Hearing of the House Veterans Affairs' Committee - The State of VA's Fiscal Year 2015 Budget

Hearing

Thank you all for joining us for today's oversight hearing, "The State of VA's Fiscal Year 2015 Budget."

I called this hearing two weeks ago following a series of concerning and inconsistent reports from veterans and Department of Veterans Affairs (VA) employees in the field regarding the current state of VA funding.

I was not aware then of the troubling extent of VA's current budget crisis.

And, unfortunately, I suspect that had I not called this hearing, I would still not be aware today of the two point six billion dollar funding shortfall that the Veterans Health Administration is currently estimating, largely as a result of increased veteran demand for non-VA care and rising costs of Hepatitis C treatments that VA did not properly plan for or manage.

Given the extensive pent-up demand for care that was exposed during last year's hearings on wait time manipulation, VA had ample time to adjust its budgetary needs with the Office of Management and Budget to prevent what we are now seeing.

In February through April of this year, Secretary McDonald appeared at four separate budget hearings.

Since those have concluded, the Secretary and I have met and spoken regularly on a number of important, emerging issues.

At no point in those hearings or in our subsequent discussions since, has the Secretary expressed to me that the Department had a budget shortfall of such a magnitude -- one that threatens VA's ability to meets its obligations to our nation's veterans.

Nor did other VA leaders or officials communicate how much in the red VA was either - even though the Committee was informed late last week that the Department knew as early as March that there were giant disparities between the amount of money that VA was spending and the amount of money budgeted.

The only message that Congress received in March regarding the state of VA's budget was the quarterly financial report VA submitted to the Appropriations Committee for the first quarter of fiscal year 2015, which showed that VA was actually under plan in terms of its spend out rate.

Meanwhile, just two weeks ago VA proposed a plan -- that Congress authorized at the Department's urging - to transfer one hundred and fifty million dollars in fiscal year 2015 funding to support the continued construction of the replacement medical center project in Denver, Colorado.

VA also proposed an across the board recession of just under a one percent in fiscal year 2016 funds to devote to the Denver project -- a proposal, by the way, that the Veterans Health Administration's Chief Financial Officer told Committee staff last week that she did not even know about until after it had already been transmitted to Congress.

Those actions clearly show that VA leaders believe that moving forward with the Denver project -- which is not scheduled to open to veteran patients until 2017 at the earliest - is a higher priority for the Department than ensuring that veterans who need care now are able to access that care.

I have come to expect a startling lack of transparency and accountability from VA over the last years; but failing to inform Congress of a multi-billion dollar funding deficit until this late in the fiscal year while continuing to advance what I believe are lower priority need that further deplete the Department's coffers in support of a construction project that benefits no veteran for at least two more years is disturbing on an entirely different level.

Earlier this week, VA issued a "fact sheet" that claims that VA "formally requested limited budget flexibility" in February and March and May of this year and, "plainly articulated" VA's need for additional resources.

Buried on page one hundred and sixty seven of the second volume of VA's budget submission is a single statement that reads: "[i]n the coming months, the Administration will submit legislation to reallocate a portion of Choice program funding to support essential investments in VA system priorities…"

Secretary McDonald repeated this statement in his budget testimony without providing any additional supporting details or justification and, to-date, no legislative proposal has been submitted by the Administration.

In a May 12th letter to the Chairmen and Ranking Members of the House and Senate Veterans' Affairs and Appropriations Committees regarding the Denver project, VA stated that the Department, "…requests flexibility to make the [Choice] program work better for veterans through limited authority to use funds from Section 802 of the Choice Act to fund care in the community to the extent it exceeds our FY 2015 budget."

Again, no further information or supporting materials were provided.

If those two statements -- absent any data or details - are what VA calls "formally requesting" budget flexibility and "plainly articulating" the Department's needs, then I understand why VA has found itself suffering nothing but string after string of failures in the last year.

What's more, it proves to me once again that VA's current problems reflect a management issue far more than they represent a money issue.

This Committee cannot help VA solve its problems, if VA refuses to be honest, upfront, and transparent with us and with the American people about the position it is in, the struggles it is facing, and the help that it needs.

Congress has consistently provided VA with the funding that the Department has requested and, as a result, VA funding has risen seventy three percent since 2009 while the number of Veterans using VA for care has grown by only about 2 percent per year, per VA's own testimony.

I know that I speak for every Member of this Committee when I say that we are committed to ensuring that VA has the funding it needs to deliver the world class health care our veterans deserve.

But VA must do its part - to confront and correct its poor budget planning and poor management issues, to hold poor performing executives and employees accountable, and -- perhaps most importantly -- to prioritize our veteran's needs over the bureaucracy's wants.

And if the current shortfall shows us anything it's that what our veterans need and want is to have a say in where and when they receive their health care.

Assuming VA's numbers are true, non-VA care appointments now make up twenty percent of all VA appointments, with veterans receiving more than one million appointments from community providers each month.

In the coming weeks, I will work with my colleagues on the Appropriations Committee to give VA the flexibility it is seeking to use a limited amount of Choice Funds for non-VA care and ensure that no veteran suffers as a result of VA's mismanagement of the generous budget the American taxpayers have provided.

However, going forward, there must be a dedicated appropriation account to fund non-VA care under a single, streamlined, integrated authority with a dedicated funding stream contained within VA's base budget - rather than the seven disparate, ill-executed non-VA care programs outlined in VA's testimony.

This morning, I look forward to discussing this proposal with Deputy Secretary Gibson and with my fellow Committee Members.

I thank you all for being here and I now recognize Ranking Member Brown for any opening statement she might have.

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