Hearing Of The House Committee On Veterans Affairs - Veterans Affairs Budget Request For Fiscal Year 2010

Statement

Chaired By: Rep. Bob Filner (D-CA)

Witnesses Panel I: Eric Shinseki, Secretary, U.S. Department Of Veterans Affairs; Panel Ii: Carl Blake, National Legislative Director, Paralyzed Veterans Of America; Kerry Baker, Assistant National Legislative Director, Disabled American Veterans; Dennis M. Cullinan, Director, National Legislative Service, Veterans Of Foreign Wars Of The United States; Raymond C. Kelley, National Legislative Director, American Veterans (Amvets); Panel Iii: Steve 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; Paul Sullivan, Executive Director, Veterans For Common Sense;

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REP. FILNER: (In progress) -- year 2010. Mr. Secretary, we thank you for joining us. I know you are used to going to battle alone, but you got nobody on your wings or your back there. So, good luck.

I want to make sure before we start that I ask unanimous consent that all members may have five legislative days to revise and extend their remarks, and that written statements be made part of the record. Hearing no objection, so ordered.

As I said, today is the preliminary budget submission from the Department of Veterans' Affairs for our next fiscal year. A few weeks ago, the administration submitted a preliminary budget and it is a document that provides what they call topline budget numbers and brief discussions regarding administration priorities.

I must say, Mr. Secretary, we are pleased to see that even with this summary you had is about a 10 percent increase in the discretionary account and about a 20 percent increase in the mandatory accounts, overall for a 15 percent increase overall.

I will say to you, sir, that since the independent budget was first put out, budget put together by independent -- by our veterans' service organizations by and for veterans as they say and I've been using it as my bible for the last 17 years, this is the first administration budget to exceed the independent budget. And we are very happy that has occurred. I hope you can be proud of that. And we know that the budget forecast is for about $25 billion, I think, increase over the next five years. We haven't had an administration budget like that for a long, long time.

So, thank you sir and it looks like that you understand and the administration understands the importance of veterans in the budget. We know they are not binding figures, but they are a good start. And you put some interesting things in there which, I think, the committee shares your policy formulations. For example, beginning to bring in so-called Priority 8 veterans over the time of your forecast, 500,000, as I understand it; many of us have wanted that for a long time.

I think you also expand the so-called concurrent receipt and again, many people in this committee have been working on both sides and they offer a long, long time. So we thank you for that and, you know, we're looking forward to meeting the needs of our veterans in the coming year.

From looking at your Senate testimony and the testimony of some of the veterans' organizations, there is, I guess, a controversial policy recommendation in the budget concerning collection -- third party collections. We believe, Mr. Secretary, that we can meet your numbers for revenue income, third party, without any policy change that is using existing authority.

We believe that we can do that with the numbers you have created and that we don't have to get into policy recommendations on third party collections but still meet your revenue needs that you have forecasted in your budget, and we'll be talking about that.

In fact, I know, both Mr. Buyer and I have been talking over the last several years with people who think that we are leaving hundreds of millions, if not billions, on the table from third party collections and we are both committed to seeing that you realize that without going into any policy shifts with regard to service connected veterans.

Again, thank you for being here. Thank you for the leadership that you have shown in your few weeks on the job. We are looking forward to work with you over the next four years and I will yield to my Ranking Member Mr. Buyer.

REP. STEVE BUYER (R-IN): Thank you, Mr. Chairman and good afternoon.

It is my pleasure once again to welcome Secretary Shinseki back to the committee and thank you for appearing here today. I look forward to your testimony. I also look forward to hearing from the second panel of witnesses from the veteran service organizations.

Mr. Secretary, the funding increase as outlined in your budget is welcomed. Overall it is also a move in the right direction. I do have some concerns particularly with regard to the out-year numbers and that is the gamesmanship that occurs in this town. And so when I'll put together the budget use and estimates, I'll also try to make these projections with regard to the out-years.

It is a gamesmanship that's occurring through OMB and not that you haven't lived with this when you were over at DOD, but if we are going to put together a budget, and we want to be realistic with regard to those out-years, we really need to prepare for them. And kind of what is happening is there is so much lumped on the front-end, it's try to make it look as though they're more fiscally responsible in the out-years.

I want to die in the out-years, okay. That way I'll live forever.

This is the way we do budgeting in this town.

REP. FILNER: I want to make an amendment to that.

REP. BUYER: That be -- so I can live forever? Well, maybe you'll be right there with me and we'll create a lot of energy for a lot of years for somebody.

A number of factors, I believe, are going to place great demand, Mr. Secretary, on the VA, and so when I'm talking about the out-years, I think we have to prepare to handle it. President Obama announced the drawdown of the combat troops in Iraq, which will contribute to an increase in veterans seeking VA benefits and services over the next two to three years.

The Priority 8 is being enrolled and I know we are moving incrementally. What type of political pressures are there going to be VSOs to even make -- accelerate that, especially at a time when we have the economic circumstances that we do. You couple that with medical inflation, that tells me that the outline -- the out-year numbers are too low in the budget that you submitted to us.

Regardless of what the numbers are, it will require, I believe, bold action to ensure the VA's health and disability systems are effective in delivering timely and quality service to our veterans. I'm also concerned about a proposal, and I've spoken to you about it, reportedly considering the bill's third party insurers for the treatment of service-connected disabilities.

I told you in private, which I'll also say public, I'll be a good listener to your proposal. However, I believe that the proposal is contrary to our basic national obligation. And that's just how I feel. But that's my opinion and I want to be a good listener to what you are proposing to us and we'll have it properly vetted. And so we'll treat your proposal with respect and we'll figure out where it lies.

I also have growing concern about the VA's ability to handle the thousands of claims it will receive next fall for the new GI Bill benefits. As you know, I requested the VA office of inspector general assessment of the system being implemented to administer the new program. We must have a candid view of any problems as far as in advance if possible to ensure the VA is ready and capable when the new delivery system comes online.

The men and women of our armed forces do not hesitate when called upon to defend our nation and I think that we as the government owe them the timely delivery of the benefits that they have earned. Veterans will be relying on the VA to make timely GI Bill payments to them and their schools next fall, and it is incumbent on Congress and the VA to make sure the program works as it was intended.

Also when you appeared here last month, I expressed my concern over varying quality of care standards with regard to veterans' grave sites. The Battle Monuments Commission sets, I believe, the gold standard. It is followed closely by the National Cemetery Administration. But I am not pleased, however, by the appearance of two cemeteries that are maintained by the National Park Service - Andersonville in Georgia and Andrew Johnson Cemetery in Greenville, Tennessee.

I am -- they have improved -- they've improved it and I've shared the pictures with you, but it is -- it still, it should not -- we should not have three tiers of standards with regard to how we honor those who came before us.

So I am close to the conclusion that the best solution would be transferring the jurisdiction of these two open cemeteries to the VA and I welcome your thoughts on that idea. You had told me that you were going to be working -- speaking with the secretary of Interior. So I anticipate if you could share that with the committee, I'd appreciate it.

I do want to note my particular agreement with the provision in the budget summary that states that the high disability veterans who are medically retired will be eligible for concurrent receipt. When I served on the Armed Services Committee and chaired personnel, I had $25 million and I took that and I popped the lid off the issue of concurrent receipt, and did for the 100 percent disabled combat veteran. And that was the beginning of -- now you're bringing to us a budget for full concurrent receipt and it has taken about 10 years for this to happen.

So I agree with your proposal. In fact, it is similar to provision I have, of one of them that's in the Noble Warrior initiatives that I had introduced. I also introduced the Armed Forces Disability Retirement Enhancement Act to simplify the military disability retirement and ensure that those found unable to serve will automatically receive retirement benefits based on rank and years of service.

This is another issue that we've discussed. The chairman has his ideas, I have mine, Danny Akaka has his. Everybody has got a lot of ideas on how to do this one. We welcome your input.

And with that Mr. Secretary, I appreciate you being here. There are a lot of issues to discuss today.

REP. FILNER: Again, welcome, Mr. Secretary. We are all, I think, knowledgeable of your outstanding record of service and personal sacrifice to our nation having served with honor and dignity for 38 years in the United States Army in Vietnam and Bosnia, Afghanistan and Iraq before your retirement as the 34th Chief of Staff of the Army.

You have been called a soldier's soldier. We are looking forward to you for you being the veteran's veteran. We welcome you today and the floor is yours.

SEC. SHINSEKI: Chairman Filner, thank you, and Ranking Member Buyer, thank you for having me here today. And other members -- distinguished members of this committee, thank you for this opportunity to present an overview of the 2010 budget for the Department of Veterans Affairs.

I appreciate also the opportunity I've had to speak with a number of the committee members in preparation for testimony during what has been a very busy legislative session, but regret that I wasn't able to get to everyone. But that's something I'll correct in the future.

Let me also acknowledge and thank the leaders of our veterans' service organizations who are here today sitting in our audience.

President Obama has charged me with transforming VA into a 21st century organization, not change for the sake of change, not nibbling around the edges, but a fundamental and comprehensive review of all that we do for veterans before moving boldly to acknowledge new times, new demographic realities, and leveraging new technologies to renew our commitment to veterans, wherever they live.

I've been conducting that comprehensive and fundamental review for about seven weeks now and would like to offer a quick status about what I've learned since my last appearance before this committee.

New GI Bill. An outside consultant was hired to conduct a quick look study to validate our plans and procedures for executing this large new program of educational benefits. The quick look was completed on 27 February and it validated what we are doing and provided -- validated the procedures and process that we have in place and are executing, but provided us eight additional risk factors to consider. I've accepted them all except for one, which I accommodated internally.

I am satisfied that we will get veterans who apply in time in the schools this fall. It remains high risk because of the compressed time lines we have faced since legislation was passed. But we have mitigated that risk responsibly and at this point, I consider the risk an acceptable one.

The 2009 plan for the new GI Bill be a computer assisted manual exercise, manual system -- computer assisted but manual exercise. We hope to move to a fully automated system in 2010; we're just not able to get all the pieces in place this year.

But for 2009, user testing of the interim IT solution was completed. Phase I training for our newly hired 530 employees began yesterday and I get updates on how we are progressing there.

The final regulation is at OMB, the contingency plan is finished, and final coordination is underway, in my opinion all is in order to meet the August 2009 implementation date.

We still have multiple milestones to meet before that and I will continue to keep the committee updated as we achieve them.

Paperless. Our goal is to reengineer the claims process into a fully paperless environment by 2012. A lead systems integrator has been onboard since October 2008 reviewing our business processes and beginning key design deliverables, which we expect by August of this year.

Application developers will begin building specific components in early FY 2010 capitalizing on recent successes with VETSNET and leveraging funding that should be available in next year's budget. We are already processing loan guarantees, insurance, and education claims electronically, and plan to conduct a business transformation pilot at the providence's regional office later in this fiscal year.

In conjunction with this paperless initiative, DOD and VA have met three times now to address the potential for automatically enrolling all military personnel into the VA upon entry into the armed forces. We call this initiative uniform registration. We are in agreement about the goodness of such a system and have people working towards making it a reality.

Uniform registration will push both of us, both DOD and VA, to create a single electronic record that would govern how we each acknowledge, identify, track, and manage each of our client's active and reserve component to populate both of our departments from the moment they first take the oath of allegiance in uniform.

Our management decisions will be better, faster, more consistent, and fair, and less subject to lost files or destroyed claims. Such electronic records would have a personnel component and a medical component. We have benefited from the insights and experience and advice of Secretary Gates and Deputy Secretary Lynn about not trying to build a single large database. So we are committed to doing this smartly and differently from some of our past hard lessons learned.

Electronic health record. In the VA's experience, the EHR, electronic health record, has figured prominently in the growth and quality of medical services. In 1997, we rolled out an enterprise- wide update to our EHR. We've been in EHR for about 20 years, but in 1997 we rolled out this enterprise-wide update.

Two years later, by 1999 that update provided a conical data repository including privacy protection with real-time data flow across the entire system with clinical decision support, and clinical alert templates, notification systems, and disease management features. Today it has an imaging capability, EKGs, any test that has ever been taken as part of this -- studies, procedures, endoscopies, scan documents are -- can be part of this file.

International observers have called it -- I'll say some international observers have called it the gold standard in clinical informatics.

What has been the impact? Between 1996 and 2004, this updated electronic medical record enabled VA's ability to handle a 69 percent increase in patients and reduce the workload by 35 percent, and hold the cost of medical treatment steady when the cost of health care across the country was increasing significantly.

Now, some would suggest that the VA's lower costs of treatment were as much a function of its lean budget in some of those years as they were of efficiencies and delivered services, and I think that is fair. But lean budgets were not just visited on the VA in those years, but at Medicare and other institutions as well where costs rose 26 percent. So there is a variance between what our performance has been.

On the backlog, I have not made headway in understanding or solving this dilemma other than to acknowledge that it is a significant obstacle to building trust with veterans and the organizations that represent them. I'm not sure that I have a valid working definition for the backlog, but I am working personally to develop that valid definition, not to define myself out of a problem. But if a claim is initiated today and I ask is it part of the backlog tomorrow, and the answer is yes, there is no way for me to fix that. I have to define the backlog in a way that gives me the opportunity to measure it and then to set about correcting it.

So this is what I am about and unless I can validly define and measure the backlog, I'd have a hard time fixing it and I am about fixing it.

Our efforts to institute uniform registration and create a single electronic record will lay a foundation for eventually controlling the inputs of the backlog dilemma. But I must find ways to control and reduce the backlog as it exists today and for the time being it is a group force exercise. I put more people into handling these claims because that's the only way to get measurable progress. I'm not sure that's the solution for the long-term when paperless becomes important to this consideration.

So having provided you this quick update, let me now report that our proposed 2010 budget is critical to realizing both the president's vision for the 21st century VA and also my opportunity to set about correcting some of these issues that I've described for you.

The proposal would increase VA's budget, as the chairman has pointed out, to $112.8 billion, up $15 billion, or a 15 percent increase from the 2009 enacted budget. This is the largest dollar and percentage increase ever requested by a president for veterans.

Nearly two-thirds of the increase, $9.7 billion, would go to mandatory programs, which would increase it by 20 percent. The remaining third, $5.6 billion, would be discretionary funding and would increase that account by 11 percent. The total budget would be almost evenly split between mandatory funding, $56.9 billion, and discretionary funding, $55.9 billion.

The 2010 budget funds the new GI Bill and would allow a gradual expansion of health care eligibility to Priority Group 8 veterans, who have been excluded from VA care since 2003, an expansion of up to 550,000 new enrollees by 2013. Further, it contains sufficient resources to ensure that we will maintain our quality of health care for veterans, which today sets a national standard in my opinion, with no adverse impact on weight times for those -- or quality for those already enrolled.

The 2010 budget provides greater benefits for veterans who are medically retired from active duty by phasing in an expansion of concurrent receipt eligibility to military disability retirees. The proposal allows highly disabled veterans to receive both their military retired pay and VA disability compensation benefits. The budget provides resources to effectively implement the post 9/11 GI Bill and streamline the disability claims process. It supports additional specialty care in such areas as aging, women's health, mental health, homelessness, prosthetics, vision and spinal cord injury, and it helps extend VA services to rural communities which lack access to care today.

The details of the president's budget are still being finalized and should be available in April, at which time I'm happy to come back and address this committee again. So while I lack budgetary detail on specific programs and activities today, I do however, look forward to answering your questions and I'm prepared to take those questions now.

Thank you, Mr. Chairman.

REP. FILNER: Thank you, Mr. Secretary. When I think about some of the issues that have been brought up over the last decade, just sort of thrown on the table, nobody listening to us, sort of scary to hear you come back with all of them, so we're really glad to have you here today.

Mr. Michaud, I recognize you for five minutes.

REP. MICHAEL MICHAUD (D-ME): Thank you very much Mr. Chairman and ranking member for having this.

First I also want to thank you, Mr. Secretary, for coming here and look forward to working with you as we move forward over the next couple of years to make sure that we provide adequate funding in a timely manner for all veterans.

I do have one question, but I also have a comment I want to follow-up on, actually Congressman Buyer's remark.

You mentioned the backlog in building trust with veterans organization and have with veterans -- and having not seen the budget language, I've heard the same rumors that I'm sure a lot of members here have heard about the administration, whether it is OMB, whether it is the president, whoever it is, I don't know, want to have third party payment on service connected disability.

If that is in the budget, I will not be supporting the budget. It is unconscionable and is an insult to our veterans who've been hurt overseas. So hopefully, you will give that message to OMB as it relates to third party collections for disabled veterans, which is just unbelievable that anyone would ever think of doing that in this budget. So hopefully it will not be in the budget, but that's what the rumor is out there and hopefully you'll do everything you can to persuade those who are pushing this, because in fact they are not to include it.

My comment is that I would like to commend everything that you had mentioned about the budget outline that focuses on access and services for post-traumatic stress, TBI, for our rural veterans. As you know, Maine is a very rural state. We have a large number of veterans in Maine, and I look forward to working with you to provide our veterans with greater access to PTSD services.

Can you offer the committee your ideas on how VA plans to make these services available to rural veterans? Could you offer the committee your assurance that the VA will work with Congress to ensure that these priorities will be enacted into law to take care of veterans?

SEC. SHINSEKI: Certainly Congressman. I would tell you that I have been engaged in discussions about the rural health issues with a number of members of this committee as well as other committees, and I am sensitive when I look at a map about how much of the country is either rural or highly rural. And that provides challenges.

I think for us the movement in the VA away from singular hospitals as the only measure of health care deliverability to other options that included community based out-patient centers, outreach clinics, mobile clinics, and so forth is the right move, and it has been underway for some time now. We are just building more capacity here.

But it does reach not only the veterans who can't get to the hospital, but gets to those areas where there are no hospitals. And I will continue to treat this as priority.

I think you know that we are implementing a rural health pilot project involving mobile clinics at four of our VISNs. And we'll look to the goodness that comes out of that to inform us on how much faster and what else we can do in that area. But I am sensitive to the issue and this will be -- continue to be a priority.

REP. MICHAUD: Well, I want to thank you very much for making it a priority because that's where a lot of the complaints that we hear, those of us who are from rural areas is that whole access issue. So I really appreciate your making that a priority and look forward to working with you and really appreciate your willingness to meet with members of Congress on both sides of the aisle, to get our concerns and hear them in advance before you move forward with policies.

I really appreciate that and I realize that you have laws as well, and you have to deal with OMB. So hopefully you will deliver that message and when we meet or when I meet with the OMB director, I will be delivering that message personally as it relates to collections for soldiers who are injured in the battlefield.

So thank you once again, Mr. Secretary, for coming here today. I appreciate it.

SEC. SHINSEKI: May I just add a point here. It is a consideration. It is not in the budget, but it is a consideration and I'll be sure that your concerns are delivered. And again, we're talking -- in health care; the two aspects of this are delivery of health care and the financing of it.

This is about the financing. I want to assure you that there should be no concern about the delivery. That we will provide the best quality health care we can to our veterans. That is not discussable.

REP. MICHAUD: Thank you.

REP. FILNER: Thank you, Mr. Michaud.

Mr. Moran.

REP. JAMES MORAN (D-VA): Mr. Chairman, thank you very much. General, thank you for joining us today and thank you for the opportunity I had to visit with you in my office earlier this year. There are a couple of bills that are being implemented, or should be implemented by you and the Department of Veterans Affairs in this current year.

One, you mentioned in your testimony, the GI Bill and I look forward working with you. I hope you'll spend a lot of time with veterans and with financial aid officers and universities and colleges and technical colleges, trying to make certain that we do this in a way that is very effective. Another one is the implementation of a bill that I introduced that became law last November.

You mentioned four VISNs and a implementation of mobile vans in rural areas. The implementation -- there is also another rural program that we created in last -- in the last Congress, that you will be implementing. And I want to point that out to you and tell you that how it's implemented is so important because I want this program to succeed.

And that is that if there is no outpatient clinic or VA hospital within a certain distance of our veterans that in four VISNs you are to implement a pilot program in which you contract with local providers to provide those services to veterans.

One of those VISNs is, in fact the two VISNs that I represent in the State of Kansas are included in that pilot program, and I would love to have the opportunity to visit with the appropriate staff personnel at the Department of Veterans Affairs about this implementation, if you could make that possible.

In addition to those two implementations, I'd be delighted to hear from you, your thoughts about a provider, health care provider, recruitment, and retention. As I listen to my VISN directors and hospital administrators within the part of the VA that I represent or the geography that I represent, the Department of Veterans Affairs is no different than the private sector, in many ways, in regard to the inability to attract and retain the necessary health care professionals. And it's particularly true, I think, in specialties, but specialties dealing with mental health, mental illness at a time in which that seems to be -- the need seems to be a priority of ours.

And finally, I'd like your comments on advanced appropriations. My understanding from the comments that you made and that President Obama made that the administration will be supportive of legislation allowing for advanced appropriations. It's my understanding that there is some belief that you are now talking about timely funding as compared to advanced appropriations, and I was interested in knowing the difference between those two phrases.

And I thank you, sir.

SEC. SHINSEKI: I'm not sure I can answer the last question there. But let me start with the beginning. We need to be better at recruiting and retaining health care professionals and workers for rural areas. The VA is working with the National Rural Recruitment Retention Network to -- one, to be linked-in with them, but also to get better at the business of training our people, our recruiters on how to do this. So we are taking that on.

There are incentives for recruitments such as the Education Debt Reduction Program. And besides that we also look at the opportunity to employ an outreach clinic, which is not a fulltime clinic in a given area. But we will go for a period of time, set up a clinic, brining in all the health care professionals we need, and conduct the clinic as many patients as need to be seen, and then move it to another locations.

The patient load is not enough to keep that clinic open fulltime. But it gives us an opportunity to, one, see what the needs are and also address some of these issues. Regarding advanced appropriations, I believe a couple of testimonies ago I indicated that -- I think even then that I said my preference was for timely budgets.

My experience with continued resolutions always pointed up some difficulties for those of us that had missions to execute, especially where health care and other services were concerned. And if timely budgets were not available, then advance appropriations might be an appropriate alternate way of looking at this. I now understand that timely budgets are what we are going to do. And so that's what I'm going to go to work on -- my piece of it.

REP. MORAN: Mr. Secretary, thank you. It's pleasing to me that you are able to speak on behalf of Congress that we're going to do our work at a timely fashion and avoid continuing resolutions. I hope your optimism is founded.

REP. FILNER: Thank you Mr. Moran.

Ms. Herseth Sandlin.

REP. STEPHANIE HERSETH SANDLIN (D-SD): Thank you Mr. Chairman. Secretary Shinseki, thank you for being here today. Thank you for your testimony. We had a chance to visit again earlier this week. And I look forward to continuing to work with you to strengthen and transform the VA to meet the needs of our nation's veterans.

Thank you for helping craft the largest ever increase in VA funding. I appreciate the VA's commitment to assuring that it has the resources it needs to meet a very long list of challenges. However, Congress must also conduct proper oversight to ensure that taxpayer dollars are spent wisely and that programs are implemented effectively, and more funding can't alone guarantee better services. Aggressive oversight is also needed.

Now, as you know, I serve as the chairwoman of the Economic Opportunity Subcommittee and along with the distinguished ranking member Mr. Boozman, we have been working closely in our oversight capacity, with Keith Wilson, director of the education service, and Stephen Warren, the principal deputy assistant secretary for the office of information and technology.

And just recently, on February 26, we held yet another oversight hearing to review the VA's progress in implementing the post 9/11 GI Bill, which you addressed in your opening remarks. Now, at that hearing, Mr. Wilson and Mr. Warren indicated what you've indicated today, that the VA remains on schedule to implement this new benefit by the August 1, 2009 deadline.

And while we remain cautiously optimistic that the program will continue to move ahead on schedule, we also know that any disruptions to the plan will likely cause the VA to miss that deadline. Now, in your opening statement, you indicated that the FY 2010 VA budget will fully implement both the short-term and long term goals of the post- 9/11 veterans' education act, and I appreciate your continued support for the program. And I encourage you to be upfront and open with the committee, if any problems arise or if any additional resources are needed.

Could you perhaps address or share your thoughts on the concerns that have been recently expressed regarding the variance of the benefit by schools, by states, and how we can go about addressing those concerns without disrupting the August 1st deadline?

SEC. SHINSEKI: I understand there has been some concern expressed. I'm not totally familiar with all of them. I'm told they're not a single concern. But I'm on a timeline right now that's fairly precise. New forms are going to be available on 28 April.

Veterans apply for certificates of eligibility, 1 May. VA processes enrollment information from schools and authorizes payment, 8 July. Tuition fee payments are issued to schools beginning 1st week in August.

Housing allowance, book supply, stipends, et cetera, 2 September. It's a very tight timeline concern. I'm willing to work these issues. I'm just concerned that if I have to pull back the regulation that has taken us eight to nine months to put in place, to adjust them, and to undo some of the programs that we have already put in place, and have begun training on, that at risks this timeline. So I am happy to take on the concerns. I'm not sure that I can do it this year and also meet the August start days.

REP. HERSETH SANDLIN: I appreciate your thoughts.

SEC. SHINSEKI: I will analyze that.

REP. HERSETH SANDLIN: Secretary, we'll look forward to working with you on that.

Thank you, Mr. Chairman.

REP. FILNER: Thank you.

Mr. Boozman.

REP. JOHN BOOZMAN (R-AR): Thank you very much. Again, we appreciate your service and I really enjoy -- I really look forward to working with you in the future. And we appreciate your being here.

The forward budgeting, again, that seems to me like it, I know you've been in a situation where, because of continued resolutions and things like that, you start having to juggle money around. But it does seem like if that were done correctly, and I don't really have the answer to that.

But it does seem like something that we really ought to look to in the sense that, when you start juggling funds around like that, when we put your -- the agencies in those situations and Congress is the one who is doing that. And I think you know, if you look at past presidents, it's not a partisan thing.

You know, it happens on both sides, regardless of who is in the White House, regardless of who is controlling Congress. But it does seem like that's actually a way to actually save some money that you know, you would be in a situation where you could better look at your budget and then again, actually save some money from not juggling around.

So that's something that's going to be coming up again. I would just encourage you to really look at that and then, give us some good ideas and some good guidance as to, you know, if that is possible to implement. The other thing is the -- you know, I'm excited about hearing that we're -- that we have the potential to increase our category 8s as far as, you know, serving them.

One of the concerns although we've had is that we've worked really hard to get our times down and things, is that we do that and then we don't put the resources in place. The added personnel, the added infrastructure, and things like that. And so, then we go back to the waiting times that we worked so hard, I understand the importance of that.

My dad was in the Air Force for 20 years and was a recruiter. And a lot of these individuals, you know, were told that they were going to get health care and things. And so I think it's an important commitment, something we need to do. Can you comment on that? Do we -- I guess the -- at some point in time we're going to have 525,000 additional category 8s, so half a million people. Can you talk to us a little bit, how you're prepared to do that?

SEC. SHINSEKI: Yes. The timeframe of establishing this program, beginning in June of this year, out to 2013, and hitting that 550,000 potential enrollee mark is designed to let us -- get us started and then adjust as we go. I mean, if it's possible to go faster and certainly, we can do that, if not, then we need to slow things down.

The issue here is to ensure that we don't put at risk any of the programs or any of the quality of services being provided to enrollees today. To veterans who enroll today. And so that -- your question is appropriate. I will have to look at this as we start and increase the program, as I indicated, the first year, up to 266,000, which is a significant number; we think we can handle that.

REP. MORAN: I thank the gentleman from Arkansas for yielding. Mr. Secretary is your philosophy, your belief that all veterans should be covered; all category 8 veterans should be included in the health care delivery system. And it's just a matter of getting us to that point in an orderly fashion that doesn't cause a detriment to the rest of the system. Or do you believe that the VA is for a certain set of -- under a certain set of criteria, those veterans should be served, and I thank the gentleman for yielding.

SEC. SHINSEKI: Priority group veterans, priority group 8 veterans, are veterans. What distinguishes their entitlements right now is circumstances that have to do with economics or location, but they are veterans. I don't know how to -- it's within my ability to reach them. I don't know how to not include them in the consideration. Whether I can find ways to, you know, reach the affordability factor here, I don't know.

But this is why this program is phased in over a period out to 2013; that will give us an opportunity to assess how we are doing and ensure that we are maintaining the quality standards I'm describing here. And then make decisions at some point down the road.

To answer your question, whether all priority group 8 veterans should be included, today I can't tell you how many are in the priority group 8. I need to come to some way of estimating that before I can fully answer your question.

REP. MORAN: Thank you Mr. Secretary. Thank you Mr. Chairman.

REP. FILNER: Thank you.

Mr. Hall.

REP. JOHN J. HALL (D-NY): Thank you Mr. Chairman and Ranking Member Buyer. And thank you Mr. Secretary for your service. And for the president and you showing the overwhelming support of veterans that you've shown in this budget, the first time I believe in our history where an administration has proposed a budget that exceeded the recommendation of the independent budget. And I also want, as a representative from New York's 19th District home of your alma mater, West Point, to say that the veterans of my district are especially proud of you and support of your service now as Secretary.

With regards to the budget, I understand you can't go into specifics. But I'd like to ask you about PTSD in particular. As you know I have a bill introduced in this Congress that would establish service in the theater of combat as a presumptive stressor for the occurrence of PTSD.

For too long, I believe, veterans have had to leap through hoops or over hurdles to prove specific events that cause their trauma. And my bill would remove this burden if they served in the uniform of this country in a war zone. Can you tell us your thoughts on how the VA could facilitate such treatment and compensation for PTSD and how the budget would play a role in this?

SEC. SHINSEKI: Are you referring here to the determination of precursor for a PTSD based on --

REP. HALL: A presumptive stressor being established in this legislation.

SEC. SHINSEKI: I would start out by, you know, first pointing out that I'm not a clinician here. And so I rely on those experts who helped me understand what might be the precursors for validating PTSD as a condition. I do know first hand that you don't have to be in combat to go through trauma that could result in PTSD.

I think there are ample cases of assaults on women that give us the understanding that -- that's enough of a traumatic experience to create the conditions for a PTSD. So I -- my sense here is this is an area that requires a clinician's determination.

But I would also say that I've been in operational zones where service members have been exposed to conditions that were horrific enough, they were not involving combat and PTSD determinations were made on those individuals being in an operational environment. I'm willing to work with you in trying to understand how we best address this issue, PTSD and TBI issues, which we are trying to put our arms around with regard to mental hygiene, mental health, as an area for us to spend more effort in.

REP. HALL: Thank you, sir, and the legislation does require a diagnosis of the symptoms. So it's not just having been there and I appreciate your comments on -- from people handling different experiences in a different way, and -- but I thank you and look forward to working with you on developing and refining that legislation.

Regarding the IT progress that's being made in response to the legislation this committee passed, can you tell us, give us an update as to where the Department's efforts are in this area and how confident you are that when the IT account level is established, it will be sufficient to meet the requirements mandated by Congress?

SEC. SHINSEKI: You're looking for where we are going to put our priorities.

REP. HALL: Well, and just sort of an update, you could -- do tell us somewhat about the paperless -- moving toward a paperless claim system. You also talked about -- you and Secretary of Defense, which I think is a terrific idea, having single enrollment, so that starting with new servicemen and women, that record will then hopefully continue and already be in the system.

And that will obviously help future cases, but in terms of our existing veterans' population, how is it being approached, and what kind of progress are you making so far in moving toward paperless, claims in particular, I am concerned with.

SEC. SHINSEKI: In terms of just the IT arena, we are strengthening our network security operation, in terms of tools, standardizing desktop systems and components, and beginning to put into place with our process for determining how to attack the backlog. IT becomes, based on our experience with what the electronic health record did for us in terms of health care between '97 and 2004, we're looking to have the same kind of effect by putting smartly, putting IT, introducing IT into this area of adjudication.

As I think I've mentioned before, 11,100 adjudicators today -- actually it's 11,300 since the last time I was here to testify. That's a leadership issue, that's a training issue. But it's still a brute-force solution. That right now the, you know, the way that I get faster at this is to hire more people. I'm not sure that that's the solution. And I'm looking for a way to address this quickly. And IT is very much a part of this.

REP. HALL: Thank you sir. Thank you Mr. Chairman.

REP. FILNER: Thank you.

Mr. Bilbray.

REP. BRIAN P. BILBRAY (R-CA): Let me start all over again by saying, I want to thank you for your fresh approach. I had no idea. You know, I'll go tell Jane on you, Bob, okay.

But actually, Mr. Secretary, I want to say sincerely, I appreciate your fresh approach. There is a lot of people who've had your hot seat, and believe me, it'll be tough. And I just want to say that I think that we're starting off on a good footing. I think it's something that both sides can really hope for your success, pray for your success, but more importantly, work together for your success.

And as a son of a veteran, both diseased veterans and a mother who is still getting benefits from your organization, your Department, I appreciate your approach to this. My only warning to you is that two years from now, let's just hope we have that much of a positive and that's a challenge all of us working together.

And I just have to tell you personally being a personal friend of the chairman, believe me, he can be a tough overseer. He can be one of the toughest guys I've ever worked with especially, when in -- at your end of the dais. So I look forward to your success. I look forward in a few years being able to look the chairman in the eye and match any success for success. So good luck okay.

SEC. SHINSEKI: Thank you.

REP. FILNER: Thank you, I guess, Mr. Bilbray.

Mr. Perriello.

REP. THOMAS PERRIELLO (D-VA): Good afternoon.

Let me begin by thanking Chairman Filner and Ranking Member Buyer for convening this important hearing on the Department of Veteran's affairs. And also just thank your leadership and everyone on the committee for their prayers and thoughts for my family in my absence over the last couple of weeks with the loss of my father who was proud to have worn the uniform of the U.S. Army.

Secretary Shinseki, I want to echo the sentiments of my colleagues in welcoming you back to the committee and for all of your service to this country, when you wore the uniform, and in your current capacity. It is indeed exciting to see an unprecedented commitment to veterans and it is a timely moment for this leadership surge as we see the unprecedented convergence of some very severe challenges.

Veterans returning home to a very bleak job market, returning home to a bleak housing market, and dealing with the unprecedented mental heath challenges, PTSD, and TBI. It's a great time to have your leadership and a very challenging time in terms of living up to the pledge we make to our veterans.

I'd quickly like to also recognize the VSOs here today for their work on preparing the independent budget, which you have met, and matched, and exceeded. And in particular to thank the VSOs for increasing intergenerational cooperation between veterans past -- from the further past and the more recent past. It has been very helpful to all of our offices to be able to share that breadth of wisdom.

As a representative of a rural district, I just wanted to ask you two questions. One, specifically, what commitments we are ready to make to make sure we are taking care of those veterans returning to rural areas. And two, the strategies for addressing the specific challenges of the current economic environment into which our veterans are returning.

SEC. SHINSEKI: Congressman, I think, I'll quote President Obama here, when he says that veterans lead in lost jobs, homelessness, substance abuse, and the tendency towards being part of that suicide discussion. And so, my sense is that, if we are able to help upfront, first order of things here matter. If veterans come home and we have a good way to identify who they are and get them into our programs.

For those who are injured, get them safely and completely through the vocational rehab process. I know that right now we're not doing very well at that. Many of them indicate interest, lesser number show up, and even fewer complete the program. Some of that has to do with economics, and I need to get inside of that. But we show that if they complete that program, the opportunity for placement and successfully getting a job, much higher.

I'm in contact, both Secretary Donovan from HUD and I have appeared before the coalition for homeless veterans, to hear them primarily. But then, for the both of us to commit to working on the homeless veteran issue in this country, it used to be about 240,000. Today it's a 154,000. I would like to tell you that there are some programs out there that we have found have been successful in reducing by 40 percent that number. And again, these are estimates.

So I'm a little reluctant to put a hard pencil on it. But I'm told that we've reduced those numbers significantly. If we can get these veterans back and keep them from going homeless, I think we have a much better chance with our programs.

If it's substance abuse, to get then off of it, if it's educational initiatives, to get them engaged that way. Vocational rehab training and get them situated for turning a page and being successful in the next phase of their lives. These are all successful people. They were successful in uniform, and our responsibility here is to get them back on that track again.

If we can do that upfront and that requires the VA working with DOD to get this transition into our programs, working with education for those issues. Working with HHS for the health care issues, working with labor on jobs, and HUD for housing, we have a much better opportunity to reduce the 154,000 homeless veterans today to something significantly less.

REP. PERRIELLO: Well, I just want to commend you for your support of the vocational and on-the-job training programs for many of the veterans in my district; that is a top priority. The GI Bill expansion and education has been great.

I would like to see, and have authored a bill, looking to expand efforts on the job, because vocational and skills training programs are really a lifeline to living wage jobs in my area. So I commend your support of that and look forward to working with you on it.

REP. FILNER: Thank you.

Mr. Roe.

REP. DAVID ROE (R-TN): Thank you, Mr. Chairman. And thank you General for coming by the other day and visiting my office. And just -- as I was sitting here, I remember, when I was in college when the entire budget of the United States was a $100 billion. And now the VA budget is over a $100 billion this year.

A couple of -- just a couple of comments; one on the category 8 veterans. I was glad to hear you say in your testimony, or your answer I should say, that veterans are veterans. And we may have talked, I think, last week in my office about a veteran that I know that's a sheriff in a county, and the county is so poor that they can't provide health benefits for their county employees. No county employ gets health insurance.

This veteran makes a little bit more money as a sheriff of the county than is allowed apparently, and I'm not sure what that number is. And I don't know whether this 10 percent boost will help him or not. But he should be able to go to the VA medical center in his district which is close by. And I'm glad to hear you say that and I'd like to work with you to make that -- and this committee to make that happen for all veterans.

On the back log, I was just wondering, if you know any of the -- or do you know the demographics of our veterans' population now that are currently using the VA. And the reason I bring that up is because, just looking at this budget, going forward, it doesn't seem like that it's realistic.

If we raise it 10 percent this year, and then look at a 2 percent basically, which is not going to be inflation for the next several years. That doesn't seem to be adequate to me to do that. Would you comment on that?

SEC. SHINSEKI: Well, I would just offer that, timely budgets allow us to work -- the budget that's being considered, just as we did this one. And I think I would share the concern looking out that more work needs to be done as we get to those budget years, to get resource levels where the priorities that, I think, we'll be facing, will be appropriately addressed.

It's also -- touches, I won't say directly, but it also touches on the issue of advanced appropriations. Because sitting here looking out several years and trying to figure out how to put that in place, I think is the reason that timely budgets become discussable. And I will, you know, accept the -- Mr. Moran's caution here. I was not suggesting that I could do this. I was just suggesting that I'll do my part.

REP. ROE: I guess the question I'm asking is, as we look at the veterans that are currently using our facilities, 1,500 or so World War II veterans are dying everyday. And what percent of the VA budget's going to caring for them, and then the other, I mean, Vietnam era veterans, and so forth, that we know are going to be around a while longer?

SEC. SHINSEKI: You know, I couldn't -- I'm sure there's a number, Mr. Roe, I'll try to go figure it out. But I don't have that detail today.

REP. ROE: Yeah, and that's very important going forward to know what your resources are going to be, whether you may have less demand, who would know.

SEC. SHINSEKI: Our Vietnam veterans are today the largest population of our veteran -- of our veterans.

REP. ROE: So that obligation is going to be going on for a while.

SEC. SHINSEKI: Right.

REP. ROE: I guess the other question we talked about were a change in this electronic medical record and to answer, Mr. Hall, it's going to be more money than you think it's going to be. We were -- we did that in our own office, and changing our medical records to EMR. And it was a very expensive undertaking and a lot more laborious than we thought it was going to be. But I think it's essential that we do that.

And what I would recommend you looking at doing work for us is any new veteran that comes in, enter them into the EMR system, and exactly what we were talking about, when a soldier is signed up today, enter him into the system. And then as you have an active file opened up, do that person, one that's working along just fine, get to them later. And, you know, I think you'll find that it works pretty, and of course, the archive files I wouldn't fool with them unless something came up. So --

REP. BILBRAY: Would the gentleman yield on that point?

REP. ROE: Yes, the gentleman yields.

REP. BILBRAY: Yeah, I would have to echo that strongly, being able to face -- rather than having to go back and recapture old information, actually facing it in is by far a much more effective way to be able to implement the program. And I just -- I have to really reinforce with the doctor's point out here, and I yield back.

REP. ROE: Thank you. Yes, that's the method we used and it worked fairly well. It'd be hard. It'd be difficult anyway to do. But I look forward to getting that started and getting done, because I think that's going to be part of being able to get that information out there and handle it appropriately to get this backlog of 900,000 people. I agree with you, are you a backlog when you just -- you go to the -- are you 900,001? If you sign up today then you be part of the backlog. So, thank you.

SEC. SHINSEKI: If I might -- the electronic health records have other benefits and I know there is cost associated with it. But, for example, in 1996, patient records were available to doctors about 60 percent of the time. Today with our electronic health records a 100 percent of the time, a doctor has a record with a patient and not just a form, but every chest X-ray, every brain scan, every blood test, for the -- history of this patient is available so that the doctor can make some longitudinal decisions based on what has happened here.

In 1996, the VA lagged industry in terms of pneumonia vaccinations for over 65 patients at about 28 percent. Today we are at 94 percent. And all of this is information available to health care providers to make the right decisions.

And I think that this increases the quality of health care and reduces the cost, because it's preventive. It also allows us to do our part in reducing that figure that's out there, about a 100,000 patients falling victim to medical errors or poor decisions, because of the lack of current records. So there are other returns here.

REP. FILNER: Thank you.

Mr. Walz.

REP. TIMOTHY J. WALZ (D-MN): Well, thank you, Mr. Chairman, and thank you Mr. Secretary once again for being here.

The chairman mentioned it might be a little lonely there, but you know there's plenty of people that have your back. I see some friendly faces. I see Paul Rieckhoff, and Rick Weidman, and Steve Robertson, and others. They are always there for you.

They are always there and they speak for millions of veterans and we're all in this together. So I really appreciate your assessment on the GI Bill, your very candid assessment on this backlog claim. I think that is refreshing to -- let's get at it; I think your assessment that it's going to take brute force might be the only way to do it right now.

But it gets us back to how do we make sure that we start to reduce that and we start to get smart in the future? I agree with you and this electronic medical record is a big one. And I will -- after a one -- and on top of that that you said that there are people who believe that is the best.

I represent the Mayo Clinic and they always echo that that the way that the VA handles their medical records is the best in the world. And they pioneered the procedure and they've done it on a massive scale themselves too and so Dr. Roe's cautions about this it is very -- it is much more difficult than creating a database.

And it's much more than just putting things into the computer. It's how we use them and the ease of use to not only save money but to improve patient care. I just have one question.

I'm very excited too about your opening comments. When you were here last time you talked about a uniform approach to registering folks; when they raised their hand to defend this nation they've also raised their hand to be part of the VA system, and a way to get to that.

So my question deals with seamless transition. I brought it up before. The Chairman has been very proactive on this and has allowed me to ask some of these questions and to move forward.

My question is -- deals with how are we going to get to that? Because the one thing I always know whenever I'm in this committee room, nobody from DOD is ever here. And that poses quite a problem. It's very difficult on interoperability, and this is one of the questions I want to ask.

I too am very pleased with the budgeting and all that. But in -- I'm also concerned, many of these issues, they do need the funding. But it's more than just the funding. It's intelligent funding, it's how we use them, it's how we force that seamless transition in interoperability.

So I just want to ask a few, maybe, a generalized question on this is how do we go about that? In the National Defense Authorization Act last year there were some initiatives in there to get going on this. There was one very specific on the Eye Care Center of Excellence.

And the VA Undersecretary Peake, I think, took a very proactive forward-leading approach and got after it. DOD, I have a hard time getting phone calls returned, and it takes a story in USA Today to start push -- okay, we're going to get going on this.

I think they do a very good job. You've been there, I've been there. They see themselves as war fighters. They also have to understand with a little bit of front help on this we can also take care of these warriors during their lifetime.

So I'd just like to ask, I know it's a bit subjective and general question, how do we bridge that gap? How do we get interoperability? How do we -- those of us in this room make sure that the Chairman Skelton's Committee is ready to sit down with Chairman Filner's Committee to figure this seamless transition out once and for all? So please.

SEC. SHINSEKI: Well, the way I've approached this is to take this on at Secretary Gates' and my level and he's been more than forthcoming. I've met with him personally three times. We've discussed this issue and I would tell you, not everybody in the room was necessarily in agreement on whether to do this.

But with his leadership and his determination we are moving forward on uniform registration and that will become the forcing function. If we agree to that then a electronic record becomes a by- product of that decision.

REP. WALZ: And the timeline on that? You were looking at 2012, or did I hear that correctly? That's kind of the little --

SEC. SHINSEKI: That was the "going paperless" inside our --

REP. WALZ: Okay.

SEC. SHINSEKI: -- claims adjudication process.

I don't know how soon; 2012 would be well off the --

REP. WALZ: Is that funding mechanism going to work? When we fund for the VA and the DOD is funded for, how do we ensure these -- this seamless part, this compatibility, these joint operations? How do we ensure that funding is steady, and as I said intelligent again, and we're not duplicating, we're not creating our own silos and the things that we've done for years, and years, and years? Do you have any vision on that?

SEC. SHINSEKI: Well, there's always the tendency for that to happen. This will require leadership on both of our parts to agree on a single electronic record and force the people that are going to be the users of that record.

If it's, you know, if it's our medical personnel, bring doctors and nurses from both sides into a room, small room, and have them define for us what that electronic record ought to look like. We each have one today. That -- the problem is they are not identical and while you can extract information from each other's systems, it is not fully open architecture where you could pass the record, which is the problem we have today.

We can't take the record when an individual transitions. So we need to get at that, but it's going to be -- it's -- that's a leadership issue here. And we both left our own, you know systems, would probably design, and upgrade to our current system and that's what we are against. We want to come up with a system that's going to serve both of us. And whatever it looks like, that's the requirement we should be building to.

REP. WALZ: Well, I appreciate that and I feel great confidence in the two leaders we have there. And so that's a -- that's comforting as a first start. Thank you, I yield back.

REP. FILNER: Thank you.

Mr. Bilirakis?

REP. GUS M. BILIRAKIS (R-FL): Appreciate very much and thank you for your service, General. I have one question regarding concurrent receipt. I understand that the budget will spend funding for concurrent receipt. Can you elaborate a little bit? Thank you.

SEC. SHINSEKI: Concurrent Retirement Disability Compensation is going to be put into place over the next five -- four of five years. But it begins in 2010 with the highest disability categories and then incrementally put into time so that in the 2013-2014 timeframe we're looking at the 10 and 20 percent military disability retiree having that entitlement, you know, in place.

REP. BILIRAKIS: As far as medical retirees, my understanding is that if you have less than 20 years you'll receive up to 50 percent of the VA rating, is that correct, General?

SEC. SHINSEKI: I don't have the details exactly of what less than 20 years and this category. But I'd be happy to provide you the details that will address the entitlements in 2010, and then each --

REP. BILIRAKIS: Thank you very much, would like that, thank you.

SEC. SHINSEKI: It's a cascading set of military disability retiree from the highest categories down to 10 and 20 percent in the 2013-2014 timeframe.

REP. BILIRAKIS: Okay. I'd like those details. Thank you, sir.

SEC. SHINSEKI: Okay.

REP. FILNER: Thank you.

Mr. Snyder?

SEC. SHINSEKI: Once the budget is completed.

REP. VIC SNYDER (D-AR): Thank you, Mr. Secretary.

SEC. SHINSEKI: Yes, sir.

REP. SNYDER: I'm sorry; I was not here for your opening statement. I want to just make one comment and then give you your softball question for the day, so that -- the only comment I want to make is we're waiting on the details of the budget is. One of the issues that has come up through the years is in a way, I think, it's been a double counting of federal research dollars.

And by that, I mean, I'll just use some numbers that are not realistic. But let's suppose you have a pool of money at NIH of $50 million and the Veterans Health Administration is able to get $10 million of that to help with their VA research.

And then, we see a budget number that says we've got -- they put ($)40 million with -- they've got $50 million of research dollars, and you add those numbers up and you say, oh, we got a $100 million of research going on. When, in fact, we only have $90 million of research, because the money gets, you know, the NIH folks and the Congress will look at it and say, oh, we've got a good number here, and then we look at this number and say, well, it's a good number here.

But in fact, it's double counting of money and I would encourage you to sort those numbers out in a way that's transparent. I hope that the VA will be competitive; and VA researchers will be competitive for other sources of funds.

But let's not try to fool anyone into thinking that somehow we've got this great plussed-up number. In fact, what we're doing is counting on good researchers to get dollars from other sources. I think we need a good healthy number that involves your dollars. And that's one of those issues that several of us have been following along through the years and I've been pleased with the quality of research that can come out of the VA system.

My softball question is this, you are a guy who came out of a system, fairly dramatically different system that you've committed almost all of your adult life to, and you're now into a new system. You've had several months to get up to speed, and look at the culture that you are in, and all the details. What have been your biggest surprises either good ones or bad ones as you have spent the last several months getting up to speed on the VA system?

SEC. SHINSEKI: Biggest surprises, I guess, it would be the number of reports I signed and sent to Congress. I -- it just -- I was surprised that the number of reports I submit daily. And I think in time, I hope to earn the trust of the committee that I'm on a good track and doing the right things.

And where it meets your needs, I'll provide every report, and where it's less useful, I would look for an opportunity to come to an agreement on how we harmonize those requirements, because they are pretty significant. There are other surprises but that was the one that stood out.

REP. SNYDER: I think that's something that probably a lot of us would be interested in working on. We -- it's really -- you first include in some bill, we need a report on this without -- we probably should have a requirement that would have a number on it. You know this is the 102nd report that's required by the Secretary. But I think that's certainly something that a lot of us would be interested in looking at to make the reporting information more streamlined.

Thank you, Mr. Secretary.

REP. FILNER: Mr. Buyer.

REP. BUYER: (Off mike) -- interpretations here since Mr. Bilirakis asked this question. I don't want to -- it's -- it is a very complex issue, because we've got multiple disability systems. And trying to figure out who is in and who is going to be left out of this type of proposal and their different interpretations by what's out there.

So we are -- I'm at a little disadvantage, Dr. Snyder is right, we don't have the details, and it is hard for us. Even this Friday, it is truly Friday the 13th for us, because we have to deliver our budget views and estimates without any details.

And I'm not picking on you.

It's just -- even when we changed administrations in 2001, the same thing happened. We just didn't have the details. So we're going to -- I just want you to know, we're going to come and do -- ask some real questions for the record on the concurrent receipts, so we can better understand how you're going to implement this.

One of the other questions I have, the status of the VA report on -- the VA Economic Recovery Report, do you know what the status is on that report?

SEC. SHINSEKI: I don't for -- but I'll --

REP. BUYER: You had 30 days --

SEC. SHINSEKI: Yeah.

REP. BUYER: -- to get it to Congress when the president signed it into law. Has it left your desk and gone to OMB?

SEC. SHINSEKI: I don't know. I mean, it's --

REP. BUYER: Well, you know, if you've signed it, so it's not to your --

SEC. SHINSEKI: And -- I don't recall. But I will get you an answer today.

REP. BUYER: Okay. With regard to several initiatives this -- I've had a couple of discussions and you know it's one of my pet peeves now, is this multiple standards for cemeteries. And I would love from -- for the leadership of the VSOs to take on these kinds of issues. They're really -- I think they are important. And have you had a discussion with the secretary of Interior?

SEC. SHINSEKI: I have not had that opportunity as of yet, but I do intend to have that. I've had my people look into the, sort of, the background of these two cemeteries that you've mentioned and others.

REP. BUYER: Okay.

SEC. SHINSEKI: And there is a difference in management, difference in standards, and so we are trying to assess, you know, have asked to assume responsibility for what are our capabilities at this time --

REP. BUYER: Okay.

SEC. SHINSEKI: -- and you know what would it take.

REP. BUYER: And the -- thank you for doing that. And I'll wait for your response. With regard to the priority aids, we received a briefing in a report from the VA. It's titled, "Analysis of the Requirements to Re-open Enrolment of Priority Aid Veterans." And -- so this was dated January 1st, and they do -- excuse me, of last year.

So this would be January 1, 2008, and there was a -- an analysis done based off of -- hold on -- VA's Actuarial Model, "The Enrollee Health Care Projection Model projects that reopening enrolment to priority aids will increase enrolment in 2013, by 1.4 million, and patients by approximately 750,000 over the current enrolment policy.

So what I'm trying to -- when I read your budget, you're going to do a target opening up to 550,000. So when I look at this, when I compare the VA's actuarial model to the target that's being projected that it would be false then for anyone to infer that you are planning on opening up the enrolment to everyone. Is it -- would that be accurate?

SEC. SHINSEKI: At this point, the enrolment target is up to 550,000.

REP. BUYER: All right. Well, then all I can -- do rely on Mr. Secretary, is the VA's actuarial model that shows that patients would be enrolled, potentially 750,000. And I'm -- I just bring that up as a point to make sure that no one believes that it's going to be opened up to all of the aids. The great caution has been -- is the issue on building capacity.

SEC. SHINSEKI: Right.

REP. BUYER: And even some of the VSOs have now been able to voice concern for us to watch this and be very careful as the aids come in. The aids are individuals that have 91 percent of -- have access to other forms of health care. And so we want to make sure that we do not diminish that timely and accurate high quality health care that you --

SEC. SHINSEKI: You have my assurance. I think I've said that several times. The quality that we provide and access we provide today is something we won't jeopardize.

REP. BUYER: The last thing I wanted to make you aware of, the Energy and Commerce Committee passed out legislation last week dealing with tobacco. And because the Congress recently passed an SCHIP Bill that increased taxes on cigarettes in order to pay for this new tobacco legislation, by Mr. Waxman, he -- there is a hole in his bill.

So he's come now, with a quote, "a pay-for." And one of the pay- fors is mandating federal employees' enrolment in the Thrift Savings Plan. So I just want to make you aware that Congress is considering the mandating of all federal employees in the Thrift Savings Plan.

And that's going to have an impact upon your department. It will have a tremendous impact upon DOD, because I authored the Thrift Savings Plan for DOD. And when I did that I didn't have sufficient budget room and I made it an option for members of the military. And there isn't a match.

So if the Congress is about to do this, I've now alerted the Armed Services Committee, they have joint referral here, because we're about to mandate on federal, you know, the personnel pension benefits of the military as a pay-for on smoking. But I just want to make you aware of something that's moving through Congress, because it's going to impact your employees.

SEC. SHINSEKI: Thank you.

REP. BUYER: I yield back.

REP. FILNER: Thank you Mr. Buyer.

Thank you, Mr. Secretary. I just want to make a few points. Number one, on the GI Bill, we understand the pressures on you to do this on time, and the problem with any changes. There have come to our attention some -- as Ms. Herseth Sandlin said, some inequities.

I mean, if you live in the Bay Area of California, for example, if you go to Stanford, the VA will pay $30,000, if you go to Berkley, they'll pay $10,000, if you go to San Francisco State, it will pay $4,000. I mean, it's a function of our system, but there are some unfairnesses there.

And if you live in a state, as many of us here on the committee do, that has purposely kept tuition at public universities low, as a way to make sure that all of our young people do get education, they are going to be reimbursed at a level that does really not match their actual costs.

And when the Senate passed the GI Bill, Senator Warner was careful about putting in a provision; it's called the "Yellow Ribbon" provision, which essentially gives an additional subsidy to a high tuition, mainly private schools. But nobody thought at that time about a provision to help those low tuition schools who might be under-funded.

I hope that we can get a recommended change very, very quickly. If we can't, we'll have to wait until the following year, but this is an issue that is coming to the attention of many of the Congress people, because their universities are just figuring out what's going to happen.

I mean, if you live in Georgia, by your figures, the maximum public grade is about $1,200. You're not going to, you know, not only is that probably too low for real education in terms of, you know, they are subsidizing it, but it would be hard to get the full payment for any college in Georgia under the formulas that we're using.

And you can multiply these all across the university, the nation. So and I'm not sure whether we have to have a major change in terms of the -- a standard fee, for example, that we're going to pay everybody or a floor for somebody, or a reversed Yellow Ribbon provision for the low tuition states.

But I think we're heading into a real problem that we got to fix fast. And as I think, I've told you, we need to work with whoever we can, giving us a quick formula to make it more equitable and maybe work on a long-term fix later. And that's one thing I think we got to try to do quickly.

On the claims backlog, I think you put it very elegantly actually, when you said right now I'm using brute force. I'm not sure whether that's the actual way to go. If you want to use the word "transformative" for this system I think you've got to have a whole different approach.

I've suggested a couple that can get us pretty far down the road. Number one, for our Vietnam vets who are suffering Agent Orange disabilities they have gone through hell for three decades or more. First, we said, you know, Agent Orange didn't do anything to you.

Then we said, well, maybe, and maybe if you step foot on this -- in this province, or -- and now there's a whole, you know, bureaucratic presumptive thing about which diseases are covered. So if you were in the blue waters off the shore, and the blue skies above, or on the border of Laos, and you know, Cambodia, or even in Guam handling trans -- you know, trans cargoes, you're ineligible.

I think we got to just break through that and say, hey, if you were there, we should care. Define the, maybe, define the field of action which you know very well yourself and just honor those claims, get them off our books and off the shoulders of these, mainly men that is, I mean, people walk around for decades fighting the VA.

I mean they think VA means Veterans Adversary. And we've just got to say, hey, thank you for your service, stop fighting us, we're going to honor those claims. Because we know too much about Agent Orange now, and how much damage it causes to start going through all the bureaucratic procedures. And you don't have to comment on this now, sir, but at some point.

Additionally, however we count those backlog claims. I would refer you to the so called Linda Bilmes' proposal, based on the IRS model, the IRS which used to be one of the most dysfunctional agencies in America. You can rely on now when you file your 1040, and of course, I know you did, sir, because you're a cabinet member. If you have a refund coming, you'll get it, your check in three weeks. That's amazing, three weeks subject to audit.

So they will look at it at some time in the future. Why not do the same thing? If you submit a claim with the required medical documentation and aided by a certified veteran service officer, let's accept the claim, subject to audit. You could all those on your books off very quickly.

You can change the function of thousands of workers whose -- it looks like their sole job, at least to many of the veterans, is to call you a liar, once you submit your claim. I mean, they are looking for problems. Let's have them, you know, looking for answers instead of looking for problems. So I think there's a whole transformative, if I may steal your word sir, way of looking at the backlog claims and starting a new system.

On PTSD, when you meet with Secretary Gates, it looks to me and I -- I'm not a veteran and I -- but I've studied this for years and years, the quickest thing that the DOD can do to help us do our job is a mandatory physical evaluation before they leave the service, or in for PTSD and TBI.

Something as simple to say, but it doesn't happen, and there are different rules if you're in the Guard and Reserves and active duty. Different COs might look at it differently. Right now they claim and I -- you got to, you know, you got to know when they say screening, they say, well, we have mandatory screening.

And the VA does when you come into the hospital, but it's a self, it's a self -- what do I want to it -- you do it yourself of a questionnaire. There's no real discussion many times with a competent medical personnel. And people know if they don't -- if they are in denial or they don't want to be bothered, and they want to get home, they know which boxes to check no, and yes to, to get out of there quickly.

So a self-filling -- self-filled out form does not do the job for us, and I think Mr. Gates can do -- can order it pretty quickly, because it varies widely -- it varies widely. And some are getting it done, but most are not, and that's a disservice to all of these young men and women when they leave the force -- armed forces.

One last thing, if I may sir, you mentioned to Mr. Snyder, I think when he asked you about the surprises, and you said, you know, one of the things you want to do is work cooperatively with the committee, and we're very grateful for that and what that means. I mean its -- one of those things that I think that many of us get frustrated about in Congress dealing with most of our agencies is that, I mean, we're seen as a political folk.

You know, you are the professional folk and somehow our stuff, and our information, and our way of looking at stuff is just somehow tainted by that. I think you have to see us as a good source of expertise and help. The VSOs are on the frontline everyday, and when they report things, we could take it to the bank. We know that's what's happening.

But we're out there in the same way. I mean, both -- I mean we get stuff from the VSOs, but we're out at the hospitals, we're at the clinics. We're talking to our constituents all the time and people come to us obviously. We're a magnet for -- so whether you're talking about interoperability of the electronic records, for example.

We have been in discussions, I know people on both sides with Microsoft and other forms that know how to solve this, they claim, and yet the VA has not been very open to them. The third-party collections, we've had vendors who have told us simple systems at no cost to the VA, which could increase our collections dramatically. And somehow, we get this information, the VA tends to close itself off from these ideas, but we think they are good ideas.

I mean we know how to separate the chaff from the wheat even though not always, we're not the professionals in your organization. I get and I know everyone of my committee members gets presentations of new technologies to do deal with the problems that you face everyday or your organization faces everyday, our organization I should say.

Whether it's a noninvasive procedure to enlarge people who have had TBI or other problems with vision to expand their field 50 percent, and allow them to read. And yet they can't get the VA to talk to them. I just had a visit today from a company that -- whose products are used all around the nation, but they can't get into the VA, for early detection of oral cancer.

If you can detect oral cancer, and the doctor knows more than I do, but right away or in its early stages, it's going to be far cheaper and far more effective to treat, than if you have wait and see it only on by visual inspection. They have a method of dealing with it that can give you very early connection; they can't even get in the front door with the VA. So we come with a lot of this information and I hope that you've very open.

I know you have visited us personally, you have shown that you will listen, and I just want to say, again, make a that -- use us as a resource. We're not going -- we're not here to beat to you over the head, we're not here to just to oversee. We're part of a group that can help, and of course it's our constituents on the line everyday, but we come committed to the service of our veterans, and I hope that you will look at those as helpful suggestions sometime, not just political interference or anything like that.

So, we thank you. I'll give you the last word or words or as much time as you would like to say in conclusion, but we appreciate, I think everybody appreciated your candor and your willingness to listen, and your -- what we see as your effectiveness in the future.

SEC. SHINSEKI: Thanks, Mr. Chairman. Again, as I said in the beginning, thank you, for this opportunity to be here. I've always looked at this as an opportunity to establish a good dialog and solve, you know, some of the issues that we're both wrestling with, that are focused on just one thing, and that's our veterans, and what more and better we can do for them.

For the comments about the backlog, advocacy training, you know, as small as that might be, does make a difference. I mean, if the approach to doing -- performing that responsibility is, you know, favoring the veteran, it will make a lot of difference on how people see the outcomes.

So I will take that on and I'd ask you not to misconstrue my response to Mr. Snyder as any kind of complaining about the reports I submit. I'm happy to submit the reports if they are useful. I was just surprised at the volume of the reports, some of them going back a long time, that I wondered whether we were addressing current issues. That was the point of my observation.

But again, I thank you for this opportunity to appear before the committee, and my opportunity to work with each of you, and then all of you collectively, in helping me with this mission.

Thanks, Mr. Chairman.

REP. FILNER: Thank you. I think Mr. Rumsfeld heard you say that, and he called up Mr. Bush, and that was the last -- your last testimony. Thank you sir, it was great to have you here.

We'll start with our second panel right away, thank you.

(Sounds gavel)

REP. FILNER: We're very pleased to have our panels. I don't think you've heard a testimony where you guys got so many compliments, as "The VSOs" who have helped us. So we thank you for being here, and thank you for continuing your job.

We have representatives from the Paralyzed Veterans of America, Disabled American Veterans, VFW, veterans of Foreign Wars, and AMVETS. Carl Blake is a National Legislative Director for PVA.

Welcome Carl. You have the floor.

MR. BLAKE: Thank you, Mr. Chairman. On behalf of the co-authors of The Independent Budget seated here, I'd like to thank for the opportunity to present our views regarding the funding requirements for the Department of Veterans Affairs, health care system for Fiscal Year 2010.

We are pleased to see that the initial information provided by the administration suggests a very good budget for the Fiscal Year 2010. The discretionary funding levels provide for a truly significant increase.

I find it a little amusing that you say we got so much praise, because I felt like The Independent Budget got beat up a little bit there. A number of people made the comment that the administration's budget actually came out above The Independent Budget, which is great, I'm not downplaying that at all.

But given my interest in budget matters, I'd be interested in having the opportunity to dig a little deeper into the details and make up the one single number that we have from the VA right now, and see where we're actually at when we get to April, and May, and June and then down the line of the budget process. But we certainly look forward to the opportunity.

For Fiscal Year 2010, The Independent Budget recommends approximately $46.6 billion for total medical care, an increase of $3.6 billion over the Fiscal Year 2009 operating budget level. The IB recommends approximately $36.6 billion for medical services. This recommendation includes approximately $34.6 billion for current services, $1.2 billion for the projected increase in patient workload, and $800 million for policy initiatives.

And I won't explain those in much detail, because they're laid out in more detail in the full IB. For medical support and compliance, the IB recommends approximately $4.6 billion and for medical facilities approximately $5.4 billion.

The amount for medical facilities includes an additional $150 million for nonrecurring maintenance for the VA to begin addressing the massive backlog of infrastructure needs beyond those addressed through the recently passed Stimulus bill. And again we appreciate Congress' providing that additional funding. It's a known fact that the infrastructure needs, and the VA are probably one of biggest needs that there are.

The IBVSOs contend that despite the recent increases in VA health care funding, VA does not have the resources necessary to completely remove the prohibition on enrollment of priority group 8 veterans, who have been blocked from enrolling in VA since January 2003, at this time. However, we believe that it is time for VA and the Congress with our assistance and with the committee's assistance to develop a workable solution to allow all eligible priority group 8 veterans to begin enrolling in the system.

For medical and prosthetic research, The Independent Budget recommends approximately $575 million. This represents a $65 million increase over the Fiscal Year 2009 appropriated level. We are particularly pleased that Congress has recognized this 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. Mr. Chairman, we'd like to express our sincere thanks for your introduction of H.R. 1016, the Veterans Health Care Budget Reform and Transparency Act.

Moreover, we'd like to thank -- extend our thanks to the members of the committee who have agreed to co-sponsor this important legislation. I look forward to working with the committee to move this legislation forward. This funding mechanism will provide an option that the IBVSOs believe is politically more viable than mandatory funding, and is unquestionably better than the current process.

Finally, Mr. Chairman, I'd like to express our serious concerns that we have regarding the policy proposal that's been discussed here today, elegantly referred to as third-party reimbursement for veterans with service connected conditions. I think, the Secretary's testimony before the Senate this morning sort of affirmed our worst fears that this is something that the administration is seriously considering.

And I'm not so certain that the overall budget number that has been presented thus far does not include or does include the funding which the secretary testified as simply it would be about $500 million in that additional budget for Fiscal Year 2010. We just simply find it unacceptable that a veteran would have his third-party insurance billed for conditions and in disabilities and injuries that were incurred while in service to this nation.

We understand the fiscal difficulties that this country faces right now; I think we all understand that. But placing the burden of those fiscal problems on the men and women who have already served and sacrificed a great deal for this country is, as I believe, Dr. Snyder, or Mr. Michaud put, unconscionable. We strongly urge Congress to investigate whether such a proposal is actually moving forward. I get the sense that it is, and to forcefully reject it if it is brought before you.

And with that Mr. Chairman I'd be happy to answer any questions. Thank you for the opportunity to testify.

REP. FILNER: Thank you. Kerry Baker is the assistant national legislative director for the DAV. Welcome, Mr. Baker.

MR. BAKER: Mr. Chairman, Ranking Member, and members of the committee. It's a pleasure to be here today on behalf of The Independent Budget. Today, I'll focus on issues affecting the Veterans Benefits Administration.

On behalf of VBA, we have come before you for many years requesting additional funding to averse its chronic history of understaffing, you've answered that call. In just the past few years, VA has hired over 3000 additional claims processors and more continue to be hired as we speak.

This year the IBVSOs recommend that Congress adopt both short and long-term strategies for improvements, strategies focused on the VBA's IT infrastructure as well as the claims and appeals process. We are also seeking improvements in training, accountability, and quality assurance.

To improve the claims process VBA must do more to upgrade its IT infrastructure and must also be given more flexibility to manage those improvements. Despite growing problems in the claims process, Congress has steadily reduced funding for IT initiatives over the past several years. In FY 2001, Congress provided $82 million for IT initiatives. By 2006, the funding had fallen to $23 million.

Congress has however noticed the disconnect between IT and improvements in claims processing. Section 227 of the Veterans Benefits Improvement Act of 2008 places new requirements on VA to closely examine all uses of current IT and comparable outside IT systems with respect to claims processing.

Following that examination, VA is required to develop a new plan to use these and other relevant technologies to reduce subjectivity, avoid remands, and reduce variances in VA regional office disability ratings. Section 227 will require VBA to examine IT systems that it has been attempting to implement and improve for years. We believe this examination will review -- will reveal the progress that has been impeded due to lack of direct funding to underwrite IT development.

The IBVSOs believe a conservative increase of at least five percent annually in IT initiatives is warranted. VA should give the highest priority to the review required by the Benefits Improvement Act of 2008 and double its efforts to ensure these ongoing initiatives are fully funded and accomplish their goals.

Further, the secretary should examine the impact of IT centralization under the CIO and if warranted, shift the responsibility for their management from the CIO to the Under Secretary for Benefits. Additionally, as long as stated by the IBVSOs, VA must invest more in training adjudicators and decision makers. It should also hold them accountable for higher standards of accuracy.

The VBA's problems caused by a lack of accountability do not begin in the claims development process, nor the rating process, they begin in the training program. The lack of accountability during training reduces or even eliminates employee motivation to excel.

The VA should undertake an extensive training program to educate its adjudicators on how to weigh and evaluate medical evidence, and it should require mandatory and comprehensive testing by all trainees as well as the claims process and appellate staff.

In addition to training, accountability is the key to quality. However there is a gap in quality assurance for purposes of individual accountability and decision making. In the STAR program, the sample drawn each month from a regional office workload is simply too inadequate to determine individual quality.

The Veterans Benefits Improvement Act of 2008 requires VA to conduct a study on the effectiveness of the current employee work- credit system and work-management system. The legislation requires VA to submit a report to Congress which must explain how to implement a system for evaluating VBA employees, no later than October 31, 2009.

This is an historic opportunity for VA to implement a new methodology, a new philosophy by developing a system with primary focus on quality through accountability. Properly undertaken, the outcome would result in a new institutional mindset across VBA, one that achieves excellence and changes a mindset focused on quantity to one focused on quality.

The IBVSOs believe the VA's upcoming report must concentrate on how the VA will establish a quality assurance and accountability program that will detect, track, and hold responsible those employees who commit errors. VA should generate this report in consultation with veterans service organizations most experienced in the claims process. That concludes my statement and it has been an honor to testify before you today.

REP. FILNER: Thank you, sir.

Dennis Cullinan, directs the National Legislative Service of the VFW. Welcome.

MR. CULLINAN: Thank you very much, Mr. Chairman, distinguished members of the committee, it's certainly a pleasure to be here today, and I want to extend the thanks of the men and women who are the Veterans of Foreign Wars for including us in today's most important discussion.

VA's most recent, and as you're aware of the VFW handles the construction portion of the IB budget, I'll limit my remarks to that. VA's most recent Asset Management Plan provides an update of the state of CARES projects including those only in the planning or acquisition process. It shows a need of future appropriations to complete these projects of $2.195 billion.

Meanwhile, VA continues to identify and reprioritize potential major construction projects. 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 five years would be in excess of $6.5 billion.

One thing, it is clear that VA needs a significant infusion of cash for its construction priorities. VA's own studies validate this. In light of these things, the IB recommendation for FY 2010 major construction is $1.123 billion. With respect to minor construction we recommend $827 million.

We need to increase spending on nonrecurring maintenance. For years the IBVSOs have highlighted the need for increased funding for the nonrecurring maintenance account. Projects in this area are essential, because if left undone, 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, perhaps even major.

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 their repairs were never done, it creates an even larger inconvenience and safety issue for veterans and staff.

VA must dramatically increase funding for nonrecurring maintenance in line with the 2 to 4 percent total that is the industry standard so as to maintain clean, safe, and efficient facilities. VA needs an NRM budget of at least $1.7 billion.

Portions of the NRM account should continue to be funded outside of the VERA formula so that funding is allocated to facilities that actually have the greatest maintenance needs. Congress should also consider the strengths of allowing VA to carryover some maintenance funds 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 the fiscal year.

It has come to our attention that something like 60 percent of NRM funding is expended in the final quarter of fiscal year; that just is not a good management. VA must protect against deterioration of its infrastructure and a declining capital asset value. The last decade of under-funded 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 of over 55 years, and it is essential that funding be increased to renovate, repair, and replace these aging structures and physical systems.

Accordingly, using the 5 to 8 percent industry standard, VA's capital budget should be between ($)4.25 (billion) and $6.8 billion per year in order to maintain its infrastructure. Congress and the administration must ensure that 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 departments can continue to provide health care in safe and functional facilities long into the future.

I would add here that the IBVSOs and the VFW are very appreciative of Congress' actions and additional funding that they have provided over the past several fiscal years to attend to VA's physical infrastructure needs. The last thing I would mention here is the IBVSOs are concerned with VA's recent attempts to back away from the capital infrastructure blueprint laid out by CARES.

To put it briefly there has been an increased emphasis on privatization in providing contract care. The IBVSOs support contract care where necessary; however, we wish that the Congress would guard jealously against over-excessive use of private facilities. VA's capital infrastructure and its own resources must be protected.

Thank you, Mr. Chairman that concludes my statement.

REP. FILNER: Thank you.

Raymond Kelley is the National Legislative Director for AMVETS. Thank you for being here, sir.

MR. KELLEY: Thank you, Mr. Chairman. Thank you for holding this hearing today and inviting AMVETS to testify on behalf of The Independent Budget.

As a partner of The Independent Budget, AMVETS devotes a majority of its time with the concerns of the National Cemetery Administration and I'd like to speak directly to the issues and concerns surrounding NCA.

In Fiscal Year 2008, $195 million was appropriated for the operations and maintenance of NCA, ($)28.2 million over the administration's request, with only $220,000 in carryover. NCA awarded 39 of 42 minor construction projects that were in the operating plan. The State Cemetery Grants Service awarded $37.3 million of the $39.5 million that was appropriated. Additionally, $25 million was invested in the National Shrine Commitment.

NCA has done an exceptional job of providing burial options for 88 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. An analysis shows that the five areas with the highest veteran population will not become eligible for national cemeteries, because they will not reach the 170,000 person threshold.

Lowering the population threshold to 100,000 veterans would immediately make several areas eligible for a National Cemetery regardless of any change in the mile radius threshold. A new threshold model must be implemented, so more of our veterans will have access to this earned benefit.

The Independent Budget recommends an operations budget of $241.5 million for NCA for Fiscal Year 2010, so it can meet the increasing demands of interments, gravesite maintenance, and related essential elements of cemetery operations. Congress should include as part of NCA's appropriations $50 million for the first stage of a $250 million five-year program to restore and improve the condition and character of existing NCA cemeteries.

The Independent Budget recommends that Congress appropriates $52 million for the State Cemetery Grant program. This funding level would allow the program to establish six new cemeteries that will provide burial options for 179,000 veterans who live in regions that currently have no reasonable access to state or national cemeteries.

The national average cost for a funeral and burial in private cemeteries has reached $8,555, and the cost of a plot -- a burial plot is $2,133. 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 with inside the VA accessibility threshold model, and those who live outside the threshold.

For veterans who live inside the threshold, the service-connected burial benefit should be increased to $6,160. Non-service connected veteran's burial benefit should be increased to $1,918. And the plot allowance should increase to $1,150 to match the original value of the benefit.

For veterans who live inside the threshold, the benefits for service connected burial should be $2,793. The amount provided for a non-service connected 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 of a VA funeral and not on a private funeral cost that will be provided for those veterans who do not have access to state or national cemeteries.

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 annual inflation. This concludes my testimony and I am happy to answer any questions at this time.

REP. FILNER: Thank you, Mr. Kelley.

Mr. Boozman.

REP. BOOZMAN: Thank you, Mr. Chairman. Can you -- the panel, can you guys talk -- first of all thank you all for being here and thank you for your testimony. Can you talk to us a little bit about how you feel like; we've heard the plans to significantly increase the category 8s, priority 8s, which is a very good thing?

Can you tell us any concerns about perhaps by what you feel like we need to do as far as capacity concerns about maybe all unwanted consequences that we don't realize that might have on some of your membership. Mr. Cullinan.

MR. CULLINAN: Mr. Boozman, if I might, first -- a big concern of ours is that VA not be inundated with category 8 veterans. We want to see them flow into the system; we want to make sure that the quality and timeliness of care is maintained.

And we also view it is as essential that this be a cooperative venture between the department and the Congress. And it is funny that was mentioned early -- Chairman Filner, you mentioned that earlier that at times it seems that the executive branch views the legislative branch's expertise as being somehow different than theirs.

And I suppose it is different, but it's essential as well. So that's what's going to be what -- we need close oversight of what's going on in a cooperative venture with the secretary and VA.

MR. BLAKE: Mr. Boozman, can I add something. Let me say that I think, just at first glance, the administration's plan as it relates to this roll out of 500,000 additional through the next, I think, five fiscal years, essentially as that was laid out without any real details.

It seems like a doable solution budget-wise, because I think it can be easier -- much easier managed that way. Interestingly, based on -- as we were developing The Independent Budget, one of the troubles we had is sort of pinning down this priority group 8 number, because I don't think anybody really knows what the number may actually be.

But from what we have been told by some officials at the VA, the actual number of folks who have been turned away from the VA physically since this enrollment ban went into place is pretty close to the 550,000 that is apparently the target for the next five fiscal years.

So I can easily see where the idea that this is the -- the initial target would come from. But going forward, I think there are a lot of dynamics that, by rolling it out will allow us to better judge it just going forward, because I'm not sure that the utilization patterns, at least in the short term would be like what priority group 8 may have been in the past.

And we just don't know what the current economic state of the country might have -- I mean there are so many factors, but I think that without a lot of information, the administration has at least outlined a good plan that seems reasonable, and if managed correctly, and as Dennis mentioned, with adequate oversight, it could be done.

REP. BOOZMAN: Okay. Again the, I guess the only thing I would, I think we have to be careful. It just doesn't seem like your budget numbers really seem to -- are a little bit questionable, you know, when you start.

Again, you know, it's good news that we're in the process of moving forward. But I would agree with you all in the sense that this is something that we need to work together to make sure that it is done in a way such that, you know, we've worked so hard to get ourselves in a much better situation than we were a few years ago.

And with everyone working together and I would hope that we would continue in that regard. Let me just ask one other thing real quick. The VA budget request assumes a 33 percent increase in the medical care collections fund for a total of ($)3.4 billion.

VA estimates only about ($)2.5 billion in collections for Fiscal Year 2009 and 2010. That seems a little bit optimistic. Can you all -- did you all notice that in regard to the budget or --

MR. BLAKE: I would say it definitely stands out, which I think is relevant as it relates to the discussion we had about third-party reimbursements for service connected veterans. Now, again, the devil is in the details, we don't know what makes up that estimate. It is a significant jump, given what we've seen, sort of the recent history, as we've gotten into this area of the $2 billion realm for collections.

There've been sort of marginal increases in the estimates year after year, and this seems like a pretty significant jump. But again, I go back to my point from my testimony that what the secretary said this morning was that they've estimated that under this third-party billing for service connected, they could generate as much as $500 million.

Now, whether that is actually in that $3.4 billion or not is unclear. I think the secretary, sort of said it wasn't, but I find it hard to believe with that significant of an increase, that it would not be. So it still remains to be seen.

MR. CULLINAN: Mr. Chairman, we were -- Mr. Boozman and Mr. Chairman, we were startled too in reviewing the numbers, when we saw this. It was over a $1 billion increase. And that is before we heard the rumors about the possible inclusion of this abhorrent idea of charging insurance companies with service-connected care.

I'd have to say too that in recent fiscal years, VA has been doing very well with respect to its collections. So a 33 percent increase is inexplicable; well, that is something pretty extraordinary.

REP. BOOZMAN: Thank you, Mr. Chairman.

REP. FILNER: Mr. Walz.

REP. WALZ: Well, thank you all again for everything you do and for coming here. And as I've said, the last two years, and I need to say it again, and I always will, as long as I'm in this job. A presidential budget is a suggestion. Article I of the constitution puts it here. So I share your concern too, the third party billing thing, does not fly.

And I am not deaf to the need to make sure we use every dollar wisely, making sure we are cutting down on waste and getting efficiencies, but as I've said it, and I'll continue to say it, we are not going to balance this fiscal mess on the backs of veterans. So this is a bad idea at a bad time. It would be bad at any time.

But with that being said, here is a conundrum I want you to help me with a little bit. I too share your concerns of making sure this issue on private contracting, and some of those types of things. The thing I hear about, coming from a rural district is that its easier access to care. And I literally have veterans who say, I live in the shadow of the Mayo clinic, but I've got to get on the bus to go to Minneapolis.

Now, my concern is making sure, just like you, and you've stressed it very clearly, keeping the core issues of the VA, funded and working. We have expanded some CBOCs; we are going to get one in my district, and another one, which I think is on the right track.

I would like to ask you, how do we go back and talk to those veterans, about -- and I want to thank each and every one of the organizations for bringing this out there. Because you can see from a veteran's perspective where they are saying, heck, I just wish I had a car and could walk in to Mayo and get everything done.

That's the way they see it. They don't realize, well, that's maybe because you could walk in the Mayo and do it. You are not one of our veterans who has the core issues that need to be cared for at the VA, the research dollars and everything else. So I just want to hear from each of you maybe on that, if you've got some, just some ideas on what you think and how do we talk about that?

MR. CULLINAN: Mr. Walz, I would say that we are -- right, first of all, right now, VA has authority to provide contract care in certain rural areas. And we think they should use it more. And we would ask this committee and the Congress to ensure that they do. There is a pilot program going on now that was just initiated.

We think there could be some valuable results coming out of that. There remains to be seen what ideas come out of that. And of course, certain parts of the country, while a mobile clinic or -- and that kind of thing isn't equivalent of a CBOC or certainly not a hospital, it's a lot better than nothing, and greater utilization of these should be made as well, with respect to the Mayo clinic. That's a tough one.

MR. BLAKE: And Mr. Walz, one thing I would suggest too is we've all sort of advocated for supporting the Office of Rural Health and the VA. And yet, I'm not sure that that office has been really given a fighting chance. It has had a very small budget, a very small staff, and yet, from my perspective, the rural health care issue, while, may be not targeting the biggest population of veterans, is dealing with what is one of the biggest, maybe the biggest access related issue.

And so I think there needs to be some focus on plussing up the operations of the Office of Rural Health and giving them the ability to sort of manage this. That is not to say that they force things into the VA, but figure out the best ways to work around these problems. I agree with Dennis entirely that the VA has the authority as it relates to fee basis for contract care in a rural setting.

And for years, since I've been here, we've batted around the idea of what constitutes rural and that sort of thing. As far as getting at the veterans themselves, Dennis mentioned mobile clinics and other things. Some of this is an outreach effort to these folks out there, and particularly in the extremely rural areas.

I would say we've been pleased to see how the VA has rolled out their mobile vet centers, and what the capabilities of those are. And I believe there may be a desire to expand that program further, but you get at these folks and figure out what their needs are, and you can kind of use that an arm to adjust the access and the delivery of care going forward also.

REP. WALZ: And I just had one final if I could. Just that I'm really focused on this seamless transition thing. It sounds like to me that maybe we are getting close. I know many of you've said, yeah, I've heard that for 20 years.

It seems different this time. And I've watched this for a long time too. Do you see any concerns or areas that you think need to be addressed first or are you optimistic after you heard what the secretary had to say today from each of you as far as seamless transition goes and in making sure that we see that as a way to cut down some of the systemic problems?

MR. KELLEY: Mr. Walz, Ray Kelly from AMVETS. There has been a continuation of -- we are two years away from having an IT solution or a transition solution. I'll believe it when I see it. I take it to heart that he says that he is going to do it. I believe that he is going to put every effort into making that happen. But again, I'll believe it when I see it.

MR. BAKER: There are a lot of things that sound promising to us. I don't believe we have had the chance to discuss the idea about enrolling somebody in VA as soon as they come into the military, that's something I'd like to discuss with everybody.

I know the Benefits Delivery at Discharge Program has become paperless. I know that assisted in the seamless transition. The VONAP system, while not necessarily restricted to people coming off active duty, it's paperless.

You know, the key thing is right now transferability with the medical files between the VA and the DOD. If that could become seamless, somebody mentioned the DOD is never in this room -- you need them here for that, but if you could accomplish that, then you've just taken a very large step.

MR. BLAKE: Mr. Walz, I would say that through the Senior Oversight Committee, I think we've seen the, at least the biggest stab at trying to fix seamless transition, since I've been here. I mean, I feel like there is a real commitment to addressing this now, because of that entity, and the level of focus being placed on it. But again, I go back to what my colleagues have said about seeing it and believing it. So --

REP. WALZ: We can quote President Reagan on this one, we will trust but verify. That needs to be our mantra around here. But thank you all.

Thank you Mr. Chairman.

REP. FILNER: Thank you.

And again we thank you for your being here. My sense is and this is just from my political understandings, the message that you've been sending about the third party has been received at the White House. I don't think, frankly you should spend too much time worrying about it. That's my sense.

You got other better things to do, so -- and you were wondering where the money is coming from, for example. If they didn't have a policy change, I think I mentioned several times in the earlier hearing that -- I mean, we believe there are systems available to the VA that would dramatically increase their collection rate. And they have just not taken up.

I hope that the new secretary will look at it differently. Both Mr. Buyer and I have in fact been involved with it together. We think there is hundreds of millions of dollars on the table, if not more. And that we hope to really dramatically increase that without the kind of policy change you were worried about.

And I just, one last question -- have you -- I mentioned within the GI bill situation, the inequity of low tuitions states. Have you guys been in contact with us? Has that been expressed by anybody, in either colleges? Do you see there is a real problem that we've got to correct right away?

MR. CULLINAN: Mr. Chairman, we are aware of the problem. And the real issue comes down -- there are certain states where this in- state tuition is low. But since the money for the GI bill tuition flows directly to the university, it doesn't impact the veteran directly.

Or if the veteran wants to go to a private institution in that state, he or she is out of luck, unless the Yellow Ribbon program, which is an opt-in for the university cuts, and it still represents an inequity. We'd like to see some kind of -- this addressed somehow.

I mean one approach may be to establish a different floor for those veterans in those particular states who are going to private institutions. So I'm not saying that an institution that charges $1,200, I think that was the sum that was cited earlier, should get more than that.

However, if a veteran wants to go to a pricier private institution that say cost $1,200 a year, that difference should somehow be accommodated.

REP. FILNER: I mean, you've got two big problems. One, some of the high tuition publish rates are not really --

MR. CULLINAN: Yeah.

REP. FILNER: -- the rates. I mean, it's artificial. There is tuition discounting in there that we have to be careful of. On the other hand, as I said, California is one that I know very well, they are artificially low. That is you said they shouldn't get more than their public tuition.

But it costs more to educate a student in those states than the public -- published tuition. So we got to watch it for abuse at one hand, but I think we got to help the universities at the other end.

MR. : And the veterans they serve, sir. Yes, sir.

REP. FILNER: Thank you very much. We appreciate your testimony, and as always we'll be continuing in touch with you.

We look at the third panel please, if they can come forward.

Paul Sullivan is the executive director of Veterans for Common Sense. I look forward to your testimony, Mr. Sullivan. Please.

MR. SULLIVAN: Veterans for Common Sense thanks the Chairman and the ranking member for inviting Veterans for Common Sense to testify here today about the 2010 VA budget.

Last month President Barack Obama and VA Secretary Eric Shinseki announced they would increase VA's budget to a new record high of $113 billion. This $15 billion increase far exceeds our highest expectations. With that money, Veterans for Common Sense urges Congress to focus on five key measures to monitor VA during 2010, maybe cut down some of those reports.

Those five areas are health care, mental health care, suicide prevention, reducing homelessness, and eliminating the disability benefit claim backlog. VCS asks you to focus on three budget questions when dealing with the VA.

First, we ask you to ask VA, does VA have enough funding, staffing, and legislative guidance to accurately process all disability claims within 30 days? Second, does VA have enough funding, staffing, and legislative guidance to provide all patients with quality physical and mental health care within 30 days?

And the third question, does VA have enough information to answer both of those two questions? This is bottom-up budgeting that we support. We want VA to say, yes, we can provide this information. And asking these questions is essential because of VA's past history of failing to plan properly, and VA's continuing underestimation of the number of Iraq and Afghanistan war veteran seeking care.

In February 2008, VA told this committee it expected to treat about 333,000 Iraq and Afghanistan war veterans in 2009. However, by September 2008, VA had already treated more than 400,000. Based on the current rate of more than 10,000 first-time patients flooding into VA each month, VA may expect a total of 520,000 Iraq and Afghanistan war veteran patients by September 2009.

In contrast, Secretary Shinseki's testimony a little while ago said that the VA expects 419,000 patients this year. VCS, summarized from our written statement, recommends five priorities for VA's 2010 budget.

First, VCS urges Congress to streamline VA's claim system and quickly pass Chairman Hall's COMBAT PTSD Act H.R. 952. There are more than 105,000 Iraq and Afghanistan war veterans already diagnosed by VA with PTSD. However, only 42,000 received service disability compensation for PTSD.

In 2008, the instituted medicine concluded there is a link between deployment to a war zone and PTSD. With a new law or a regulation based on science, VA can improve the lives of tens of thousands of disabled veterans with PTSD during an economic crisis when their needs are most acute.

Second, in a manner similar to PTSD, VCS urges Congress to streamline claims for TBI. Third, we urge you to improve seamless transition and bring VA to our veteran by expanding VBA. VA should open permanent offices at military bases and at more cities so veterans can meet face to face with VA staff about claims including their new GI Bill benefits.

Fourth, Congress needs to expand research to better understand Gulf War illnesses.

In 2008, the Research Advisory Committee on Gulf War Veterans' Illnesses confirmed up to 210,000 Gulf War veterans remained ill. We ask you to please support $30 million for competitive research in the congressionally directed medical research program, the search for treatment, which is what the Gulf War veterans want.

Fifth and finally, VCS would like Congress to insist that veterans play a key role in any proposed truth commission suggested by Senator Leahy investigating administration actions between 2001 and 2008. In 2008, the Houston Chronicle editorialized that service members and veterans bore the brunt of the enormous policy failures of the last administration.

If we are to truly understand the mental health needs of our war veteran, then we must make sure our history books accurately reflect the fact that the Vietnam War, the Gulf War, and the Iraq War were each initiated by the executive branch using misleading statements and without preparing the plan to care for veterans when they came home. And this is a betrayal of our veterans who are serving our country and our constitution. Thank you.

REP. FILNER: The second speaker Paul Rieckhoff from the Iraq and Afghanistan Veterans of America.

MR. RIECKHOFF: Thank you, sir. On behalf of IAVA and our more than 125,000 members and supporters, I want to thank you for inviting Iraq and Afghanistan Veterans of America to testify today regarding the VA budget for fiscal year 2010.

I would also like to thank you for your commitment to our nation's veterans. From the passage of the new GI Bill to the dramatic increases in veterans' health care funding, the remarkable legislative victories we've seen for veterans in the last three years would not have been possible without your leadership.

At IAVA, we are committed to making sure that no service member and no veteran is ever left behind. Our mission is to improve the lives of the more than 1.8 million Iraq and Afghanistan veterans and their families. And as veterans come home from Iraq and Afghanistan to the worst economy in decades, we need to show real support for our troops and veterans.

Now overall, we are pleased with the limited information currently available about the 2010 budget. The topline numbers for veterans' discretionary funding is about $1.2 billion higher than the amount recommended by leading veterans' organizations, including IAVA, in the independent budget.

The budget plans increases to VA funding by $25 billion over five years. And this funding will be critical if we are to provide proper care and support to the surge of new veterans who will be coming home from combat in the coming years.

We are also pleased to see the renewed focus on mental health care in the DOD budget, including comprehensive TBI registry, and the rollback of concurrent receipt limitations that unfairly cut benefits available to disabled military retirees.

We were also pleased to see the administration's planned expansion of VA health care access to about 500,000 moderate-income veterans. This is a good first step, although we'd like to see it happen faster. About 1.8 million veterans lack health insurance, and over 500,000 have been denied VA health care because their income level was too high.

IAVA believes that every single veteran should be eligible for VA health care. From what we've seen, the budget looks strong. But the devil is in the details. Until we have had the opportunity to go through this budget line-by-line in April, we cannot entirely endorse the plan. Above all, we must ensure that this budget does not rest on increased co-pays, premiums, and fees for veterans.

Our biggest disappointment about the current budget is that the president has not opted to include advance appropriations to the VA in this proposal.

Advance appropriations doesn't cost any additional money. It gives VA hospitals and clinics advance notice of the funding they will receive for the following year. Right now, VA hospitals have no way of knowing what their budget will be next year. When the budget is passed late, and it usually is, they often have to ration the care they give to veterans.

The bottom line is that VA budget delays hurt veterans, veterans of all generations. I want to tell you about one of those veterans that would definitely benefit from advance appropriations.

Rey Leal served as a Marine in Fallujah during some of the heaviest fighting, earning a Bronze Star with valor as a Private First Class, almost unheard of for a troop of that rank.

When he returned to southern Texas, his VA hospital was over five hours away. He's a tough Marine, and he's a boxer, but he shouldn't have to fight to get care at a veterans' hospital.

At his nearest outpatient clinic, there was just one psychologist taking appointments only two days a week. The psychologist only works two days because that Texas clinic, like many VA clinics and hospitals, has to stretch its funding to make sure the money lasts the whole year.

They don't know how much funding they'll have next year because the VA budget is routinely passed late. For the millions of veterans like Rey, we must fix this broken funding system.

Advance appropriations is a Common Sense solution that President Obama supported as a candidate and it's something we would like to see in the budget. If the Obama administration is not going to lead on the fight for advance appropriations, we need Congress to step in.

A number of members on this committee including, of course, Chairman Filner, have already provided -- have already proven to be key allies in the fight for advance appropriations and we thank them for their leadership and support.

IAVA is proud to endorse of H.R.1016 and S.423. We will work with committees in any way we can to move this legislation forward. With your help, we can ensure that veterans are not kept waiting as they have been in 19 of the last 22 years while Congress plays politics with the budget.

Last month, President Obama traveled to Camp Lejeune to announce the eventual drawdown of combat troops in Iraq. No matter what you think about this plan, one thing is clear. The new strategy in Iraq will create a surge of new veterans coming home in 2009 and 2010.

America needs to be ready and the 2010 veterans' budget will be a crucial first step. Thank you for your time. We look forward to working with you.

REP. FILNER: Thank you, Mr. Rieckhoff. And thank you for representing our newer young men and women when they come back.

Rick Weidman, executive director for Policy and Government Affairs of Vietnam Vets of America. Welcome.

MR. WEIDMAN: Thank you, Mr. Chairman. And thank you to your distinguished colleagues on both sides of the aisle for the opportunity for us to represent our views here today.

The overall -- first let me say that we endorse the independent budget and associate ourselves with their figures particularly when it comes to the construction which needs to be speeded up and not slowed down.

And those within VHA who take the attitude that we will never again build a free standing hospital need to be -- find another way to contribute to the good of the world and be replaced with people who understand what the core mission of the VA is.

We looked at this, we do every year, the Center for Medicare and Medicaid Services and the inflation rate that they are projecting for medical inflation and they are upping theirs by 3.6 percent.

And so we use that in calculating that we need $1.4 billion assuming that there were no more people that came into the VA and that VA had adequate staff to meet the full needs of people at this point which in fact they don't.

So we recommend that another $2 billion on top of that for just for VHA order to expand organizational capability and front-load the staff needed to take care of the new veterans coming through the door, not just those who served in Iraq and Afghanistan and elsewhere within the world, but of new registrants who qualify with moving forward with restoration of ability of Category 8, so-called Category 8s to be able to use this system.

We had asked VA repeatedly for four years now to do a migration study about people who were refused treatment who were Category 8s. How many of those ended up either being led into the VA hospital eventually because they became service connected, but were much sicker and therefore more expensive to treat when they came in. And how many of those people ended up indigent because they couldn't work and therefore gained admission that way. And they just continued to come up with excuses and perhaps if the committee asked you will get the answer to that question looking back to January of 2003.

We recommend a significant increase in research and development to $750 million for the next fiscal year, for 2010, and moving up in increments to bring that research total to well over $1 billion by the end of five years on an annualized basis with ordinarily -- (inaudible) -- inflation increases from that point forward.

NIH does not do veteran health research, they flat won't do it. Even the grants they give to VA they do not take a person's military history as a variable and a possible confounder in the studies that they conduct at the VA.

This is -- and therefore we know DOD is not going to do it because they always want to continue to have deniability, particularly about the environmental ones. Therefore, all we've got left is the VA.

For the first time in many years, VA has not -- VVA has not signed on to the Friends of VA Medical Research and Health Care, and the reason is they've pledged not to ask for any earmarks.

It would be irresponsible of us not to ask for earmarks and a changing of the course of the leadership of research and development when they're not funding a single study related to the long-term health care of Agent Orange at the moment.

Nor, I might add, except for those earmarked items in studies, are they funding looking at the long-term health care effects of environmental hazards in the first Gulf War.

So we have a real problem with the way in which they are going and ask that you again ask Mr. Edwards to include an earmark in the budget legislation requiring the VA to obey the law and complete the National Vietnam Veterans Readjustment Study replication, thereby making it a robust mortality and morbidity study of Vietnam veterans, and that they set aside $20 million additionally out of R&D funds specifically for study of long-term consequences of Agent Orange. And in addition to that, $15 million to go to MFUA or the Medical Follow- up Agency of the Institute of Medicine of the National Academy of Sciences which is the repository for all of the wealth of data of the Ranch Hand Study which has now ended.

But all that data needs to be put into modern computerized format in order to make it accessible for research.

Mr. Chairman, I'm overtime and I appreciate your indulgence.

I would just add two things, if I may. One is the idea of having a specific line item for outreach is important. We just started and launched last month the Veterans Health Council initiative working with the private sector to inform providers and through providers to inform veterans, 80 percent of whom don't go anyway near the VA, of their rights and benefits, and more importantly what are the health care dangers that they should be looking for in themselves and what should their family be looking for in their health based on when and where they serve.

But everybody's responsibility is nobody's responsibility and outreach continues to be very haphazard from VA. Last, but not least, we appreciate all of your leadership on getting the advance funding, advanced appropriations act through. And we look forward to working with you on that and hope that this year you will, despite the fact of having new leadership at the very top of VA, look to his own words that what's wrong at the VA at almost every level is leadership and accountability, and we need to have much more stringent and much more in depth oversight of VA's function in the coming year.

Thank you very much, Mr. Chairman.

REP. FILNER: Thank you.

Steve Robertson is director of National Legislative Commission for the American Legion. Welcome, Steve.

MR. ROBERTSON: Thank you, Mr. Chairman, members of the committee. The American Legion appreciates the opportunity to be able to participate in this hearing on President Obama's topline budget request.

And in fact the American Legion has sent a letter to the White House telling them that we support the topline numbers that they have recommended. I would be remised if we too do not express our appreciation to you and your colleagues for passing the FY '09 budget on time at the start of the fiscal year.

And I am sure when Secretary Shinseki sits around the cabinet table, he realizes what an advantage he has in this transition period with having a budget while many of his colleagues at that table are still waiting on theirs. We've been there before and we understand the situation.

Speaking of the budget, we too want to thank you, Mr. Chairman, for your leadership on the advance appropriation legislation and I assure you'll do everything we can in our power to make that a reality.

And we also want to thank you for the stimulus package and the many provisions that were in there that specifically related to veterans. But one particular thing I'd like to highlight is the money that was set aside for construction within the VA, a lot of nonrecurring maintenance and we would hope that service of veteran- owned businesses and those -- specially those businesses owned by disabled veterans would be given some consideration in awarding a lot of the contracts that we'll be doing -- done in VA facilities.

With the president's budget outline that we got of two pages which is a lot easier to read than these five or six volumes that we normally get, looking at the highlights the American Legion supports all of the highlighted items based upon finding -- seeing the final details. The area that's dealing with Priority Group 8 veterans, the American Legion has always advocated that every veteran be entitled to their own benefit.

And a lot of people don't realize it, but there have been continuous flow of Priority 8 veterans into the system even though the prohibition is in place. Veterans that are OEF or OIF veterans initially show up as a Priority Group 6 and then as their five years expires they are reassigned to whatever priority group that they are supposed to go to.

So many of them wind up with 8s, which brings up an interesting point. If an OEF or OIF veteran does not enroll in the VA during that five-year period, has a seamless transition that's a smooth transition, and at some point later on down the road decides that they want to come to the VA under the prohibition, if they made a successful transition they probably wouldn't be allowed into the VA system because they would be a Priority 8 veteran. So we're basically punishing them for a seamless transition.

The other area that we are really concerned about is the homelessness of our veterans. We keep talking about the homelessness of veterans and we're forgetting about the families, especially the children.

We have a lot of single parents that are now in the military and when they become homeless they have children. And I'm not sure that VA is adequately prepared to deal with a family -- a homeless family situation. The GI Bill, the exchange we've had about the equity and the inequity, I'm having problem with grasping what the situation is.

As long as the tuition is going straight to the university, if I decide to go to Louisiana Tech, or Louisiana College, or LSU, or Tulane, that's my decision. The goal is to get a college education. And I'm not worried about somebody going to Stanford and getting more money sent to their university. That does not bother me. I want to get a degree.

And I think that's what we need to stay focused on. The original GI Bill paid the university full tuition wherever you got accepted. So if you went to Louisiana Tech, yeah, you got a little less money than if you went to Harvard. And --

REP. FILNER: But Steve, the way the system is set up, let's say you have no money, just for -- just to take that. If the cap in a state is low, you may not be able to go to any of the higher tuition colleges you want to because it doesn't pay enough based on the formula.

It doesn't -- you know, you're limited to the cap and then plus from the Yellow Ribbon provision. So you can't go to the college you want if it's a high one. And again, if you're going to a lower one you're going there, but the services provided may be more than you're paying which hurts that university.

MR. ROBERTSON: Well, I'm not worried about the university structure.

(Cross talk)

REP. FILNER: Well, but it hurts the service to the student. If they are not getting the money that it really cost to educate, they are not going to provide the services whether it's rapid movement in the admissions department, or it's counseling services, or anything else. They may just not be able to provide it. I mean, I think it affects the quality to the veteran of how we're going to reimburse the institution.

MR. ROBERTSON: We'll look into it more --

(Cross talk)

But I would rather get this thing done on time than trying to tinker with it and possibly benefit --

REP. FILNER: It may be that the first year that's the situation. But I don't think we should neglect these inequities.

MR. ROBERTSON: Yes, sir. The third party reimbursement rumor concerning service connected disabilities, we're adamantly against that. We signed a letter along with many of the other organizations to the White House expressing our deep concerns about that concept.

We've been asked many, many times if there's a shortfall where's the money going to come from? And the American Legion still believes that when the whole concept of eligibility reform was passed in 1996 many of the veteran service organizations believed that the concept was to bring veterans in along with their health insurance.

Right now over half of the VA patient populations, if you ask them who is your primary health care provider, the answer is Medicare. I have Part A, I have Part B. Why can't I bring my dollars to the VA? Right now, the VA is subsidizing Medicare in the billions of dollars.

Medicare is not a health care provider. Medicare is an insurance company. And I do not understand why VA cannot be reimbursed for treatment of non-service connected medical conditions that are allowable under the VA -- I mean under, the Medicare reimbursement. And it just seems that we're just giving Medicare a windfall.

REP. FILNER: Yeah, I perfectly -- I agree with you, Steve. You think this -- should we take on this thing right now? I mean --

(Cross talk)

MR. ROBERTSON: You are bringing Priority Group 8 veterans and you're trying to figure out to pay for them. You're trying to figure out if you have the resources to --

REP. FILNER: Right.

MR. ROBERTSON: -- hire extra doctors, nurses, providers, et cetera. That is a logical revenue, I agree.

REP. FILNER: All right. I mean, if you guys are willing to work with us, we'll take that on. I agree with you, yes, that there is, you know, the argument from I guess the average American, hey, you're just taking it from one pocket and putting in the other because it's both government, but --

MR. ROBERTSON: Sir?

REP. FILNER: Does he know we are hurting the Veterans Administration in that situation.

MR. ROBERTSON: Sir, I have been paying Medicare --

REP. FILNER: You've been paying for --

MR. ROBERTSON: -- the day I started working. That's a benefit that I'm entitled to. If I don't go to the VA and I go down the street, it works and the reimbursement is going to be made, that is when I become Medicare eligible. But I can go down the street and use my benefit.

If I choose to go to a VA, I should be able to take my health care dollars with me. And if I have a supplemental, then VA should be allowed to build a supplemental as it currently does. So I believe that this --

REP. FILNER: I think we have to take on that fight.

MR. ROBERTSON: Well, I would prefer that over charging a triple amputee for his medical costs. And a lot of insurance companies have caps and once you reach that cap, what's his family going to do? They have a medical condition and the veteran's service is so severe --

REP. FILNER: I understand. Again, I think that's off the table, but I think we still have to figure out how we're going bring in those dollars.

MR. ROBERTSON: Yes, sir. Well, again, we look forward to working with you and your staff -- your capable staff on addressing these problems.

REP. FILNER: Were you familiar with, you know, the previous bills that we did on this called Medicare subvention and were those -- was that an adequate or do we have to re-look at that?

MR. ROBERTSON: Sir, the problem was -- is that there was a false assumption. They said that before you could collect money, you had to render the services that you would have rendered anyway. There is nothing in the entire Title 38 that you qualify for VA because you're Medicare eligible. That's not a criteria.

Somebody in OMB or CBO or some puzzle palace came up with this idea that it was an obligation of the VA to treat Medicare eligible patients. There is nothing. What qualifies you for treatment in the VA is honorable military service. I don't care if you're 21 or 121. There shouldn't be any veteran ever turned away from a VA hospital if that's their best choice.

REP. FILNER: I agree, but I was just wondering there has been previous legislation on Medicare subvention. Was that adequate or do we have to re-look at that to --

MR. ROBERTSON: We have to re-look at it because --

REP. FILNER: Okay.

MR. ROBERTSON: -- of the way that it was -- the assumption was that VA would have to treat all of the patients that they are currently treating --

REP. FILNER: Right.

MR. ROBERTSON: -- that are Medicare eligible before they could bill anybody else. And that's just a false -- somebody made the law, somebody can change it.

REP. FILNER: Yeah, all right. We look forward to working with you on that because that's --

MR. ROBERTSON: Certainly.

REP. FILNER: And you know, I think that's a win-win for America because the cost is cheaper probably in the VA than they would be getting private care.

MR. ROBERTSON: I'll be making another bet with you, Mr. Chairman. It would probably reduce the amount of fraud, waste, and abuse in Medicare billing because VA has no incentive to try to falsely bill Medicare for services.

It's a government-to-government agency. Indian health care services have been doing it for years. It is the principle behind TRICARE for Life. So for somebody to tell me that one government agency can't bill another government agency, that's false. And I'm sure public health service probably does it as well.

REP. FILNER: Okay. Thank you, sir.

MR. ROBERTSON: Yes, sir.

REP. FILNER: Mr. Boozman.

REP. BOOZMAN: Thank you, Mr. Chairman.

And again, we appreciate you all being here and the testimony today was excellent. The -- I think that the good news I'm hearing from the dais is that it seems like there is starting to get real consensus. So we've got to do something about the budgeting process.

As I told the secretary, I think that's something that it didn't cost us anything. We're actually going to save a lot of money in doing that and reap the savings. But -- and again, that's not -- it doesn't matter whichever party is in power, that's just been the real problem for many, many years.

As you know, we're -- Ms. Herseth Sandlin and I really are working hard to try and get, with your alls help and everybody else's help, trying to get things implemented. We've got some things arising, you know, like we've been discussing today.

I think the key though is we've got to get the thing on plan, you know, without tinkering too much. It's too much to ask as I go forward. So I guess my thing is, you know, we need to help and go forward. I can say that because I was a supporter of Ms. Herseth Sandlin's bill that I think was much easier and we wouldn't have, you know, the complexity that we are in now.

And yet, you know, this is just a very difficult thing to implement and really is going to take all of us working together. And yet, the good news is there is a tremendous benefit, it's going to make a real difference in the lives of lots of veterans.

You mentioned, Mr. Robertson, about homeless children, you know. And are you aware of H.R. 293? It's the homeless women's, veterans and homeless veterans -- I'm sorry, I don't -- H.R. 293. But it addresses homelessness. Are you aware of that bill at all? Do you have -- go ahead.

MR. ROBERTSON: My concern is that VA is going to take legislation to prompt them to start focusing on the homeless family as opposed to the homeless veteran. And, sometimes, you know, my guess is with my military background I believe you lead rather than follow. And I think that's the mindset that VA needs to take, is how do we address the problems that exists, not, you know, ignore it until somebody tells us to do it.

REP. BOOZMAN: I agree. And I think, again, I have not -- we are in the process, you know, of really looking hard at that bill. I was wondering if any of you all had any -- if you feel like that bill would help address that particular problem.

MR. ROBERTSON: I believe it would push the VA in that direction. But again, a lot of the -- what I'm hearing is that a lot of the homeless veterans with families are winding up in grandma and grandpa's house.

REP. BOOZMAN: Right.

MR. ROBERTSON: And it's -- they are not showing up in homeless shelters per se. But I think it's something that needs to be addressed. And I'm not sure it's being properly addressed at the right level.

REP. BOOZMAN: Okay. Thank you all.

(Cross talk)

MR. RIECKHOFF: Yes, we are seeing, you know, Iraq and Afghanistan vets walk into our office. And it's hard to get a grasp on the numbers. But the numbers at this point are manageable. And there is a definite shortage of transitional housing, there is definitely a lack of comprehensive understanding of what these folks are facing as a family.

We are seeing single parents, you know, sometimes both parents deployed which is really unprecedented. But I also want to address the issue of the GI Bill oversight, if I could so for a second.

I think we have got two issues. One we've got the execution piece. And I think, Mr. Chairman, you're right to focus on that, and Ms. Herseth Sandlin was as well. Your questions were dead-on. And we got to work out this issue of the fee and tuition disparity, and we got to have a fair simple way of addressing this.

But there is a larger problem and it's a communications problem. And I think all of us are kind of at the tip of the spear here, facing veterans who have serious questions about where this legislation stands, where this benefit stands. Is it going to be ready by August? How is it going to be implemented? And the VA has got an opportunity here to get ahead of the curve.

When August hits, we are preparing for a boat load of phone calls and e-mails from vets who don't understand this benefit. So we've got a communications problem. And I think that that's an area where the VA could sort of reframe the way they look at technology.

The conversation here today focusing on technology was outstanding. But it's largely focused on the backlog and internal operations. The VA has an opportunity now to utilize technology to look at it as an outreach opportunity and a communications tool. And that is how our generation looks at it.

So -- and General Shinseki has got some new folks coming in that have an understanding of that element and that may be an opportunity for them to really break some ground. Our generation is going to look to the GI Bill for some of them as their only point of contact. It's going to make or break, I think, the VA's relationship with huge percentages of my population, guys and women who served in Iraq and Afghanistan. And if they mess it up, they are going to be dealing with a reputation issue for a long time to come.

REP. BOOZMAN: No, I know -- excuse me, I'll let you in a second, but I would agree with that. And yet, again, in being pretty close to this thing as you all know and both sides working very hard, because what we all want is when that -- you know, when that August date comes that we have a very successful transition into the new system.

And right now, it's -- you know, we are -- we've had several hearings, and we are pushing forward. And those are really -- those are updates; those aren't adversarial at all. I mean that's just, how can we help you? You know, what can we do as our, I think, you are, you know, how can we help? How can the VSOs push this thing forward?

But I think right now, a lot of those questions, to be honest, they are really formulating right now, they are figuring it out, and so it's difficult to communicate, you know, what you're really not sure of yet. But that is the next step.

We've asked them to do a tremendous amount. And the good news is that I think that they really are rising to the occasion.

I can't speak for them, but I do think that is part of it. And I know that Ms. Herseth Sandlin, you know, is committed to doing whatever it takes to get it done.

MR. RIECKHOFF: Yeah, I think it's a tremendous opportunity for us all to work together sir. But if you look at the VA's website, it looks like it was created in the Gulf War. And if you look for a GI Bill resources and how to navigate this new benefit, you probably are going to come to -- (cross talk.)

REP. BOOZMAN: I think that's a point --

MR. ROBERTSON: -- rather than on the VA. And I think the VSOs have stepped up and are trying to fill a critical gap right there.

REP. FILNER: Mr. Walz.

REP. WALZ: Thank you, Mr. Chairman.

And thank all of you for sticking it out late here. I thought when the Chairman left earlier he was going to pick the pizza up for us or something. So I appreciate you being here.

I have to tell you your advocacy for veterans is something I am truly appreciative of. As a dues-paying member of some of these organizations that testified today, I'm getting my money's worth, I can tell you that. So thank you very much.

Couple of questions. Of course the advance appropriations issue is a big one. This is -- for several reasons. One is we think, it obviously allows for the programming and the care of our veterans which is our first and foremost concern.

But I think all of us realize too in these challenging economic times it's a way to be efficient with our resources. And I think we need to continue to push the administration if this is truly about a change and not business as usual. I think this is smart. I think it's efficient. I think it could work.

And I think one of the things is that, with any deliberating body, having a deadline is important because otherwise nothing gets done until everybody asks how come we don't get anything done until right before we recess. I mean, that's the nature of it because it's the give and takes and all that. But if there is no drop-dead deadline there, no one gets really serious about it.

And I can tell you, I have been absolutely ashamed as we finished the appropriations process for the VA and set on it as leverage against 12 other appropriations bills, something here -- we could deliver this if we work together and put the pressure on and you help us put the pressures on each one of us to deliver the darn thing by October 1st.

Since I've been here the last two years, it was ready to go. It wasn't delivered when it should have been. So I don't think we should back away one inch from this of asking for this to happen. I think it's the right thing to do, I think it's obviously the right thing for veterans. And it's good stewardship of the public's money. So I thank all of you for taking that one up.

Rick, I just had a question on this because I'm very curious about this. This is a type of stuff again being -- understanding data driven, this migration study. Am I right to understand we never got an answer on that? We don't know what those numbers are?

MR. WEIDMAN: That is correct, sir.

REP. WALZ: And you were talking about in January of 2003. Was that something that VA took it upon themselves to do or were they directed by Congress to do that?

MR. WEIDMAN: No, there was a decision by the Secretary of Veterans Affairs to temporarily limit the registration of new Category 8s. That's what I was talking about.

REP. WALZ: Okay.

MR. WEIDMAN: And at a briefing four weeks later of the VSOs on the cares process, we saw the projections for 2023. And it was no Category 8. And I said, wow, go back to that slide.

REP. WALZ: Okay.

MR. WEIDMAN: Why are you using those figures? We were told to. By whom? And it turns out that it didn't become temporary anymore. It was built into the long-term planning and into the cares plan for the physical plan of freezing out Category 8s. And so basically, we were sold a pig in a poke.

REP. WALZ: Okay, all very good. And that -- very appreciative of that. Last question I just throw out as you heard me ask the last panel on this. The two questions I had, that this conundrum of trying to deliver care, especially in rural areas, without diminishing the core services and delivery at the VA. And also this idea of seamless transition, the commitment that seems to be there to start alleviating some of these problems. I'll just let you just randomly comment if you would, just your perspective on it.

MR. ROBERTSON: First of all, you know, the American -- the VA is affiliated with over -- I think it's a 108 medical schools right now. I have never understood why VA did not reach out to rural community hospitals and try to work out partnerships with the rural -- I mean, where would be a better place to send them than in Newtown, North Dakota rather than building in -- (inaudible) -- work out some kind of an agreement with the hospital that you would contract the services there, so they wouldn't have to make the trip all the way to Fargo.

Today Rick made a comment at an earlier hearing about the difference between remote areas versus rural areas. And that is a serious problem that I had never really thought of it in that capacity where there is some places where you can't get to a VA hospital, that are part of the continental United States. And I think that is something that needs to be seriously addressed.

The question you had about the Mayo Clinic; why doesn't VA have a partnership with Mayo Clinic to be able to take people there in that catchment area under some kind of a contract? That would seem wise use of resources.

MR. WEIDMAN: It would, and there's certainly been a lot of concern and a lot of leadership exercised, particularly by this committee, in regard to dealing with rural health care. And the distinction that Steve is talking about is actually our Alaska state president has written a paper that's almost ready for release to the Hill on remote versus rural health care. And it's a -- it will help in our thinking and planning.

However, we all passed a number of laws having to do with rural health care. And it's basically nobody at home at VA. They still have not staffed up that office. And it's -- everybody is talking about the new team at VA. This is a pretty lonely team, because you've got General Shinseki and you've got John R. Gingrich who is his chief of staff. And that are it. And I think there is a couple of speech writers. But other than that, he hasn't been able to get anybody else on board.

So in regard to rural health, it would be helpful to us and VSOs to -- for you all to press hard about why the heck haven't you staffed up and done what we told you to back in the 110th Congress?

MR. RIECKHOFF: And other than pile on to what these gentlemen have already said, I think when we deal with remote and rural areas, we look to technology. I'm going to sound like a broken record, but this is an opportunity for innovation. I think that VA has made good progress, for example, in the suicide prevention hotline, in finding new ways to do outreach.

But as some of you know, we launched a massive public service announcement campaign with the ad council. We are going where the veterans are. And I think that's a critical way of reaching the newest generation of veterans especially. We've got to be online. We got to be innovating. And I think that's an area where they can really utilize new technology to bridge some of these gaps and create programs that work.

And when it comes to DOD and VA, you know, Congressman Walz I share your optimism.

And I think we've got an opportunity here with General Shinseki and Secretary Gates to really bridge that gap. The GI Bill would be a good test. I mean they've got to work out transferability. They've got to be communicating effectively. We get a lot of calls from recruiters who want to know how does the new GI Bill compare to the old GI Bill. How do I communicate this to incoming recruits? So I think that will be a critical test there as well.

REP. WALZ: Well, thank you all.

Thank you, Mr. Chairman.

MR. SULLIVAN: And Congressman, to add on to what they said, the vet centers -- new mobile vet centers are -- those are fantastic. We encourage those and in fact expanding vet centers when it comes to mental health. Otherwise, we agree with what they said.

On seamless transition, the goal here is to bring VA to the veterans. And when a service member is about to get out of the military, become a veteran, they are at their military base, they are there already. By putting benefits delivery discharge at all VA facilities making them permanent offices and also at some of the national guard permanent facilities, we can make a great step forward so that there is a good presentation and initial contact with these service members on their way out the door.

And it's one stop shopping -- GI Bill, disability compensation, home loan guarantee, there are insurance, all of that can be done walking out the door with a permanent VA facility. That's when we truly have seamless transition, it's when that happens.

REP. FILNER: Thanks so much.

MR. WEIDMAN: Mr. Chairman, may I just say one other comment about transition. And this transition has nothing seamless about it. And I hate it because this is news speak. I would settle for a decent transition period.

The combined physical that is happening at Walter Reed is not working well. It seems to be better at Bethesda, but Walter Reed is not working well. They are not doing it properly according to their own SOP. And the soldieries that I'm in contact with regularly are really unhappy.

We brought it to the attention of the previous secretary last fall several times, to the current undersecretary several times, to the deputy undersecretary a number of times, and it's still not really fixed. And it's to the point where many of the young people are turning to JAG and JAG is getting involved in it because what happens is that if they say that 39-47 is wrong, then they say, too bad, if you go to -- if you don't sign this it goes to hearing, and if it's a hearing, it's de novo, and you may get nothing.

And that's it. So many of the less sophisticated ones gave in. And so the -- they get a disability rating from the military that is much less than it should have been in the first place. And that is all because they are not doing what they are supposed to be doing as the army person sitting down with the military medical file and going over it with the soldier and then a separate process, the VA person sitting down with that same medical file and going over it with the soldier and filling up the 39-47 again to make sure it's correct. And it ain't happening.

And we don't know what to say except that I know that the Armed Services Committee perhaps has a joint oversight on this because they are about to expand this thing to 17 major military installation separation points and it's not even working for the people who are housed in Malone House right now.

MR. : Mr. Chairman?

REP. FILNER: Yeah, please.

MR. : Before you hit the gavel, our commander testified last September on our joint views and estimates for FY 2010 budget. Do you mind if I submit this to the record?

REP. FILNER: No, that will be added to the record, thank you.

MR. : Thank you, sir.

REP. FILNER: I was just struck -- just as a concluding note, several things that are on the plate from last -- from other secretaries and other administrations, you might want to give us a summary of all those or a list of all those, and we will give it to the new administration. I mean stuff that, you know, not that you have to accept, you know, the instant return, but let's see -- let's restart it all. Reset the button, as Ms. Clinton was -- (off mike).

Thank you all. This hearing is adjourned.

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