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

    The committee met, pursuant to notice, at 9:33 a.m., in room 334, Cannon House Office Building, Hon. Bob Stump (chairman of the committee) presiding.
    Present: Representatives Stump, Smith, Bilirakis, Spence, Everett, Buyer, Quinn, Stearns, LaHood, McKeon, Gibbons, Evans, Filner, Gutierrez, Brown, Doyle, Peterson, Reyes, Snyder, Rodriguez, Shows, and Berkley.


    The CHAIRMAN. The committee will please come to order. Today we are meeting to hear testimony on the Veterans Affairs budget for fiscal year 2000. We will hear both from the Department of Veterans Affairs and from various veterans' service organizations.
    I want to begin the hearing, Mr. Secretary, by welcoming you back for your appearance here. We appreciate you coming down. I know the members will have some questions.
    As you know, Mr. Secretary, each year we view the budget as a gauge of how well we are meeting our commitments to our veterans. The VA budget for fiscal year 2000 appears to be adequate for benefit programs and for cemetery administration. However, the administration's proposal to deny even the smallest budget increase for VA health care programs is very troubling.
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    Mr. Secretary, your budget identified hundreds of millions of dollars needed for existing fixed costs, new advanced treatments, and new initiatives to provide a fuller continuum of care to veterans. Unfortunately, the administration has not included any new funding to address those needs.
    As with last year's budget, the VA predicts overly optimistic insurance revenue for non-service-connected care. But more significantly, this budget triples projected savings from unspecific management initiatives.
    While the past VA health care budgets have assumed savings of $200 to $300 million, this year's budget asks Congress and veterans alike to rely upon VA's stated ability to save an unprecedented $1.4 billion in fiscal year 2000. We are most anxious for you to be able to expand on this part of the budget, if you would.
    At this time, I would yield to ranking member of the committee, Mr. Evans from Illinois.


    Mr. EVANS. Thank you, Mr. Chairman. I join with you in welcoming Secretary West and the other witnesses here today. I am especially pleased that the Secretary is here to help us better understand the proposed budget.
    This budget contains many important veterans' initiatives that I strongly support. When these initiatives are realized, there will be real improvements in veterans' benefits and services.
    Unfortunately, this budget provides no more dollars or other resources for these initiatives. This budget may underfund veterans' programs next year by as much as $2.5 billion, possibly more.
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    This budget is like building a house of cards. It is trying to add more stories but with no more resources. This may work for a while, but eventually the house of cards will fall.
    Having said that, it is important to emphasize some of the commendable initiatives included in this budget. I have been an advocate for a long period of time for improving veterans' access to non-VA emergency care. Last month I introduced the Veterans Access to Emergency Care Act of 1999. The budget takes a small step in the right direction on this important, life-saving issue.
    The budget also increases assistance to homeless veterans, expands VA treatment for veterans with hepatitis C, and continues current efforts to improve the quality and timeliness of veterans' claims processing.
    It also proposes increasing VA non-institutional long-term care for veterans, providing more funds for the establishment of State veterans' cemeteries, and providing a cost-of-living adjustment to veterans receiving service-connected disability compensation.
    It will be up to this Congress to supply the new resources required for this budget to become a real blueprint for improving veterans' benefits and services. I will fight for the needed programs and resources that veterans need.
    This budget can be laid on the doorstep of the administration, but only for so long. It is this Congress that determines our national priorities and spending. While the administration proposes, it is the Congress that disposes.
    I look forward to working with other members who support our efforts, Mr. Chairman, and I appreciate this opportunity to speak.
    [The prepared statement of Congressman Evans appears on p. 67.]

    The CHAIRMAN. Thank you, Mr. Evans.
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    Mr. Secretary, we will turn to you now, and some of the members, I am sure, will have questions after your statement. If you care to introduce those with you this morning, please do so. You may proceed at your own leisure. We will include your entire statement in the record, sir.

    Secretary WEST. Thank you. I will introduce those who are seated with me, starting at my far right with the Acting Under Secretary for Memorial Affairs, Roger Rapp. Next to me, Dr.——
    The CHAIRMAN. Let me interrupt you. We need to get one of the microphones just a little closer, if you would, sir.
    Secretary WEST. Is this better?
    The CHAIRMAN. That is fine. Thank you, sir.
    Secretary WEST. Thank you, Mr. Chairman. I will start on my immediate right, your left, by introducing the Acting Under Secretary for Memorial Affairs, Roger Rapp, raising his hand. On my immediate right, closer, Dr. Kenneth Kizer, the Under Secretary for Health. On the far left, Joe Thompson, the Under Secretary for Benefits, and to my immediate left, the Deputy Assistant Secretary for Budget, who, I think is well-known to you and staff, Mark Catlett.
    Mr. Chairman, thank you for putting the full statement in the record. If I may, I will just highlight a few instances in it that I would like to call your attention to, and then we can get right to the questions.
    Mr. Chairman, Ranking Member Evans, members of the committee, thank you for the opportunity to appear before you today to present the President's budget for fiscal year 2000 for the Department of Veterans Affairs. This is a total budget of $43.6 billion, and as you pointed out, Mr. Chairman, it is largely in the area of health affairs, a straight line from the previous budget relying on medical collections for our increase.
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    We build on previous accomplishments to include the savings that we have already demonstrated this Department can make. We seek in the area of health affairs $18.1 billion, all discretionary, including $749 million in medical collections, to provide care for eligible veterans. To increase access, the Department of Veterans Affairs will open in fiscal year 2000 89 new community-based outpatient clinics to treat 54,000 more patients than in 1999.
    This continues our emphasis to move from inpatient care to outpatient care, but more than that, to bring the care to where the veterans are located, perhaps the single most significant effort we have underway in an effort to assure veterans the quality care from their country that they have earned.
    We are proposing $50 million in additional funding for homeless veterans, those who have served their country but who have at the end of the day no roof under which to lay their heads, including among this $40 million in medical and $10 million in mandatory transitional housing subsidies.
    We are asking for a $136 million increase in VA's efforts to combat hepatitis C, and we are proposing to increase our long-term care alternative programs by another $106 million.
    Mr. Chairman and members of the committee, as we proposed last year, the administration supports a Medicare subvention demonstration program, though it is not included in our budget presentation. This will help us to fully utilize VA's medical capacity. Once again, Mr. Chairman, we would like to express our thanks to you and to this committee for your support and continued leadership in this effort to provide subvention for veterans.
    As you have undoubtedly noted, much of the success of our budget in coming fiscal year and after fiscal year 2000 will depend on obtaining that stream of assistance for our veterans and revenue for the Department.
    This budget includes a proposal that would authorize VA to cover the cost of out-of-network emergency care for enrolled veterans with compensable disabilities related to military service. Let me just explain one part of that now, Mr. Chairman. Out-of-network is not a term of art that refers to moving between one of our facilities and another. It means any facility that provides care to a veteran in the civilian community other than a VA facility. This legislation would ensure that these veterans have access to emergency care when treatment in VA facilities is not an option.
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    I know this has been a matter of some concern to you and the members of this committee, and I look forward to the opportunity for Dr. Kizer and me to discuss this with you in greater detail in your questioning.
    If there is an increase in our budget or an item of our budget that I think brings great hope to all of us this year, it is what we are doing in the VBA budget in terms of the operating expenses of the Veterans Benefits Administration. For 5 years, I have traveled this country, either as Secretary of the Army or as Secretary of Veterans Affairs. And although often our veterans express to me their belief that the health care they have received is the best—I have the best doctor, I have the best nurse, I have the best technician—if I ask them if something is troubling them, it is that they have a claim pending and that they would like to know what is happening or why we can't get it right.
    Our effort in the budget this year is to emphasize Joe Thompson's, Under Secretary for Benefits, desire to make sure that we are on a path that assures veterans that we are not only handling their claims timely but that we are getting it right.
    The budget provides $860 million, $49 million more in the discretionary part of operating and putting in his improvements. This is a 6 percent increase, Mr. Chairman, and will ensure that compensation, housing, education, and pension benefits to veterans will be delivered, and delivered in a process that we are structuring to ensure that it works for our veterans.
    With this budget, we hope to assign 440 new employees to help process disability claims efficiently. This is a combination of new slots as well as reassigned slots that will be devoted to the claims process. I suspect you will have a number of questions about that as well, and we will be happy to entertain them.
    We request for the National Cemetery Administration $97 million, $5 million more than in the 1999 enacted level, for the operations of the National Cemetery Administration.
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    Mr. Chairman and members of the committee, we are losing to death—pardon me just a moment, Mr. Chairman. I was going to give you the number of veterans daily that we are losing to death each week. Do you know those numbers?
    Mr. RAPP. We are losing about 550,000.
    Secretary WEST. That is the one I want, 550,000 per year to death. This means that the workload for our cemeteries is increasing and that the need for improving the ways in which we can operate them and, more importantly, assuring that we will open the new ones on time, the reasons the requirements are increasing. We expect this budget then to provide for the activation of first-year operations of four new national cemeteries. With the opening of these four, we will be closer to our goal of 80 percent of our veterans being within a reasonable distance of a cemetery. The precise number will be 77 percent of veterans within reasonable distance of a State or national cemetery.
    Mr. Chairman, with these and other adjustments to the budget, we believe that we are delivering for fiscal year 2000 a budget that is workable, that will provide for continuing increase in access to health care for our veterans, that will continue to see to the maintenance of the specialty programs for which our veterans rely on VA, and know that VA can provide when other medical facilities may not always be there. We are providing the assurance that there will be improvements in the claims processing, not only as to time limits but as to accuracy, and providing the assurance that when their life is ended, veterans will be treated honorably and located in a cemetery within reasonable proximity of their families.
    All of these, we think, are worthy objectives. We seek your support of this, and we are ready for your questions.
    The CHAIRMAN. Thank you, Mr. Secretary.
    Let me remind members that we will follow the same format as we usually do. Those who were here when the gavel went down will be recognized alternating from side to side by seniority. Those that came in after the gavel will be recognized in the order that they came in.
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    I would now yield to Mr. Evans.
    Mr. EVANS. Thank you, Mr. Chairman.
    Mr. Secretary, in the first paragraph of your prepared statement, you report that the President's budget ''acknowledges the Nation's responsibility to provide high quality care and services. In short, we believe that the fiscal year 20000 budget provides better and more accessible service to more veterans.'' Yet earlier this year, there was a news article entitled ''Lack of funds prevents VA from delivering on promises.'' In that story, an official of one of the VA's premier medical centers bluntly states what too many veterans already know. He cautions that veterans seeking outpatient care may need to be patient; depending on demand, patients have to wait as long as 30 days or more to get an appointment with a primary care physician. If the number of veterans seeking treatment at the VA clinics exceeds their capacity, veterans may be referred to the private sector, which would then bill the VA for its services.
    Under the President's budget, how many fewer days will veterans need to wait to get an appointment with a primary care provider? How much will the wait for the veterans' outpatient care be reduced? Is the long waiting time today for outpatient and primary care consistent with the delivery of high-quality care?
    My point, Mr. Secretary, is this: The lack of funding already exists, preventing the VA from delivering on its promises to this Nation's veterans. The easy efficiencies have already been achieved, and this budget requests no more resources to provide veterans better access to improve VA services and no more resources for the new initiatives in the budget. This budget is not about ''Saving Private Ryan.'' It is about saving money, and I would like your response to those particular charges.
    Secretary WEST. Well, let me see if I can point out a couple of things, Congressman, and I accept your judgment and also the fact that you have a record of passionately supporting our veterans and of proper funding. But I think for fiscal year 1999 that any innovations, any savings, any, if you will, right-sizing that we have done is less driven by budget, which frankly I think the budget that this Congress approved last year for this current fiscal year was not only adequate, but we were able to do the things we needed to do, but is driven by the shift in our priorities from inpatient treatment to outpatient treatment and a number of other things.
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    I am not sure about the waiting days you have outlined. I will leave that to Dr. Kizer to address. But my belief is that in fiscal year 1999 under almost any measure of satisfactoriness of the rendering of medical care, whether it is by our own benchmarking or benchmarking by outside authorities, we have provided superb medical care.
    Those instances in which veterans have to wait long times for appointments are intolerable, and, yes, each instance that crops up is another marker for us to review what corrections need to be made. But I think our record for as much of fiscal year 1999 as we have been through is sustained not only by my own obvious willingness to stick up for our programs, but also by the fact that others who have evaluated them have said so.
    In terms of the ultimate question, whether under the fiscal year 2000 budget we can deliver quality health care with reasonable accessibility for veterans, I think we can. Of course, we are expecting savings. The chairman pointed that out as he addressed one part of our budget. We are expecting $1.4 billion in savings. That has to do with an assessment of how we operate, where we operate, and with what personnel we operate. But I think we will be able to do our job.
    Now, on the specific questions of delays, may I let Dr. Kizer have a chance to respond to that?
    Mr. EVANS. Yes, sir.
    Dr. KIZER. I would note that we recognize waiting times are a problem in some places. I think the specific statistic that you refer to is the time for a new appointment in primary care. The number that you cite is not consistent with, at least, my understanding of what occurs in most places regarding follow-up appointments, with some exceptions as far as some of the specialty clinics.
    There is no doubt that the system is stressed. Last year we had approximately 10 million more outpatient visits than we had 4 years ago. That is a huge increase and shift in care by anybody's standard. Indeed, it is unprecedented anywhere in American health care.
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    I would also note in the same vein that the number of patients with scheduled appointments who get in within 20 minutes of their scheduled time has increased by 50 percent in the last 4 years. Four years ago, about 40 percent of patients were getting in within 20 minutes of their scheduled time. Last year, this increased to two-thirds or 66 percent, which is still not adequate but it is certainly moving in the right direction.
    The last thing I would note in this regard is that we are undertaking a systemwide collaborative effort with the Institute for Health Care Improvement in Boston—I think you are familiar with that entity, Mr. Evans—to see what we can do to improve waits and delays for appointments. We do believe that many of the problems that we have in this regard are process problems that are not solely, or in many cases not even in large part, driven by budgetary issues, but instead the problem is in how we schedule and arrange for the flow of patients.
    Mr. EVANS. Thank you, Dr. Kizer.
    The CHAIRMAN. Mr. Evans, did you have more of your question that was not answered?
    Mr. EVANS. Just one quick question.
    The CHAIRMAN. Go ahead.
    Mr. EVANS. Thank you, Mr. Chairman.
    Is it a 20-minute waiting period that people have after waiting 30 days to get that appointment?
    Dr. KIZER. Yes, for the scheduled appointment. The specific index measure that is tracked is how long the patient waits when they have an appointment scheduled. Our goal is that within 20 minutes of the scheduled appointment time all patients will be seen by the caregiver.
    Mr. EVANS. Thank you, Mr. Chairman.
    The CHAIRMAN. The gentleman from Alabama, Mr. Everett, is recognized.
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    Mr. EVERETT. Thank you, Mr. Chairman. Good to see you, Mr. Secretary.
    Before I begin, let me mention something my colleague from Alabama, Mr. Callahan—who is on the Appropriations Committee, I would just add, incidentally—is concerned with the fact that about $1.5 million was included in the fiscal year 1998 budget for cemetery expansion in Mobile, and I have some questions I will submit for the record concerning that. He is a little concerned that there has been no movement on that.
    (See p. 205.)
    Mr. EVERETT. Mr. Secretary, as you know, my Subcommittee on Investigations and Oversight has been concerned with how well the VA spends its money from time to time. There are many ways we can commend the VA, and there are other ways that I feel like that we can take another look at saving money. I would particularly urge you to take a look at energy savings and performance contracts, which we have had one hearing on, which would save you $63 million a year, according to the Department of Energy estimates.
    Mr. Secretary, the VA's projected collection for fiscal year 1997, 1998, and the first quarter of 1999 had shortfalls of $28 million, $49 million, and $17 million, respectively. The planned goal for fiscal year 2000 is $749 million, a great escalation.
    How confident are you that that goal can be reached and that we are not talking about money that just won't be there?
    Secretary WEST. Congressman Everett, I think we have reasonable confidence. I think that we continue to refine our collection efforts. We continue to learn more each year in terms of the best way to do it. I think Dr. Kizer in a moment will mention some further refinements that we have underway. We are considering some recommendations to include a little bit more centralization of how we do it. So I believe that when we put an estimate in there and it comes from Dr. Kizer's folks, it is a realistic estimate.
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    Will it be a stretch? Will we have to work hard at making sure that we first of all record our charges correctly, that we bill properly, and that we then follow up properly? Yes. But I don't think that we are dealing in make-believe here, because if we don't have the money, we are the ones who end up stuck with the question of what we do about it. So that is a very important source of revenue. That is roughly three-quarters of a billion dollars that we are counting on. I don't think we put that number in there lightly.
    Mr. EVERETT. Dr. Kizer, before you answer, let me further this discussion by pointing out some other things. An April 1990 Coopers & Lybrand study of MCCR shows the following: Systemwide, VA identifies only 16 percent of its new patients having billable insurance while the private sector identifies 100 percent. Private sector clinicians and medical staff close treatment files within 5 days. It takes the VA 41 days to do so. Private industry takes an average of 9 days from the date of care to send a bill to payers while this process takes the VA 83 days. Industry collects $2 to $3 million per PTE while VA collects between only $150,000 to $200,000.
    The same study also states that the most prevalent revenue measure used by health care industry is days in accounts receivable. The industry average is 60 days while the VA's money is tied up for 244 days.
    Why would it take—Dr. Kizer, I will address it to you—the VA four times longer than it takes private industry? And also, if you would, address some of those other points that I brought out.
    Dr. KIZER. I think the most straightforward answer to your question is simply that it was never important until a year ago. It never mattered to anyone because the money was not something that made any difference to the system. So I think that is the straightforward answer as far as why those numbers are as bad, if you will, as they are.
    I would also note that the fact that you have those numbers—the fact that you can cite those statistics—is because I asked for the study and that we recognized that we were not performing well. We sought out expert help, identified where the problems were, and are taking corrective actions.
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    Indeed, I think Coopers & Lybrand also note in their study that we are being quite vigorous in our efforts to remedy those problems, and that if you took a snapshot today as opposed to a year ago, or so, when that study was done, you would find that there is significant improvement. But there is still substantial improvement that needs to occur. Let's not kid ourselves. Until a year ago, these funds didn't mean anything to the system. They were really on paper. They now make up part of our operating budget, and our managers have a whole different attitude about it. They have to learn some new skills—some new ways of doing things. They are learning that and better results are being achieved.
    Secretary WEST. If I might add, Congressman, you are right, and so is Coopers. We can't achieve the three-quarters of a billion operating the way they identify. As Dr. Kizer said, that is why we asked them to look at it to see if we could do the things we need to do. We don't expect to operate the way Coopers & Lybrand have done that. If we do, not only will we miss our target, but we will have lost the whole purpose of the study.
    Mr. EVERETT. Thank you, Mr. Secretary. In light of everything these studies tell us, I would like to ask you which of your medical care collection functions can be immediately improved through contracting out? I would like for you to take a look at that, and, Mr. Chairman, perhaps Secretary West could provide the committee with his recommendations within 3 months. Would that be enough time?
    Secretary WEST. Sure.
    Mr. EVERETT. Thank you, Mr. Secretary. Thank you, Dr. Kizer.
    The CHAIRMAN. Thank you, Mr. Everett.
    The gentleman from California, Mr. Filner, is recognized.
    Mr. FILNER. Thank you, Mr. Chairman. Just so I can structure some of my time, will we have an opportunity for a second round?
    The CHAIRMAN. Yes, sir.
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    Mr. FILNER. Thank you, Mr. Chairman.
    Secretary WEST. Would you like me to give shorter answers, Congressman?
    The CHAIRMAN. Always. If they are answered.
    Secretary WEST. Okay.
    Mr. FILNER. No. I just want more time for my questions.
    Thank you, Mr. Secretary, and all your colleagues with you. We know your commitment to our veterans and, of course, earlier to our active-duty personnel, and we appreciate your service. We know that operating within the context of an administration and a budget process, there are probably things that you would like to do that, by the process that is given to you, you can't. I don't think we as a committee or as a Congress are necessarily constrained by that internal situation because, as I look at the budget and as other people such as the Independent Budget folks have looked at it, there is a consensus that our commitment to veterans is not being kept in this budget. And I think we have an obligation as a committee and as a Congress to restructure priorities nationally to make sure that the programs that you administer are funded properly. I would hope that this committee accepts that responsibility, accepts that opportunity, and does the right thing for veterans. We can establish our own priorities in a budget, and we ought to do that.
    Saying that, we are going to, again, hear a presentation on what has been called the Independent Budget. Are you familiar with that?
    Secretary WEST. Yes, I am.
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    Mr. FILNER. Aside from the fact that you may have not been able to recommend an increased amount of dollars, do you have any problems with any of those recommendations?
    Secretary WEST. Congressman, I don't have any problem with the fact that a group of people who care deeply about our veterans, as do we all, have sat down and put their best brains to work and come up with what they think is a proper funding. But it does not represent my views, no.
    Mr. FILNER. Well, I am very impressed with the Independent Budget. I think, by and large, this committee ought to adopt it as a framework as opposed to your own recommendations. They find a little over a $3 billion shortfall, and I think that is an appropriate point of departure for this committee.
    Let me just try to highlight some of the areas to back that up, especially in the benefits area, but also, of course, in the health area.
    As I understand the budget, the backlog of cases that you spoke of and we hear from our constituents all the time ought to be better addressed. I look at the budget, and it looks like there are only 164 new positions. From the studies I have seen, it seems we ought to have 340 new adjudication positions to address the backlog of cases.
    We have heard horror stories of waiting times. People have, it looks like, not only many, many months but up to years of waiting for a decision. I think it is reasonable that veterans ought to have a decision within 90 days, and that ought to be our goal. And we can't do it with 164 new positions. A couple hundred more would bring us closer to that goal.
    We know—and you may be defensive about it, but there are decisions that are not being made accurately because they are overturned in other processes. In fact, more than one-third of the cases are being incorrectly decided. If I were in my former career as a college teacher, that wouldn't be a passing grade, in my opinion. And yet we only have nine new full-time employees to oversee the program that assures the quality of those decisions. Why not 50, as I think is recommended by other perspectives, so we can get that rate of failure down?
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    You don't underestimate that problem, I know, but you haven't put the dollars in to take care of it. Hepatitis C is not mentioned in the benefits side of the package. There is no additional funding for people who have been applying for compensation benefits as the results of being diagnosed, and even on the health side, the thing that bothers me the most—and I will come back to it if I have a chance in a second round—you say in your statement you are asking for $136 million more, and you have a whole lot of other things you are asking. I don't find that in the budget particularly. Where is that going to come from? If your health dollars are the same, where is this money coming from? Something has to give. And you are not clear about that, so it is not convincing that that money is going to be there or that we are not hurting something else.
    Can you just address that last point? There is no new money, so where are these programs that we all support, for hepatitis C, for homeless, for other things? I don't see any place where that funding is going to come from.
    Secretary WEST. To parse through it with you, obviously the easy answer is to say that if we are expecting three-quarters of a billion in collections, then $134 million out of that is easy to see. That doesn't completely address your point, Congressman, because there are so many other things that I think you would say we also have to look at.
    Mr. FILNER. But you can't rely on that, as we have seen.
    Secretary WEST. Oh, surely. Surely we can rely on enough of it to get——
    Mr. FILNER. Is that part of the budget process, those dollars?
    Secretary WEST. Well, we need your authorization to spend it. We are collecting it, but it is part of your authorization to us to spend it.
    Let me just say quickly, I take your point that a question, when we take slots from somewhere else, is are we harming something else, but I would surely ask you to let us address those two things separately. First of all, if we are putting 440 new positions into processing, that is a lot better than just 300, wherever they come from, whether they are new or not. And then the analysis is for the 200-plus that we are taking them from elsewhere in VBA, are we harming something there? But I must say——
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    Mr. FILNER. Well, that is the question.
    Secretary WEST. But I must say to you that I think our idea to add 400 into processing is better than the idea than to just add 300 into it because it will improve processing.
    Mr. FILNER. Yes, but the trade-off is as equally important.
    Secretary WEST. Yes.
    Mr. FILNER. We want to know what you are taking that from.
    Secretary WEST. Yes, and I think we have a good answer for you. If I can have a minute, I will let Joe Thompson address this.
    Mr. THOMPSON. Primarily, the folks that would be transferred into claims would come from two areas. One would be the home loan program; the other would be information technology. We are moving in a different direction in both of those areas. With the home loans, we are looking at a way to better administer our property management part of the business, and we are doing an A–76 study this year. And in information technology, we are, in fact, moving to where we are using more and more commercial products and doing more and more contracting out versus doing it all with in-house staff. So that is where we expect to gather most of the transfer into the claims process.
    The CHAIRMAN. The gentleman from Florida, Mr. Stearns, is recognized.


    Mr. STEARNS. Thank you, Mr. Chairman. And good morning, Mr. Secretary.
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    Let me just echo the comments of Mr. Evans when he says this budget is a house of cards. And, of course, Mr. Filner just told you that he doesn't believe the budget is really committed to serving veterans or their real needs.
    You mentioned earlier that you support Medicare subvention, but it is not in your budget. You mentioned you want to add 400 new employees, but your budget calls for cutting 7,000 jobs next year. You have been in office since January 1998. Let me just ask you, and if you would be courteous to answer this question yes or no. Have you or your staff given instructions at any time during your tenure to the effect that the VHA or VHA officials should not send you proposed reductions in force or staffing adjustments? In other words, have you instructed your staff not to propose staffing adjustments or reductions in force, yes or no?
    Secretary WEST. No. To the best of my knowledge, no. But I need to know what the basis for that question is, Congressman. Is there a suspicion that I have, that at some point that I have said that, that I have given that sort of general——
    Mr. STEARNS. Take a look at this graph.
    Secretary WEST. Because, I tell you, we are sure doing them. I mean, I am sure getting those proposals.
    Mr. STEARNS. No, no. Our graph shows, if you look at it, that prior Secretaries in 1996 had staff reductions and in 1997, but since you have been in, there have been no staff reductions.
    Secretary WEST. Well, that doesn't mean I haven't received the proposals. It may mean that I have asked for them to be better coordinated, that I have asked questions about them. I am not a rubber stamp.
    Mr. STEARNS. If you have been in office a year and you are proposing in your budget to save $1.4 billion by reducing 7,000 employees, and in one year you haven't reduced one person, how credible is to this committee that you are going to actually——
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    Secretary WEST. Well, is that true? Is that a true representation that we haven't reduced any people in one year? I mean, maybe we haven't RIF'd anybody, but the staffing has certainly gone down, Congressman. I am sorry, but I can't accept that.
    First of all, no, I have given no such instructions. Secondly, I think we have continued to reduce substantially in the year that I have been there. And, thirdly, the proposals for continued reduction are still coming forward. If there is anything credible about what is happening in our Department, it is that the continued process towards reductions continues where they are reasonable and where they contribute to the mission.
    Mr. STEARNS. Have you signed off on any RIFs since you have been in office for one year?
    Secretary WEST. I am not partial to RIFs.
    Mr. STEARNS. Not partial to RIFs——
    Secretary WEST. I may have not—but that only would mean——
    Mr. STEARNS. I am just asking you the question. Have you signed any——
    Secretary WEST. Congressman, I don't—I have seen several proposals. I suspect I may have or I may have not.
    Mr. STEARNS. You should know. Yes or no?
    Secretary WEST. No, no, no. Here is the point, Congressman. What we have done is reductions. RIFs, which in my mind are an effort to lay people off without keeping their jobs, are different from buyouts and from other efforts at reductions.
    Mr. STEARNS. So have you signed any personnel——
    Secretary WEST. I will look and find it and give you the information.
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    Mr. STEARNS. Okay. See, the——
    Secretary WEST. But can I say something else?
    Mr. STEARNS. Oh, sure.
    Secretary WEST. Nor will I, after this conversation, feel more obliged to sign off on the first one that comes before me. I insist, in my prerogative and responsibility as Secretary, to look and make sure that what we are doing is in the best interest of our veterans and of our ability to do our jobs.
    Mr. STEARNS. All of us have the same objective. But our problem is when members on both sides of this aisle look at this budget, I mean, smoke and mirrors is too light a term for it. Mr. Evans has pointed out it is a house of cards. And Mr. Everett has pointed out that you expect to get $749 million from medical collections. That is not going to happen. You are saying you are going to cut 7,000 jobs. You have been in office one year, and we don't see any reductions.
    Secretary WEST. Wrong. That is wrong, Congressman. I just said that is wrong. There have been reductions——
    Mr. STEARNS. In RIFs——
    Secretary WEST. Substantial reductions.
    Mr. STEARNS. Personnel RIFs.
    Secretary WEST. The difference, the effect on our budget is the same. If we reduce in whatever manner, the costs go down, the savings exist. And, in fact, if we can do it that way, it is more humane. Employees are not trash just to be thrown away when we are through with them.
    Mr. STEARNS. Well, I think the facts are you haven't approved a single reduction in force at any medical center during your tenure, while your previous VA Secretaries have approved reductions in 1997 and 1996 and I would just encourage you——
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    Secretary WEST. I don't think that is true, Congressman.
    Mr. STEARNS. Well, then, what you have to do is say that the staff which provided me this information is patently false.
    Secretary WEST. No. What we will do is we will provide you the information right away, and if it turns out you are right, then I apologize. If it turns out you are wrong, you will have the correct information.
    Mr. STEARNS. The larger issue here is that this committee, veterans, people who are interested in the veterans, Democrats and Republicans, independent, just don't find the budget credible, whether it is medical collection or reduction in force or talking about your desire to have Medicare subvention but it isn't in the budget. We are just having a credibility problem, Mr. Secretary.
    I don't know what to tell you other than we just got to go back and do this budget in a bipartisan way all over again. And yet your job is to really present us with a credible budget.
    I think my point is made, and I don't mean to emphasize it too much. But I think the frustration on both sides is that this budget is not credible.
    Thank you, Mr. Chairman.
    Secretary WEST. Mr. Chairman, may I make one further comment? If there is anything that I expect to be attacked by, it is not that we are not reducing fast enough.
    Mr. STEARNS. Reducing what?
    Secretary WEST. Fast enough.
    Mr. STEARNS. The figures show you are not reducing anything.
    Secretary WEST. I hear you. I hear you.
    The CHAIRMAN. If you would, then, respond for the record.
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    Secretary WEST. Dr. Kizer wants to add something.
    Dr. KIZER. I would just note for the record that last year our staffing did drop by about 3,600 FTE.
    Mr. STEARNS. Now, is this a RIF, a personnel RIF that the Secretary signed?
    Dr. KIZER. I don't know what the composition of that is. I just know the figures from 1998—the drop was over 3,600 FTE. I would have to go back and look as well.

    (Subsequently, the Department of Veterans Affairs provided the following information:)
    The effective FTE reduction in VHA in 1998 was 3,606 FTE. The net employment reduction of 1,367 in 1998 (186,135 in 1997 compared to 184,768 in 1998), is the difference between the actual reduction of 3,606 FTE being offset by the transfer of 2,239 FTE from the old MCCR account into Medical Care. The Balanced Budget Act of 1997, Pubic Law 105–33, shifted the retention of medical collections along with the administration expense (2,239 FTE) to the Medical Care appropriation starting in 1998.

    Mr. STEARNS. Well, we would just like to verify that because our staff is not showing anything in terms of this.
    The CHAIRMAN. The gentleman from Pennsylvania, Mr. Doyle, is recognized.

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    Mr. DOYLE. Thank you very much, Mr. Chairman.
    Mr. Chairman, I have a statement that in the interest of time, I would like to submit.
    The CHAIRMAN. Mr. Doyle, and without objection, all statements will appear in the record if members have any. And if you have any written questions you want to submit to the Secretary, they will be accepted.

    Mr. DOYLE. Thank you.
    [The prepared statement of Congressman Doyle appears on p. 70.]
    [The prepared statement of Congressman McKeon appears on p. 72.]
    [The prepared statement of Congresswoman Brown appears on p. 73.]
    Mr. DOYLE. Mr. Secretary, welcome. I guess you can tell by the questioning today that members of the committee on both sides of the aisle have serious concerns about this budget, and when we look at the increased cost of just to maintain the existing programs we have in this budget, it is going to necessitate some $870 million of increase, and to fund the new initiatives in this budget, over $500 million of new funds are needed.
    It seems that there is a shortfall in this budget of almost $1.5 billion, which is planned to be met by these management efficiencies that you talk about. You expect to get some $1.4 billion from that, and then you are increasing your medical collections by $124 million. Yet we know last year your goal, you fell about $50 million short of collecting what you projected last year.
    We have great concerns that when these goals aren't met and these efficiencies may not bring in the type of projections that you have in this budget, those costs have to be cut somewhere in that budget. You have to go to plan B when those numbers don't materialize, and that many times that directly affects veterans.
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    This is a very restricted medical budget you have here, and I see that you have made a decision to expand service to priority 7 veterans. A lot of us are concerned that priority 1, 2, and 3 veterans are experiencing long waiting lists. I know from the area that I am from, I have talked to people in our facilities, some veterans waiting up to 4 months to get an appointment. And I just wonder, number one, have you really got a firm handle on what it would cost to treat priority 7 vets, what that is going to cost you? And do you still stand behind the decision to enroll priority 7 vets when we have so many problems just meeting the needs of much higher priority veterans?
    Secretary WEST. I think you raise a good point, Congressman, as has everyone. We made the decision on priority 7's, and Dr. Kizer may want to add a comment. We make that decision on an annual basis. We made that decision for fiscal year 1999. When we have more data, I guess this summer, we will know better whether we will continue, whether we will do it again, priority 7's in fiscal year 2000.
    So if you ask me if I stand by our decision, yes, it was a decision for fiscal year 1999, but I think you are also asking me do I predict that we will do it again in fiscal year 2000. I think Dr. Kizer doesn't have the information yet to make his recommendation to me and won't until some time this summer.
    Mr. DOYLE. I would like you to expand a little bit further, too, on where you hope to gain this $1.4 billion in these efficiencies. You talk about a reduction of the workforce of some 7,000 employees, and the concern a lot of us have with the facilities, a lot of those reductions are coming on the front lines, the people that are directly serving veterans.
    I have watched consolidations take place, and it seems like the people at the top of those consolidations—you know, when you merge a service division and there used to be three service chiefs, and now there is one. Those two other chiefs don't disappear. They are somehow still in the system, but a lot of the front-line people, the nurses, the people that are providing the more direct care to the veterans, they are swamped. I mean, I don't know how some of them are performing their jobs, quite frankly. I think we are not only putting veterans at risk in some instances, but these employees, too, that are being asked to just take on incredible workloads.
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    How are we going to beef up the front lines? You know, I hear this talk about how many people you have RIF'd or didn't RIF. I am not for a lot of reductions in the workforce. I think we need to increase employment at the front lines of serving veterans and do a much better job there. And many of us are prepared to fight for more money for you to do that. I know that you represent the administration, and this is the President's request, and you are here to defend that request. But I can tell you many in the President's party would like to see more money, guaranteed real dollars in this budget, to meet some of these very good initiatives that we all support. And we are concerned that when you don't meet these goals, they are going to go by the wayside.
    I hope that these reductions that you are looking at, these 7,000 positions, aren't coming from the front lines. I would like to know where you see these reductions coming from.
    Secretary WEST. I am not sure we have those plans formed yet. Do we?
    Dr. KIZER. You asked multiple questions. I am not sure which one to start with first, but let me perhaps address the one that you started with on the priority 7's.
    What has been made clear to everyone throughout is that this was a one-year decision for fiscal year 1999 and that it would be revisited this summer for the year 2000. In fact, Public Law 104–262 requires that this determination be made annually.
    There is some absolutely critical information that we need to gain during this first year of enrollment because it is not only a matter of the increased number of users, but also, what services do these veterans use. We know already, for example, that the costs of the new users is about half or less than existing users, which is not altogether surprising since we are dealing with marginal and variable costs here. Also, the other side of the coin, what revenues do they bring with them. It is from the priority 7 veterans that we get the MCCF collections, which have already been talked about here by several members. We have to review the combination of those three variables—numbers, utilization, and revenues that they bring with them. We are trying to get a better handle on this experience this year and we just don't have all that information yet. We know some bits of it, but as the year evolves, we will know more. And by the late spring and summer, we will have enough information and will make the determination at that time.
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    Shifting gears to some of the things you asked on the management efficiencies, it is clear in my mind that the budget sets out a very ambitious goal. One of the areas that we are focusing a very concerted effort on this year is the procurement and inventory side, things that would be largely invisible to patients as well as caregivers. We are looking at how we manage the $6 billion worth of supplies and materials that we need, and we do believe that there are substantial efficiencies that can be achieved through better materials management.
    I would not profess, though, that better materials measurement can make up the entire amount by any means, but we do believe there are substantial savings that can be achieved if the plans that we have put in effect now come to fruition over the next year.
    Mr. DOYLE. I see my time is up, Mr. Chairman. I will wait for the second round.
    The CHAIRMAN. We will get back to you, Mr. Doyle.
    The gentleman from New York, Mr. Quinn.


    Mr. QUINN. Thank you, Mr. Chairman.
    Mr. Secretary, welcome. I am sorry I had to step out for a minute, but we have a lot of things going on here today in and around the Hill.
    I have a couple of specific questions as to your testimony, but I first want to more than anything inform you of some activities of the Benefits Subcommittee. Of course, Mr. Filner and I—in the subcommittee meetings, we say ''co-chair,'' but I guess we really don't. We work very closely together on the Subcommittee on Benefits. In fact, just this past week, we met with Mr. Principi. Both of us and our staff met with him and representatives of the Commission to talk about some of the recommendations that they have made, and we are encouraged by some of the suggestions in the report and expect to follow up with some legislation that we will welcome your input on during the course of the year and some of the things Dr. Kizer has talked about even this morning relevant to the report.
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    I also want to let you know that I think the week after next or the first part of March I will be traveling over to see Under Secretary Joe, a fellow New Yorker somewhere in his past. I have done that once or twice already to meet with the staff and find out what is going on. We will be doing that again in the next week or two. I think you have been kind enough, Mr. Thompson, to set that up, and we appreciate that. We will keep you informed of what we see and what we hear and what we might suggest. So thanks for allowing us to do that.
    In terms of your testimony this morning, I want to deal with two parts: one is the education component on the Benefits Subcommittee, and then the comp and pension claims. This goes back a little bit, too, to Mr. Principi's report. As the Secretary of Army, of course, your experience there and now at the VA, just your thoughts on the current Montgomery GI bill in terms of its use as a recruiting tool and usefulness to keep our enlisted people in the service. Can you comment just briefly for a minute or two on that?
    Secretary WEST. Yes, sir, I can. I don't have numbers in my head, but, frankly, during my experience we relied on it heavily. We thought it was a very useful tool.
    In fact, as I recall, in the 1993, 1994, 1995 time frame we thought it was so useful we included it in the Army advertisements that show up on Super Bowl Sunday or whenever. We found that education was a powerful inducement for our youngsters, surely. We would prefer to be able to say to you that most of them enlist because they are motivated by patriotism and a desire to defend their country. But at the age of 17 and 18, when they are finishing high school, they are trying to figure out what they are going to do with themselves.
    Mr. QUINN. Do you think a return to a World War II-like GI bill, which is what the Commission suggested, will help or hinder in the long run?
    Secretary WEST. It is hard to say at the moment. I haven't read the report. Even though you have asked me for my personal experience, I am going to be required to submit a report and comment jointly with DOD. I don't want to get out ahead of that.
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    Mr. QUINN. Sure.
    Secretary WEST. But my instinct is that for the larger underlying question education has always been an important selling factor—and the opportunity to get it, to those who decide to seek a career or some time in uniform. It may be one of the largest. It means that they will not only serve for however long they are in, but, when they leave, they will be able to do something more with their lives than they could do when they entered.
    Mr. QUINN. Thank you. And I think that is a huge issue for this committee, Mr. Chairman. As we talk about education in and around the Hill in general, I want to make certain and with your help we all can make certain that education for our veterans and the members of the service isn't given short shrift here, that while the rest of the country and the administration and this building, the Congress and the Senate, talk about education, education, how important it is, and we see all kinds of visits to schools at all levels that all of us make, I haven't seen too many visits to talk about education as it relates to our veterans. And I hope we can raise that discussion all of us together in the next few months.
    Quickly, while I still have some time, let me move to the comp and pension. The budget, certainly when we talk about adjudicating claims in a timely fashion, we have not been able to do that. We know all that. But you suggest an additional 440 FTEs. Let me just get your opinion today about our ability, your ability to train those 440 additional. We have had some discussions that even existing staff aren't trained properly to do what needs to be done, as Mr. Doyle points out. I, too, am not particularly proud talking about RIFs and how many people we are going to cut unless we know it is not going to hurt us. But not to follow up on Mike's question because I agree with him, but to talk about the training if we get the 440 additional, do you think we are okay with that? Are you going to be in a good spot?
    Secretary WEST. Well, it is going to be a big deal. I think the training is the heart of it. When we start to use people differently, which is what this is all about, then how well trained they are is going to make all the difference in the world.
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    If I could, I would like to have the Under Secretary Joe Thompson say a word about that?
    Mr. THOMPSON. Training is the key for us.
    Mr. QUINN. I agree.
    Mr. THOMPSON. We do make too many mistakes in adjudicating claims, and one of the primary causes of that is that folks are not as well trained as they should be. We have devoted a fair amount of money in this year's budget and we have a significant amount for next year to develop computer-based instruction for claims examiners, as well as we have a number of folks here in Washington developing packages that we expect to have out and ready. And the goal is, if we are given this opportunity to bring on additional staff, we want to make sure they are equipped, that when they make a decision, they make the right one every time. So training is the key for us. I promise you that if we cannot train the folks, I will not bring them on board. I would rather not hire them than bring them on and not be able to adequately train them.
    Mr. QUINN. Precisely my point. It is great news that they are in there, and we don't want to this to be a ''use them or lose them'' situation. But they are going to cause us more harm than good if they are put in positions that they are not trained and ready to do the job. Maybe when I visit next week or the week after, Joe, and, Mr. Secretary, I would say to you, if there is anything that we can do here from the committee or the Congress to help you get that training, let us know and we will try to move it along for you.
    Thank you, Mr. Chairman. I yield back.
    The CHAIRMAN. The gentleman from Minnesota, Mr. Peterson, is recognized.

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    Mr. PETERSON. Thank you, Mr. Chairman, and, Mr. Secretary and your colleagues, we appreciate your being with us today.
    I guess I share the frustrations of some of the other members around here with this budget, and I know that you are doing the best you can with what the reality of the situation is. And I think we ought to all step back a little bit and briefly remember how we got into this situation.
    Some of us put a budget forward in 1995 that we think would have kept us out of this situation, and we finally passed a building in 1997, which I very much support and want to maintain, that put in some tough spending caps. And now we are bearing the fruits of that budget. I believe the spending caps are $30 billion less this year than they were last year. So you don't have to be a rocket scientist to figure out what kind of situation that puts us in.
    I serve on the Agriculture Committee. We have got shortages there of $1 billion or $2 billion that we absolutely need to address. You know, we have got needs in the military that I think all of you understand. And we are going to be confronted here shortly with a decision about what we are going to do with these caps and whether we are going to respond.
    So I hope that everybody understands that the Secretary I don't believe should be blamed for this. I believe that the administration and the President did the right thing by sticking with the caps, and now we have to decide, all of us collectively, whether we are going to do something about this. And I just hope that we all, you know, don't get mired down in partisanship and work together to figure out how to get through this, but I also hope that we are careful about what we do because I for one believe that we ought to take—that the Social Security trust fund ought to be set off completely by itself and we ought not to be using that money for anything. And if we are going to accomplish that, it is going to be very difficult for us to deal with these spending priorities that we want to deal with if we are going to start giving up revenues.
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    So I just hope everybody keeps in perspective how we got here and that we don't get ourselves in a situation where we can't work through this. We are going to be confronting this shortly.
    I guess I have a question either to you or Dr. Kizer, Mr. Secretary. Out in my area—you know, you are moving, as you said, to more of an outpatient type situation which we appreciate out in my area because it is long ways between anything, which it is in a lot of places in the country. But I am concerned, I guess, if we keep this lid on things and keep trying to make everything work, how we are in the long term going to provide that outpatient service and still maintain the bricks and mortar. Are we going to come to a point where this is going to get to be a problem? Nobody wants to talk about it, but up in my area where we are trying to do this reorganization and we have all these hundreds of miles between everything, now I understand there is a shortfall in the Fargo hospital that they are trying to make up from the other hospitals. We are having a hard enough time just keeping our things together with the budget that we have got.
    So I am concerned how this whole thing is going to work. I mean, I understand that you legitimately think that you can squeeze this savings out, but the reality is that I have got this one hospital that there has been a good part of it that has been sitting empty because they don't have the resources to staff it and to keep it open, and that same hospital has a great big waiting list of people that want to get in there. And the thing is sitting empty, and so we are going to try to take some money from other places.
    I don't know how we are going to get through this thing unless we address what I talked about earlier. And I don't know exactly what my question is, but I guess maybe all I am asking you to do is—I haven't really been able to look into this situation with what is going on in Fargo and in that region. Maybe rather than taking up the time of the committee if you could, Dr. Kizer, or whoever, take a look at that and give me an analysis of what is happening there and what you think the impact is going to be on the other hospitals.
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    Secretary WEST. If I can make two points——
    Mr. PETERSON. I think you have been up in that area.
    Secretary WEST. My Deputy Secretary, Hershel Gober, is going out next week specifically to look at that situation. On the first point, yes, sir, it is true that one of the ways we bring health care closer to veterans, 89 new outpatient clinics, is that we use some of the savings from the reduction in the inpatient treatment. That is part of the shift, the shift from one kind of treatment to another. Whether it leads to further considerations down the pike, we are constantly trying to evaluate what we are doing. But it is true that as we carry the service out to veterans, then that will mean a shift of resources from larger bricks-and-mortar places to outpatient clinics. I don't think that is a completely false statement about what you are doing, is it?
    Dr. KIZER. No. It concerns me that you don't want to talk about—not referring necessarily to you, Congressman—this notion that we have to do something about all the bricks and mortar we have, because the reality is that we can do a better job, we can provide more health care, we can take care of more individuals by shifting how we take care or—or how we provide care.
    Last year we took care of 520,000 more veterans, more than half a million more persons who actually got care than 4 years ago by some of the changes that we are doing in how we provide care. It is expensive to maintain hospitals that today we may not need, and in the future, we may need less because of the changes that are going on in the technology and how health care can be provided.
    We have to get beyond the notion that hospitals are the only way to provide health care. Today we can do more. There are so many other options and ways to provide health care that we have to look at the total continuum of care—the whole gamut of care. We need to have that discussion.
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    The CHAIRMAN. The gentleman from Mississippi, Mr. Shows, is recognized. No questions?
    Mr. SHOWS. No questions.
    The CHAIRMAN. Dr. Snyder from Arkansas.


    Mr. SNYDER. Thank you, Mr. Chairman. Thank you, Mr. Secretary, for being here. I just have one comment.
    In the first week of December with four other members of the National Security Committee, I visited one of our American cemeteries in the Ardennes Forest in Belgium, and it was the only person I ever talked to, when I asked them, you know, how is your funding, and he said it was fine for the cemeteries, which is probably good since they don't have a whole lot of constituents to advocate on their behalf. It was a very wonderful visit there, very respectful, and I appreciate the efforts you all have put into maintaining those cemeteries overseas for our American troops.
    Dr. Kizer, would you talk for me please about the 30/20/10 proposal? When I was first beginning on this committee in 1997, we had those proposals. You make reference to it, Mr. Secretary, in your statement. But would you give me a year-by-year—in 1997, for the fiscal year, how did we do in fiscal year 1998? How did we do in fiscal year 1999? And then how do you see—I don't know how you have your numbers here, the 30/20/10 over what period? Could you review that whole thing?
    Dr. KIZER. Sure. As I have said before, people have particularly fixated on the 30/20/10, but those three indices are part of ten indices that are our goals for the system—our targets for the 5-year period.
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    Mr. SNYDER. If I might interrupt, I don't think we are fixated on it. You spent a lot of time discussing those in 1997, and it was a big part of how you are going to find money that is scarce.
    Dr. KIZER. Well, let me answer you quite directly——
    Mr. SNYDER. Very quickly, if you have the numbers.
    Dr. KIZER. Okay. Compared to fiscal year 1997, in 1998 the reduction in cost per individual treated was about 10.3 percent. On the 5-year goal to reduce the expenditure per patient by 30 percent, we achieved over 1/3 of that in the first year. Over a 4-year period, there was an 18 percent drop. Specifically on the 20 percent, we were up over 9 percent, so from 1997 to 1998 we achieved almost half of that 20 percent goal. And for the 10 percent goal which has to do with the percent of our funds that come from non-appropriated sources by the year 2002, we were about 4.3 percent, as I recall in fiscal year 1998.
    Mr. SNYDER. I think it would be helpful to me if you would respond in writing for the record with maybe a chart analysis of that evaluation.

    (Subsequently, the Department of Veterans Affairs provided the following information:)

Strip offset folios 1 to 4 here
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Makes pp. 22 to 25

    Secretary WEST. Can I say that we won't get to the final goal without Medicare subvention?
    Mr. SNYDER. I understand, and I agree with you on that. The issue that was brought up earlier with regard to the waiting times when—you know, I talked with people who work in VA hospitals in early 1997, they were very concerned that the goal of increasing the number of veterans was going to cause problems for them to provide the services. And part of your defense of the waiting lines was the number of additional veterans that you have treated in the last year, the additional numbers, which I think is great in terms of providing care. But it is also a way of saying that the predictions that were made 2 years ago were true, that we did not have the resources to do as good a job as we would have liked to have done with those additional veterans we bring on board if we are using that as a defense for our inability to get the waiting times down at the clinics.
    Do you have any thoughts there?
    Dr. KIZER. I think that we are making progress on our waiting times. When I came into the system, as I recall, one of the biggest complaints then were the excessive waiting times. So I don't think we should assume that 4 years ago before we started these changes, everything was fine and that it has deteriorated. In fact, if you actually look at the metrics, there has been significant improvement.
    Do we have a ways to go and is there further improvement that needs to be done? Absolutely. And as I mentioned before, we are taking some very specific steps to move in that direction.
    Mr. SNYDER. My experience as a family doctor is that no matter what level of medical care we all get, we want a little bit more. If it is a $10 copay, we want it to be $9. If the waiting time was 3 days, we want it to be 2 days. And I think that is a challenge. I think your waiting time numbers are getting up a little bit.
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    The final question, Dr. Kizer, with regard to hepatitis C, I had a friend of mine who was well and got sick and 2 weeks later was dead and did know that he had hepatitis C. That happened just a few months ago, and it really brought home that issue.
    Do you foresee that we have a potential time bomb sitting out there? Some of those numbers I see on some of the surveys you have done of veterans with 18 to 20 percent positive hepatitis C on the screens. I notice you have added extra money for hepatitis C. What do you see as years go by? Do you anticipate that that number will have to escalate as the hepatitis C kicks in with some of these people? Or how do you see that at this point?
    Dr. KIZER. I think hepatitis C is a much larger problem than is generally recognized, and it is not only going to be a larger problem for veterans. We happen to have data that shows what the prevalence is in some of our populations. We are expanding that data to present a more complete picture.
    I think one of the real concerns I have as a public health-oriented person is that we don't know very much about hepatitis C in the general population. There is an emerging database from inner-city populations and underserved populations that the infection rates there may be as high as they are in the veteran population, in the 12, 15, 20 percent range. Indeed, we have data from one of our domiciliaries that over 40 percent of individuals are infected.
    So we are very early, in my judgment, in the recognition and the understanding of the epidemiology of this disease. That is not surprising since the testing ability is fairly recent. I believe that this is going to be a much larger problem for the general population, as well as for veterans, and that we are only at the beginning of the epidemic. And I would hope that our experience with HIV and other diseases in the past would orient us to take a very vigorous and active approach to this early on.
    Mr. SNYDER. Thank you, Mr. Secretary. Thank you, Dr. Kizer.
    The CHAIRMAN. The gentleman from Texas, Mr. Reyes.
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    Mr. REYES. Thank you, Mr. Chairman.


    Mr. Secretary, good to see you again, and I wanted to first thank you because I represent a district that has about 60,000 veterans that live there, and as we all know that serve on this committee, veterans are very much concerned about the issues that you are hearing here today and you have heard before in previous opportunities to come before the committee.
    I do want to thank you for sending Deputy Secretary Gober to our veterans' town hall meeting last August, and I know that you weren't able to make it yourself, but I would hope that you can make it this August. We had a turnout of over 500 veterans at the town hall meeting, and it was a very successful meeting because Secretary Gober, as you know, is a straight shooter, and he explained to us some of the very things that Dr. Kizer is talking about today and all of you have talked to us about both in the hearing and in private about thinking outside the box and the fact that bricks and mortar take a lot of money to sustain from the budget.
    So some of the things that I think are critical that we speak about and that we inform our veterans of are some of the changing programs of hopefully giving them better service, a higher quality of service, and more timeliness in providing that service. And one of the ways that I believe we are going towards that is by referring veterans to medical facilities within the community and not necessarily restricting it in the traditional sense to the facilities that are there.
    Having said that, I am always concerned when I heard—I believe it was Mr. Thompson talk about the A–76 program and contracting out. I am always concerned when I hear those things because, in my experience in the Border Patrol, those things didn't always save money, and those things didn't always provide better service, more timely service, and in a more efficient or effective way. So I would ask that as you go through these A–76 studies and the contracting out of services, first, do you keep a record of those studies? And is that available to us so that we could review them? I personally am very interested in that, and I would want to—although I am from Texas and not Missouri, I still like to see it to believe it.
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    Secretary WEST. I don't think an A–76 is any kind of protected document. I think it is available to you as soon as we have it.
    Let me say something about this particular one to which you referred, Congressman. This should not—in fact, I think it won't—affect any benefit program. This has to do with something that, frankly, we don't necessarily have the best expertise at, we think. Part of the A–76 is to determine whether that is true. This has to do with disposing of properties. So I don't think it affects any delivery of services or benefits. It is a straight question of can it be done better one way or another, to address that question you raise, in terms of results and also cost.
    Do you want to say something?
    Mr. THOMPSON. That is quite correct. This is not a direct service to veterans. It is simply when we have taken properties back in foreclosure, how best do you dispose of them, and the study is to determine whether VA, whether our costs can be improved upon by some other third party who can do it faster and cheaper. But it won't impact veterans in any way, regardless of whether we do it in-house or externally.
    Secretary WEST. But we are happy to make the study available to you once it is done. I don't think we have even started that process yet. Or have we? Just started it?
    Mr. THOMPSON. We will let the contract within a month.
    Mr. REYES. All right. And I would be interested in getting anything related to the contracting out or the A–76 studies.
    I want to switch quickly to a couple of other things that I am concerned about. As you mentioned yourself, Mr. Secretary, with 550,000 veterans dying every year, we have an aging veteran population, and that requires, I think, some special transition programs to provide for them. Veterans' home health care programs, programs that provide them nursing care, and those kinds of things are very important, and the thing that I think we are most concerned about, at least that I have heard in the district and that I want you to comment on, is why is it that we persist in having third-party payers as part of the funding mechanism.
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    I think we have an obligation to our veterans to provide up front the budget that will take care of all our veterans, and we should not rely—because of all the things you have already heard, we should not rely on third-party payers when we know that inevitably there is a shortfall there. So if you can comment on those two areas, veterans' home health care and also why is that we use this technique of not fully funding a veterans' health program? And then if we get third-party money in, you can always return it or keep it in abeyance for an aging veteran population.
    Thank you.
    Secretary WEST. My instinct is that we don't ask, in terms of the third-party payment, what any other health provider would ask. We don't ask anything different, and in some respects, if we are going to be able to provide this service to veterans, including those who have no third-party access, we actually wouldn't be, I guess, good stewards if we didn't seek that third-party payment.
    I understand your point, which is forget that, every veteran has served and has built up this entitlement to have the country look after them. But we don't even treat every veteran in our hospitals. You have only 3.5 million, I think, that are getting health care out of some 26 million veterans, more than half who have served in the history of the country still living.
    So I understand your question and your philosophy, but I am not troubled by seeking recovery of third-party payments. I think it is simply part of good stewardship.
    Do you want to comment?
    Dr. KIZER. There are a couple of things I would add. One of the reasons that we use non-VA sources is we just don't provide access in some places, and we spend about $1 billion a year on fee-basis care simply because there are veterans who we care for when they are near our facilities, but when they are some place where they don't have access to VA care we provide it on a fee basis.
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    In other cases, for example, home care—you specifically mentioned that—we have 71 home care programs right now. But the type of home care that we offer is quite different than what is available commercially in that we provide a much more sophisticated level of home care. Indeed, we call it home-based primary care. It is also on a much longer-term basis. Frankly, it is a way of providing long-term care in the home for the veteran. We have expanded that. I think last year we expanded by almost 20 percent the number of patients who were taken care of by that. But we are contracting with other home care providers for the more short-term post-acute care that is typically provided, say, under the Medicare program or commercially available.
    Secretary WEST. The only other distinction that might be useful, Congressman—and maybe I should have said this—we, of course, don't collect third-party payments for service-connected disabilities. This is only for non-service-connected.
    Mr. REYES. Well, I am only concerned in that there is always a shortfall, and we ought to just get beyond that and take care of the veterans flat out and not depend on third party to continue this myth of a collection to include it in the budget like this.
    Secretary WEST. You mentioned the shortfall, but, you know, in the last recorded time—what was our percentage? I mean, we collect—we may have missed our target in the past, but we are well above 90 percent. What did you say it was?
    Dr. KIZER. We were 6 percent short of our target in fiscal year 1998. In other words, we collected 94 percent of our target last year. The year before, as I recall, we collected about 91 percent. Again, this is something that only had relevance to us in the last year. Prior to a year ago, a little over a year ago now, we couldn't use these funds, so it was, in essence, meaningless for the system to put the sort of effort into it that is now occurring. During the last 2 months of fiscal year 1998, we actually exceeded the monthly targets.
    So we are moving in the right direction. There is still room for progress, but I wouldn't ignore the fact that in the last 2 years we have exceeded 90 percent of our target, and almost 95 percent last year.
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    Secretary WEST. More significantly, we are determined to make our target. But 95 percent of three-quarters of a billion dollars is a lot of money. It is worth going after.
    The CHAIRMAN. Mr. Reyes, I think you raise a valid point. I think before, as you are well aware, this money went straight to the Treasury. When we fought to allow the VA to keep that, we envisioned that to be bonus monies, not monies to offset within their budget. Anyway, thank you, Mr. Secretary.
    The gentle lady from Nevada, Ms. Berkley.


    Ms. BERKLEY. Thank you, Mr. Chairman. Mr. Secretary, I have never had the opportunity to meet with you before today, but I have been very impressed with what I have heard, and I can see that you share the same concerns that I do regarding our veterans and the need to help those that saved us at a time of critical need in this country.
    I would like to share with you some of the issues in my district and tell you something about my district that I represent. To give you some idea how important veterans' issues are to the State of Nevada, I think it is instructive to note that although Nevada only has two Representatives in Congress, we both sit on this committee.
    I have the fastest growing district in the United States. I represent Las Vegas. I have the fastest growing senior population, and I have the fastest growing veterans population in the United States. I spend a great deal of time with my veterans, and they have made certain that they have adopted me and made sure that I know what their issues are and how important and serious they are.
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    I have brand-new medical facilities in Las Vegas. We have got brand-new equipment. We don't have enough personnel. We don't have enough doctors and nurses to care for the number of veterans that we have pouring into southern Nevada. And I have 5,000 people pouring into southern Nevada every month.
    I don't have any technicians to operate that wonderful equipment, so oftentimes they sit idle when the needs are there. If a veteran has a problem after 5 o'clock, the only voice they hear is that on an answering machine. There is nobody to address their problem. If somebody gets sick or needs help after 5 o'clock on Friday, they can't get a hold of anyone until 8 o'clock Monday morning.
    In May, I met with a group of veterans that came to my office to share with me many of their experiences. Perhaps the most poignant was a gentleman that spoke to me about finding a lump and going to the VA clinic to have a biopsy and being told that he could not be seen until September. And I know Mr. Evans speaks of a 30-day wait. I am speaking of a 5-month wait.
    Now, when I had a lump, I was able to see my doctor that very same day and knew within 48 hours what my diagnosis was. I can tell you that that 48 hours was the most horrific that I have ever experienced. I can only imagine what it is like waiting 5 months to see if that lump is benign or malignant and seeing your life and your loved ones in front of you waiting for that. That is something that no American should have to experience, least of all a veteran who has sacrificed so much for this country.
    I receive a lot of complaints from the doctors and nurses that staff my VA clinic, that when they complain about the shortage of doctors and nurses and personnel and technicians, that there is hostility that develops in the administration and that they are retaliated against for bringing these problems to the attention of those running the VA clinic. And I think that is a very serious concern because I admire anybody that could stand up and speak out for those that have no voice. That should never happen.
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    Nevada has the fourth highest remand rate in the United States, which leads me to believe we don't have enough people processing these claims.
    I overheard—that is one of the beauties of being last in seniority, is you get to hear everybody else. I don't know what that little repartee between you and Mr. Stearns was about. I suspect there are some underlying currents there. But I can tell you that my experience is not cutting, although I admire anybody in your position that can cut positions and save money. But my experience in my own district is we have a desperate need for more personnel in almost every area: processing claims, seeing our veterans, providing the adequate, necessary benefits, and Medicare subvention is one of the issues that my vets talk to me constantly about. So all of these issues are very important, and I am here to help you and to help my vets because they are crying out for needs that we need to address, and if your budget isn't big enough, then I will stand with Mr. Filner and work as hard as I can to make sure that the budget is adequate for the needs of our veterans.
    Thank you very much.
    Secretary WEST. Is it possible for me later to get details from your staff about the one veteran?
    Ms. BERKLEY. You can get it from me directly, if you would like. We are pretty new around here.
    Secretary WEST. I need to follow up on that, along with all the other things.
    Ms. BERKLEY. We are in desperate need of your help.

    (The information follows:)
    The Veterans Health Administration has contacted the House Veterans' Affairs Committee to obtain additional information concerning the veteran mentioned. An insert may be provided at a later date if needed.
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    The CHAIRMAN. The gentleman from Illinois, Mr. LaHood, is recognized.


    Mr. LAHOOD. Mr. Secretary, thank you for being here. A few months ago, you and I met about the cemetery in Illinois, and I wonder—I am not going to ask you to bore the rest of the committee. I wonder if you could provide a status report to my office on what is happening there. Also, if you could give us a status report on your commitment to the things that we talked about in terms of signage and other things that you committed to doing so that there is no confusion about what is happening there, I would appreciate that.
    Secretary WEST. We will provide it, sir.
    Mr. LAHOOD. And let me just say that I have a VA clinic in my hometown of Peoria, and there are many, many very fine, dedicated people whom all of you would be very proud of. They work very hard, and they do a very good job at taking care of the veterans in central Illinois. And I want you to know how proud you would be of the work that they do there because they really do a fantastic job, and they have limited resources and limited space. So we are trying to work with them a little bit on trying to get an expansion there.
    I want to pick up just for a minute—and you don't have to comment on this. I don't expect you to. But I want to comment on something that Mr. Peterson said. He and I both service on the Agriculture Committee together, as well as this committee, and there is a lot of heartburn on this committee about the budget that has been presented. My feeling about that is that the President has traveled all over the country touting a lot of new programs. In his State of the Union address, which I observed, like many of you, I think he proposed 75 new programs. And I think the expectation really is that you will come in with a budget that is far short of the dollars that are needed, knowing that there are a bunch of people on this committee and in the House and Senate that will try and find the dollars to take care of it.
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    The President talked about reforming crop insurance, which has nothing to do with what you do, but didn't put one dollar in his budget to take care of it. And I know that he will go around the country and talk about the importance of veterans and taking care of veterans, and then have all of you come up here and present this lousy budget that doesn't do anything about what you need to do. And I don't fault you for that. I am sure the recommendations that you sent down to OMB don't look anything like what OMB sent back to you. And you don't have to comment on that.
    I have every reason to believe that what you probably sat down and talked to OMB about was a heck of a lot more than they gave you. And in the end, the President likes to talk a good game about all these things and promise a good game about all these things, then send them up here and expect us to take care of them.
    I think, you know, we resent that, but we realize that is the era of politics that we are in today. You promise a lot, don't provide the money, and then come up here and have us do it. Because there are a lot of committed people, including Lane Evans from Illinois and Bob Filner and the chairman and others, and in the end we are going to try and find the money to do what you need to do—not because the President provided it, though. But he talks a good game about it, and then he lets all of you come up here and have to put up with the kind of stuff you have had to put up with today. And I think we resent that.
    I find the same thing on the Agriculture Committee. He talked a good game about reforming crop insurance, which is very important, and not one penny in the budget to do it. You know why? Because he knows we are going to find a way to do it because it is important for ag country.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, Mr. LaHood.
    The gentleman from Texas, Mr. Rodriguez, is recognized.
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    Mr. RODRIGUEZ. Thank you very much.
    First of all, Mr. Secretary, let me thank you. I know you went to San Antonio, and I think everybody was real pleased with your visit, and it was great. The turnout was good. Everybody loved you there. You did a great job.
    I also want to thank Hershel Gober who also came down for the town hall meeting and got a chance to hear a lot of the veterans and the complaints and stuff, and I think that worked out real well, and the follow-up that has been done.
    When I first got here about a year and a half ago, I know that I had some real frustrations with the administration there and the operations of the caseloads that we had. And it seems like we are making some progress there, so I just wanted to thank you, and I think we are moving forward. There are still some little problems there that we need to correct, but I think overall it has been real positive.
    One of the things that I wanted to kind of share with you, I represent a district that goes all the way to the Mexican border, and we have four Congressmen in San Antonio. We go over 200,000 veterans in that area. And as we move forward south, there are no cemeteries for anyone. We have Congressman Ortiz from Corpus all the way to the border. We have Congressman Hinojosa, don't have any place in terms of any cemeteries, and I know I have talked to the administration about trying to see what we can do in that area. And I am real pleased that we have been able to expand the cemetery in San Antonio, and we need some additional expansions because we are getting a lot of people.
    I have a community that is about 100 people that live there, and it goes from 2,000 to 3,000, you know, because of the winter birds that come in, the snowbirds, and a lot more veterans that come in. And so I was hoping that as we move forward, we will continue to work on maybe some access to some additional cemetery plots as well as some additional work in one specific area.
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    From a VERA perspective, I sent you some letters, and I am very pleased with the final results, but I would hate that that might come up again, and that is that in Texas, as the money is distributed, we saw disparity between some regions and others. The region that I represent that have both Hinojosa and Ortiz and myself and Lamar Smith and Bonilla, we were getting a disproportionate amount of resources from the State there. And as I got it, it was mainly because of a local distribution in the State where it was going to other regions. But the disparity came about to almost 1,000 per patient difference. I was glad that you responded to it and kind of took care of that last time. I just hope that that doesn't come up again.
    Again, I just want to thank you for your visit. I want to invite you again to come to San Antonio and my area, and Hershel Gober was great also when he came by. I want to just thank you again and thank you for your hard work. And I know that one of the dilemmas is that we don't provide enough resources.
    So I would ask that you also talk to us as to how we can make that happen. One of the difficulties, and I know from the lady from Nevada, we also experience the fact that we have growth and there is a need for clinics. And I want to thank you for the opening of those clinics because I know as you move south to Corpus Christi, to McAllen—and those two areas are not mine. They are my fellow Congressmen. There is nothing there, and there is a need for us to kind of reach out in South Texas and see how we can help out overall, especially with the growing population. All of our congressional districts have 100,000 or 200,000 people more in our areas in terms of redistricting and the growth that has occurred, and a lot of them are veterans coming in from the North and deciding to stay down there.
    So thank you very much for being here, and hopefully we will continue to get your help and support as you have been doing. Thank you.
    Secretary WEST. Thank you, sir. You asked me to lay out how the committee can be helpful. I think that the committee is in the process of making up its mind about that, but I would just use this as an opportunity to say again Medicare subvention, we are requesting buyout authority to continue our reductions, whatever my RIF record is. There are all sorts of things that are important to us as tools, in addition to what you are considering.
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    If I may, also, let me say that there should be no doubt—I cannot let pass the opportunity to say that there should be no doubt about this President's, this Vice President's, this Secretary's, this administration's, all of our commitment to our veterans. We do the best we can to put together a budget that exists within the circumstances in which we find ourselves, and we will do our best to use this budget to provide improvements in claims processing, continued reforms in health care to bring more health care to more veterans. And your support in that is always useful to us. We have had it, and we are grateful for it.
    The CHAIRMAN. The gentleman from Illinois, Mr. Gutierrez.


    Mr. GUTIERREZ. Thank you, Mr. Chairman. Welcome, Mr. Secretary.
    Let me just make a few points. As we examine President Clinton's fiscal year 2000 budget request for the VA medical services, the VA health care budget contains, as far as I can see, no money for increased costs of existing programs, and the VA health care budget contains no new money to fund administration initiatives. In all probability, the VA health care budget significantly underestimates the cost for necessary treatment.
    The President has recommended a fiscal year 2000 appropriation of $17.306 billion for veterans' care, exactly the same as provided this year. And so I was watching on C-SPAN the Secretary of Energy yesterday, Bill Richardson, talk about his 5 percent increase as modest, 5 percent increase in his budget, and after him was coming the Secretary of Agriculture talking about his modest 6 percent increase in his budget. So it really worries me that we have a veterans—I haven't examined all the budgets, to be quite honest with you. I just happened to have seen that yesterday as I was preparing for today's hearing.
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    I am wondering. You know, it seems as though the Veterans Administration, especially given the fact that, as Dr. Kizer has spoken so eloquently about your ability to increase receipts of third parties and you are really going to gung-ho this year because you have got a 20 percent increase—that is your target to increase 20 percent those collections to $749 million in fiscal—that is pretty aggressive if you can get 20 percent more.
    I agree with you, Mr. Secretary. Let me just add quickly that if you can get the money, get the money. But that is pretty aggressive. What we are talking about is a budget that is flat, where we all know we have problems, in critical areas, and it is flat compared to everything—compared to at least two other budgets that I have examined thus far and really is—its predictions in terms of its funding possibilities are based on a very, I think, optimistic 20 percent increase all the way up to 749, because, you know, it usually gets—once you get up to 96 percent, it is always real hard to get that—I mean, it would seem to me it is always hard to get that last 4 percent. You kind of maximize yourself out.
    So those are my concerns, and I would suggest simply that the members of the committee not just give a cursory review to this budget and that we spend some time as a committee of the whole, not necessarily with any witnesses, Mr. Chairman, or once we have received all of the information so that we can respond with a budget of our own, as I am sure other committees are doing, so that we can actually help the Veterans Administration. Because I think what we are going to find is that we are—the Secretary and all of the people that work in VA are for veterans. We are obviously on this committee not because of the huge PAC money that comes our way for serving on this committee and t largesse. We are here for other reasons.
    So I don't want to pat ourselves on the back, you know, too much, but I mean, there is a reason it sometimes gets hard to fill some of these seats on this committee from both of our sides of the aisle, Mr. Chairman. It isn't like people are jumping over the aisles begging the leadership on either side to please put us on the Veterans' Committee.
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    So now that we are here and we know that we don't have some of those other reasons for being on this committee, as we all know the politics of being a Member of Congress, then I think that we should just take that on a little more seriously and with a little more energy and vigor so that we can come back and kind of ask the Secretary, Is this enough or would you like more? And where is it that we can do it? Because I think that we have a responsibility to do it, and we can work in a bipartisan fashion, and we are just going to have to go after the people and our appropriators. We are going to have to stop, of course, I think, Mr. Secretary and Mr. Chairman, simply saying, well, you know, we did everything we could and those darn appropriators, the Appropriations Committee—everybody wants to be on that committee, of course. But those darn appropriators just wouldn't give us the money.
    So I think, you know, we have to be as proud and as valiant as the veterans who served this country and be forceful and, you know, kick some people around, whether it is those big powerful cardinals of the Appropriation Committee, once we come up with a budget that is real and break whatever kinds of agreements and deals in the past that have shortchanged the veterans in this country.
    Thank you very much, Mr. Chairman, and thank you very much, Mr. Secretary.
    The CHAIRMAN. Thank you. Let me just remind members that we do have two more panels to go, the veterans service organizations that are presenting the Independent Budget, and also the military alliance people.
    The gentleman from Florida, Mr. Bilirakis.

    Mr. BILIRAKIS. Thank you very much, Mr. Chairman, and I think all of us on this committee endorse Mr. Gutierrez's remarks. Certainly under your leadership, and even prior to that, we have always improved upon the President's submittal of the veterans' budget.
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    I want to welcome Mr. West, Secretary West. As I understand it, sir, your submittal on behalf of the Department of Veterans Affairs, is $19.6 billion, but the President's request cut that by approximately $1.2 billion. Is that correct?
    Secretary WEST. I am not sure to what you are referring, sir.
    Mr. BILIRAKIS. I am referring to the medical programs: the OMB submission, is $19.6 billion; the President's request, $18.4 billion—a difference of approximately $1.2 billion.
    Secretary WEST. Are you reading from something about my submittal to OMB.
    Mr. BILIRAKIS. To OMB, yes, I am.
    Secretary WEST. Well, I would have to check on that. I am here to support the President's budget, sir.
    Mr. BILIRAKIS. You are here to support—so you did not submit to the OMB $19.6 billion——
    Secretary WEST. No. Whatever you have there I am sure is accurate, but I don't think I am going to talk about what I said to OMB and to the President.
    Mr. BILIRAKIS. All right. I am giving you credit. I am saying that you wanted $1.2 billion more than the President put in his budget.
    Secretary WEST. And I thank you, but it may be credited. By my position, I am constrained from not accepting—constrained not to accept. (Laughter.)
    Mr. BILIRAKIS. Well, I guess it really leads into the question that I am asking. Others have all touched on this very, very strongly, Mr. Gutierrez, so many others, the gentleman from Illinois. But how much have you fought for these additional dollars? I know you are here on behalf of the administration, and you are here to support the President's request. But, by gosh, if you initially felt that the President's dollars were not adequate to do the job, how much have you fought in that regard? And how can we help you here in the Congress to get closer to those particular dollars and, as we will hear regarding the Independent Budget, even more?
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    Secretary WEST. Congressman, I think the fairest thing for me to say and the most accurate thing is to say that I gave an honest assessment, but I also think that I don't fault those who worked with me to come up with what you now have before you.
    I am not up here as part of a sham or a required show. I actually believe that we can achieve this budget and that it will allow us to do well for veterans. If I did not believe that, I would not be here. I think that is the fairest answer I can give you.
    I understand that may not be your judgment or anyone else's who is seated there, but I hope that it won't be.
    Mr. BILIRAKIS. Well, the——
    Secretary WEST. I want to say one other thing, and that is, I don't think that the only measure is what the top line is. I think another measure is what are we doing within the budget. And now I am through.
    Mr. BILIRAKIS. Well, sir, others have spoken on both sides of the aisle about the additional programs that appear in the President's budget for which there is no financing for them. Now, you are saying that you can meet those additional programs, the long-term care areas and all of these others that are here somewhere that I am just looking at——
    Secretary WEST. I am saying we have several things we need to do. First of all, we have to look for the $1.4 billion in efficiency, and I think we know how we will have to do that. Secondly, we have to see whether Congress is going to give us the authority to do emergency care, which is a $200-plus million of the increase. Thirdly, we need to know more about what the associated costs will be and also what the experience with priority 7's is going to be.
    There are several unknowns just yet. But do I think that we can do the job for veterans within our budget? I could not have presented it to you if I didn't think so. Will it be a strain? Will it be a stretch? Yes, it will.
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    Mr. BILIRAKIS. As I understand it, the President's budget doesn't even take into consideration inflation increase.
    All right. My time is up, Mr. Chairman, and I know that I would like to—I don't know whether it would be to speak with you, or maybe Dr. Kizer, or whoever, regarding the spinal cord injury center in Tampa, FL, if I may, sometime after you finish up.
    Thank you, Mr. Chairman.
    Secretary WEST. We will both be available.
    The CHAIRMAN. The gentleman from New Jersey, Mr. Smith.


    Mr. SMITH. Thank you very much, Mr. Chairman.
    Mr. Secretary, current law, as you know, provides clear direction to the VA not to provide infertility or abortion services. I am advised, nevertheless, that the VA as a matter of policy is likely to make IVF, invitrofertilizatiion, a expensive service available. Could you please explain why, given the proscription in law, the fact that the health plans around the country do not routinely cover IVF and that you are working within a budget that has about a $1.4 billion deficit, how can you look to expand by including something that is explicitly proscribed by law? We had a very clear argument, discussion, and debate on that legislation, and how your general counsel or anybody else in your office can misread the intent of Congress is absolutely mind-boggling. If you could respond?
    Secretary WEST. I don't have an answer for you. I am not aware of this particular concern. I will certainly look into it and give you a response, but I just don't know that we are about to do something that, as you say, is prohibited by statute because if we are prohibited, we won't do it.
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    Mr. SMITH. I would appreciate that, and as soon as possible, because if there is going to be a misreading of the law, I can assure you many—not all, but many members of this committee and others will take very forceful action, including, perhaps, a lawsuit. To say that this section—and that is what your staff was advising our staff in December, somehow gave them the flexibility to expand a service—and IVF is very controversial—is misguided and wrong. The routine disposal of human embryos which is part of that method is very controversial. I believe it is the loss of human life every time an embryo is poured down the drain, and it is especially wrong given the parameters of our funding.
    We are looking to boost VA funding, but I can tell you the consensus cracks if that money is going to be used for that kind of purpose.
    Secretary WEST. We will look into it and provide you whatever information we have on it, Congressman.
    Mr. SMITH. I would appreciate that very much, Mr. Secretary.
    Mr. Secretary, let me ask also you, in my district there is an outpatient clinic that I worked for over ten years to establish in Brick Township which now faces the prospect of specialty care cutbacks. What was once a list of more than a dozen services that were to be transferred, we have whittled that down to four or five. Now, it looks like, given the cutbacks, we may see a loss of those services. Perhaps now or for the record, if you could provide us an update on where you expect that to go. I know that the veterans in that part of my State, New Jersey, are very disturbed that what was there is now in the process of being lost. If you could provide that for us as well.
    Secretary WEST. Do you want to say anything? We will provide it for the record.
    Dr. KIZER. I would like to say, Mr. Smith, that we have talked about this, and as you know, some of the proposed reorientation of services has been changed and some of the services that you are most concerned about have been restored at the Brick clinic, and they are continuing to look at some of the others.
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    Mr. SMITH. I appreciate that.
    Secretary WEST. We will give you a further status.

    (Subsequently, the Department of Veterans Affairs provided the following information:)

Strip offset folio 5 here
Makes p. 39.

    Mr. SMITH. Thank you, Mr. Secretary. I yield back, Mr. Chairman.
    The CHAIRMAN. Thank you, Mr. Smith.
    Mr. Secretary, I want to comment on something that Mr. Bilirakis was saying. I think the reason that many of us on this committee who fought to create the Secretary—or elevate the Veterans Affairs to the secretarial position—was so that we would have somebody on the inside, so we would have a strong advocate in there perhaps to get to the President. And I realize your position. I realize politically you are certainly constrained about some of the remarks you want to make. But we need that help, and we need somebody to get to the President. It is obvious that we have to add millions of dollars, I think almost $300 million in health care alone last year, to this budget. And it is obvious that we are going to have to do it this year.
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    I wish you a lot of luck in being able to make that billion and a half savings, but I don't know that there are many people on this committee that think that can be done.
    Anyway, let's go for a quick second go-round, if you would, Mr. Secretary, if you have the time. Mr. Evans?
    Mr. EVANS. Thank you, Mr. Chairman.
    Mr. Secretary, the President's budgets for fiscal year 1999 and next year, fiscal year 2000, propose to merge VA accounts into DOD or other appropriate functions. As the chief executive officer of the DVA, is this a concept you support?
    Secretary WEST. I am sorry. Propose to do?
    Mr. EVANS. To merge VA accounts into DOD or other appropriate functions.
    Secretary WEST. I don't think it is—if you are referring to what I think you are referring to, that recurring page that I was asked about last year, I don't think this concept has even been discussed with me. So I certainly couldn't support it.
    Mr. EVANS. It is in the budget. Page 172 of the budget. Would you like us—in the interest of time, I will submit to you a copy of the budget.
    Secretary WEST. Could you give me a cite to it? Do you have a page cite there?
    Mr. EVANS. Page 172.
    Secretary WEST. Which volume is it in?
    The CHAIRMAN. Of the President's budget.
    Secretary WEST. Same answer. It has not been discussed with me.
    Mr. EVANS. Sorry?
    Secretary WEST. It has not been discussed with me. It is not a concept that has been discussed with me by anybody in the administration.
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    Mr. EVANS. Do you support it?
    Secretary WEST. It is hard to take a position on something that I haven't been informed about.
    Mr. EVANS. All right, Mr. Secretary, I will submit it for the record and ask for your response to the record in the interest of time if you can elaborate on that. It is rather lengthy.
    I do find it kind of curious that——
    Secretary WEST. If this is the same thing that was presented to me last year at this hearing, the answer this year is the same as last year, which is I didn't support it then and I don't know enough about it to support it this year.
    Mr. EVANS. What can you do to get it out of the administration's budget?
    Secretary WEST. Excuse me?
    Mr. EVANS. What can you do to take it out of the administration's budget?
    Secretary WEST. Apparently nothing. I mean, this is the second straight year it has shown up.
    Mr. EVANS. Who is writing this?
    Secretary WEST. I have no idea how this gets in here. But I do not——
    Mr. EVANS. Does anybody on this panel know? This is rather significant——
    Secretary WEST. It does not represent a position taken with consultation with the Department of Veterans Affairs.
    Mr. EVANS. Why weren't you in the process? Going to what the chairman said, that is why we fought to have a Secretary of Veterans Affairs with Cabinet level status.
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    We are in a little bit of a short time period, so if I could get you to respond for the record, I would appreciate it.
    Secretary WEST. Well, as I read it, it simply seems to be a statement that this would be a good way to measure the true cost of our national defense by looking at these in concert. But as I say, it is not a concept that has been referred to us for review, that has been raised with us for discussion.
    Mr. EVANS. If you would review it and get back to us, we will put it in the record.
    The CHAIRMAN. Mr. Evans is asking that you respond in writing, if you would, Mr. Secretary. There will be other questions submitted. We are trying to save a little bit of time here.
    Secretary WEST. I will do it.
    The CHAIRMAN. Thank you, sir.
    Mr. Filner?
    Mr. FILNER. Just a few follow-up things, and I thank the chairman for his remarks earlier. All of us share your advocacy for veterans, and we see ourselves, even though you see a frustration here, working in partnership for them. We want to help you, and we hope that you don't feel defensive because we want to work as a team.
    Chairman Quinn of the Benefits Subcommittee mentioned that we take very seriously the Transition Commission's recommendations on expanding the Montgomery GI bill, and we will be looking at that very seriously. I think it is a very good proposal, we have studied it together, and we will be looking at that report in our committee.
    As we have said many times in hearings before this committee, we ought to be focusing more on the situation with our Persian Gulf veterans. In particular, for example, I don't find in the budget any new initiatives to compensate those veterans who are receiving different decisions depending on whether or not identical symptoms are classified as undiagnosed illnesses or, say, chronic fatigue syndrome. There is a different way of compensating based on undiagnosed versus diagnosed. I think regulations which might clarify eligibility, for example, on the basis of a rating for fibromyalgia have not even been issued. So we have a lot of work on just the technical side there. I think we have a lot of work in dealing with some more honesty about that whole situation.
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    I couldn't let a hearing go by without mentioning, of course, the situation of the Filipino veterans of World War II. I am sorry that you don't have more in the budget for this group. You do have a proposal to pay full compensation for those veterans who live in the United States, and I think that is a good start. I would like to go further, as you know—we have discussed this many times—because we owe a debt to these brave soldiers.
    Last year, when you had that item in your budget, you didn't have full funding for it. What is the situation on this year? Does the proposal have funding associated with it? Does it require enactment of other legislation?
    Secretary WEST. I think if you authorize it, we are going to do it.
    Mr. FILNER. Okay. Your recommendation last year depended on the tobacco settlement, if I recall.
    Secretary WEST. Aren't we proposing in here $5 million a year for this?
    Mr. FILNER. Right. I just want to be clear—it was very unclear that the proposal last year depended on new funding.
    Secretary WEST. It is now out of some—it is out of the appropriation. We are not depending on some other event to be able to fund it, Congressman.
    Mr. FILNER. All right. I thank you. Just sort of a conclusion, but also as an introduction for the next panel, the Independent Budget which is going to be presented adds over $3 billion to your proposal. I think that is the responsible position for us to be starting from on this committee. The administration recommends that the Congress is the body that authorizes and appropriates, so we ought to take that responsibility very seriously.
    I think on both the benefit side but also on the medical care side, we have to have a higher level of care. The Independent Budget gives that. It improves the timely adjudication of claims and other decisions that have to be made. It brings in the kind of money that is necessary to make progress on all the issues that we discussed here today. So I will be recommending to the committee that we use that Independent Budget as our basic starting point, thanking you for your recommendation and for your implementation of whatever is decided here. So thank you, Mr. Secretary and your colleagues, for being here.
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    The CHAIRMAN. The gentleman from Pennsylvania, Mr. Doyle.
    Mr. DOYLE. Thank you, Mr. Chairman.
    Mr. Secretary, I think what my colleague, Congressman Reyes, was saying and what many of us feel on this committee—whether it is $1.5 billion or $3 billion—many of us who would like to just up front fund what we see as at least a $1.5 billion shortfall encourage you to go ahead with these efficiencies and other cost savings where possible, where it doesn't negatively impact service to the veterans, and that money could be returned back to the Treasury. You know, and if you don't get the whole $1.4 billion back—we have not heard the veterans. We have just returned, you know, whatever you meet on your goals, and we would all probably feel a little more comfortable if it were done in an up-front manner that way as opposed to having to depend on these things.
    I just wanted to give Dr. Kizer some extra time to expand on my original question about the reduction of 7,000 FTEs. I am curious to get a little more information on where you see these reductions taking place. In what areas of the VA health care do you see these reductions? And how did you arrive at that number? What plans do you have in formation that makes you arrive at that number of 7,000? And where are likely those reductions to take place, in what areas of the VA?
    Dr. KIZER. The intent would be for as few front-line caregivers to be reduced as possible and that any cuts would come from support personnel, administrative personnel, others that would have the least impact on care that is given. Indeed, I acknowledge that there are more than a few places where we may need to bolster our front-line caregiving personnel, and we are doing that through some of the changes in personnel that are occurring at those sites.
    The manner or the specifics of that are going to have to come from the field, from the individual facilities and from the networks, and those plans have not yet been developed or received in headquarters. So I really can't answer your question with the sort of detail that I know you would like to have.
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    Mr. DOYLE. Might I just state a concern, then? What we have seen to date in many of the facilities where these plans have been started, you know, instead of it being a pyramid where the primary caregivers are the wide part of that pyramid, it seems to be upside down; that some of the people on the front lines, at least from my experience, have been paying the price and that a lot of the top management in some of these areas, they seem to find other positions. They are not doing what they used to do, but they are still there, and we are paying the price down at the front line where the direct care to the veterans is.
    If we are going to be asking our various directors to come up and formulate these plans for how they are going to effect these efficiencies, I hope there is clearer direction that, you know, they should be looking at the people who aren't giving the direct care as the first line and work their way down, because it doesn't seem to be happening that way by some of our experiences.
    Dr. KIZER. Clearly that is the goal. As you know, we are bound by law, and the law does specify various considerations that have to be given whenever these reductions occur. One of them is seniority and other factors that are attendant to the civil service system. That doesn't always result in the mix or the outcome that you might like, and you can't predict that until you actually go through the reduction-in-force or staffing adjustment.
    Mr. DOYLE. Thank you, Dr. Kizer. Thank you, Mr. Secretary.
    The CHAIRMAN. The gentleman from Mississippi, do you have any questions? The gentleman is recognized. Flip your mike on there, if you would, sir.
    Mr. SHOWS. Thank you, Mr. Chairman.
    Mr. Secretary, it is a pleasure to be here and meet with you this morning. To give you a little history about myself, I am quite a frequent visitor to the VA in Jackson, Mississippi. My Dad used the facility three times one year for major surgery, and I can tell you that it was very successful every time. We appreciate the care and attention that the doctors and nurses and the staff give us there.
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    I guess I am concerned, like most people, that we feel like you may be underfunded, and we do want to help you. And I like to think of this effort as a team concept on both sides of the aisle. You have heard from both sides, and I think both sides are willing to help you, and I know that I am personally.
    But one thing I want to ask you about, in Mississippi, at the Jackson facility, it is a long ways for a lot of our veterans to travel. I understand we are going to expand and try to put some satellite areas out there. Are you going to be able to do this throughout the country with your cut in funding that you are looking at and extend it to other parts of the country? Where veterans have to travel 2 or 3 hours by automobile to get to a facility, are you going to make this—I know in Jackson, I don't know if it is because our guys are doing such a good job over there with the money that they are able to expand it in the rural areas more so for the ability of people to reach the facilities. Is this going on nationwide?
    Secretary WEST. I think it is a central thrust of Dr. Kizer's innovations. We have in the budget for fiscal year 2000, the one we are talking about, 89 new outpatient clinics to be spread around the country in various places. So, yes, we continue to do that, and we have to because that is essential to what we are trying to achieve.
    Mr. SHOWS. Well, I think it is a good cause because a lot of times men and women—my Dad is a World War II vet, and their age now is getting where it is hard for them to drive to get there, and if they have to stay overnight, it is kind of a problem for them. So we appreciate that effort, and, again, I would like to say I appreciate the dedicated men and women who do work at these facilities.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you.
    The gentleman from Arkansas, Dr. Snyder.
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    Mr. SNYDER. Thank you, Mr. Chairman.
    Mr. Secretary, when you were in Arkansas, I guess it was last year, I very much appreciated being there and visiting our VA center there, and part of what you saw there was a facility that does a tremendous amount of medical research, literally that the whole world benefits from, not just American veterans. If I might, I want to ask Dr. Kizer a couple of questions with regard to medical research. But first I would like to say that when you respond in writing about the 30/20/10, would you also describe the baselines and how you arrived at your baseline numbers and how much confidence you have in your baseline numbers, too, if you would.
    We were talking a little while ago about hepatitis C, and it is my understanding that you all may well be ahead of the rest of the world in terms of looking at this whole problem of hepatitis C. As you alluded to, there are not good numbers or the numbers are not well understood yet in the non-veteran population, which is just an indication there is just a whole lot of research that is going to have to go on. And I appreciate all the work that you all are doing and are probably ahead of the curve on this whole thing with hepatitis C.
    But I have two specific questions. In terms of your trying to achieve the efficiencies given the financial constraints you are under, one of my concerns is that people that are doing research may well be transformed more into clinicians than they want to be, that the doctors that are doing research may be having, you know, to say you are going to have to start staffing two clinics a week. I would like you to comment on that reality.
    Then, if you just take the remainder of my time and amplify your answer about hepatitis C, what you see as the problem, describe the problem for us, the latency period, the potential explosion down the line, if you would, the cost of drugs, the diagnosis, those kinds of issues.
    Dr. KIZER. Do I have an hour or so?
    Mr. SNYDER. You have about 3 minutes. (Laughter.)
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    Dr. KIZER. Specifically to your first question, research is clearly an issue and is one that we are trying to work through. It is an issue that academic medicine throughout the country is also wrestling with. We have clinician investigators, all VA research is nested within the clinical delivery system. This is one of the VA's unique assets and one of the reasons why we believe that the VA research program has been so productive. It is clearly, if not the most, one of the most productive research programs in the world. It is highly successful, and we certainly appreciate the support that it has gotten. The fact that we accrue so much extramural support I think is another measure of the productivity of our investigators.
    Having said that, in some cases, some researchers who might prefer to spend more of their time in the lab are being asked to do more clinical work, and we are trying to sort through what is the right balance. If they are in a system that is designed, first and foremost, to provide direct care. We have to find the right balance between them being not only an investigator but also a teacher, because we are so much involved in the medical education system as well, as well as a direct care provider. We are sorting through that.
    As I talk with my colleagues and cohorts in the academic world, they are wrestling with the same issues, and I am not sure that we have arrived at the solution yet. We are trying to find that right balance.
    Shifting gears and talking about hepatitis C, as I commented before, one of the reasons why we know so little about this is that the reliable testing has only been available in the last few years. It used to be known as a non-A/non-B hepatitis. It now has its own letter, and we know more about it. It is the leading cause of liver transplants in the country. In the VA, 52 percent of our liver transplants are due to hepatitis C.
    It is acquired through many of the same routes that hepatitis B is acquired, parenterally or through the spread of blood, whether that is historically through blood transfusions; or, in the case of veterans, in combat situations where there may have been blood-to-blood contact, for example, among our Vietnam veterans; through use of illicit drugs, whether that be through injection or, intranasally, as in the case of cocaine. So there are many of the same mechanisms. It turns out it is not as efficiently spread sexually as is hepatitis B, and while it certainly can be spread that way, it is not as common.
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    It has a very long latency period, many years. The disease is certainly exacerbated by things like alcohol use or other physiologic insults to the liver. And many of those specific behaviors we are just now learning about, indeed, many celebrities who were formerly thought to have had cirrhosis because of alcohol, it turns out, in fact, had hepatitis C. So there is a lot to be learned about this disease.
    I think one of the big concerns right now is we don't know very much about it nationally, and we particularly don't know much about it in some particular populations that would appear to be at the most risk. And I think there is an urgent need to do more investigation, not just within the VA setting but across the country, particularly in the populations which historically have been at high risk for other types of hepatitis, for HIV, and for other infections acquired by some of these same mechanisms of transmission.
    Secretary WEST. Mr. Chairman, there is an impact on the benefits side of our house, too. Joe, could you please say a word about this?
    Mr. THOMPSON. As the statistics come in, we will see more claims for service-connected disabilities as a result of this, and while we don't have a large volume right now—just as with health care, we are at the beginning of this—we do expect to see additional claims and additional grants of service-connected disabilities flowing from this.
    Dr. KIZER. Let me just add one other thing that I think is important for the committee to be cognizant of. Hepatitis C is the second major disease that is somewhat different in that the expense of treatment, in ballpark figures, is probably around $15,000 a year just for the pharmaceutical treatment. It is not unlike HIV, where protease inhibitors, which recently have become available, and very expensive involve prolonged treatment; there really is a new era, if you will, in drug therapy for chronic diseases like these. I expect that we will see a number of other treatments become available for conditions which historically have not been treatable in the past, which will have very hefty price tags associated with them. This is one of the concerns specifically related to our pharmaceutical budget, which is increasing disproportionate to all other elements of the budget.
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    The CHAIRMAN. Thank you, Doctor.
    We have just a couple more quick questions, Mr. Secretary. Mr. Bilirakis?
    Mr. BILIRAKIS. Thank you, Mr. Chairman.
    Mr. Chairman, you have been more than gracious, and in the interest of time and because I was late, being in a Commerce markup, I am not going to take up any time with questions. I have some that I wanted to submit to these gentlemen. One of them has to do with VERA. I would ask unanimous consent that the article which has triggered really my questioning regarding VERA might be made a part of the record.
    The CHAIRMAN. Without objection.
    [The information follows:]

Shoot new true folio p. 47 insert here
Makes p. 47

    Mr. BILIRAKIS. I would just merely say very quickly, Mr. Secretary, that I am just very pleased that the chairman hitchhiked upon my comments regarding the reasons why we fought so very hard to upgrade, if you will, your position to that of Cabinet level. And I understand that there are constraints and restraints upon you. You have got to be here to support the President's budget. But, we, all of us work for the American people. And on this committee, when we are functioning as members of this committee and you in your capacity and Dr. Kizer, et cetera, et cetera, et al., all work for the veterans. That is our job. This is the real world. When you have had an administration that has reduced what you think is really necessary to care for our Nation's veterans that you will fight for additional dollars. I am not trying to belittle your role in trying to fight for the higher amount of dollars.
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    Anyhow, we hope that you will be available to help us in the process of increasing the dollars for various programs.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Mr. Smith?
    Mr. SMITH. Thank you, Mr. Chairman. I will just ask one final question and ask that some other questions be made part of the record and submit them for response.
    Mr. Secretary, activation of the new national cemeteries mentioned in your statement is indeed good news for veterans in those areas of the country, the Saratoga, Abraham Lincoln, Dallas-Fort Worth and Cleveland area. Those veterans I think will be most appreciative for that effort.
    As you know, however, the committee is very concerned about the prospects for additional cemeteries being established after the year 2000. Your previous assurances regarding further progress on this matter has been very helpful. However, there appears to be nothing in the budget documents indicating a commitment to the planning that is necessary to go forward with construction of additional cemeteries beyond 2000.
    Could you explain where the administration is heading on this very important issue?
    Secretary WEST. Well, I think in several directions. One, Congressman, is I reaffirm what I have said before, which is that we will look to the needs as our veterans and you and others and we are able to sort them out. We will look at the death rate. We will look at where they are occurring. You know what our measurement is, that we want burial space to be reasonably available to all of our veterans. And as I said, we are nearing 80 percent.
    In terms of one part, I know, of your question, when are we going to identify and build new national cemeteries, the answer to that one is at the moment our plate is full, and we need to see how we do with these before we identify more.
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    The second part of that is we continue to support the State grant program. I think there is money in this budget for that. I think that is an important part in many locations where the State-size facility, that kind of facility, can be more appropriate. So we are not backing off from our commitment. We have raised the budget a little bit in cemeteries, and we intend to keep pursuing this. This is an important part of our mission.
    I don't know if you want to add anything, Roger, to this, but the answer is we are not shutting down at all.
    Mr. RAPP. We are challenged with the ones that we are working on right now. It is unprecedented for us to have four new cemeteries under construction at one time, and we are doing a number of other things as an adjunct. We have a number of columbaria projects that are under construction and will soon be available soon. We also have significant expansion projects underway at some of our higher-volume cemeteries like the one in Arizona.
    We still have an awareness of places in the country that have been documented by our reports as being underserved, and I think we will be working with the Secretary to take a look at those in the next budget cycle.
    Mr. SMITH. If I could, given the lead time that is necessary for establishing new national cemeteries—what is it, a few years, 4 years, 5 years?—that is why we were looking in the budget to see if there is anything in the offing in terms of planning as to where we might be in the year 2003, 2004, or beyond. Is there nothing being looked at as a potential site?
    Secretary WEST. Well, I think we have lists that were developed a while back. Those lists are still actively present before us. It is not as if we have nothing on the horizon. But we will want to see a little bit more clearly how those needs are developing. But in terms of actual dollars you can identify for some kind of planning, I think that is not what we have there. No planning dollars. Is that your question? No, sir.
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    Mr. SMITH. Thank you, Mr. Chairman.
    The CHAIRMAN. Mr. Secretary, we thank you and the gentlemen for your time today being with us. We do have some questions, and if you could respond. Do you care to make a closing remark?
    Secretary WEST. No, just a note. Congressman Snyder was kind enough to compliment us on the cemetery in Europe, and as I think you know, those are not our cemeteries. Those belong to the American Battle Monuments Commission, which is reputedly the best financed executive agency in the Government. (Laughter.)
    The CHAIRMAN. Thank you. Thank you, gentlemen.
    [The prepared statement of Secretary West appears on p. 77.]

    The CHAIRMAN. If we could get our second panel to come up, we will try to move right along here.
    I am sure we all want to get through as rapidly as possible. Those that are leaving, if you would please do so as expeditiously as possible.
    The CHAIRMAN. If we could resume, please, our second panel consists of the four veterans' service organizations who have prepared the Independent Budget: the PVA, the DAV, AMVETS, and the VFW.
    Gentlemen, we congratulate you for all the work you do. I don't have to tell you that the members of this committee do appreciate it, although, looking around, you might not believe that right now. I apologize for the absence of the members, but we do sincerely appreciate all the work and effort you put into this, and it is you, believe me, against the administration's budget.
    You gentlemen may proceed in any way you wish. I will give each one of you 5 minutes. Mr. Steadman, they are pointing to you, if you want to start off.
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    Mr. STEADMAN. Thank you, Chairman Stump, Ranking Minority Member Evans, and members of the committee.
    Mr. Chairman, if I can for just a minute welcome and thank the new members of this committee, new members of Congress to this committee. I am Ken Steadman from VFW. I am acting this year as Independent Budget Policy Council chairman. I want to thank you, Mr. Chairman, for the opportunity accorded to the Independent Budget to make our case before this committee of the Congress, because, Mr. Chairman, we have not been able to make the case for veterans with this administration, but it is not for want of trying. We carried our case to DVA. We carried our case to OMB. We tried to carry our case to the White House repeatedly, but we were ignored.
    Mr. Chairman, to make our strongest case for an adequate budget for veterans, let me introduce my Independent Budget colleagues, beginning with Mr. Gordon Mansfield, the executive director of Paralyzed Veterans Association, to be followed then by Mr. David Gorman of the Disabled American Veterans, and Veronica A'zera of AMVETS. Finally, I will finish with our portion.
    Thank you.
    The CHAIRMAN. Gordon, before you start, I neglected to recognize the ranking member, if you would give me a minute, please, sir.
    Mr. EVANS. Thank you, Mr. Chairman. I am going to have to leave soon for an appointment that conflicts with this hearing. But I do appreciate what you are doing in proposing the Independent Budget. It gives us a good starting point as far as where we can go as a committee, and I appreciate it very much.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, Lane.
    Mr. Mansfield?
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    Mr. MANSFIELD. Thank you, Mr. Chairman and members of the committee. My name is Gordon Mansfield. I am the executive director of the Paralyzed Veterans of America, and on behalf of the Independent Budget groups, I will address the impact of the President's fiscal year 2000 proposed budget on the provision of health care for our Nation's veterans. I would like to include this copy for the record, if the committee would so desire.
    The CHAIRMAN. All of your statements will be included in the record in their entirety.
    Mr. MANSFIELD. Thank you, Mr. Chairman.
    I want to express our appreciation to you, Mr. Chairman, for your swift response in condemning the inadequacy of the administration's budget request. For the third year in a row, the President is proposing a straight-line appropriation for VA health care. In so doing, he is ignoring the true cost of health care for veterans, especially the more costly care needed by the most vulnerable veterans—our older veterans, our poorer veterans, and our veterans in need of specialized services, such as spinal cord dysfunction medicine.
    For example, in last year's budget submission, the administration proposed cutting rehabilitative care, including spinal cord injury care, by $34 million. This year's proposal calls for an additional $21 million cut. We greatly appreciate the action of this committee and the Congress last year in reaffirming, by statute, that VA must maintain its core specialized services, such as spinal cord injury care and other specialized services. But how can capacity be maintained with fewer beds, fewer staff, and fewer dollars each year?
    The balanced budget agreement 3 years ago straight-lined the VA appropriation. With soaring medical inflation, with World War II veterans reaching the age of maximum health care utilization, the administration's design is to downsize, curb, and limit services based not on need, but on how much money the administration wants to give the system.
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    To attempt to make up for this shortfall, the budgets have counted on the gimmick of third-party reimbursement to allow the VA to squeeze reimbursements out of the private insurance policies of veterans. They have relied on ''pie in the sky'' estimates of third-party reimbursements, overcounting how much they intend to collect each year. In many respects, these estimates are a ruse to cover the fact that they are not providing any new Federal dollars to the system. The budget estimates that the VA will collect $151 million more in 2000 than in the current year, a surprising estimate when the Department has never met its collection projections in the past. And I might add also that we have to include in these dollars the fact that it costs approximately 22 or 23 percent of the total for overhead to collect them, so that is not usable for health care. It is already spent before you get the money.
    The VA's aggressiveness in trying to reach the goals has many dangers. Increasing numbers of veteran patients will be hounded for collections of any kind. And we are greatly concerned, Mr. Chairman, by recent reports in the press and elsewhere that the VA may be forced to refund more than $600 million in overpayments to insurance companies due to potentially questionable billing practices. If true, such a penalty could clearly wipe out any net gain to the system from the entire collection program for one year.
    Mr. Chairman, the President's Office of Management and Budget could care less whether VA meets its collection targets. But from my own experience, I can tell you that sick and disabled veterans care a lot when they do not get the health care they need and deserve.
    At the same time the administration has proposed flat-lining VA medical care funding, it has also produced a list of new initiatives. These improvements to the VA health care are appropriate and long overdue. Unfortunately, in asking VA to perform these services, the budget does not provide the dollars to pay for them. In all, the cost of these programs is well over $1 billion which VA must pay for out of increased and unobtainable efficiencies. VA has always been asked to do more with less. This budget asks VA to do more and more and more with less and less and less.
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    Among other new initiatives, the administration asks for a $250 million program to expand treatment for hepatitis C-related illnesses. The budget calls for $50 million improvement programs for homeless veterans, and the budget also calls for $106 million for expanded long-term care programs in home and community-based services. The budget calls also for $244 million in needed emergency care services. To pay for the emergency care services alone, which the President promised in his Patient Bill of Rights last year, the budget calls on the VA to reduce 1,500 health care personnel. This scheme forces the VA to rob from one veteran to care for another, and we believe that this is intolerable.
    This year's Independent Budget recommends that Congress appropriate just over $20 billion for VA medical care. This figure represents a core appropriation of $19.7 billion, which is approximately $3 billion more than this year's appropriation. The figure is large, but it represents what it would take to overcome the cumulative losses the VA budget has suffered over the past several years and meet the challenges of medical inflation rates that are currently back in double digits.
    The administration has proposed significant increases for medical research conducted by other Federal agencies, such as the National Institutes for Health. But yet this year's budget straight-lines the VA research. The Independent Budget recommends $375 million for VA research appropriation, an increase of $59 million. The Independent Budget would also boost VA's medical administration and miscellaneous operating expenses account from $61 million this year to $69 million to help boost the VA's quality assurance programs.
    Mr. Chairman, as we have in the past, we are asking for your support and the help of this committee to set this budget right. The President is proposing billions of dollars in new spending for new programs and new initiatives in nearly every aspect of the Federal Government. VA health care programs have been left out of this plan. We need your help to bring the needs of American veterans back to the table and to the attention of this Congress.
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    Thank you, and I will be pleased to respond to any questions you may have.
    [The prepared statement of Mr. Mansfield appears on p. 87.]

    The CHAIRMAN. Thank you. Mr. Gorman.

    Mr. GORMAN. Thank you, Mr. Chairman.
    First, Mr. Chairman, on February 1, when you released, your press release, I read it with interest and agreed with what you had to say. I have to say, though, that after sitting here all morning and listening to the various questions from the committee and the responses from the VA, I think that you are probably more on target with your news release as far as the inadequacies of the VA budget and the administration's request on a non-priority basis of veterans than we all may have realized back on February 1.
    The CHAIRMAN. Thank you, sir.
    Mr. GORMAN. My remarks today, Mr. Chairman, will focus mainly on the benefit program because that is the DAV's primary area of the Independent Budget. The President's budget recommends a cost-of-living increase for compensation as well as dependency and indemnity compensation. The Independent Budget also recommends an increase because compensation rates must be adjusted annually to avoid loss in earning power. If the value of compensation is to keep pace with inflation, then the COLA must be equal to the annual rise in the cost of living. However, again this year the President's budget again recommends legislation to permanently require rounding down the increases to the nearest dollar. With rounding down year after year, the value and buying power of compensation simply erodes. There is simply no justification for making temporary deficit reduction measures permanent and, in effect, reducing the compensation for those who rely on it for the necessities of life.
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    It is bad enough to reduce benefits to disabled veterans in the name of deficit reduction, Mr. Chairman, but it is indefensible to reduce benefits to disabled veterans merely for the sake of doing it. We urge you and the committee, Mr. Chairman, to adamantly reject this unwarranted proposal by the President.
    Also, we have mixed feelings about the administration's proposal to increase staffing for claims processing. This year, and for the past several years, we have recommended a substantial increase in personnel to adjudicate compensation and pension claims. The President proposes an additional 440 FTE for claims processing, but almost two-thirds of that increase would be attained, as we heard this morning, by shifting staff or staff positions from other benefit programs. This continuing cannibalization of the Veterans Benefits Administration raises two concerns. First, can these other benefit programs really take the losses without diminishing their own services to veterans? And, second, are the employees who will be reassigned properly suited for the complexities of claims adjudication?
    Unfortunately, we know from experience that VA sometimes makes these staff reductions and transfers that are unwarranted and adversely affect the timeliness and quality of its service to veterans. We were heartened, however, to hear the testimony by Under Secretary Thompson that if these people weren't adequately trained to do the job, then he really wouldn't want them working in the C&P service. After all, that is exactly what has gotten them into their current predicament with the claims backlogs. With the near crisis situation in claims processing, this is no time for questionable moves or makeshift solutions. Claims adjudication, Mr. Chairman, in our view could be made less burdensome for VA and claimants by legislation by this committee to override existing judicial interpretation of the well-grounded claim requirement.
    Throughout VA's history, it has had the duty to assist veterans in gathering the evidence necessary to substantiate their claims. Veterans are not required to prove their claims to a certainty, but only to submit enough evidence to demonstrate that their claims are indeed well grounded. Congress thought that the preservation of this burden of proof and the duty to assist so important that it included them in the Veterans Judicial Review Act. However, the Court of Veterans Appeals has interpreted the statute as requiring a veteran to submit enough evidence to establish that the claim was well grounded before VA has any duty to assist. This in our view defeats the purpose of the duty to assist because for the veteran to obtain VA's assistance, the veteran must first do the very things he or she needs assistance with.
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    When veterans unknowingly fail to meet this preliminary requirement, the VA or the Board of Veterans' Appeals summarily denies the claim on the technicality that it was not well ground. This court-imposed formality is, again, in our view counterproductive and contrary to the intent of Congress, and that is why the Independent Budget recommends remedial legislation.
    Mr. Chairman, in the budget process, we always look for ways to most efficiently and effectively use VA resources. Unfortunately, at least in our view, some masquerade schemes to reduce veterans' rights, benefits, and services as ways to increase efficiency, and there have been many in the past. The most recent example perhaps is the Commission on Servicemembers and Transition Assistance, which recently recommended legislation to retroactively change the status of military service after February 28, 1993, from wartime to peacetime service, even though we have continuously been engaged in hostile military action in the Persian Gulf since the beginning of the war with Iraq.
    Although the costs of our national defense have always been viewed as a Federal Government responsibility, the Commission recommended shifting the cost of treating service-connected disabilities to the private sector. Finally, the Commission has recommended combining VA and DOD's disability compensation programs and health care programs.
    While we agree, as has been stated today by some, that there are many, many commendable and positive recommendations in that report, there are also some that we don't think do well and right for veterans, and we are going to strongly oppose those as strongly as we will support others.
    Mr. Chairman, I was struck, sitting here, by a lot of things, and I have two comments in particular, one from Secretary West regarding Mr. Evans' question about the merging or bringing together the function that was contained in the budget of DOD and VA, not so much that he was unaware that they were there but there was obviously no consultation by anybody in the Administration, DOD, White House, or OMB with the VA on that. If these kind of recommendations are going to be made with the VA left out in the lurch, it leaves even more importantly the comment that you made, Mr. Chairman, about the work of this committee trying to elevate the VA to a status of Cabinet level and the very importance of why that was done.
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    The other thing that I was struck by was the Secretary's comment that he, in the context of Mr. Bilirakis' comment about trying to give the Secretary credit for increasing the budget request for health care, Secretary West's comment that he supported the President. And I understand also, as was made, the comment made by someone on the committee that that is his job and that is his position and there are political overtones to all of that. But, really, we are all here to do one job, and that job is to do right by veterans. And if we can't advocate for veterans, then I am afraid we are not doing our job correctly. And we all need to look at exactly what we are doing and how we are doing it and where we are doing it in order to make the job that you have and that we have all that much easier and to do the right thing for veterans.
    Thank you, Mr. Chairman.
    [The prepared statement of Mr. Gorman appears on p. 94.]

    The CHAIRMAN. Ms. A'zera.

    Ms. A'ZERA. Thank you, Mr. Chairman. We appreciate the opportunity to join with our distinguished colleagues from the Independent Budget to provide testimony to the House Veterans' Affairs Committee on the Department of Veterans Affairs budget for fiscal year 2000.
    As you may know, AMVETS' portion of the Independent Budget is the National Cemetery Administration section, and this is my third year personally of working with the IB. To me, it may be a small section, but it is also a very important section. And if you don't believe me about that, we have tons of letters—and I know you receive letters also—from family members whose loved ones were refused to be placed into a cemetery because it was too full or even refused military honors because they could not be provided. So that gives proof that, although a small section, it is also a very important section of the IB.
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    Expansion of the VA cemeteries over the next 10 years is critical to meeting the burial demands that will be placed on the system. NCA projects that interments will peak at approximately 107,000 in 2008. It has, however, no strategic plan in place beyond the year 2000. The IB recommends NCA establish a longer and successive planning period to develop strategies for obtaining funds, acquiring land, and assessing veterans' burial preferences so that the system is responsive to the needs and demands of veterans and their families. And as Congressman Smith brought up earlier, the time it takes to get a cemetery on line is about 5 to 10 years. So we don't have the time right now to wait for that to happen to meet the critical needs in 2008.
    Of the 115 national cemeteries, 22 are closed to new burials and 36 are only open to cremated remains. Although there are three new cemeteries that will be open this year in Texas, New York, and Illinois, there are no plans to address the burial needs of major population centers such as Atlanta, Miami, and Sacramento. To date, VA has built or initiated construction of new cemeteries in only six of the ten areas most in need, as identified in the congressionally mandated study of 1987.
    The IB partners would like to acknowledge the ability of the dedicated staff who continue to perform the burial mission of the VA, despite the budgetary shortfalls, inadequate staff, aging equipment, and the increasing workload of new cemetery activations, development of gravesites, and land acquisitions. With the emphasis on a smaller and more efficient government workforce, the staffing needs of NCA have become more critical as the interment rate has increased. And I personally have toured a couple of the cemetery systems, and I can tell you that they are very prideful of their cemeteries and the staff works very hard to make it work.
    In 1978, Public Law 95–476 authorized VA to administer the State Cemetery Grants Program, under which States receive financial assistance to provide burial space for veterans and eligible dependents. State veterans' cemeteries are operated and primarily maintained by the States. Recently passed legislation by last Congress allows States to receive 100 percent funding from VA to establish a State veterans' cemetery. The newly funded grant program should encourage States to establish cemeteries to meet the demands of the aging veteran population and the rising interment rate. The expanded grant program will also create new funding demands of the program. The IB recommends an increased funding level to ensure that all approved State cemetery grant applications will be funded, and currently right now we don't believe there is enough money in there to meet the needs and the demands on this program.
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    I also would like to touch a little bit on the military honors. As you know, with the DOD Authorization Act, DOD and VA were asked to come together as a task force, and we participated in that task force at the meeting that was held November 17 at the National Guard Association Headquarters, and Secretary Gober participated in that also. We are waiting to see what the recommendation of DOD is back to Congress. They are supposed to make their recommendation, I believe it is by April, so we are waiting to see what happens with that.
    Whether or not Congress accepts their recommendations, according to the law, the current law will take effect that after December 31, 1999, all requests will be honored. And while we are waiting to hear what they have to say about it, I think one thing that definitely has to be added to that is a directive to the service Secretaries themselves. At the conference, we found out from the Marines that they don't have a denial rate. They make it happen regardless, and that is because their commitment from their service Secretary says it will happen. And I think that that needs to play a part in all the others, too.
    In summary, the addition of new cemeteries, coupled with the increased interment rate of the aging veteran population, has intensified the NCA's budget problems. In order to address all these funding issues, our recommendation is that Congress fund the NCA account at $106 million for fiscal year 2000. This amount is $9 million more than the Clinton-Gore administration budget proposal. It accounts for the higher cost of administrative expenses due to increased programmatic workload, general inflation, and wage increases.
    In conclusion, long-range planning and adequate funding are crucial to addressing veterans' burial needs during the peak years and beyond. Shortfalls mean reduced services to veterans, cemetery neglect, and disrespect to the memory and honor due to our Nation's servicemen and -women.
    Mr. Chairman, I will be happy to address any questions from the committee.
    [The prepared statement of Ms. A'zera appears on p. 102.]
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    The CHAIRMAN. Thank you. Mr. Steadman.

    Mr. STEADMAN. Mr. Chairman, members of the committee, the VFW is glad to be co-author of the veterans' Independent Budget. Our contribution lies in the construction portion, but we are obviously concerned for all aspects of the VA's budget, and I feel compelled to mention a few grave concerns about this budget.
    The administration's proposed budget for DVA is devastating, we feel, to our Nation's veterans. This proposed budget will seriously undermine VA's ability to provide quality, timely, accessible health care for veterans.
    The VFW hears daily complaints of increased waiting times for veterans to see specialty providers, such as orthopedic doctors or dermatologists, and this seems to be happening throughout the country. More egregious, however, is the 1-year wait for hip replacement surgery in Ann Arbor, the 1-year wait for dentures in Maine, and the 1-year wait for a dermatology appointment in New Orleans. These are only a few examples, unfortunately, of what we think is a nationwide epidemic—an epidemic of increased waiting times and delays in getting appointments which, in these examples, can only be interpreted as a denial of care. And it will get worse this year and next year because of this proposed budget.
    For a fourth year in a row, the health care appropriations is flat-lined at just over $17 billion, absolutely no increase to cover new programs or inflation. The administration's budget is worse than a flat-line budget. It is a ''negative growth'' budget that threatens the health and well-being of veterans.
    This proposed budget does not provide any real increase in personnel desperately needed for important projects needed to correct quality problems in the processing of veterans' claims. The funding proposal is unrealistic and unfair. It is unfair that, in the presence of the largest budget surplus in recent history, veterans are once again being asked to sacrifice with essentially a ''negative growth'' budget.
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    Let me now address our primary responsibilities, VA construction.
    The VA construction budget consists of major construction, minor construction, and grants for construction of State extended-care facilities, grants for States veteran cemeteries, and the parking garage revolving fund. The VA construction program must face the serious challenge of modernizing and replacing major patient care facilities as well as repairing rapidly aging infrastructure.
    The ongoing transformation of the VA health care system from an inpatient hospital system to a system of outpatient community-based clinics has taxed the system's aging and antiquated infrastructure. In the 12 previous editions of the Independent Budget, we have strongly advocated budget increases to ensure that patient care, safety, and privacy needs are met. The construction needs have consistently exceeded the authorized construction budget. This has created a growing backlog in projects that are needed to meet critical patient care needs and safety requirements. This practice is totally unacceptable and must be stopped.
    We believe that the VA's construction program must emphasize expanding primary care access, making facilities more modern and attractive, and increasing long-term care capacity in non-institutional setting and institutional settings. Not only does this make the VA more efficient, but it also raises the quality of life of our veterans. Veterans deserve nothing less than what is available in the private sector, both medically and by utilizing modern and up-to-date facilities. Too often, however, the quality of life that is afforded veterans who utilize the VA health care system is compromised by inadequate funding, overworked staff, and decaying physical plants.
    The need for additional outpatient and extended-care facilities and infrastructure improvements are now the most important construction needs in the VA health care system. Unfortunately, many renovation projects are threatened because the costs exceed the minor construction project ceiling of $4 million. Therefore, we recommend that the minor construction cost ceiling be adjusted annually, using an inflation-adjusted matrix, so funding shortfalls due solely to inflation of any costs do not continue to occur with each passing year.
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    An independent study by Price Waterhouse concluded that over 42 percent of all Veterans Health Administration facilities are at least 50 years old. The study concluded that major and minor construction accounts were significantly underfunded and that the VA has not been able to make a significant investment in its aging properties. This has created a backlog of maintenance and repair projects. Inadequate construction funding will make it difficult for VA to entice paying patients into aging and inefficient structures.
    We recommend major construction funding at $176 million and minor construction funding at $185 million.
    In conclusion, Mr. Chairman and gentlemen, this epidemic must stop. We must turn this flat-lined, negative-growth budget into something that the VFW, the Independent Budget, your veterans, and you can agree will be beneficial to veterans. Nothing else will do.
    This concludes my statement, Mr. Chairman. May I ask that the Independent Budget Executive Summary be entered into the record?
    The CHAIRMAN. Without objection, certainly.
    [The summary appears on p. 107.]

    Mr. STEADMAN. Thank you, sir.
    [The prepared statement of Mr. Steadman appears on p. 105.]

    The CHAIRMAN. Thank you, Ken.
    The members of this committee are going to do all we can. It is obvious this morning that no one on this committee, I believe, is happy with the administration's budget. But when the administration doesn't come out and request some of these things, it makes our job extremely difficult to go to the appropriators or the other committees and say we need this money. Their response is, well, the administration didn't ask for it. So you know what position we are in, and we are going to do all we can. We are going to need your help more than ever, and we thank you once again for all the work you do on this budget, and in other areas, in helping us to fight for the veterans.
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    The gentleman from Pennsylvania, Mr. Doyle.
    Mr. DOYLE. Thank you, Mr. Chairman.
    I would just reiterate what our chairman just said. You are preaching to the choir here, but our real job is going to be amongst our other colleagues in the House, and that is where the VSOs can play a major role of lobbying Members of Congress that don't sit on the Veterans' Affairs Committee, and especially those appropriators, that this budget just is unacceptable and does not serve the needs of veterans. So we will ask for your support in the days to come, and I think you will find most members of this committee, if not all, will be championing increases in this budget.
    The CHAIRMAN. The gentleman from Mississippi, Mr. Shows.
    Mr. SHOWS. No.
    The CHAIRMAN. The gentleman from Arkansas, Dr. Snyder.
    Mr. SNYDER. Thank you, Mr. Chairman. I just want to make a comment. It seems like—this is my second term here, but we get ourselves in this pattern of the President probably knows that there is a tremendous constituency for adding money to the budget, but no matter what budget he comes out with, there is going to be those of us who will say it is not adequate. You have obviously presented us very eloquently the need for additional dollars. So they come out with a budget knowing we probably will fix it, and we get ourselves in this pattern. And I don't think it is a very healthy pattern on either side.
    I don't know how we get out of it. I know Mr. Hefley on our MilCon, he got dissatisfied a few years ago with the National Guard Bureau not asking for armories because he knew that we would do add-ons, and he just refused to have any add-ons. So 2 or 3 years went by, but finally they started putting it in their budget, which was good.
    I appreciate your time. I think your Independent Budget is going to get a lot of study, and it is going to be helpful in the process this year. I appreciate your doing it.
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    The CHAIRMAN. Thank you, Doctor.
    Mr. Bilirakis?
    Mr. BILIRAKIS. Just to reiterate and endorse all of the other comments and to commend this group of the Independent Budget. I really am pleased with the way you present it, too, the way you kind of break down various areas and each one of you concentrates in a certain area rather than basically repeating everything. So I just wanted to commend you, Ken, and all of the others, for your great work.
    Thank you, Mr. Chairman.
    The CHAIRMAN. The gentleman from New Jersey, Mr. Smith.
    Mr. SMITH. I, too, want to thank the VSOs for their excellent testimony, and I really believe the Independent Budget is absolutely invaluable in terms of giving us a blueprint to look at the administration's request and figure out where we go with funding, and you just give us a great marker to work with, and I want to thank you for it. And I want to thank the chairman for his leadership.
    I have been on this committee now for 19 years, and through successive administrations we have always had this problem, although it has gotten worse, I believe, in the last couple of years, and perhaps more so this year than any other year, with gross underfunding of the VA and, by extension, our veterans. So hopefully at some point—and I think the point was made just a moment ago about letting them kind of stew in their own juices, but we can't let that happen, obviously, with the VA. And we will respond, and I think respond in a bipartisan way, to make sure there is enough money there.
    I think Bob Stump, our chairman, has put it well. Unfortunately, when there is a low-ball figure, as you know so well, we have a real devil of a time with our appropriators who are loath to go above earmarks and levels of funding that have been suggested by the VA.
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    I would hope that the VA itself would fight much harder with the others within the administration who are putting together the budget. And when the Secretary says he doesn't know how something got in there, I quake.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you.
    Any closing comments, gentlemen?
    Mr. STEADMAN. Mr. Chairman, on behalf of my colleagues here, I would like to thank you and the members of this committee for your words of encouragement. We started this process early on this year. Back in November we issued a critical issues report, which I commend to every member of the committee. And we have taken this battle as far as we could. Now we must make our case to the Congress. We are ready to work with the Congress to help America's veterans.
    Thank you, sir.
    The CHAIRMAN. Thank you, gentlemen. Thank you.
    If we can proceed rapidly on with our last panel today: Mr. Williams of the American Legion and Mr. Rhea of the Non Commissioned Officers Association, testifying on behalf of the National Military Veterans Alliance.
    Gentlemen, we welcome you today, and you are each recognized for 5 minutes. I don't like to limit you. If you need to go over, please do. We appreciate your waiting until the last, but your entire statement will be included in the record, and you may proceed in any way you see fit.
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    Mr. RHEA. Thank you, Mr. Chairman. Good morning. NCOA always appreciates this opportunity, Mr. Chairman. We thank you for that, and we thank you for including our prepared statement in the hearing record.
    As you have read that statement, you know that it reflects our concerns and that our concerns parallel many of those that have been expressed by the chairman, Mr. Evans, and other distinguished members of this committee. Rather than rehash some of that which has already been said, permit me please to just take a few moments and make some overall observations and comments.
    Veterans were pretty straight lined in the Balanced Budget Act of 1997, and those caps are now translating into real reductions. Last year veterans lost nearly $20 billion in budget cuts and have lost that much again over the previous 10 years. Yet overall Federal spending continues to grow, and the President has proposed nearly 100 new programs or initiatives in fiscal year 2000, yet he proposed no relief for important, worthy veterans' programs and benefits.
    Two years ago, this committee and the Senate Veterans' Affairs Committee joined the House and the Senate Armed Services Committee in establishing a congressional commission to examine veterans' benefits and programs. NCOA was honored to have worked with former Senator Dole and his staff in the legislation that mandated that review, and we salute the distinguished members of this committee for the tremendous work you did that resulted in that initiative becoming law.
    Mr. Chairman, it would take the restoration of only a small amount of the cuts over the next few years to make up for the neglect of recent budget cycles. It would also take the restoration of only a small amount of past cuts over the next few years that would also allow Congress to address and possibly enact many of the tremendous improvements proposed by your own Transition Commission.
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    Our message to you this morning is this: We urge this committee to work with the Budget, the Appropriations, and the Armed Services Committee to establish a funding plan that would allow us, beginning this year, to provide for a newly enhanced GI bill, a substantially revised employment program for veterans, an affordable program of medical benefits for veterans, and for some of the dozens of other new and revised program initiatives contained within the report.
    In addition to establishing a funding plan, the association would recommend that we also establish an aggressive timeline to get the job done.
    The Commission's final report presented a road map, and as someone observed just a few moments ago, the Independent Budget has presented you a road map. Together we believe they can be used in many instances to repair important programs and benefits that have become outdated or seriously deficient.
    As we close out this century, Mr. Chairman, I think Congress has a unique and a rare opportunity before them. They have an opportunity to deliberate and possibly enact improvements to these programs in a surplus budget environment. It is NCOA's belief that your Commission did its work that you, the members of this committee, assigned them to do.
    Mr. Chairman and distinguished members, NCOA and other veterans must now rely on your leadership to ensure that those efforts were not in vain. We stand ready to work with you throughout this session to help get that job done, sir.
    Thank you.
    [The prepared statement of Mr. Rhea appears on p. 128.]

    The CHAIRMAN. Thank you. Mr. Williams.
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    Mr. WILLIAMS. Yes, sir. Thank you.
    Mr. Chairman, I would just like to add, before I present my oral remarks, that we are in this together. This committee, like the American Legion and our sister organizations, are advocates for veterans, and I know this committee will do it darnedest to ensure that proper funding is initiated to ensure that the services that we provide our Nation's veterans are fulfilled.
    The American Legion appreciates the opportunity to provide its views on the President's fiscal year 2000 budget for the Department of Veterans Affairs.
    Mr. Chairman, at the outset, the American Legion believes that many areas within the President's proposed budget require improvement. Conversely, we are pleased with the President's recommendations to provide additional resources and staff to met the demands in processing and adjudication of veterans' and dependents' claims in a timely and accurate manner.
    As you well know, on October 6, 1998, our national commander, Harold ''Butch'' Miller, from the Department of Virginia, presented the American Legion's specific budget recommendations for the Department of Veterans Affairs for fiscal year 2000 before a joint session of the Congressional Committee on Veterans' Affairs. Mr. Chairman, there is nothing that has changed to modify those particular recommendations. We are confident that the amount of funding requested by Commander Miller presents a more straightforward budgetary picture of the Department's needs than those presented by the administration.
    The American Legion believes that funding for veterans' benefits and services is a bipartisan matter. There is no particular philosophy that should guide VA funding issues other than doing what is fair and what is right. VA programs and services symbolize a sacred trust between the Federal Government and those who have faithfully served in the Armed Forces of this great Nation. The President's fiscal year 2000 budget does not uphold the complete commitment of this Nation to its veterans and dependents.
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    Mr. Chairman, the Balanced Budget Act of 1997 is creating damaging and severe effects throughout the Veterans Health Administration. For the past 2 years, funding has essentially been frozen at the fiscal year 1997 level. Apart from unsubstantiated third-party insurance reimbursements, Congress has not authorized sufficient funding for the medical care programs and services of the Department. The committee knows that the Veterans Health Administration is facing many critical choices due to funding shortfalls.
    The American Legion fully acknowledges that over the past few years it was important to improve internal efficiencies rather than pump more dollars into an old, antiquated system. However, the trend across the Nation today is declining real dollar budgets and increasing workloads. There is little additional margin to decrease internal efficiencies without harming core VHA programs.
    For fiscal year 2000, the American Legion recommends a funding increase of $1.4 billion above the current year level. This is separate from any anticipated third-party reimbursements. Mr. Chairman, this is the minimum amount of funding required to permit VHA to successfully meet all programs' requirements and to continue providing high-quality health care.
    Mr. Chairman, beyond the immediate issue of fiscal year 2000 funding, the American Legion believes the Congress and VHA must explore a range of options to increase annual revenues. The annual appropriation process has historically been the sole source of VHA health care funding. In addition, the option of increasing third-party insurance reimbursements and Medicare subvention are now before the Congress. The American Legion suggests that Congress must meet these issues head-on and develop a mechanism to permanently improve VHA's funding predicament.
    The American Legion believes a third option that Congress should adopt is seeking to bring new business into the system, as would be accomplished through the GI bill of health. A GI bill of health demonstration program can easily be incorporated into a Medicare subvention pilot program. The American Legion testified several years ago during the hearings on eligibility reform that the system would implode if VHA's funding mechanisms were not reformed along with eligibility. Mr. Chairman, that is exactly what is occurring today.
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    Mr. Chairman, one day in the not too distant future, we will wake up and discover that the VHA health care system cannot withstand repeated marginalized budgets. There are indications that this is occurring today within many of the VHA's 22 veterans' integrated service networks. This issue is not so alarming until it occurs in your own back yard, as was attested to today by several members of this committee. The recommendations contained in the GI bill of health will help prevent this inevitable day of reckoning.
    As this Nation confronts the subject of saving Medicare for future generations, one only needs to study how the Veterans Health Administration squeezes its dollars. Mr. Chairman, the American Legion also recommends that Congress closely review the President's inadequate fiscal year 2000 funding proposals for medical and prosthetic research, major construction projects, the state extended-care grants program, and the national cemetery system.
    The American Legion is generally pleased with the proposed additional resources for the claims adjudication process, and it will take some time before these new resources are fully productive. They will greatly support VBA's road map to excellence. Sadly, however, the first increment of additional FTE and resources for claims adjudication represents a belated recognition that the effort to downsize well-trained personnel in favor of increased computer dependence has failed. This failure led to a deterioration in timeliness and the growing backlog of claims awaiting final disposition. The American Legion supports the efforts underway to improve VBA operations.
    These actions validate the adage that there is no substitute to getting the job done the first time.
    Mr. Chairman, that concludes my testimony. Thank you.
    [The prepared statement of Mr. Williams appears on p. 136.]

    The CHAIRMAN. Thank you, gentlemen. We appreciate your waiting and apologize for taking you through the lunch hour here.
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    Larry, thanks for your comments about the transition team. I think they did an excellent job. We have scheduled hearings. Bob Dole has agreed to testify. On the staff level, we are already working with the Armed Services Committee or shortly will be working with them. And one thing that may help a little bit, we have in this new Congress 11 members that are both on this committee and on Armed Services, so that is roughly a third of this committee. That may help and we may get their attention over there.
    Mr. Bilirakis?
    Mr. BILIRAKIS. Mr. Chairman, I just wanted to say to both these gentlemen, I am a member of both your organizations. I am a former non-com, as many of us up here were. But, you know, Mr. Doyle said it. We need your help. And the trouble is—now, you all, you have your legislative digests or whatever you call those pages in your booklets.
    Mr. WILLIAMS. Legislative priorities.
    Mr. BILIRAKIS. I am a member of the VFW, too, another one of the organizations. But only a very small percentage of veterans out there are members of the service organizations. Twenty percent, I always say, and maybe less, maybe a little more, so there is a good 80, 85 percent out there who you are really doing the job for who are not paying dues and who are not active in any way whatsoever.
    But it is critical to get what is needed out to them so they in turn can press their elected representatives. And I would just commend to your attention some way where you can get those lists. Many of them, of course, have veterans' benefits, and so you can get them, I guess, somehow through the VA. But there are also other ways. They could really help us do this job, because we agree with you that things have got to be improved, and we need your help to do it.
    Mr. WILLIAMS. I would like to add also that the American Legion, as you are aware, Congressman, have held several town hall meetings around the country, and we have invited veterans who are not members of our organization just to convey what is going on inside the Beltway and that we need their assistance. We put out several publications, alerting them to benefits that they are entitled to, and the fact that if we don't get together as one group, then there is a possibility that this fine benefit package, health care, et cetera, may just one day disappear. So we need them and we agree.
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    Mr. BILIRAKIS. Well, we certainly do have to work together.
    Mr. WILLIAMS. Yes, sir.
    Mr. BILIRAKIS. Mr. Shows didn't say so when he talked about his father and his health care, but he is an ex-POW, and I am kind of proud of the fact that we have got a member of our committee, Mr. Chairman, whose Dad sacrificed, as so many others have, as much as he did.
    Thank you, Mr. Chairman.
    The CHAIRMAN. Thank you, Mike.
    Any other questions or comments? If not, let me express my appreciation to those of you who stayed through this long, long meeting. I appreciate it very much.
    Gentlemen, thank you very much for your hard work.
    The meeting stands adjourned.
    [Whereupon, at 12:39 p.m., the committee was adjourned.]