated 419,000 Iraq and Afghanistan War veteran patients treated by 
VA through the end of September 2010. VA's estimate was wrong. By June 
2009, VA had already treated 480,000 patients.
    At the current rate of nearly 9,000 new patients per month, a more 
realistic VA estimate should have been a cumulative total of 615,000 
patients treated as of September 2010. VA's 200,000 patient 
underestimation is a colossal failure because VA may lack the mental 
health care providers, disability claims processors, and education 
benefit processors to meet the need of this increasing cohort of 
veterans.
    One factor that may increase health care use and claims activity is 
multiple deployments, as Stanford University researchers estimated 35 
percent of new war veterans may return with post traumatic stress 
disorder in a study published last year.
    VCS is concerned about VA's continued underestimation of 
casualties. For 2012, VA estimated less than 500,000 patients from the 
two wars. However, a more realistic estimate, based on VA data, may be 
as high as 800,000 by the end of 2012.
    As the five years of free health care for Iraq and Afghanistan war 
veterans expires, VBA should expect the number of disability claims to 
catch up to and then surpass the number of patients. In order to 
provide a continuity of care, Congress may want to consider extending 
free VHA health care indefinitely to Iraq and Afghanistan war veterans 
with pending disability claims stalled at VBA.
    This issue is serious because, according to three reports issued by 
VA's Office of the Inspector General, one-in-four patients wait more 
than 1 month to see a doctor. According to the Veterans Benefits 
Administration, more than one million veterans now wait 161 days for an 
initial answer for a disability claim.
    VCS is highly alarmed that VA's 2011 budget request shows VBA 
taking a staggering 190 days to process an initial claim--that's an 
unacceptable 1 month addition to the current delays facing our veterans 
and families.
    VCS remains deeply concerned that funding for the Board of Veterans 
Affairs only increased three percent. The Board remains a very serious 
unresolved bottleneck in VA's broken claims system, with a backlog of 
200,000 unprocessed claims. Veterans wait, on average, four to five 
years for a claim decision from the Board, indicating that staffing, 
training, policies, procedures, and oversight must be strengthened.
    VCS offers a solution for Iraq and Afghanistan war veterans. VA and 
DoD must develop and implement a transparent strategic casualty plan. 
This means VA and DoD must improve data collection and forecasting so 
it is more accurate. VA and DoD must hire more medical professionals, 
especially mental health professionals.
    Furthermore, our government needs to perform pre- and post-
deployment medical exams, launch a broad national anti-stigma campaign 
encouraging veterans to seek medical care, and place full-time, 
permanent VBA claims staff at every military discharge location and 
every VHA medical center.
    VBA must also streamline the claim process with a one-page form and 
simpler regulations VBA staff can learn in 6 months--not the current 
three years. While VBA has additional funding to hire staff and process 
an expected surge of Agent Orange claims, VA's budget does not appear 
to contain additional funding to hire staff and process post traumatic 
stress disorder claims under new VA's new, streamlined regulations 
expected to be finalized this year.
Our 700,000 Gulf War veterans.
    The second cohort of veterans in need of additional funding are our 
Gulf War veterans. Nearly 20 years after the conflict began, VA and DoD 
still do not have a comprehensive plan for medical research to better 
understand and treat the 175,000 ill Gulf War veterans.
    VCS urges the Obama Administration and Congress to create and fund 
a robust Gulf War veteran advocacy committee to provide advice directly 
to VA Secretary Shinseki on Gulf War illness, treatments, and benefits.
    Furthermore, VCS urges Congress to fully fund the Congressionally 
Directed Medical Research Program, a highly effective approach to 
identify ``off the shelf'' treatments for our ailing Gulf War veterans. 
We urge VA and Congress to work with veterans' advocates to expand 
scientific research, especially in the areas of depleted uranium and 
chemical warfare agents.
    VCS encourages VA to fund the research led by Dr. Robert Haley and 
his excellent team at the University of Texas Southwestern Medical 
Center in Dallas, Texas.
    Finally, VCS urges Congress to ask VA to respond in writing about 
how they are implementing the recommendations made by the Institute of 
Medicine regarding veterans' health. For example, VA and the military 
should indicate when they will implement IOM's recommendation to use 
the best available testing method to determine DU exposure rather than 
the flawed test they are currently using. Congress should fund the best 
tests, research, treatment, and benefits for our Gulf War veterans.
    Thank you. I will be glad to answer any of your questions.

                                 

                             VA Fact Sheet
               Consequences of Iraq and Afghanistan Wars
                        Updated January 27, 2010
              U.S. Veteran Patients Treated at VA: 480,324
          Veteran Disability Claims Filed Against VA: 442,413
  Chart #1, U.S. Troops Deployed to Iraq and Afghanistan War Zones \1\
---------------------------------------------------------------------------
     Prepared by Veterans for Common Sense using documents obtained 
through the Freedom of Information Act:
    \1\ Department of Veterans Affairs (VA), ``VA Benefits Activity: 
Veterans Deployed to the Global War on Terror,'' Nov. 18, 2009.

----------------------------------------------------------------------------------------------------------------
                          Servicemembers  Still       Percent in      Veterans Now  Eligible
 Deployed to War  Zones        in Military             Military               for VA           Percent  Veterans
----------------------------------------------------------------------------------------------------------------
          1,946,042                  786,405                 40%                 1,159,637                60%
----------------------------------------------------------------------------------------------------------------

     Chart #2, Iraq and Afghanistan Veteran Patients Treated by VA 
                             2 3
---------------------------------------------------------------------------
    \2\ VA, ``Analysis of VA Health Care Utilization Among U.S. Global 
War on Terrorism Veterans,'' Oct. 2009.
    \3\ VA, ``VA Facility Specific OIF/OEF Veterans Coded with 
Potential PTSD Through 3rd Qt FY 2009,'' Sep. 2009.

------------------------------------------------------------------------
        Category            Number of Veterans            Percent
------------------------------------------------------------------------
   Veteran Patients                   480,324         41% of Veterans
------------------------------------------------------------------------
Mental Health Patients                227,205         47% of Patients
------------------------------------------------------------------------
      PTSD Patients                   134,103         28% of Patients
------------------------------------------------------------------------

     Chart #3, Iraq and Afghanistan Veterans' Claims Against VA \4\
---------------------------------------------------------------------------
    \4\ VA, ``VA Benefits Activity: Veterans Deployed to the Global War 
on Terror, Nov. 18, 2009.

------------------------------------------------------------------------
        Category            Number of Veterans            Percent
------------------------------------------------------------------------
Disability Claims Filed               442,413         38% of Veterans
------------------------------------------------------------------------
     Claims Pending                    69,397     16% of Claims Filed
------------------------------------------------------------------------
Approved PTSD Claim                    67,052     50% of PTSD Patients
------------------------------------------------------------------------

                   MATERIAL SUBMITTED FOR THE RECORD

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                     March 25, 2010
Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Mr. Secretary:

    In reference to our Full Committee hearing entitled ``The 
Department of Veterans Affairs Budget Request for Fiscal Year 2011 and 
Fiscal Year 2012'' on February 4, 2010, I would appreciate it if you 
could answer the enclosed hearing questions by the close of business on 
May 7, 2010.
    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 your answers consecutively and 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 
Debbie Smith by fax at 202-225-2034. If you have any questions, please 
call 202-225-9756.

            Sincerely,

                                                         BOB FILNER
                                                           Chairman

DMT:ds
                              ----------                              

                        Questions for the Record
                  House Committee on Veterans' Affairs
                        The Honorable Bob Filner
           U.S. Department of Veterans Affairs Budget Request
               for Fiscal Year 2011 and Fiscal Year 2012
                            February 4, 2010
    Question 1: Reducing the claims backlog is at the top of the VA's 
six high priority performance goals that are supported by the FY 2011 
budget request. In addition to the additional FTE investments for VBA, 
what other solutions is VA exploring in the near-term to address the 
claims backlog?

    Response: Bold and comprehensive changes are needed to transform VA 
into a high-performing 21st century organization that provides the best 
services available to our Nation's Veterans and their families. VA's 
transformation strategy leverages the power of 21st century 
technologies applied to redesigned business processes.
    There are a number of claims process improvement initiatives in 
various stages of concept development or execution. Some of the 
initiatives are quickly implemented changes to build momentum and reach 
out to our Veterans. For example, in an effort to speed up our work and 
to connect with our Veteran-clients, VBA now requires staff to reach 
out and call Veterans more often during the claims process rather than 
to rely solely on written communication. VA is also currently working 
to develop over 60 new medical questionnaires to take the place of 
current VHA examination templates to improve rating efficiency.
    Another initiative is being conducted at our St. Petersburg 
Regional Office (RO) to identify and pay Veterans at the earliest point 
in time when claimed disabilities are substantiated by evidence we 
already have on record. In addition, four ROs are testing the concept 
of an ``Express Lane'' to expedite single-issue claims to improve 
overall processing efficiencies and service delivery. Yet another 
initiative will allow employees and Veterans to communicate regarding 
VA benefits using on-line live chat capabilities through the new portal 
called e-Benefits. All of the initiatives described and a number of 
others are being tracked for impact on timeliness and quality, and we 
will launch the successful initiatives nationally. For example, VA has 
initiated a new shorter application form--cutting the previous 23-page 
form down to 12 pages. In many cases we expect to see significant 
improvement in Veteran satisfaction with the application process.
    Pilot programs are underway at four of our regional offices to 
support our business transformation plan to reduce the claims backlog, 
improve service delivery, and increase efficiencies. Each pilot 
functions as a building block to the development of an efficient and 
flexible paperless claims process. The results of all four pilots will 
be incorporated into the nationwide deployment of the Veterans Benefits 
Management System (VBMS) in 2012.
    The Little Rock Compensation Claims Processing Pilot began in July 
2009 following completion of the VBA Claims Development Study by Booz 
Allen Hamilton. The Little Rock pilot focused on a ``Lean Six Sigma'' 
approach to streamlining current processes and procedures. The Veterans 
Service Center converted from the VBA's existing claims processing 
model into new fully integrated claims processing teams or pods. The 
pilot concluded in May 2010, and VBA is evaluating the outcomes to 
determine next steps.
    The Business Transformation Lab (BTL) in Providence, RI, serves as 
a ``test ground'' for defining processes and testing functionality that 
will be incorporated into the development and deployment of VBMS. The 
primary purpose of the BTL is to utilize a structured approach to 
identify the most efficient way to process claims in an electronic 
environment incorporating current technology. As part of this process, 
the Providence RO is testing paperless claims processing using a small 
population of claims. The business process improvements identified by 
the BTL will be supported by technology enhancements and be integrated 
into VBMS.
    The Pittsburgh RO began the Case-Managed Development Pilot in 
January 2010. The purpose of the pilot is to identify opportunities to 
reduce the time required to request and receive evidence, providing 
direct assistance to Veterans in compiling the necessary documentation 
to support their claims throughout the claims process. A second 
important aspect of the pilot is to enhance relationships and 
partnerships with our Veteran-clients through personal communications. 
Goals of the pilot include more personalized service to Veterans and 
greater advocacy on their behalf; more accurate decisions; and a more 
transparent understanding of VA's claims process.
    The fourth pilot, the Virtual Regional Office (VRO), has already 
produced excellent results. The single and focused purpose of the VRO 
pilot was to deliver the specifications for an implementable, 
professional-grade technical front end ``dashboard'' of the new system. 
This dashboard will enable VBMS users to do their jobs more efficiently 
and effectively. Based on the role of that individual user, the 
dashboard will provide relevant information about a Veteran's claim 
that will enable faster and more accurate processing of claims. The 
specifications were not developed in a vacuum but rather side-by-side 
with VBA employees who gave input to the developers. The initial field 
use of dashboard capabilities is scheduled to begin in November 2010, 
and will be primarily focused on testing the software. Each iterative 
version of the dashboard will add improved functions and tools.
    VBMS will be built upon a service-oriented architecture, enabling 
electronic claims processing by providing a shared set of service 
components derived from business functions. Initially, VBMS will focus 
on scanned documents to facilitate the transition to a paperless 
process. Ultimately, it will provide end-to-end electronic claims 
workflow and data storage.
    VA is also seeking contractor support in development of a system to 
support evidentiary assembly and case development of the new Agent 
Orange presumptive claims. The system will enable Veterans to 
proactively assist in the development of their claims through a series 
of guided questions and will automate many development functions such 
as Veterans Claims Assistance Act notification and follow up.
    In addition to an electronic claims processing system, VA is 
committed to improving the speed, accuracy, and efficiency with which 
information is exchanged between Veterans and VA, regardless of the 
communications method. The Veterans Relationship Management (VRM) 
transformational initiative will provide the capabilities to achieve 
on-demand access to comprehensive VA services and benefits in a 
consistent, user-centric manner to enhance Veterans', their families' 
and their agents' self-service experience.

    Questions 2: The FY 2011 budget requests $44.1 million to complete 
the automated solution for processing Post-9/11 GI Bill claims and to 
begin the development and implementation of electronic systems to 
process claims associated with other education programs. What are the 
projections for FY 2012 and beyond on the out-year resource needs to 
fully automate Post-9/11 GI Bill claims and the claims associated with 
other education programs.

    Response: The Post-9/11 GI Bill automated solution is scheduled for 
completion prior to 2012. We are still planning the adaptation of the 
Long-Term Solution (LTS) to fully automate the claims associated with 
other education programs, to include incorporating lessons learned from 
its initial deployment and use. VA is currently formulating its FY 2012 
budget request. As part of this process, the immediate and out-year 
funding requirements of the Post-9/11 GI Bill claims and the claims 
associated with other education programs are being considered.

    Question 3: Please provide an update on the expanded enrollment of 
Priority Group 8 Veterans in the VA health care system. It is our 
understanding that the VA plans to enroll about 500,000 new Priority 
Group 8 Veterans with the funds provided in the 2009 appropriations 
bill. How much additional funding is needed to meet the 500,000 target 
enrollment figure?

    Response: No additional funding is needed at this time because the 
appropriations already provided for fiscal years 2010 and 2011, along 
with the President's Budget request for 2012, includes the funding 
needed for the continued enrollment of moderate-income veterans into 
the VA health care system by 2013.
    VA is closely monitoring observed demand for enrollment and patient 
access, and proposes expansion of enrollment only based on the 
availability of resources to meet current demand and projected demand 
through subsequent relaxations of enrollment restrictions. The resource 
requirements for the continued expansion of Priority 8 enrollment will 
be included in future budget submissions to Congress.

    Question 4: The FY 2011 budget estimates obligating $2.575 billion 
for OEF/OIF Veterans in FY 2011, an increase of $597 million in 
estimated obligations for FY 2010. Forecasting the cost to care for 
OEF/OIF Veterans has been difficult in the past. What specific steps 
has VA taken to improve the cost projections? For example, is VA 
collaborating with DoD to better estimate the number of returning 
Servicemembers who will enroll in the VA's health care system?

    Response: Due to operational readiness issues and sensitivity 
surrounding actual plans for military deployments, VA utilizes data 
from the Congressional Budget Office (CBO) to project the overall 
number of Servicemembers that may seek care at VA in any given year. 
The VA enrollee health care projection model projects separately OEF/
OIF Veteran enrollment and utilization. The model is updated annually 
to reflect VA's most recent experience among the OEF/OIF Veteran 
population. The overall FY 2011 and FY 2012 funding levels for medical 
care takes into account the impact of publically announced increases in 
troop deployment levels. In addition, VA meets regularly with Army and 
Navy officials to determine the number of VA Liaisons stationed at 
Military Treatment Facilities to transition Servicemembers from DoD to 
VA.

    Question 5: The FY 2011 budget requests $4.2 billion in 2011 to 
prevent and reduce homelessness among Veterans, which includes over 
$3.4 billion for medical services and nearly $800 million for specific 
homeless programs. Please provide specific details regarding VA's plan 
to end homelessness including implantation projections regarding 
actions that VA can take using current authorities along with the 
metrics the Department plans on utilizing to judge whether these steps 
are successful or not.

    Response: VA estimated that during the last year, on any given 
night, 107,000 homeless Veterans were living in shelters, on the 
streets or in places not meant for human habitation. While there has 
been a significant reduction in the number of homeless Veterans, VA's 
efforts are focused on eliminating and preventing Veteran homelessness.

      The average homeless Veteran profile:

          served in the post-Vietnam era (1975-1990).
          age 51, male, single, and equally likely to be 
        African-American or Caucasian.
          is unemployed and has an income of less than $125 per 
        week.

      At the time of contact with the VA, the average homeless 
Veteran is living outdoors or in a homeless shelter and suffers from 
medical and mental health/substance use disorders. Many homeless 
Veterans suffer with depression, substance use and significant physical 
health problems.
      Minority Veterans are overrepresented (48 percent of 
total) in the homeless population compared to the number of minority 
Veterans in the population.
      Female Veterans are the fastest growing segment of the 
homeless population.

    In order to end homelessness among Veterans, VA must proactively 
provide needed health care assistance to enable these Veterans to 
regain the physical and mental health to move on with their lives. Our 
2011 budget requests $3.4 billion to provide core medical services for 
homeless Veterans.
    VA is taking decisive action toward its goal of ending homelessness 
among our Nation's Veterans. To achieve this goal, VA has developed a 
5-Year Plan to End Homelessness among Veterans that will assist every 
eligible homeless Veteran willing to accept services. VA will help 
Veterans acquire safe housing; needed treatment services; opportunities 
to return to employment; and benefits assistance. These efforts are 
intended to end the cycle of homelessness by preventing Veterans and 
their families from entering homelessness. VA's philosophy of ``no 
wrong door'' means that all Veterans seeking to prevent or exit from 
homelessness must have easy access to VA programs and services. Any 
door a Veteran comes to--at a medical center, a regional office, or a 
community based outpatient clinic--will offer them assistance.
    VA plans to expand existing programs and develop new initiatives to 
prevent Veterans from becoming homeless and to aggressively treat those 
who are currently homeless. These program enhancements will provide 
housing, health care, benefits, employment, and residential stability 
to more than 500,000 Veterans and their families. Additional expansion 
of these efforts will begin in fiscal year (FY) 2011 through FY 2014, 
subject to the availability of appropriations.
    The plan seeks to:

      Increase the number and variety of housing options 
including permanent, transitional, contracted, community-operated, and 
VA-operated.
      Provide more supportive services through partnerships to 
prevent homelessness, improve employability, and increase independent 
living for Veterans.
      Improve access for VA and community based mental health, 
substance abuse, and support services.

    The 5-Year Plan to End Homelessness Among Veterans is built upon 
six strategic pillars:

      Outreach/Education;
      Treatment;
      Prevention;
      Housing/Supportive Services;
      Income/Employment/Benefits; and
      Community Partnerships.

    The provision of safe housing is fundamental. However, programming 
must include: mental health stabilization; substance use disorder 
treatment services; enhancement of independent living skills; 
vocational and employment services; and assistance with permanent 
housing searches and placement.
    The performance metrics to determine progress toward the goal of 
ending homelessness among Veterans will include the number of Veterans 
identified by VA as homeless or at risk of becoming homeless, and those 
who transition to stability using programs for housing vouchers and 
other supportive services.
    Our FY 2011 funding includes $799 million in targeted homeless 
assistance for a variety of programs that will help to prevent some 
from ever falling into homelessness and also rapidly assist those who 
are homeless in that condition. The major initiatives are described 
below:
EXPANSION OF EXISTING PROGRAMS:

      Health Care for Homeless Veterans (HCHV):

    HCHV provides ``in place'' residential treatment beds through 
contracts with community partners and VA outreach and clinical 
assessments to homeless Veterans who have serious psychiatric and 
substance use disorders. Expansion of the program will provide services 
to 4,800 Veterans in FY 2010, and will ensure that every VA medical 
center has the capacity to offer services that are targeted to, and 
prioritized for, homeless Veterans who are transitioning from literal 
street homelessness. VA expects to spend nearly $116 million and 
provide services to 9,500 Veterans in 2011. A total of 70,000 Veterans 
are expected to receive services through HCHV Contract Residential Care 
between FY 2010 and FY 2014.

      Housing and Urban Development-VA Supported Housing (HUD-
VASH):

    HUD-VASH is the Nation's largest supported permanent housing 
initiative that targets homeless Veterans by providing permanent 
housing with case management and supportive services that promote and 
maintain recovery and housing stability. More than 6,900 Veterans and 
their families obtained permanent housing in FY 2009. Program expansion 
will provide additional permanent housing opportunities for Veterans by 
allocating 10,000 new Housing Choice Vouchers in FY 2010. VA expects to 
spend nearly $151.1 million and provide housing and case management 
services to a total of 24,268 Veterans in 2011. A total of 60,000 
Veterans are expected to enter the HUD-VASH program by FY 2014.

      Grant and Per Diem (GPD) Program:

    GPD provides grants to community providers to create and operate 
transitional housing programs and provide services for homeless 
Veterans. Currently, the program funds over 500 community-based 
agencies and provides more than 11,000 transitional housing beds. It is 
estimated that program expansions will create capacity to serve 
approximately 20,000 Veterans in FY 2010. VA expects to spend nearly 
$192 million and provide services to 22,000 Veterans in 2011. A total 
of 138,000 Veterans are projected to receive services from this program 
between FY 2010 and FY 2014.

      Veterans Justice Outreach (VJO) Program:

    The Veterans Justice Outreach (VJO) program, formally launched in 
2009, aims to prevent homelessness by providing outreach and linkage to 
VA services for Veterans at early stages of the justice system, 
including Veterans' courts, drug courts, and mental health courts. 
Program enhancement is expected to provide services for 7,500 Veterans 
in FY 2010. VA expects to spend $12.6 million to provide direct 
services to more than 11,000 Veterans in 2011.

      VA Residential Rehabilitation Treatment Programs (RRTP)/
Domiciliary Care for Homeless Veterans (DCHV):

    There are currently 237 operational Mental Health RRTPs providing 
nearly 8,500 treatment beds. DCHV provides homeless Veterans with 24 
hour-per-day, 7 day-per-week (\24/7\), time-limited, residential 
rehabilitation and treatment services that include medical, 
psychiatric, substance abuse treatment, and sobriety maintenance. 
Program expansion will increase capacity and access by establishing 
five 40-bed DCHV programs in large urban locations in FY 2011. VA 
expects to spend nearly $153.0 million and provide services to 6,900 
Veterans in 2011 in the DCHV Program. A total of 39,000 Veterans are 
projected to receive services from the DCHV Program between FY 2010 and 
FY 2014.
DEVELOPMENT OF NEW PROGRAMS:

      New HUD/VA Prevention Pilot:

    This new prevention initiative is a multi-site 3-year pilot project 
designed to provide early intervention to recently discharged Veterans 
and their families to prevent homelessness. Priorities for site 
selection for this pilot project are in communities where there are 
high concentrations of returning OEF/OIF soldiers and rural 
communities. Under this pilot HUD will select sites to receive funding 
to support housing and supportive services for Veterans and their 
families and VA will provide coordinated case management to keep 
Veterans in their housing, maintain employment and connect them with VA 
health care and benefit assistance. Implementation of this program is 
expected to provide services to nearly 100 Veterans and their families 
in FY 2010. VA expects to spend $5 million to provide services to 
approximately 200 Veterans and families in 2011. A total of 650 
Veterans are projected to receive services from this program between FY 
2010 and FY 2014.

      National Referral Call Center:

    This new prevention initiative establishes a National Call Center 
that provides linkages for homeless Veterans, their families and other 
interested parties to appropriate VA and community-based resources. It 
is anticipated that in FY 2010, the Call Center will provide 
information and referral assistance to 15,000 Veterans and other 
interested parties. VA expects to spend nearly $3.0 million to assist 
Veterans in 2011.

      Supportive Services for Veterans and Families:

    This new homeless prevention initiative will provide grants and 
technical assistance to community non-profit organizations to provide 
supportive services to Veterans and their families in order to maintain 
them in their current housing and to prevent homelessness. Regulations 
have been drafted and are under review. Under the 2011 proposed budget 
VA will enhance prevention by offering more than $50 million for 
Supportive Service Grants for Low Income Veterans and Families at 50 
percent or less of area median income. We expect to award funding in 
2011 that will provide services for 10,000 Veterans and families. A 
total of 65,000 Veterans are projected to receive services from this 
program between FY 2011 and FY 2014.
DEVELOPMENT OF NEW INITIATIVES:

      National Homeless Registry:

        888VA will establish a database to track and monitor expansion 
        of existing homeless programs, prevention initiatives, and 
        treatment outcomes for approximately 200,000 Veterans in FY 
        2010. The Registry will serve as a data warehouse for Veteran 
        Homeless Services identifying and monitoring the utilization 
        and outcomes for VA funded homeless services. It will enhance 
        VA's capacity to monitor program effectiveness and the long-
        term outcome of Veterans who have utilized VA funded services. 
        VA expects to spend nearly $5.9 million for the National 
        Homeless Registry in 2011.

      Management Information System: VA will establish an 
information management system (dashboard) for the homeless programs. 
The system will include specific program metrics that address 
structural, process, and outcome measures. Data from the management 
system will be turned into monthly and quarterly reports for senior VA 
leadership to monitor progress and to address barriers in helping 
Veterans exit homelessness.
      Homeless Interdiction Initiative: VA Regional Offices 
will develop a homeless interdiction plan specific to their area of 
jurisdiction that identifies the segment of Veteran homelessness they 
can best address, specific goals for their targeted clients, and the 
resources required to properly execute the plan.
      Foreclosure Notification Initiative: VA will develop a 
strategy to identify Veterans with VA home loans referred for 
foreclosure that may need expedited claims processing, benefits 
counseling and/or referrals to assistance programs.
      Effectiveness: Each initiative under VA's 5-Year Plan is 
judged on its effectiveness to limit Veterans from entering 
homelessness (prevention programs), or quickly and permanently 
returning Veterans to independent living.

    Question 6: The FY 2011 budget assumes $5.235 billion in 
obligations, an increase of $410 million over FY 2010 for mental 
health. Is this sufficient to meet the needs of our returning OEF/OIF 
Veterans who suffer from PTSD or TBI? If additional resources were 
provided which additional programs or activities, would the Department 
undertake?

    Response: Yes, the funding level for FY 2011 includes the needed 
resources to meet the mental health needs of returning OEF/OIF Veterans 
who suffer from post-traumatic stress disorder (PTSD) and other mental 
health problems that may exist either as co-occurring conditions with 
PTSD or separately. While the treatment of traumatic brain injury (TBI) 
is not primarily a function of mental health services, mental health 
conditions associated with TBI can be adequately addressed by the 
proposed funding increase.
    For those Veterans specifically with TBI, the FY 2011 funding level 
adequately supports the full continuum of outpatient and inpatient 
rehabilitation programs targeted to meet the individualized care needs, 
including identification, assessment, treatment, and rehabilitation of 
the physical, mental and psychosocial problems that accompany TBI and 
Polytrauma.

    Question 7: The VA estimates $250 million in obligations for rural 
health initiatives in FY 2011. To clarify, does the $250 million in 
estimated obligations support the grants awarded by the Office of Rural 
Health? Please explain how the funds will be used to meet the 
challenges facing rural Veterans. How does this fit into the VA's 
overall strategy for increasing access to health care among rural 
Veterans?

    Response: Yes, the $250 million in estimated obligations does 
support the grants awarded by the Office of Rural Health. VA is 
committed to enhancing access to health care for Veterans residing in 
rural and highly rural areas. To meet the challenges facing rural 
Veterans, VA is planning to invest $87.8 million in FY 2011 rural 
health funding to sustain funding for CBOCs in 11 Veterans Integrated 
Service Networks (VISNs) for the second year of operation. In addition, 
$100 million will be supporting the Contract Care Pilot Program for 
Highly Rural Veterans (Section 403, P.L. 110-387) in VISNs 1, 6, 15, 18 
and 19. Also, in FY 2011, $62.2 million will be utilized to sustain 
previously approved rural and highly rural projects including, but not 
limited to, mobile clinics, rural telehealth and telemental health 
initiatives, home based primary care (HPBC) programs, rural health 
outreach clinics, and mental health intensive care management (MHICM) 
programs and expansions.

    Question 8: The FY 2011 budget requests $590 million for medical 
and prosthetic research, which is a modest increase from $581 million 
provided in FY 2010. This is well below the 3.2 percent increase in the 
biomedical research and development price index, which is developed by 
the Bureau of Economic Analysis. Does this mean that VA will be 
awarding a smaller number of research grants in FY 2011? How will VA 
meet any shortfalls if projections regarding other federal funding 
sources prove to be too optimistic?

    Response: The increase in appropriations from FY 2009 ($510 
million) to FY 2011 ($590 million) is 16 percent. The Office of 
Research & Development (ORD) will be able to execute its mission 
without any adverse impacts. The number of projects that ORD fund is 
not dependent on other federal funding sources.

    Question 9: The Secretary's written testimony states that ``after a 
cumulative increase of 26.4 percent in medical care budget since 2009, 
we will be working to reduce the rate of increase in the cost of the 
provision of health care by focusing on areas such as better leveraging 
acquisitions and contracting, enhancing use of referral agreements, 
strengthening DoD/VA joint ventures, and expanding applications of 
medical technology.'' As a percentage of your medical care budget, how 
much do you expect to realize in savings if these initiatives are 
successful looking toward the future?

    Response: The FY 2011 advance appropriation for the three medical 
accounts is $48.183 billion. The estimated savings from the initiatives 
listed above are approximately $177 million, or 0.4 percent of the 
advance appropriation amount.

    Question 10: Please provide a detailed list of specific cost-saving 
proposals that could be utilized by the VA to reduce future medical 
care increase, along with estimated dates as to when these proposals 
are expected to be pursued and when cost-savings will be achieved?

    Response: The estimated savings referenced in the answer to 
question # 9 are for increased use of regional and programmatic blanket 
purchase agreements and consolidated national contracts, decreased use 
of sole source contracts and increased competition, and improvements in 
the contract management process. The specific details of each 
individual proposal and the expected dates that the savings will be 
achieved have not yet been finalized. In addition to the above, we also 
anticipate approximately $252 million in reduced dialysis purchased 
care costs, which will be contingent upon the publication of a final 
Federal Register notice regarding the specific rates that VA will pay 
when purchasing dialysis services from private sector providers.

    Question 11(a): The Administration requests $3.3 billion for IT in 
FY 2011, which is the same level as the amounts provided in FY 2010. 
How does this budget request support all of the ambitious IT 
initiatives, such as VLER and the creation of bi-direction, 
interoperable health care records?

    Response: Our budget provides the resources necessary to continue 
our aggressive pursuit of the President's two overarching goals for the 
Department--to transform VA into a 21st Century organization and to 
ensure that we provide timely access to benefits and high quality care 
to our Veterans. The $3.307 billion budget request is sufficient to 
meet VA's IT needs and in FY 2011 represents a 32.9 percent increase as 
compared to FY 2009. Funding for maintenance and operational costs will 
be sustained to keep the systems at current capability and acceptable 
performance levels with due consideration made for risk.
    VA's decision to centralize IT in the summer of 2006 has resulted 
in improved fiscal and budgetary discipline in our IT operations and 
development, thus enabling VA to move forward with 21st Century 
technology initiatives such as the Virtual Lifetime Electronic Record 
(VLER).
    We have implemented new, tighter management, including Project 
Management Accountability System (PMAS) and prioritization that will 
assist VA in making better use of IT funding. The PMAS uses an 
incremental development and fiscally responsible approach that will 
control development spending and ensure early identification and 
correction of failing IT programs. Halting development programs that 
fail to meet their delivery milestones will prevent wasteful spending 
and provide accountability in the delivery of technologies to help 
transform VA.
    Our Major Investments will continue to increase above the FY 2010 
level to meet the on-going demands for our Veterans and transforming 
VA:

      Veterans Benefits Management System (VBMS) with $145.3 
million requested, is a 104 percent increase above 2010, and is 
designed to transition from paper-intensive claims processing to a 
paperless environment.
      The Post-9/11 GI Bill (Chapter 33) with $44 million 
requested is a 28 percent increase above 2010 and will provide the 
long-term solution to deliver an end-to-end solution to support the 
delivery of tuition, university fee payments, housing allowance and 
yearly books and supply stipend.
      Financial and Logistics Integrated Technology Enterprise 
(FLITE) with $120 million requested, is a 52 percent increase above 
2010, and will effectively integrate and standardize financial/asset 
management data and processes across VA.
      Virtual Lifetime Electronic Record (VLER) with $52 
million requested, is a 23 percent increase above 2010, and will create 
the capability for VA and DoD to electronically access and manage the 
health, personnel, benefits, and administrative information needed to 
efficiently deliver seamless health care, services, and benefits to 
Servicemembers and Veterans.
      Tele-Health and Home Care Model with $48.6 million 
requested, will enable VA to become a national leader in transforming 
primary care services to a medical home model of health care delivery 
with a new generation of communication tools that can be used to 
disseminate and collect information related to health, benefits and 
other services.

    Question 11(b): Please provide an update on the key deliverables 
that the VA has met for the Department's priority IT initiatives.

    Response: The Department has identified 13 goals for FY 2010 that 
IT supports as their priority initiatives. These goals and key 
deliverables in the last 6 months include:

     1.  Eliminate Veteran Homelessness
     2.  Enable 21st Century Benefits Delivery and Services (through 
Veterans Benefits Management Systems-VBMS)
     3.  Automate GI Bill Benefits (Chapter 33)
     4.  Implement Virtual Lifetime Electronic Records (VLER)
     5.  Improve Veteran Mental Health (IVMH)
     6.  Veteran Relationship Management (VRM)
     7.  New Health Care Model (NHCM)
     8.  Expand health care access for Veterans (i.e. women and rural 
populations through ACCESS)
     9.  Preparedness
    10.  Enterprise Wide Cost Accountability (EWCA)
    11.  Integrated Operated Model (IOM)
    12.  Transformation of the Human Capital Improvement Plan (HCIP)
    13.  Perform research and development (R&D) to enhance the long-
term health and well-being of Veterans

    Currently, we report the following updates:

    1. Eliminate Veteran Homelessness.

    An initial Plan of Action and Milestones (POAM) was developed for 
activities known at this time, in concert with the Office of Public and 
Intergovernmental Affairs (OPIA), the Office of Policy and Planning 
(OPP), Enterprise Infrastructure Engineering (EIE), the Office of 
Acquisition and Logistics (OAL), and the Veteran Benefits 
Administration Office of Policy and Program Management. VA and 
Department of Housing and Urban Development are meeting to establish 
data sharing capabilities.

    2. Enable 21st Century Benefits Delivery and Services (e.g., 
backlog reduction) (Veterans Benefits Management System--VBMS).

    The Veterans Benefits Management System (VBMS) Initiative is a 
business transformation initiative supported by technology and is 
designed to improve VBA service delivery. It is a holistic solution 
that integrates a Business Transformation Strategy (BTS) to address 
process, people, and organizational structure factors and a 21st 
Century paperless claims processing system--VBMS.
    VBMS will provide a modern electronic repository and a new 
graphical user interface (GUI), which will enable end-to-end electronic 
claims processing. The VBMS technology solution started with the 
Virtual Regional Office (VRO), which was completed on May 5, 2010. The 
VRO resulted in a system specification and business requirements for 
the new GUI. Following the VRO are three iterative pilots leading to 
the rollout of the software solution. Pilot 1 is currently under 
development and scheduled to be deployed to one VBA Regional Office in 
November 2010.

    3. Automate GI Bill Benefits (Chapter 33).

    Chapter 33 Long-Term Solution (LTS) version 1 was released in March 
2010. Version 1.01, which provided some enhancements, was released 
April 26, 2010. These releases, the first of several planned, will 
provide increasing functionality as we automate the GI Bill process.

    6. Build Veteran Relationship Management (VRM) capability to enable 
convenient, seamless interactions.

    Version 1.3.0 of the Veteran Tracking Application (VTA)--Disability 
Evaluation System (DES) was released in March 2010. Version 2.3 of the 
eBenefits Web Portal, which provides Veterans and Servicemembers with 
Web portal access to health and benefits information and transactions, 
was released in April 2010.

    9. Ensure preparedness to meet emergent national needs (e.g., 
hurricanes, H1N1 virus) (Integrated Operations Center--IOC).

    `The intent of Initiative #9, Preparedness, is to provide oversight 
and management direction over those programs that have a substantial 
effect on VA continuity and security efforts. Although the two 
initiatives--the IOC and Homeland Security Presidential Directive 12 
and Personal Identity Verification (HSPD-12//PIV)--are not directly 
related, they both are cornerstones in security and preparedness 
management.

      The IOC will provide a situational center during crisis 
or national emergency to serve as a fusion point/single office focal 
point for collecting, analyzing, planning, and disseminating 
information to its stakeholders.
      The HSPD-12/PIV Program will increase the security of VA 
facilities and IT systems through identity verification and strong 
authentication to prevent logistical and physical intrusions, and 
provide better protection for Veterans, VA employees, information 
systems, and VA facilities.

    11. Establish strong VA management infrastructure and integrated 
operating model (IOM).
    One component of the Financial and Logistics Integrated Technology 
Enterprise (FLITE) solution was deployed as a pilot project. The 
Strategic Asset Management System (SAM) Pilot project was deployed on a 
limited basis for testing purposes prior to full deployment.

    Question 12: The FY 2011 budget request provides $468 million for 
minor construction projects, which is $235 million or 33 percent below 
the amount provided in FY 2010. In a time when there are long lists of 
projects awaiting funding, what is the VA's rationale for a 
significantly lower budget request in FY 2011.

    Response: Fiscal Year 2011 request is second largest budget ever 
proposed for minor construction. The largest ever proposed was in 
Fiscal Year 2010--$600 million. VA will use the requested minor 
construction funds, as well as funding for non-recurring maintenance 
and major construction, to address the Department's highest priority 
projects..

    Question 13: The FY 2011 budget requests $85 million for grants for 
construction of state extended care facilities, which is $15 million or 
15 percent below what was provided in FY 2010. However, the most recent 
State Veterans Home Priority List shows that there are over $400 
million in Priority 1 projects where States have already committed 
money to the construction process. What is the Department's 
justification for not seeking additional funding in order to address 
the Priority 1 backlog?

    Response: VA believes it is an unwise public policy to build large 
numbers of new nursing home beds at this time. The number of Veterans 
over age 65 will peak by 2013 and decline steadily thereafter, 
resulting in fewer Veterans needing nursing home care. In addition, 
nursing home utilization rates are declining steadily as non-
institutional home and community-based long-term care alternatives to 
nursing home care become more widely available both in VA and in the 
private sector. Overall occupancy in State Veterans Home beds is only 
85 percent; although some states still have a great need for new beds. 
VA believes it is unwise to burden states with a brick-and-mortar 
infrastructure that will be increasingly difficult for them to maintain 
in future years, putting the states at risk of recapture of state home 
construction grant funds if they cease to operate their facilities as 
State Veterans Homes. Currently, there is no Priority Group 1 backlog 
of renovation projects (including renovations to protect the lives and 
safety of Veterans) or of new construction projects in states with a 
great need for new beds. All of the projects in these categories on the 
FY 2010 Priority List received Funding Letters in FY 2010. VA is 
confident that the budget request of $85 million for FY 2011 will be 
sufficient to fund all Life Safety and other renovation projects and 
all new construction projects in states with a great need for new beds.
                     The Honorable Timothy J. Walz
    Question 1: What is the status of the VA's office that handles 
seamless transition with the Department of Defense? More Specifically:

    Question 1(a): Has the VA hired a director for this office? If so, 
who?

    Response: Since its inception in 2008, the VA-DoD Collaboration 
Service has had an executive director. Robert D. Snyder is the current 
executive director and has been serving in that position since June 
2009.

    Question 1(b): How does the office fall into the JEC/SOC structure?

    Response: This Service is the lead on VA-DoD seamless transition 
initiatives and provides support to the Joint Executive Committee (JEC) 
and the Wounded Ill and Injured Senior Oversight Committee (SOC).

    Question 1(c): What is the mission and goals for this office?

    Response: The Service's mission is to facilitate the development of 
joint policies and programs between VA and DoD and to provide oversight 
for the implementation of joint VA-DoD programs and policies as they 
relate to activities of the JEC and SOC. The roles and responsibilities 
of this Service include coordinating VA's efforts within JEC and SOC, 
coordinating VA responses to external requirements and mandates 
relative to seamless transition issues, coordinating and facilitating a 
VA-wide perspective in VA-DoD collaboration activities and initiatives, 
and developing the VA-DoD Joint Strategic Plan (JSP) in coordination 
with DoD.

    Question 1(d): What are the priorities for the office?

    Response: The Service's current priorities are facilitating the 
expansion of the Disability Evaluation System (DES) pilot model, 
developing and implementing the VA-DoD integrated mental health 
strategy, requiring mandatory separation physicals for Servicemembers, 
creating a process for early communication of VA benefits to 
Servicemembers prior to their separation from active duty, requiring 
mandatory attendance during the VA portion of the Transition Assistance 
Program (TAP), and refining the VA-DoD strategic planning process.

    Question 1(e): What help can Congress provide to the office to 
overcome challenges?

    Response: VA appreciates the support of Congress in the role of 
assisting Servicemembers as they transition from active duty status to 
Veteran status. Extension of the VA/DoD Senior Oversight Committee from 
Congress last year will ensure continued oversight and assistance in 
addressing the issues and challenges of transition activities.
                      The Honorable Corrine Brown
    Question 1: After years of no major hospital construction, there 
are two VA medical centers that are scheduled to open in 2012--Las 
Vegas and Orlando. In fact, all money has been appropriated to complete 
these projects and no money was requested by the Administration this 
year for their construction.

    Question 1(a): Is there enough money in the pipeline to ensure the 
activation of these medical centers?

    Response: Yes.

    Question 1(b): What will the final costs for completion be when the 
construction ends and before the patients are admitted?

    Response: The final cost is not available at this time. Since 
construction is done in phases, buildings are ready for beneficial 
occupancy when construction is complete on that phase. This often 
occurs prior to completion of all phases. Therefore, final costs may 
not be known at time of occupancy of a particular phase, but rather 
when all phases are financially complete.

    Las Vegas, Nevada:

    The total estimated cost for the Las Vegas, Nevada, medical center 
is $600.4 million. This includes two critical items still in design, 
the Administration Building and a Photovoltaic system. OALC believes 
that the final cost for the construction of this project will be within 
these appropriated funds.

    Orlando, Florida:

    The total estimated projects cost for the Orlando, Florida, medical 
center is $665.4 million. OALC believes that the final cost for the 
constructions of this project will be within these appropriated funds.

                                 

                                     Committee on Veterans' Affairs
                                                    Washington, DC.
                                                  February 12, 2010
The Honorable Eric K. Shinseki
Secretary
U.S. Department of Veterans Affairs
810 Vermont Avenue, NW
Washington, DC 20420

Dear Secretary Shinseki,

    In reference to our Committee hearing of February 4, 2010, I would 
appreciate your response to the enclosed additional questions for the 
record by close of business Wednesday, March 17, 2010.
    It would be appreciated if you could provide your answers 
consecutively on letter size paper, single spaced. Please restate the 
question in its entirety before providing the answer.
    Thank you for your cooperation in this matter.

            Sincerely,

                                                        Steve Buyer
                                          Ranking Republican Member

SB:dwc
Enclosure
                              ----------                              

                        Questions for the Record
               The Honorable Steve Buyer, Ranking Member
                  House Committee on Veterans' Affairs
         The Department of Veterans Affairs Budget Request for
                 Fiscal Year 2011 and Fiscal Year 2012
                            February 4, 2010
    Question 1: Some employees at the Muscogee National Call Center 
have expressed their frustration with the phone system. Apparently, the 
system automatically kicks callers out of the system whenever too many 
customer service representatives are on the phone. Our staff was told 
that the reason VA chose that particular phone system for the call 
center was that it was installed at other VA locations. Is there any 
plan to modernize the phone system at the Muscogee Call Center and if 
so, is that money in the budget?

    Response: The immediate issue expressed by Muskogee National Call 
Center employees was corrected with configuration changes to the phone 
system and the plan to modernize the phone system is underway. The 
modernization plan includes the Veterans Relationship Management (VRM) 
project, which is intended to address call center system instability 
issues by modernizing voice access and routing systems. VRM funding is 
included in VA's budget.

    Question 2: How will the Veterans Benefits Management System 
project interact with IT systems at VHA and the Virtual Lifetime Health 
Record? Will the systems be interoperable so medical records and 
compensation exams can be viewed by both parties?

    Response: Yes, the systems will be interoperable. VBMS will 
interact with VHA systems as well as the Virtual Lifetime Electronic 
Record (VLER). Included within the scope of this overall effort is 
development of an interface between VBMS and VHA systems to allow for 
the seamless movement of information, from the request of a disability 
examination to viewing the examination result. Authorized VHA clinical 
staff and VBA claims staff will have access to view pertinent claims 
information to conduct disability examinations.
    Medical records and disability examinations from the Veterans 
Health Administration serve as highly probative evidence in support of 
Veterans' disability claims. As a result, VA invested in and achieved a 
significant level of interoperability between VHA and VBA in support of 
disability claims processing. VHA clinicians and VBA Compensation and 
Pension staff already view electronic medical records for the purpose 
of providing treatment and adjudicating claims. VHA clinicians access 
information through the VA electronic record known as VistA 
Computerized Patient Record System, and VBA claims staff access the 
same information through its Compensation and Pension Records 
Interchange (CAPRI).
    In 2009, VA and DoD formed a partnership to develop the Virtual 
Lifetime Electronic Record (VLER). VLER will support the full continuum 
of care and seamless benefits delivery to Servicemembers, Veterans and 
their dependents. To a VHA clinician or VBA employee, VLER will provide 
a comprehensive view of the collected health and benefits data, 
regardless of where those data are stored. Beginning with progressive 
piloting and implementation of the National Health Information Network 
(HNIN), the Departments are in the early stages of technology 
development that will support VLER, VistA and the Veterans Benefits 
Management System (VBMS).

    Question 3: What lessons learned will VA incorporate into the 
Veterans Benefits Management System program from the numerous other 
failed paperless and IT systems for Compensation & Pension?

    Response: VA is applying several lessons learned to the development 
approach of VBMS.
    Rather than follow the traditional waterfall development approach, 
VBMS is using a so-called Agile Methodology, a highly collaborative 
software implementation approach that delivers small, integrated, and 
testable software in weeks rather than months. Agile calls for tight 
requirements and clear outcomes on short, even daily, timelines. Of 
course, changing methodologies is just the first step, but it is an 
important one.
    Another important lesson is that our business requirements were not 
well articulated, with the predictable result that the technical 
specifications were similarly compromised. To remedy this, VA 
successfully implemented the first of our ``pilot'' programs, the 
Virtual Regional Office (VRO) which ran from January until May of this 
year. The sole purpose of the VRO was to create a set of technical 
specifications based upon actual user requirements; the exercise was 
successful, and we are now in the implementation phase of creating a 
new (and modular) user interface, designed to support the eventual 
replacement of VETSNET.
    Finally, we also included a business transformation work stream, 
which will allow us to transform the business process, rather than just 
apply technology to the current claims process. VBMS has been placed 
under VA's Program Management Accountability System, which tightly 
manages the products and deliverables of the program.

    Question 4: Secretary Shinseki's testimony stated VA intends to 
develop and implement an ``end-to-end'' solution to modernize the 
delivery of education benefits. First, which system would VA use, 
Benefits Delivery Network (BDN) or VETSNET for the payment system, and 
second, how will VA build on lessons learned from the BDN project?

    Response: Initially, VA will use BDN as the payment system for the 
delivery of education benefits. Once the Financial Application System 
(FAS) can be modified to support the delivery of education benefits, 
which is scheduled for FY 2011, FAS will be used as the payment system.
    We had originally anticipated integrating the ``long-term 
solution'' directly to FAS, but recently made the deliberate decision 
to use BDN for the time being. In our judgment, this temporary solution 
lowered implementation risk, even though much of the work will be 
redundant once the FAS interface is in production.
    There were several valuable lessons learned as we migrate benefits 
programs form the outdated legacy mainframe to a more modern and 
extensible platforms. The most important of these are the technical 
challenges of creating scalable, maintainable, and modular ``wrappers'' 
around the existing software components. As VA takes better advantage 
of commercial development tools and standards-based environments, we 
expect to encounter fewer of these impediments.

    Question 5: Section 809 of Public Law 110-389 reaffirmed VA's 
existing authority to purchase advertising in national media outlets 
for the purpose of promoting awareness of benefits, including 
assistance for programs to assist homeless veterans, promote veteran-
owned small business, provide opportunities for employment in the 
Department of Veterans Affairs, and for education, training, 
compensation, pension, vocational rehabilitation, and health care 
benefits, and mental health care including prevention of suicide among 
veterans. We have seen VA's TV ads to recruit health care employees. 
When will VA begin using that authority to increase the awareness and 
understanding of veterans benefit programs and what is the budget for 
the national media marketing effort for this fiscal year and FY 2011?

    Response: In Fiscal Year 2010 and Fiscal Year 2011 VA will spend at 
least $30M to increase awareness and understanding of Veterans benefits 
and programs (a portion of which will include paid media).

    Question 6: The President has proposed using $30 billion in TARP 
funds to promote small business. Noting that I have introduced H.R. 
295[sic], which would reestablish the VA's Small Business Loan Guaranty 
Program, what will be VA's role in that effort?

    Response: The Department testified in September 2009 in support of 
the concept of reauthorizing the VA's Small Business Loan Guaranty 
Program contained in H.R. 294, and more recently introduced in H.R. 
4220. However, as we testified, several aspects of H.R. 294, which 
continue to be reflected in H.R. 4220, led us to conclude that we could 
not support the bill as written. We do believe an alternative approach 
to reauthorizing the program could be centered on an Interagency 
Agreement with the Small Business Administration (SBA) in order to 
utilize the Certified and Preferred Lenders who currently manage Small 
Business Loan Guaranty applications. This would allow VA to leverage 
SBA's expertise in this business area. As the Department has not run a 
federal credit program involving small business loans in many years, we 
are still evaluating the programmatic and cost implications associated 
both with the contractual approach presented in H.R. 294/4220 and the 
public partnership option with SBA. Once an evaluation of all cost 
implications and partnership options is complete VA will provide the 
Committee with these estimates upon completion.

    Question 7: Following Mr. Snyder's question during the hearing 
regarding the complexity of claims, VA does not get full credit for 
that complexity because VA only reports the number of claims, not the 
total number of issues which are the driving factor in processing 
claims. Could VA change the reporting process to include total claims?

    Response: We agree that reporting not only the number of claims 
received and completed but also the number of issues (disabilities) 
claimed would increase awareness and understanding of the complexity of 
the claims process. New support architecture is under development that 
will allow VBA's integration into a comprehensive issue-based reporting 
structure. We anticipate incorporating this data into our reports by 
the end of fiscal year 2012.

    Question 8: The new IT system for the Post-9/11 GI Bill is 
scheduled to be in place by December 2010. Let's assume that despite VA 
and SPAWAR's best efforts to meet that date, full implementation slips 
by at least a fiscal quarter. In that case, what is the plan and will 
you need additional funds to retain at least some of the term employees 
through the implementation and transition periods?

    Response: While VA expects the successful delivery of the Post-9/11 
GI Bill long-term solution in December 2010, we plan to continue to 
utilize the interim processing solution to process Post-9/11 GI Bill 
claims if full implementation of the new IT system is not provided on 
schedule. VA's budget request includes funding to retain temporary 
claims examiners through the third quarter of FY 2011.

    Question 9: Since the President has taken office, the backlog of 
disability claims has grown by 25 percent, and this budget projects 
that the average days to complete a claim will rise from 165 days in FY 
2010 to 190 days in FY 2011. How will the budget request reduce the 
backlog?

    Response: VA anticipates continued growth in incoming disability 
claims. VBA experienced a 14 percent increase in 2009, and we project a 
13 percent increase in 2010 and an 11 percent increase in 2011. On top 
of these projections, additional claims are anticipated as a result of 
the Secretary's decision to add three new diseases to the list of 
conditions presumed related to herbicide exposure. The budget request 
includes funding to hire 1,820 additional employees to assist in 
addressing the increased workload in 2011. However, we recognize that 
additional staffing alone is not sufficient to keep up with the growing 
workload. We are actively exploring process and policy simplification 
and short-term technology enablers, in addition to the traditional 
approach of hiring additional employees, to address this increased 
demand. VBA established pilot initiatives at the Little Rock, 
Providence, Baltimore, and Pittsburgh Regional Offices to improve 
claims processing and services to veterans. As we identify best 
practices and early successes, we will export those ideas nationwide.

    Question 10: Will the Veterans Benefits Management System project 
involve VETSNET? If not, how does VA justify the millions of dollars 
spent on this project that is now basically obsolete?

    Response: The goal of VBMS is to provide a complete claims 
processing environment from submission to payment. The underlying 
architecture of VBMS will allow seamless integration with current or 
future accounting and claims management systems. The VETSNET suite of 
applications provides the current tracking and payment infrastructure 
and will be closely linked to VBMS to enable not only the paperless 
processing of claims, but also provide a much more effective user 
interface.
    VBMS is based on a service oriented architecture (SOA) that will 
facilitate long-term maintenance and upgrades, including and especially 
upgrades of the underlying components. VBMS will use Veterans' data and 
claim data already contained in the VETSNET database (VBA's corporate 
database), as well as production services that are currently part of 
the VETSNET suite. Finally, VBMS will deploy the architecture for the 
paperless document repository, the workflow engine to facilitate the 
processing of a claim, and the interface layer to allow the system to 
utilize the business and policy logic, as well as authoritative 
corporate records.