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Hearing of Committee on Veteran's Affairs on Nomination of Hon. R. James Nicholson to be Secretary, Department of Veterans Affairs

Location: Washington, DC

Hearing of Committee on Veteran's Affairs on Nomination of Hon. R. James Nicholson to be Secretary, Department of Veterans Affairs


Senator Obama. Thank you very much, Mr. Chairman and Ranking Member Akaka. Thank you so much for allowing me to join this Committee. It is a great honor to be here.

I want to thank, first of all, Ambassador Nicholson, for his service to this country. It is a great honor for you to not
only be willing to serve now in this current position, but also your service as a veteran to the United States. And I am
looking forward to working with you. We have had occasion to meet, and I have no doubt that you will do an outstanding job.

As you know, I do have a set of particular concerns with regard to Illinois that I will be raising with you. Senator Akaka mentioned this quote earlier from George Washington about the importance of us serving our veterans so that we can
continue to ask our Nation's young men and women to serve on our behalf. I think the Father of our Country understood what
every veteran in this great country knows today: that when we send our troops to war, it is our solemn obligation to care for
them upon their return and to do so in a timely manner and to treat them with the respect and dignity which they have earned
and which they deserve.

Now, a lot of my questioning is going to be focused on the fact that in Illinois in particular, there seems to be some
concern that we are failing to live up to that obligation. Very specifically, Illinois' disability pay compensation system
appears to be broken. There was a recent report by the Chicago Sun-Times that found that Illinois veterans, when compared to the compensation levels granted to veterans in other States, rank 50th out of 52 States and territories, and I think, in
fact, we have a chart here that I just want to show very briefly.

Apparently, there is as much as a $5,000 discrepancy between Puerto Rico and Illinois with respect to compensation
levels for disabled veterans. Mr. Ambassador and Members of this Committee, that is unacceptable by President Washington's
standard, and it should be unacceptable by our standards as well.

Worse still, many of the veterans who finally receive benefits only get them after long, stressful battles with the
VA. I believe we can and we must do better. Over the past several days, I have met with more than 500 veterans throughout
Illinois to hear about what they believe, how they believe they are being treated by the VA. Though I know that the Department is doing some things very well, and that was acknowledged by a number of the veterans' groups, nearly every veteran I talked to was frustrated. Some have been fighting claims for decades; some have yet to receive compensation they deserve, and worst of all, some feel that the VA simply is not listening to them or does not care about them.

So I recognize that some of these issues are going to have to do with budget concerns. It was already referred to by our
Chairman that you are going to be inheriting a more difficult fiscal situation than your predecessor. At the same time, I
also know that because we are at a time of war, this is precisely the time when we are going to have to do better. We
know that the situations that contribute to post-traumatic stress disorder are directly proportional to the type of warfare fought. Urban combat in Iraq, mixed with an insurgency that is not always identifiable, coupled with a prolonged deployment create an even greater stress on today's brave soldiers.

And I will just note in closing that a recent Army study showed that 1-in-6 soldiers in Iraq reported symptoms of major
depression, and some think that figure could eventually reach 1-in-3, a figure equal to those veterans who served in Vietnam.
With hundreds of thousands of veterans from Iraq and Afghanistan who are going to be coming back from the war, some
predict that the soldiers requiring mental health treatment could exceed 100,000.

So I look forward very much to working with you, Mr. Ambassador. I look forward to the answers that you're going to
be providing to this Committee. I am looking forward to your actions to address the disparities that I have already alluded
to. Hopefully, if we learn where we failed our veterans in the past, we can better serve them in the future.

I thank you for your attention.


Senator Obama. Thank you very much, Senator Akaka.

The comment that I want to make is that with respect to your brother. My grandfather is buried in Honolulu. He was a
World War II veteran, and it was an outstanding service. And the division that your brother was operating does, in fact, do
an excellent job, and I am grateful for that.

Now, I am very appreciative, Ambassador, of the fact that you took the time to meet with me ahead of this hearing. Part
of the reason that I agreed to gladly vote for your confirmation, despite not having the opportunity to ask questions formally in the Committee, was the fact that we had met earlier, and you had addressed some of my concerns in your opening statement.

But I do think it is important for purposes of getting it in the record just to indicate the nature of the concerns that
we have. As I stated, there has been a series of Chicago Sun-Times articles that I would ask unanimous consent to place into
the record that indicate that there are wide regional disparities with respect to disability benefits paid to our disabled veterans. Illinois is doing particularly poorly, ranking 50th, although I would note that Colorado is not better. It, I think, ranks 44th. And these are not modest discrepancies; as I indicated from the chart earlier, these are discrepancies that go into the thousands of dollars.


Senator Obama. And I may, you know, after this question have one more.

Chairman Craig. Sure.

Senator Obama. Although I am happy to wait for a second round, if that is possible.

Chairman Craig. Very fine.

Senator Obama. But one of the speculations in the articles and discussions with veterans that I have had on this issue is
that the raters in Illinois, and there seems to be some correlation with the Midwest having lower payments than in
other parts of the country, that the raters in some fashion are either trained differently or incentivized differently in terms
of their evaluations of claims. And I recognize you are still trying to figure out what causes this specific disparity.

I would ask a broader question, and that is how standardized are the ratings procedures that are taking place
in these various regional offices, and what kinds of incentives are we creating for raters? Are they being rewarded, which is
the suspicion, sadly, of some of the veterans that they are being rewarded for turning down claims as opposed to being
rewarded for being accurate and just and hopefully generous in terms of making decisions?

Mr. Nicholson. As to the training, that is something that I am asking myself, is that, you know, how uniform and consistent
is the training, the preparation of these adjudicators? And I think that there, also, is a fertile area for us to look at to
ensure that it is.

I also read the reports of your town hall meeting in Illinois last week, Senator, and read where there was a statement about incentives for people turning down claimants. I am not aware that that exists, but that is something I also will find out. This is a high priority for me, if confirmed, to really get our arms around this. That is, to me, a surprisingly big disparity in our country.


Senator Obama. Thank you, Mr. Chairman.

Ambassador, I just want to revisit a couple of issues that we discussed earlier. The first, I guess, is I was not clear
with respect to the investigation that you intend to be engaged in that the Inspector General has already started on this
disabilities disparity, when, exactly, we can start getting some sort of report, and I was wondering if you had some date
that when I go back to Illinois and talk to veterans, I can say as of this time, I think we will at least have the initial
assessment in terms of what is going on.

Mr. Nicholson. I wish I could give you that, Senator Obama, but I cannot. I asked that same question myself of the
Inspector General.

Senator Obama. Okay.

Mr. Nicholson. And he said he could not, would not project that.

They are working on it with intensity, and we, if I am confirmed and take over the VA, are going to review where his
work is and then see what, you know, if we should be doing something independently of this, put a team together to look at

I discussed this a great deal with our very able head of the Veterans Benefits Administration, Admiral Cooper. He shares
the concern over this and sort of the puzzlement about why this is happening to that degree, but we don't know. I can just tell
you that we will stay in close touch, and we will be working on it.

Senator Obama. Let me say this: I have no doubt that you are concerned about it, and I think that there are going to be
other people that are concerned about this. My concern is that you have got a full plate coming into this thing. I mean, the
issues that were just raised, I thought the Chairman raised an excellent point about Guardsmen and Reservists and how you have to rethink the role there, because as I travel throughout the State of Illinois, we get the same thing, that the lines are
now blurred between active duty and our citizen-soldiers. The point that Senator Thune raised about travel times, you know,
believe it or not, in Illinois, we have got some folks who have to drive a lot, too, and are experiencing the same issues.

So you are going to have a lot of things coming at you, and I guess my concern is that without some timetable, this can get
lost. And I should note that even in the Sun-Times article, for example, you have got quotes from senior analysts in
headquarters here in Washington that say things like the folks who do the adjudication in Chicago are pretty tough; folks
there really look at everything with a jaundiced eye, and they are rather stringent in their application.

So, I mean, there are people in your offices that have opinions about why this is occurring, and if the Inspector
General cannot give us a date certain, then, I guess I would be interested in whether there was some team that could be put
together, you know, so that I can provide some certainty to the folks back home.

Mr. Nicholson. I understand exactly what you want and why, and I am sympathetic to it. I can only say that we will get on
it, and I will make a decision about whether I think there is some independent group that should come together to look at it
or wait for the IG, and as soon as I can give you some projection of time, I will do so, Senator.

Senator Obama. Okay. Fair enough. Not to belabor the point, because I only have a minute left on this round: one issue that
does seem to be coming up is the fact that there may be a shortage of personnel in these offices. You know, it appears at
least that just to give an example, during the past 2 years, the number of claims filed for service connection and the numbers of issues per case have increased; you have already noted that.

My understanding, at least, is that the Administration has proposed decreasing the number of employees available to
adjudicate claims. As of December 31, 2004, there were 48 fewer adjudication employees in the VA regional offices than there
were on September 30, 2004. So given what we expect to be a significant influx of claims being made, partly as a
consequence of great medical care in the field, one of the results of that is more disabled veterans making claims. I am
wondering whether, in fact, we are reducing or even just maintaining, keeping constant, the number of people evaluating
claims and what you intend to do to make sure that these numbers are sufficient to meet the demand.

Mr. Nicholson. The time that it is taking for these claims to be filed and adjudicated bothers me. It seems to take a long
time, and so, I have a goal to see if we can shorten it. As to the number of adjudicators, I think that they did go down, but
the agency was then able to transfer, I think, some fiscal 2004 money into this budget cycle so that we are now hiring some
more adjudicators, and the net result of that should be we should have more. And I am not speaking specifically to your
case there, you know, in Chicago, Illinois----

Senator Obama. No problem.


Senator Obama. One issue that has come up fairly frequently, Ambassador, is the issue of back pay for disabilities. I mean, it seems to be a particular problem where you have a veteran who goes in, gets evaluated, the initial evaluation says 10 percent disability. He continues to pursue his claim. Perhaps two or three years later, there is an evaluation that, in fact, he was deserving of 70 or 80 percent. And one of the questions I guess I have is that--and I am not sure whether you know the answer to this--where there is an adjustment of that sort? Is that veteran then entitled to back pay or retroactive benefits given the second opinion that was rendered?

Mr. Nicholson. I am not sure I know the answer either, Senator. Is your question that when they looked at the veteran
the second time, and they found him to be 70 percent that they also found that he should have been adjudicated 70 percent when it was 10?

Senator Obama. Right; this would not be a situation where there would have been a deterioration of his condition, but
rather, simply, it turns out that there was a different assessment that was made.

Mr. Nicholson. I do not know the answer. That is a good question, and it also leads to what his appeal rights might be
about that.

Senator Obama. Right.

Mr. Nicholson. I will look into that and learn from the answer and provide it to you.

Senator Obama. Okay; the second question I have really has to do with the whole issue of mental health and post-traumatic
stress disorder that has already been discussed. Right now, are there plans to expand the resources available for those
purposes, and if so at what point, would this Committee sort of get a sense of how that is being structured?

Mr. Nicholson. There are plans to expand that in anticipation of the needs of returnees from Operation Iraqi Freedom and Operation Enduring Freedom. I would think that--I guess the first time probably, I mean, we can always talk about
it soon, but the 2006 budget also will encompass that.

Senator Obama. Should reflect some of those.

Mr. Nicholson. Yes, and should have what the agency has in their----

Senator Obama. Okay; and just the final point that I would make, and this circles back to this broader concern that I have
expressed about disparities, regional disparities.

If it turns out that there does appear to be a problem with the raters and how they are trained and the lack of
standardization, I guess part of what I would very much be interested in would be to see some sort of third-party reviewer
to come in and assess these claims and to think about how we create the same system across the board. I mean, I am new to
this Committee, but one thing that I am absolutely certain of and that is that if a veteran has lost a leg and lives in
Illinois, they should get the same disability as a veteran who lost his leg and lives in Puerto Rico. I mean, that seems to me
an unassailable statement.

And so, one of the commitments that I am going to have is if it turns out that the raters need some sort of additional
training, it may also be necessary that we have some sort of third-party reviewers or somebody from the Washington office
that starts overseeing some of this work until it gets smoothed out.

Mr. Nicholson. I think that is a very insightful question, Senator. I will tell you that the VA does send people around to
do an independent review of adjudications, and I have looked into that with respect to Illinois, and for some reason, they
seem to have been found to have been pretty accurate and pretty consistent.

Senator Obama. I am just curious: is it consistent internally in the sense that they are uniformly stingy with all of the--I mean, I do not mean to be sarcastic, but I guess----

Mr. Nicholson. That is not the meaning of the way I used it. This person had this set of conditions, and they were
adjudicated thusly and that was being done consistently in the findings of--because it is sort of an ombudsman function that
the VA does do, just to run a check on how these people are doing. So that has not shed any light yet, but as I said in my
opening statement about this, there are two parts: we have got to get to the bottom of it and then figure out what to do about
it. And you have my commitment on both of those.

Senator Obama. Right. Okay. I appreciate your commitment.

Mr. Chairman, I appreciate you devoting this time to an issue that is very important to my folks.

And finally, I want to thank you, Ambassador. I know that before this hearing, you had made a commitment that once we had some answers, you would be willing to come to Illinois to discuss them directly with veterans. I appreciate that
commitment, and I wish you all the best of luck in your service.

Mr. Nicholson. Thank you.

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