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House of Representatives,
Subcommittee on Benefits,
Committee on Veterans' Affairs,
Washington, D.C.

    The subcommittee met, pursuant to notice, at 10:30 am, in room 340, Cannon House Office Building, Hon. Jack Quinn (chairman of the subcommittee) presiding.
    Present: Representatives Quinn, Evans, Filner, and Rodriguez.

    Mr. QUINN. We'll call the meeting and hearing to order and begin.
    We're here today, basically, to hear testimony on two separate bills. The first, although not in that order right now, H.R. 3039, is a bill to provide a VA loan guarantee for transitional housing for homeless veterans. The second is H.R. 3211, and that's a bill to codify eligibility for burial at Arlington National Cemetery.
    Before we start with any opening remarks that members have, we're actually going to hear testimony in the opposite order, so that we're going to hear from the gentlemen first on Arlington National Cemetery, and then we'll get to the transitional housing for homeless veterans.
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    And also, before I begin with my opening statement and then yield to Bob Filner, our ranking member, I want to thank Lane Evans, ranking member on the full committee, who traveled to Buffalo, NY, in December last year and others, who I see now in the audience, to join me and Congressman John LaFalce, a colleague from Buffalo, to spend the day in Buffalo to visit some sites of housing and transitional housing, to see first hand some of the success stories that we're able to accomplish, not only in Buffalo, but in other parts of the country. We tried to keep Mr. Evans there with some Buffalo-style chicken wings. And as cold as the day was, the heat of the chicken wings couldn't convince him to stay much longer than the plane that needed to take him back to his home district.
    And, Lane, I want to thank you for coming up. It was a really successful day, I think, that we held there, for all of us, and for the people in my District to get a chance to talk with you and to pick your brain a little bit about your experiences on the committee over the years. More experience than I have had, that's for sure. But, not only did I appreciate it, but I wanted you to know that the constituents, the veterans, and the people at large in Buffalo, NY, were very, very happy that you could join us, and extended an invitation to come back.
    Mr. EVANS. Thank you, Mr. Chairman. Always a pleasure to be following your leadership, even in December in Buffalo. So thank you, and I look forward to working with you and Mr. Filner and the rest of the subcommittee on these issues.
    Mr. QUINN. Thank you, Lane. It was a great trip.
    So, let me begin just with some opening comments on both the bills this morning. And then, as I said, I know Bob Filner wants to join me in some opening remarks, and other members as well.
    We know that it's fairly common knowledge that veterans compromise about a third of the homeless adults in the country. And that's been said at countless hearings, that of all the homeless people, about a third of them are veterans.
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    Public Law 103–446 was enacted during the 103rd Congress and called for programs serving homeless veterans to receive a proportional share of funding for the homeless. Unfortunately, that hasn't happened. It is also another well-known fact that a very high percentage of the homeless suffer from substance abuse and mental illness. So we're taking action to provide a safe sober environment for veterans trying to become productive members of our society.
    Unfortunately, there appears to be a niche that's not being filled in that continuum of service necessary to accomplish this goal. Transitional housing programs, which provide a supportive and structured environment are in short supply, and therefore have become the focus of H.R. 3039, the second bill that we'll hear from the panels on today. This bill also uses a unique financing method to fund the program. And in this—I think whenever we have a unique suggestion to fund anything around this place, it makes us all aware that not everybody agrees with it. As a matter of fact, later this morning, I'm aware that the VA will express its concerns about the bill's financing provisions. But while I believe the financing provisions in the bill are acceptable, we're always willing to listen to the Department's concern and to approach it with an open mind.
    I would note, however, that the committee requested the Department's views in November, and we're still awaiting a written reply to some of our requests. I believe that we mentioned some of the Department's inability to provide us with some of that timely comment in our last hearing just down the hall. The bill, of course, has been on record for several months in a bipartisan way when it was filed. And we're looking forward to working with the Department as best we can.
    Even though I'm disappointed in the VA's position on the housing for homeless legislation, I guess I for one, and I don't want to speak for other members, certainly not for Mr. Filner, but when they oppose it I guess I shouldn't be surprised. And I'm trying not to be too negative here. I said we will approach this with an open mind. Most of the VA's current programs that are serving homeless veterans came about as a VA initiative. All of the programs which the VA operates and talks proudly about in the testimony, that we'll hear a little bit later, were programs conceived and funded by Congress, often in the face of some opposition.
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    Unfortunately, once again, the VA doesn't seem to bring constructive suggestions to the table, only criticism based on what appears to be, at least in my opinion again, not an accurate or clear understanding of the bill. It seems to me that the testimony we'll hear later this afternoon from the VA is a bit hesitant and uncertain at times. The testimony makes no mention of the tens of thousands of veterans who would benefit from the housing which the bill is aimed at stimulating.
    Instead, it seems that they're worrying about having to assign four of over two hundred thousand employees to administer a program that could benefit, we think, about ten thousand homeless veterans a year. I happen to think that reassigning or changing the assignment of about four or five people to benefit maybe as many as ten thousand veterans makes some sense.
    Because of some of the previous legislation, the VA is helping thousands of homeless veterans every month. And that's great. We agree. But too often the battle for recovery is lost because there's no transitional drug-free housing in which to place veterans. Veterans desperately need the housing that this bill will help create. We heard that over and over again at the testimony at least in Buffalo in December. We'd like to see that other veterans' groups, homeless advocates, people like Governor Tommy Thompson of Wisconsin, and people that are knowledgeable in the real estate business, also bankers who are willing to risk their own money to help homeless veterans, would also be able to work in sync with the VA.
    The other bill that we'll be looking at today, also introduced by Chairman Stump, is intended to bring order to the process of being buried in Arlington National Cemetery. Until now, burial eligibility, has been governed by Army and Federal regulations. Unfortunately, those regulations did not include rules governing waiver criteria, and over many administrations, waivers appear to have been granted on the basis of some kind of other connection.
    Chairman Stump and I believe—without speaking for Mr. Evans, he'll do that himself—very strongly that burial at Arlington should not be a matter of connections, but should be based on well-defined and understandable qualifications as provided in this bill. The bill essentially codifies the eligibility of veterans and family members now carried in the regulations. However, the bill removes eligibility for senior government officials, it removes eligibility for members of Congress, as well as cabinet members, ambassadors and others. In the past, veteran status made these officials eligible, a distinct advantage over all other veterans. The president remained eligible as commander-in-chief, of course.
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    It's important to note at this point, I think, for the record, that Chairman Stump and Ranking Member Lane Evans have removed their own eligibility for burial in Arlington through this proposed change. The other significant difference between existing regulations and the bill, is that the bill eliminates waivers.
    I know that we're going to look forward to discussion on the item. We're interested in hearing suggestions from others. And I turn now to Mr. Filner, ranking member of the subcommittee, for any comments that he might have at this point. Bob?

    Mr. FILNER. Thank you, Mr. Chairman. And I join you in welcoming everyone here this morning to discuss these two pieces of legislation, both of which I have originally co-sponsored. We want to hear what you have to say about them. As I looked at the testimony for H.R. 3211, it looks like there's unanimous support for the bill. I think, after all that has been said and written in recent months about Arlington National Cemetery, we agree that Arlington's burial eligibility requirements need to be clarified, codified, and refined. And that's precisely what H.R. 3211 is designed to do.
    I am very proud that this committee has come together in a bipartisan fashion to introduce responsible and evenhanded legislation that will bring continued honor and dignity to Arlington's sacred ground. The matter is too important to us as a nation, a nation that deeply respects its military dead, for it to be manipulated to meet partisan political goals.
    I'm sure all of you were comforted, as I was, by the results of the GAO investigation, which found no evidence that political contributions played a role in waiver decisions. This is not to say that the Arlington waiver process does not need revision and clarification. The process does need to be reworked. And I believe that H.R. 3211 will satisfy the concerns that many of us have about burial eligibility at Arlington National Cemetery.
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    I want to thank in this connection, Jack Metzler, the superintendent of Arlington National Cemetery, for all he has done through the years for America and its fallen heroes. Like his father before him, Jack has poured his heart and soul into Arlington National Cemetery throughout much of his personal and professional life, and his insights will be invaluable to this subcommittee as we consider the issues surrounding burial at Arlington. Jack, we appreciate your sincere and heartfelt commitment to insuring that Arlington National Cemetery is maintained as one of our nation's most beautiful and revered landmarks.
    Mr. Chairman, with your permission, I would like to submit for the record to this hearing the GAO report regarding the authority process and criteria for burial waivers at Arlington National Cemetery.

    (See p. 69.)

    Mr. FILNER. I also ask that remarks from our colleague, Congressman Kleczka from Wisconsin, regarding legislation he has introduced on this issue, be included in the hearing record.
    Mr. QUINN. Without objection, it's so ordered.

    [The statement Congressman Kleczka appears on p. 94.]

    Mr. FILNER. Thank you.
    Moving to H.R. 3039, I thank Chairman Quinn for his leadership on this issue. There is virtually no disagreement, as he has already stated, that one-third of the homeless men in this country are veterans, and that approximately 60 percent of those individuals are veterans of the Vietnam era. On any given night, almost 300,000 veterans are on our streets or in homeless shelters. I am particularly troubled that this number has not decreased over the past 10 years. This says to me that our approach to this problem must change. I hope the transitional housing program created as a result of H.R. 3039 will provide the assistance and support necessary for homeless veterans to reestablish themselves as stable, productive citizens.
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    I share the chair's disappointment at the VA testimony on this legislation. In fact, I'll go a little further, Mr. Chairman. I am astonished at the can't-do attitude that is evident throughout the written testimony. I have not in my tenure on this committee, seen a statement as uncooperative and as unenthusiastic and as lacking in vision and creativity as this statement. There are hundreds of thousands of veterans sleeping on the streets. How can you show so little interest, I ask the VA, in a measure that would help many of these men and women?
    There is some legitimate concern, I agree, from the VA on the funding mechanism. And we'll look at the VA's comments on that. There may be a better way to generate the funds. But let us find a way to do it, and not find a way not to do it.
    I thank you, Mr. Chairman. I look forward to hearing from the witnesses.
    Mr. QUINN. Thank you, Bob.
    As he always does, the ranking member of the full committee is here and we're pleased to have Lane Evans with us. Lane, I would turn to you for opening remarks.
    Mr. EVANS. Mr. Chairman, thank you. I just want to associate myself with your remarks and the ranking member's remarks. I think they're right on point. And I don't have any other additional statements.
    Mr. QUINN. Thank you, very much. Mr. Rodriguez is here. Ciro, opening remarks?

    Mr. RODRIGUEZ. Yes, let me just—I just want to take this time to make just some general comments. First of all, I want to thank you for, you know, pushing on this legislation. I think that there's no doubt that there's a big need.
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    Just want to share, you know, some concerns. And I think sometimes we get kind of callous. I recall the first time I saw the first one that I thought was a homeless in San Antonio, and it attracted my attention, you know, some 10, 15 years ago. And now as I go through certain parts of town, I see them all the time. And now they don't attract my attention as much. They've become a part of the landscape and we take it for granted that that should be something that should be there.
    And I would just want to share with you that some of the studies on the homeless have reflected that about one-third of them on the overall roughly are individuals that have, you know, some difficulties mentally. And I know veterans with the post-traumatic stress disorders that they suffer is something that we kind of take too lightly. And I think that if any one of us has ever experienced, which is not anything close to what they might have experience, but if you've ever experienced anyone getting shot close to you or in front of you, you know. We always provide assistance even to the some of the sites that we've had, where we've had individuals do a lot of shooting. For 2 or 3 years after the incident, we're still counseling with those individuals and providing assistance. And it's something that kind of stays with us and has an impact.
    And I personally had—in the fifth grade, when I was a young man, as a school patrol witness a young girl and a young boy get run over. And to this day I can still see that, you know. And it's not anything close to what some of these individuals might have experienced. And I think we take that thing too lightly, and we need to kind of continue on that.
    The only other thing that I share with you is the fact that along with that I know that a lot of it, in the mental health perspective, has to do with a chemical imbalance. But a lot of that is also triggered because of stress. And a lot these individuals have a great deal of difficulty in terms of employment. And I think we need to do whatever we can to try to see if we can help them out. I'm there with you. And thank you for allowing me this opportunity to say a few words.
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    Mr. QUINN. Thank you, Ciro. And you know, that's one of the things we found at the hearings. And others already know on this committee, that it's a multi-pronged problem, if you will. It's not only the homelessness, but it's the unemployment and the sometimes chemical-related, sometimes alcohol-related problems. And the bill suggests that we try to approach it from different angles of solving it, that's all. And you're right. Sometimes we become callous. If a member of this subcommittee or committee had a single family member homeless, that'd sure change their attitude toward this, I think. And we need to step up for those folks, is all we're saying. And I thank you for your comments. I appreciate it.
    We're going to move then to our first panel. We're very fortunate indeed to have Mr. John McLaurin, Deputy Assistant Secretary of the Army for Military Personnel Management, Equal Opportunity Policy. He's accompanied by Mr. Jack Metzler, the Superintendent of Arlington National Cemetery. So our discussion then, obviously, moves to discussion of H.R. 3211, the Arlington bill.
    Gentlemen, we're both thrilled to have you with us here this morning. We do ask that if you could keep your comments to about 5 minutes or so. We will receive all of your written testimony. It becomes part of the record for this morning. Mr. Secretary.


    Mr. MCLAURIN. Thank you, Mr. Chairman. We're glad to be here to discuss the proposed legislation regarding eligibility criteria for burial at Arlington National Cemetery. As you're aware, the Secretary of the Army has designated the Assistant Secretary of the Army for Manpower and Reserve Affairs as the individual responsible for oversight of burial policy at Arlington. Today, I am representing the acting assistant secretary, who was unexpectedly hospitalized over the weekend. In my capacity as the Deputy Assistant Secretary, I am here to provide the Army's comments on the proposed legislation. Seated next to me, of course, is Mr. Metzler.
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    Arlington National Cemetery is America's most prominent national cemetery and serves as a shrine honoring the men and women who have served in the armed forces and those Americans who have made extraordinary contributions to the Nation. Over the years, the symbolic significance of Arlington National Cemetery has evolved. The Cemetery has become recognized as the Nation's foremost national memorial to its military members and is the final resting place of presidents and other leading public figures.
    The Army supports the committee's effort to set forth in law many of the rules that have governed eligibility criteria for burial in Arlington for the past 30 years. As you know, rules governing burial in Arlington are set forth in Title XXXII of the Code of Federal Regulations. We support your effort to make these rules readily accessible to the American public in the form of enacted laws.
    We also support your effort to identify in law those categories of persons entitled to burial in the cemetery who are routinely granted exceptions, allowing them to be interred in Arlington. These exceptions took into account humanitarian considerations and, as a matter of practice, were granted in cases involving the burial of disabled, adult, unmarried children in the same gravesite as their parents.
    We are troubled, however, with two aspects of this legislation. First, this bill eliminates an entitlement that presently exists for former members of the armed forces whose superior contributions to the Nation are reflected in the high legislative, judicial, and executive offices they hold. For example, Oliver Wendell Holmes is buried at Arlington. Holmes served in the Army during the Civil War and was later confirmed as an associate justice to the Supreme Court. The proposed legislation would preclude Associate Chief Justice Holmes' burial despite his brilliant combat and public service records.
    Under the current regulations governing burial at Arlington, individuals such as Oliver Wendell Holmes would be allowed to be buried in Arlington based on their distinguished service to the Nation. They would not be eligible for burial based on their military service alone, unless they were highly decorated. Changing this rule constitutes a radical departure from current burial practices, and fundamentally changes the character of the cemetery.
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    Second, the legislation creates a set of immutable rules that limit any discretion to grant exceptions in those circumstances that historically have warranted burial in this hallowed cemetery. For example, former Supreme Court Justice Thurgood Marshall did not have military service. Yet, due to his extraordinary public service accomplishments and demonstrated record of supporting this Nation's highest traditions of freedom and democracy, there was overwhelming national support for his interment in Arlington. Under the proposed legislation, Justice Marshall and other extraordinary public servants could not be buried in Arlington National Cemetery.
    In addition, this bill would exclude from burial in Arlington individuals who, while performing a mission on behalf of the United States, make the ultimate sacrifice by giving their lives for their country. For example, Mr. Robert Frasure died in a tragic accident in an armored vehicle in Bosnia. Mr. Frasure was a deputy assistant secretary of state and a special envoy to the president. He had no military service and was, therefore, not eligible for burial in Arlington. We believe that individuals like Mr. Frasure, who are dispatched to strife-ridden areas and make the ultimate sacrifice in service to their country, should not be excluded from burial in Arlington National Cemetery.
    Arlington should be preserved as a national shrine honoring the men and women who have served in the armed forces and those Americans who have made extraordinary public contributions, the vast majority of which are veterans of our armed forces.
    If there is one thing we know, it is that life is uncertain. We believe that there must be a mechanism under the legislation to deal with facts and events that are impossible to predict with certainty today. We recommend that language be included in the bill that would provide the president, through his designee, the Secretary of the Army, the discretion to grant exceptions for burial in Arlington National Cemetery to individuals whose acts, services, or contributions on behalf of the Armed Forces or the Nation are extraordinary and substantially similar to the acts, services or contributions made by the individuals who would be entitled to burial under the legislation that you enact. The authority granted could include a proviso that appropriate oversight committees be notified of each exception.
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    We support the provisions that limit the placement of memorials and monuments, other than private markers at individual gravesites, and that the event that is commemorated is of fitting historical significance.
    In closing, I would like to emphasize that the Army takes very seriously its responsibility to administer and to uphold the sanctity of Arlington National Cemetery as we pay final tribute to men and women who have served our country with distinction. In this regard, the Army has recently completed a strategic plan which is designed to ensure that Arlington will remain active as the Nation's foremost national cemetery. This plan identifies fourteen parcels of land that are located in close proximity to the cemetery and that could be used for future burials. These parcels include contiguous land sites that will be vacated by the Army, Navy, and Marine Corps, including a portion of Fort Myer and the Navy Annex. We solicit your support for this initiative. Acquisition of this property will allow for continued operation of the cemetery through the 21st century.
    We appreciate very much the opportunity to be here, Mr.
Chairman. Mr. Metzler and I are pleased to answer any questions that you may have. And just for the record, I would like to endorse Mr. Filner's comments regarding Mr. Metzler in his service not only to the Nation but to the men and women who serve our nation and the Armed Forces.

    [The prepared statement of Mr. McLaurin appears on p. 96.]

    Mr. QUINN. Thank you, Mr. Secretary. Mr. Metzler, you have a prepared statement, or are you just accompanying us today?
    Mr. METZLER. I'm just here to answer questions.
    Mr. QUINN. Okay, great. And thank you for your comments. We appreciate the work both of you do on behalf of our veterans.
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    I don't know that I have questions. Just a couple of reactions, if I may, and I'd be interested in hearing your comments about it. And then I'm going to yield to Mr. Evans, who, along with Mr. Stump put the bill together of course.
    One of the problems, obviously, from your testimony it sounds like you feel the need to have some kind of waiver ability, there's no doubt about that. The problem when we start granting some kind of waivers is how we maintain that system objectively. You know, Thurgood Marshall and Oliver Wendell Holmes and some others that you mention, I don't think Mr. Filner, who just had to leave, but will return, and I were just saying that I don't know that anybody has a problem with that. But once you begin, where do you end, and how does it stop, and who's the objective body that makes these kinds of decisions? For example, with some exceptions that you mentioned, some that you didn't mention, would burial in a national cemetery be appropriate rather than Arlington National Cemetery? Must it be Arlington? Should it be Arlington?
    And by the way, I want to sort of parenthetically support the outline of the other sites, the additional properties and we're going to be helping you with that and working with you. That's the right thing to do.
    But it just concerns me, that I think one of the things that the two original sponsors of the bill, and Lane is here with us today, are trying to accomplish is that military service is a special way, unmatched by anybody else. Where a common person, without pedigree and background and serving as a chief justice—and all of them have my highest esteem, believe me. But I think some of the intent here is to say that someone who's a common person, who has served their country, needs to be recognized in a unique way. And for now I think a lot of people think that that's one of the purposes at least of Arlington. So, again, it's maybe not a major disagreement, but I hope you understand once we open the door for waivers, the question becomes how and when and all those other things. Could you comment, please?
    Mr. MCLAURIN. Yes, Mr. Chairman. I'd be happy to comment. You know, I appreciate and understand your concerns about where waivers begin and where waivers stop. And I certainly think in legislation you could provide certain guidelines for that. But ultimately, it's going to require confidence, quite frankly, in the person, in the office, that is making the decision on those waivers. Certainly, it is far easier not to have any waivers. That I understand and appreciate. We just think, however, that it's appropriate in this case, to make provision for those waivers. And we think that the Secretary of the Army is the appropriate place to make that decision.
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    As I'm sure you're aware, the procedure that's followed is a very strict procedure and starts with Mr. Metzler, who verifies the facts and makes recommendations accordingly. I just do not know how you can come up with something that guarantees that each and every case will be handled just exactly the way you or another person or I think it ought to be handled. I think we're going to have to rely in good faith on the judgment of the individual making that decision.
    Mr. QUINN. Thank you. And I appreciate that. And believe me, that's the balancing act when we pass laws all the time, isn't it? That we don't pass a law that's so restrictive that we can predict every single time what's going to happen, because then it becomes to restrictive and doesn't allow some flexibility, if you will, and trust. And believe me, I don't think the Congress, nor does the bill, suggest that we ought to be making those decisions.
    And I don't even know how important it is what this member happens to think, because there'll be others after me and there have been others before me. But I'd be interested in even discussing it with you further, after today's hearing. I don't want to monopolize too much of the time here, to see just how we do that. That is a problem.
    Mr. MCLAURIN. I'll be very happy to do that Mr. Chairman.
    Mr. QUINN. Mr. Evans.
    Mr. EVANS. Well, thank you, Mr. Chairman. I know we have very strong bipartisan support for our legislation. I understand you know that as well. But we are open to suggestions and critiques of the legislation as it moves through the process. So we appreciate your being here and look forward to working with you, Mr. Chairman, on getting this done soon.
    Mr. QUINN. Mr. Rodriguez? Excuse me. Thanks for your testimony. We have no other questions for you. Appreciate your coming very, very much.
    Mr. MCLAURIN. Thank you for having us, Mr. Chairman.
    Mr. QUINN. The second panel is Mr. Keith Pedigo, Director, Loan Guarantee Service at the Veteran's Benefit Administration, to be accompanied by Mr. Thomas Lastowka and Mr. Peter Dougherty.
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    Keith, it's good to see you again, thanks for joining us this morning. We're going to begin with I hope not too much of a disruption here to move along. And want to thank you. It seems like such a long time ago when I became the chairman of the subcommittee and received my briefings from you and others. And wanted to say thanks again, that was really well received. And we appreciate your cooperation.
    Again, in this panel, we'd like to ask you if you could keep your comments to about 5 minutes or so, and then we'll entertain some questions and receive your written testimony. You may begin.


    Mr. PEDIGO. Thank you, Mr. Chairman and members of the committee. Before I begin, I would like to apologize on behalf of the executive branch for the untimely submission of the testimony to the committee. It's regrettable and we will strive to rectify that in the future.
    Mr. QUINN. May I say, and thank you for saying that, I think the department, I think everyone should have our schedule of events, as far as I know, for hearings the rest of the way out. All I would ask you to do and others is to take a look at that, and if it seems like you're going to have a problem with a date or a topic just let us know. Just give us a call as soon as you can.
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    Mr. PEDIGO. We sure will.
    It's a pleasure to appear before you this morning and present the views of the Department of Veterans Affairs on H.R. 3039, the Veterans' Transitional Housing Opportunities Act of 1997. I am accompanied by Tom Lastowka, Director of the VA Regional Office and Insurance Center in Philadelphia and Pete Dougherty, a homeless program specialist at the Department of Veterans Affairs.
    Homelessness among veterans is a tragic situation that concerns all of us and is unacceptable in a nation of our rich resources. Solving this difficult problem requires collaboration among a variety of entities. The VA is deeply concerned about the plight of homeless veterans and is committed to taking all reasonable steps to assist these individuals.
    While we recognize the need to address the transitional housing needs of homeless veterans, we have two over-riding concerns regarding H.R. 3039. First, we believe additional analysis needs to be performed to determine whether a loan guarantee program is the best alternative for meeting the transitional housing needs of homeless veterans. Significant uncertainties exist in regard to how such a loan program would be structured and implemented, as well as the ability of the program to generate sufficient resources to fund the full range of support services participants need.
    Secondly, we are concerned about the use of insurance trust fund assets generated from premiums paid by veterans to finance transitional housing loans.
    As we testified before the subcommittee on December 18, 1997, the VA has over 100 specialized programs for assisting eligible homeless veterans. In response to the needs of homeless veterans, the VA developed clinical programs and services to meet their needs. The VA is one of only a few Federal agencies that provide direct services to the homeless population.
    We therefore regret, Mr. Chairman, that we cannot support H.R. 3039, which would authorize VA to guarantee loans for the construction or rehabilitation of multifamily transitional housing projects for homeless veterans. The knowledge and skills that would be required to operate the proposed transitional housing loan guarantee program are very different from those necessary to run the existing VA loan program for guaranteeing loans obtained by individual veterans for single-family housing. VA does not now have the necessary knowledge or expertise to operate the proposed loan guarantee program.
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    Therefore, Mr. Chairman, we are not at this time in a position to express an opinion on how the proposed loan program should be structured and whether these loans would be commercially sound. Until such time as we are able to make a more informed assessment, we can not support pledging taxpayers' funds to guaranty these loans, let alone placing the funds of our national service life insurance policy holders at risk, however worthy the project.
    In VA's 10 years of experience in serving homeless veterans, we have learned that very few veterans were homeless because of economic difficulties alone. The majority of homeless veterans suffer from mental illnesses and/or substance abuse disorders and have significant medical problems as well. In addition to housing, homeless veterans need a wide range of support services that include case management, substance abuse treatment, mental health treatment, assistance with job development opportunities, etc. It seems unlikely, that the rents collected from homeless veterans, who would be living in these transitional housing projects, would provide enough funding to pay for the ''wrap around'' support services that are critical components of a successful transitional housing program.
    Additionally, there appears to be a technical issue with the way the bill was drafted that would result in no increased earnings from the mix of fund investments. Current law authorizes investment of moneys in the NSLI fund in mortgage-backed securities guaranteed by the United States. Preliminary VA analysis reveals, however, that investing in Ginnie Mae securities during the past several years may have actually generated a lower rate of return to the NSLI fund due to the early payoff of loans and the loss on early redemption of such securities.
    Although certain private asset-backed securities might produce a greater yield than government guaranteed mortgage-backed securities, investing in those securities would subject the NSLI fund to added risk. We're concerned that any loss to the NSLI fund resulting from such an investment could be viewed as an unconstitutional taking from the policy holders.
    We believe the principal and earnings of the NSLI fund are for the benefit of policy holders. Although providing transitional housing to homeless veterans is clearly a worthwhile endeavor, any investment decision regarding the NSLI fund must be made with the needs of the life insurance policy holders foremost in mind.
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    Under current arrangement with Treasury, the VA is able to redeem Treasury bonds early without penalty. Early redemption is not possible with mortgage-backed securities. We would therefore be opposed to committing NSLI fund assets to offset the subsidy cost of loans for transitional housing.
    Mr. Chairman, transitional housing programs for homeless veterans are currently being supported through VA's Homeless Providers Grant and Per Diem Program. To date, we awarded $21 million to non-VA organizations to develop programs for homeless veterans. Approximately, 22 projects are now complete and over 600 new beds are operational.
    In summary, the VA has a strong tradition of providing services to homeless veterans to help them overcome their physical, psychological and social needs so they can resume to be productive members of society. VA administers a number of programs to assist the estimated 200,000 veterans who are without housing. More needs to be done. However, VA cannot support taking premiums paid by other veterans for their life insurance benefits, and placing their funds at risk in order to finance this or any other program, however well-intentioned.
    We look forward to working collaboratively with the committee and with other Federal agencies, State and local governments, and nonprofit groups in efforts to assist homeless veterans and to explore options to address transitional housing needs for these veterans.
    This concludes my statement, Mr. Chairman. And I would be pleased to respond to any questions that you or other members of the committee might have.

    [The prepared statement of Mr. Pedigo appears on p. 103.]

    Mr. QUINN. And you're the only one with testimony?
    Mr. PEDIGO. Yes, sir.
    Mr. QUINN. Okay. I think we agree on a number of things—at least in your testimony—I think we agree on the reasons for homelessness as it relates to veterans, maybe homelessness as it relates to all Americans. I think you're right on the mark when you say there are often other problems, whether it's employment or a whole host of other problems a person or a veteran may encounter. The wraparound services that you talk about just now—whether it happens to be from other existing Federal agencies, some even from VA health care facilities, State and local not-for-profit you mentioned as well—I couldn't agree with you more. In fact, that's what we heard in Buffalo at this day-long set of hearings. And that's what we heard when we visited the one and two bedroom apartments and that's what we heard from the families and the veterans. What we heard was they can't do it alone—and we heard that most likely the VA is not the only group that has to be able to step forward and help them. And what we heard was that the traditional way of addressing this concern probably won't work.
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    As Mr. Filner pointed out, we haven't seen a big decrease in those numbers of homeless veterans, not that the VA hasn't been doing a great job with the programs, and you can point to those statistics in there—and we agree there, too, that you're doing a great job. But I want to make certain that we're trying to—maybe—break the mold a little bit with some ways to do more—and we agree there too, because you want to do more. I think there's more agreement than disagreement here, and would say to you—for the record—that we're not suggesting that we do anything illegal. We're not suggesting that we jeopardize any insurance funds for anybody—that will be a technical problem we'll work out and we'll talk with you some more. But, when you say that you don't have the knowledge and expertise to do this—a general question for me would be, ''How can we help you get that knowledge and expertise to do it?''
    Mr. PEDIGO. Mr. Chairman, I believe that in order to administer such a program in-house we would have to acquire that expertise. We would have to hire people with expertise in administering a multi-family loan guarantee program. That would be one option. Or, we would need the funds to hire consultants who already possess the kind of skills that we would need to administer this type of program.
    Mr. QUINN. I agree that that would be one option. I'm only suggesting that we keep an open mind to consider other options. And it always isn't to hire consultants—not always to go out and hire consultants. Because these people that I talk to will tell you that you can keep your consultants, frankly. I didn't say that, but that's what I was told, and we heard this from an awful lot of people.
    Yes, sir, I didn't mean to interrupt. Okay. Mr. Evans.
    Mr. EVANS. Well, I just want to again associate myself with your questions and your remarks.
    We had a wonderful experience up in Buffalo. We found out what could be done and, I guess, as Bob Filner has said, it's very disappointing to hear what you say we can't do, the attitude ought to be what we can do for our veterans. That's what they're trying to do in Buffalo, and I would urge you to work with us to come up with some way of dealing with your inability here to help us with a very important program.
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    Thank you Mr. Chairman.
    Mr. QUINN. Thanks.
    Mr. RODRIQUEZ. Let me just, first of all, say that I'm a little disappointed with some of the comments, and I don't know exactly why those comments were made, because it's understandable that, sure, but if people have mental health problems, and have problems in terms of counseling and job placement, it makes sense that, they're not going to—I don't want to go in for counseling if I don't have a roof over my head.
    It doesn't make sense, if you've ever been in that situation, for me to look for a job when I can't even get there; I don't have a place, you know. So one of the first prerequisites of all that is to assure to the percentage of population that sense of security that's there, and all the data's that there, and the research in terms of marginal hierarchy of needs, that first you've got to have a little roof over your head to kind of feel comfortable. And that makes just kind of sense, because for me to expect for you to give me counseling when I don't have a roof over my head doesn't make sense at all. Because I'm not going to listen to you, even though I might need the counseling. I'm not ready for that. I'll be ready when I feel comfortable, and I feel secure where I'm going to be sleeping tonight and the next day. And so that should be one of the first prerequisites of any of the other services that you might provide.
    And so that's kind of disappointing in indicating that, I would think that with the amount of staff that you have, I don't know, I just kind of have a feeling that, you know, you have a lot of bureaucrats out there, and, with the amount of staff, you would have some that are qualified in looking at housing.
    When I visited some of the Sam shelter in San Antonio, some of the housing—you get to speak—you know, one of the ones in San Antonio that's running it is an ex-alcoholic who was out on the streets and now is running that program, well-educated individual. And so you have a lot of the veterans out there that are capable of running some of those programs.
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    And I think that what we're asking, is maybe meet us halfway. If you can't pull it off, let us know what you might need in order to make that happen. But you've got a lot of people out there that already have the knowledge, and might have, you know. And I would hope that you kind of open up a little more in terms of being able to kind of come to grips with the fact that something's gone wrong; there's still too many out there that are in limbo, and, yes, they do have other problems. But they're not going to come in for counseling unless you provide them that, you know, initial roof over their head and then they might consider some other things.
    Mr. PEDIGO. Mr. Rodriquez, we certainly agree with you that there's a serious unmet need for housing homeless veterans. And what we're saying in the testimony is that we want to work collaboratively with the committee to try to find a solution for this, but that we believe that there are some flaws in H.R. 3039.
    We, clearly, want to continue to try to meet the needs of these veterans. But we have some concerns with this bill.
    Mr. RODRIQUEZ. Can you make some recommendations as to how you feel that you might feel more comfortable with that—or that you feel might be needed? Otherwise, we might have to go through some other agency to provide the assistance and take maybe some of the money that you would have had to provide that assistance yourself.
    Mr. PEDIGO. We would, of course, be willing to sit down and work with the staff on the committee. We've already had a recent meeting, and I think it was a fairly productive discussion. We have some experts on homelessness at VA. And perhaps, with your permission, I might turn to Pete Dougherty who works more intimately with our homeless programs, and ask him if he might have some ideas that we could pursue.
    Mr. DOUGHERTY. Thank you. Mr. Chairman, it's good to see you again.
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    The requirement's section under 3773, gives the Department broad discretion in which to make the determination as to whether a loan should be guaranteed. There're a number of provisions in there bill about wrap-around services, access to medical care that VA may provide, and other services. I think on the program side the bill is well written.
    I'm at least satisfied, given the seat that I have, that the discretion the Secretary would have in guaranteeing the loans is reasonable to ensure that service provider provides high quality of service to veterans. I'm not involved in the discussion about the technical parts because that's outside of my scope and area. My perspective is that the bill is well intentioned given what it asks the department to do in looking at the services that would be offered if, in fact, a guarantee would be provided.
    Mr. QUINN. Mr. Rodriquez is that sufficient?
    Mr. RODRIQUEZ. I just want to make another comment. When we look at—do you have any suggestions? Because my intent—I gather that some of part of the intent is transitional housing. That tells me, you know, at least that just partial, to try to get them, at least until they can get on their own, you know. Do you have any difficulty with that?
    Mr. DOUGHERTY. Transitional housing is, generally, considered to be housing that would last up to 2 years. Many of the programs that we work with have transitional housing. A veteran may come through VA inpatient veteran care programs or other programs; live in a transitional house, have some income, be able to both maintain a length of time of sobriety and maintain their good mental health for a period of time, be able to save money, and to be able to go out into the permanent housing market.
    The concept of transitional housing being up to a 2-year period, which I think this bill contemplates is a very good and effective means of providing service for veterans who need it.
    Mr. RODRIQUEZ. And you would say that that's an area of need?
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    Mr. DOUGHERTY. Oh, yes. We do an assessment through every VA Medical Center across the country where local VA personnel who are familiar with homeless veterans, community service providers, veteran service organizations and others meet. We discuss what the unmet needs are in that community. The need for transitional housing has shown up every year as one of the top unmet needs across the country.
    Mr. RODRIQUEZ. So you're going to try to meet us at least halfway in terms of trying to make something happen?
    Mr. DOUGHERTY. Mr. Rodriquez, on the program side, I think we're more than halfway.
    Mr. RODRIQUEZ. Okay, and on the bureaucratic side?
    Mr. QUINN. Thanks, Mr. Rodriquez.
    Just so, for those who are with us today that may not have all the background we have, we're talking here about what amounts to a demonstration program. We're talking about the VA not being able to guarantee any more than five loans in the first 3 years. That's the legislation—five loans over 3 years. In my estimation, it really is a demonstration program. I said in earlier testimony, ''I think we need to walk before we run with this.'' And we are willing to meet you, as you see pointed out, more than halfway. But we might have to step outside of the traditional way that we're used to doing that—without placing anything at risk.
    Let me ask you a direct question. Would you have a problem having the VA receive advice from a non-profit organization corporation that's already in this business—underwriting loans for transitional housing? In other words, you made a comment before that you don't have the expertise and the knowledge—and I understand that, especially if you're going to try something new, and especially if it's a demonstration project.
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    And we also are not interested here—I'm not—in creating a whole new bureaucracy to say, ''Let's set up a new assistant to the assistant, and hire all kinds of people and get a''—we really are not, particularly, until we wait and see if this demonstration project works. We may be headed down the wrong path; who knows? I think it's worth a try. But, we know there are some people out there who have been doing this; we saw it back in December. Mr. Rodriquez has seen it in his part of the country.
    Do you have a problem with seeking some advice, counsel, experience from a not-for-profit, let's say, corporation—legit, good history, good background, track record, works—without having to ask you to go out and hire a whole new department. What's the downside to that for you?
    Mr. PEDIGO. Mr. Chairman, we would very definitely be open to that type of advice. We would be willing to work with anyone who has expertise in that area.
    Mr. QUINN. Good.
    Mr. PEDIGO. We are in the process of working with the staff here to come up with something that addresses the other concerns to the bill.
    Mr. QUINN. And again, our understanding is—agreed—that it's sort of a demonstration project—five loans over 3 years?
    Mr. PEDIGO. Yes, yes.
    Mr. QUINN. Okay. I don't have any further questions for the panel. Mr. Rodriquez or Mr. Evans?
    Thank you very much gentlemen.
    Third panel will consist of Mr. Raymond Boland from the Wisconsin Department of Veterans Affairs, and Mr. Tim Cantwell from Westside Residence Hall, Incorporated.
    Linda Boone, it's nice to see you here again. Thanks for joining us. Weather's almost the same today as it was in Buffalo.
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    Hate to say that—maybe it's me.
    Mr. Boland and Mr. Cantwell, as we get you set up and ready to go there—I know that you've requested of the committee, since there's quite a bit of a history in the story here, that we waive the—here we are back at waivers again—waive the 5-minute rule and allow you both about 10 minutes in your opening statement. So I would announce to the committee and the members, the audience, that we're going to try to extend that to you—if you wish, to give you a little extra time.
    You may begin, sir, Mr. Boland.


    Mr. BOLAND. Good morning, Mr. Chairman, members of the committee. I really appreciate the opportunity to appear before you this morning and to comment on the needs of homeless veterans. As the State of Wisconsin's Secretary of Veterans' Affairs, I represent the 520,000 veterans in our State. I, and the service officers we have in each of our 72 counties, comprise a delivery system that serves our veterans on a daily basis across the full range of both federal and state benefits and issues. I have direct responsibility for State veterans' programs involving health care, primary mortgage home loans, consumer loans, education, employment and training grant programs, and programs that address the issues of veterans homelessness. I'm also an active member of the National Coalition for Homeless Veterans. I have been involved at the National level with this issue for approximately 5 years. And it is through the Coalition that many of us across the country, of different backgrounds, have come together to share our good ideas of how we can do some of these things differently.
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    In Wisconsin, through collaboration with the U.S. Department of Veterans Affairs, local units of government, nonprofit organizations, and the private sector, we have forged a continuum of care, a model that addresses the plight of homeless veterans on a statewide basis. Our concept enjoys the full support of our Governor, Tommy Thompson, the State legislature, the VA Medical Centers located in our State.
    Although our particular program is State-driven, it is actually operated by community-based, non-profit organizations. My role has been to assist these organizations in acquiring the facilities and resources they need to do the job. And we have also formed a State government bridge between the U.S. Department of Veterans Affairs and our community providers.
    And I want to tell you today about an example of the potential of what H.R. 3039 is designed to accomplish. In Wisconsin, we did something similar, by using State funds for the same purpose—to guarantee a loan made by a bank to a non-profit organization for the purchase of property for veterans transitional housing.
    In our largest city, Milwaukee, we had a community-based provider who sought to expand support to homeless veterans. A vacant hospital building at an inner-city location was for sale and was ideally suited to become a transitional housing facility. The deal called for the downpayment to be shared by the county, the community organization, and my agency. But the lender would not make the loan without additional default security. Using funds from our State Veterans' Trust Fund—which also happens to be an invested account—we furnished the amount they required to guarantee the loan. That was 4 years ago.
    Since then, this facility has served more than 1,000 veterans. The non-profit provider has also received enough grant monies to liquidate the mortgage balance. None of this would have been possible without our help. And that's why I believe that House Resolution 3039 is an excellent concept. It incorporates the diverse strengths of government, non-profits, and the private sector. It further is a social agenda at no cost to the tax payer. The proposal also makes sound economic and business sense.
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    This proposed legislation addresses a key segment in a process needed to transition homeless veterans back into the mainstream of society. That key element is housing affordability. Our program in Wisconsin provides the services veterans need to end their homelessness. The primary strength of our model is that we require each resident to work and to restore financial responsibility.
    Those veterans who require treatment or rehabilitation due to substance abuse, mental disorder, or other conditions that inhibit their ability to hold employment are screened and referred to treatment by our on-site VA clinicians. Following treatment, our residents enter a rigorous daily schedule of employment, job training, and community service as they proceed through a phased process toward self-sufficiency. When they complete this program, they leave with full employment, enough savings to begin a new life, and a manageable budget.
    And at the heart of our model is the belief that work is therapy. But an employed veteran can only acquire living accommodations that are available and affordable. And this is why we need your help. We urgently need more programs like this throughout the country if we're going to deal, seriously, with the problem. Working collaboratively with you and the U.S. Department of Veterans Affairs, I know we can make a real difference, and this belief is not based on fantasy. There are now enough of us who are proving from coast to coast that these partnerships can succeed.
    The proposed legislation will give the USDVA the ability to expand its key role within the collaboration. It would give them the authority to provide the financial guarantees necessary to assure the lending sector.
    It is my belief that we cannot leave veterans homeless on the battlefields of life in our communities. We wouldn't leave them behind on the battlefields in combat. And, therefore, we must all do everything we can to ensure that they are brought back into the fold. And to do less than our ability would allow us is to condemn the very portion of our population to whom we owe so much. I therefore, urge your support of this legislation, and once again I appreciate very much the opportunity to testify today.
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    [The prepared statement of Mr. Boland appears on p. 109.]

    Mr. QUINN. Thank you, Mr. Boland. We appreciate the opportunity that you took time to be with us. And you are to be congratulated, as well as your governor, for pressing forward with the program, and I think this is a classic example of where your Federal Government could learn a lesson from what you've done. And that's why we appreciate you being with us today. Congratulations.
    Mr. BOLAND. Thank you.
    Mr. QUINN. Mr. Cantwell, from the other end of the country out in California, heading up the Westside Residence Hall, Incorporated. You may begin your testimony now.

    Mr. CANTWELL. It's a pleasure, my name is Tim Cantwell. I am President of Westside Residence Hall. We're a single purpose, for profit housing development company formed for the purpose of acquiring a 700-student residential dormitory from Northrop University in Los Angeles in 1993. This initiative was undertaken initially, by a group of prominent veterans in Los Angeles known as the Genesis Committee. They recognized a huge need in L.A.
    Nearly 10 percent of the homeless veterans in the country are located in Los Angeles. At that time, there were 20,000 homeless in Los Angeles County and only 100 beds set aside for veterans. They determined to do something in scale to begin to address this serious issue. They identified the facility, and while in search of locating financing to acquire it, approached Century Housing Corporation which was at that time, known as the Century Freeway Housing Program which was a division of Housing and Community Development, State of California.
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    It has subsequently become the first privatized agency of the State of California. It is now a non-profit known as Century Housing Corporation. And as such, had significant assets available for financing, but they were all committed through the course of a competitive effort. The group determined that only someone that already had a financing commitment would be available to use this funding for purposes of this real estate. They approached Cantwell Anderson, which is a real estate development company of which I am a principal.
    We looked at the real estate and determined that it would be feasible for a number of different purposes, developed exit strategies in the event that no bankable segment of the homeless veteran population could be identified, and proceeded with securing the property. After significant study across the country—many of whom are board members and past members of the National Coalition for Homeless Veterans—it was determined that, clearly, a significant percentage of the homeless veterans that are out on the street—if given an opportunity, the proper setting, the proper clinical framework, the proper life skills support—would jump at the opportunity to take financial responsibility for themselves in regard to the rent associated with acquiring housing.
    That would work, so long as it was possible to look at a homeless veteran as a human resource—help them recognize that potential, and then concomitantly, they're a consumer; that consumer can pay rent. And if you can pay rent, then you could underwrite a real estate transaction. And it was from this fundamental principle that we move forward on the strength of financing this purchase and renovation of this 150,000-foot facility. That was in 1993.
    As we sit here today, more than a thousand veterans have moved through in the last two quarters alone—263 vets have come through our welfare to work entry. Seventy-eight percent of these veterans have found permanent employment, 65 percent have transitioned into the rental operation or into their own permanent housing. Currently, more than 20,000 meals a month are produced, our outreach efforts in the last quarter have touched 2,000 homeless veterans in Southern California.
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    This is a collaborative effort; by no means is this any one person's doing. L.A. Vets is a joint venture between Westside Residence Hall, Inc. a for profit development company and Los Angeles Veterans' Initiative—which is a 501(c)(3) non-profit. The division of labor has the for-profit responsible for designing, building out, delivering, and managing the housing; the non-profit coordinates supportive services. An intimate partner in the effort is the West L.A. VA Medical Center—six FTE are on-site. Department of Labor EDD rep is on-site. Inglewood Adult School is on-site. The Vet Centers are there on-site conducting PTSD classes. All of the people that you can think of that would make sense to bring to bear, at one place, for the purposes of enhancing the probability of a successful reintegration into society, is who we have there.
    The efficiency is staggering. Of the first 308 veterans that were referred into the program from the West L.A. VA Medical Center—in the year before they came to the facility, they engaged the healthcare system a lot. Eighty-five percent of them had an average of 2.2 admissions per year. The average length of stay—129 days. You roll that up, it was about 29,000 inpatient stay days. In the year after they went to Westside, of the same 308, only 41 percent went to the hospital at all, their admission rates dropped to 1 time per year for an aggregate of 3500 inpatient stay days. The difference between 29,000 and 3,500—25,000 inpatient stay days of reduction to the West L.A. VA Medical Center—pick a number on what that cost savings is—big numbers.
    If you were to roll that forward, behind 5,000 units of housing like this, [produceable from H.R. 3039] similarly organized or organized and tailored appropriate to a given community—and let me tell you there are lots of good ways to do this—but the fundamental principle is, community-based organizations coordinating, collaborating, and accessing all the other streams of funding that's available—we've mentioned HUD in the past—the ability to deliver housing significantly enhances elbow room at the table in the competition for funds with HUD, if you can think about that for a minute.
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    The community-based organizations around the country, the VA's own survey and their challenge, all point to the same thing. If you don't have a place to go after you complete primary treatment, the recidivism rate and the probability of a relapse back into substance abuse or whatever your habits were that got you into the street in the first place, is very great. It is necessary to have a mechanism that provides a long-term, stabilized, therapeutic environment. If we believe that a significant percent of our homeless veterans are in a position to support themselves from the means of their own production so long as they have the proper job coaching, placement, relapse prevention, and clinical treatment pieces, then it stands to reason that we, as a society, can find a way to deliver that housing.
    I'd like to read to you some testimony that we delivered before the House Appropriations Subcommittee in 1994.
    ''The comprehensive continuum of care necessary to truly impact the lives of these fallen heroes demands the highest level of human resources available, in a variety of clinical and service areas. These requirements are capital-intensive in an era of critical fiscal limitations on government spending as well as general societal impatience with entitlement programs. Veteran service provider organizations currently in operation struggle for their very survival while attempting to meet a piece of the continuum of care. Virtually none of them possess reliable funding for general administrative overhead so critical to the management of any organization. These struggles also force program development based upon fund availability.
    ''It is our belief that the opposite should be the rule. Programs should be developed based upon the needs of the population served. But to realistically accomplish this, continued assessment of needs and concomitant development of appropriate responses, requires adequate and reliable funding of sufficient administrative resources to assess, develop, and implement services.'' [End of 1994 testimony excerpt]
    In the last 4 years, income stream to the tax system, as a result of veterans employed, in the collaborative effort in Los Angeles, has resulted in more than a million dollars being paid in income taxes by formerly homeless veterans and payroll taxes by their employers. Again, if we were to roll this forward with 5,000 units of housing and take the ratios that Mr. Boland's operation has seen in Wisconsin, other veteran service providers around the country—I mean it's going to be on the order of 60–70 percent are going to end up employed. If you just take $12,000 a year at 6 bucks an hour, at 15 percent, payroll taxes and income taxes for 60 percent of the 5,000 units, I get $5,400,000 a year of income stream to the tax system—it's significant.
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    The Department of Veterans Affairs has expertise in providing clinical and medical support for this homeless veteran population. The private sector has expertise in housing development and job formation. Community-based organizations provide access to local networks and services. These public-private resources must be partnered in a way that not only creates the highest level of independence for homeless veterans, but must be organized in a self-sustaining manner that does not require annual appropriations for the bulk of its operations. We believe there are six major conditions that must be met to accomplish this goal: one, a large concentration of homeless veterans; two, real estate suitable for affordable adaptive reuse; three, a VA hospital with expertise and a commitment to providing clinical support; four, ready access to entry-level jobs; five, willing experienced, for-profit and non-profit partners as well as local community committees, and, six, long-term available financing
    The gap in meeting this goal is predictably available, long-term, affordable permanent financing, and H.R. 3039 provides the mechanism to fill the gap.
    This socially progressive, yet fiscally conservative idea, harnessing the strength of both the private and public sector, goes a long way towards meeting the needs for veteran specific housing.
    The National Coalition for Homeless Veterans, a membership organization with enrollment in 38 States, D.C., and Puerto Rico, hardily endorses this legislation. As a board member of NCHV and a representative of L.A. Vets, we would ask for your rapid and complete support of H.R. 3039.

    [The prepared statement of Mr. Cantwell appears on p. 113.]

    Mr. QUINN. Thank you, Mr. Cantwell. What you had to say was important, and I began by saying any full written testimony is accepted and becomes part of the record, even though we shortchanged you on the 10-minute opening. Congratulations to you to as well, and to the operation out in California. I know a little bit about yours; through staff here, I've been following it, trying to get out and see part of it, but I haven't been able to do that. But, congratulations on what you're doing.
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    You know CBO scored this bill, 3211, at about a million dollars a year. Change in the scope of the budget, and chump change in view of the positives that you say if you roll it up, so I don't think we have disagreement there. And, you know, you said that the six FTEs on-site—are they from the hospital?
    Mr. CANTWELL. Yes, they're from West L.A. VA Medical Center. They provide vocational rehab support; they provide substance abuse counseling; they do the urine testing, they provide case management; they're intimately involved in the screening and assessment. The result of that is not a negative consequence to the hospital.
    Mr. QUINN. Right.
    Mr. CANTWELL. The result of it is more service to more veterans for less money.
    Mr. QUINN. Increasingly, that's what we have heard at full committee meetings of this committee—in another room here—where we're trying to do more with less and we're hearing from other parts of the country. We're forcing the VA to do more with less. We're cutting the budgets—not cutting the budgets—but we're trying to do a better job with how we spend the money.
    And, for the life of me, I can't figure why this doesn't just fit. To me, it's perfect. You're going to where the veterans are in the first place, and their families and others, to try to provide the same service that they use to expect at a hospital. And then you run into all those other problems that go with it—transportation to and from the hospital, the rest of the family, and we know those stories as well.
    Mr. CANTWELL. Yes.
    Mr. QUINN. I cannot——
    Mr. CANTWELL. And, I'd like to cite another example.
    Mr. QUINN. Sure.
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    Mr. CANTWELL. On a 26-acre piece of the Cabrillo Savannah Naval Housing in Long Beach——
    Mr. QUINN. Yes.
    Mr. CANTWELL (continuing). L.A. Vets is the lead in delivering a thousand beds of housing for veterans and families. This effort has been significantly helped by another piece of ''out of the box''—if you will—funding stream. And that comes to us through the National Collaboration for Homeless Veterans which is an L.A. Vets Americorp Program. We have accessed, aggressively, that Americorp resource and then recruited for American members for a skill set that could impact positively on our mission.
    Mr. QUINN. Heaven forbid that a couple agencies in the Federal Government get together.
    Mr. CANTWELL. Yes. Easier said than done.
    Mr. QUINN. No kidding. We've heard it this morning.
    Mr. CANTWELL. But what's interesting is, in the last year and a half, those members have been active in a whole range of community-based organizations in the Long Beach community coordinating this effort. The Long Beach VA Medical Center will be shutting down a 42-bed inpatient substance abuse program. They'll be moving two-thirds of the FTE that supports it to Cabrillo . Their 42 bed residential treatment piece will become 120 beds of outpatient, and will provide clinical leadership to the other 300 and some odd beds for vets. So, we have a condition where a budget of $3 million supporting 42 beds will go to about $2 million supporting 500 beds.
    Mr. QUINN. I could talk more about it, but I want to yield to my friend, Mr. Rodriquez, to see if he has questions or comments at this point.
    Mr. CANTWELL. Sure.
    Mr. RODRIQUEZ. Let me, first of all, also thank you for those comments. And let me—you mentioned—and I don't know whether you went too fast through there or I didn't pick it up, but you talked about, you know, the need for some long-term financing. How would you structure that? I gather that what that meant to me—not that you want—didn't want or expect to get funding every year from the Congress, but that you wanted some kind of structure. Do you want to——
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    Mr. CANTWELL. I'd love to elaborate on it. There's basically three pieces to financing operations that we've been talking about: there's the capitalized cost of the bed, there are the operational costs to support that bed, and then there is the supportive services that are necessary to enhance the outcome for the occupant of the bed. The typical format for financing transitional housing in the universe out there, is an appropriations for the capitalized cost of the bed, an appropriations for the operational cost of the bed, and an appropriations for the supportive services.
    Well, what we're proposing here—and has been done in Wisconsin, is being done in L.A., and maybe being done in other places; I think it is—is that the capitalized cost of the bed can be an amortized cost, so it can be financed. And, the operational cost of the bed can be paid for out of the rents as well as the amortization on the facility. So, you still need to compete for supportive services dollars—that's still on appropriated activities, a fund raising activity, a coordinating activity. But, the first two components—and the most expensive component of delivering transitional beds—can be structured in a lending environment. And that's the point, and there is no place that exists to go get that [financing].
    It happened in Wisconsin because the State of Wisconsin made it happen. It happened in L.A. because there was this one, financing piece through Century Housing Corporation which is geographical limited to Los Angeles County.
    Mr. QUINN. Thank you.
    Mr. Boland, before I let you go, could I ask you, please, in about a couple two or three minutes, just to talk a little bit about how Wisconsin, Milwaukee, went about financing your situation? Is that something you can do in a couple minutes?
    Mr. BOLAND. Sure.
    Mr. QUINN. Please.
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    Mr. BOLAND. I'd like to mention, however, that Milwaukee is not our only site. We have three sites—two of them up-state in rural areas and a fourth site will open in a couple of months in the extreme southern part of our State. And that's why I said in remarks earlier that we have taken a state-wide approach to this thing—with the goal of ending homelessness, completely, among veterans in our State.
    The Milwaukee project was the one that we helped them get the loan. We did that, as I said, using trust fund money that I manage in a Veterans' Trust Fund Account, and within budget authority that I had been given for that program. And so the money—it came down to a decision of whether we use that money to help guarantee this loan or not start the program. And, so we, in conference with our counsel and our State finance people, agreed that within that budget authority we could do that.
    Mr. QUINN. Excuse me. So the lawyers for the State and the finance people for the State of Wisconsin seemed to think it would work?
    Mr. BOLAND. Yes.
    Mr. QUINN. Thank you.
    Mr. BOLAND. That's not to say there weren't objections by other bureaucrats within the scenario, but, we found a legal way to do it with funds that we had been legally appropriated to put into this program, and and we made it work. And there's no way they could have received the loan. I mean, when we met with the lenders, typically, by definition, non-profit organizations do not have the assets for collateral. That's what this is all about.
    Mr. QUINN. That's why they call them ''not-for-profit.''
    Mr. BOLAND. I think so.
    Mr. QUINN. Although so do I.
    Mr. BOLAND. So, we had the money; there was a way we could make it work, and we did it.
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    Mr. QUINN. Congratulations.
    Mr. BOLAND. We entered into a performance agreement as an extension of the loan contract.
    Mr. QUINN. Thank you. We have to finish up here. Thank both of you for your testimony here today, and we appreciate your time and travel to visit us here in Washington.
    I'm going to make sort of an executive decision here, take about a 2-minute break, and say that the last two panels—panel four and five—I'm going to ask the staff to try to combine that into one panel. We need a couple extra chairs, but we'll try to do that, and we'll get you some help. And we'll share the microphone. So let's take about a 2-minute break to try to bring everybody up for the last panel. Thank you.
    Mr. QUINN. Thank you for cooperating with us here today. We're going to try to get everybody—it's good to see you all again, first of all; had you in some hearings before. Thanks for being with us. I do want to make it clear, though, that we're asking for your input on both bills—3211 and 3039—today. In a limited amount of time, that's not always easy to do, but we would appreciate hearing from you on both of those.
    For the rest of the committee, it'll be reading the testimony. As we welcome you all—we have one microphone; I apologize for that. I don't know why they give us all these extra ones; we don't need them, but you all, who have something important to say, get to share one. So we'll work it from the left, start with the AMVETS, and work our way around, please. Thank you again for being here, and you may begin.
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    Ms. A'ZERA. Mr. Chairman, I've submitted my written testimony for the record, and I'll just make some brief comments here today.
    We appreciate the opportunity to share out views on H.R. 3039 and H.R. 3211, which is enacting eligibility requirements for burial at Arlington National Cemetery. We have previously testified on the bill H.R. 3039, and our support has not changed.
    AMVETS applauds this innovative idea to help our homeless veterans. We would like to see the demonstration project succeed under the following conditions:
    We believe clear goals and objectives for this program need to be set. We'd like the VSO's apprised of any progress or problems, and we believe, after the 3-year demonstration, the project should be evaluated and a clear decision made on whether it's a viable program or not. If done right, this program can be a win-win program for everyone. We believe this program is a huge step in the right direction.
    AMVETS supports the H.R. 3211, which enacts the eligibility requirements for burial at Arlington National Cemetery. Arlington is distinct among the national cemeteries. According to the U.S. General Accounting Office report, Arlington has a total capacity of 263,639 grave sites, of which about 60,700 remain available. The cemetery averages 2,887 burials per year. The Army projects that all the grave sites will be full by the year 2025, unless the cemetery is expanded.
    The burial rules and waiver procedures came under criticism because of the attempts to secure burial space for individuals who may not meet the restrictive eligibility criteria for Arlington. During the last few years, requests for waivers have grown from a handful to at least 69 during the Clinton presidency. The perceived arbitrariness of the waiver process and the fact that GAO has reported there is really no set guidelines to whom, or by whom, requests for waivers can be initiated, caused great concern among the veterans community. One of our major concerns was the fact that Joe Veteran could call in and be denied a burial; yet, some high-ranking official could call in and was denied, but then told about the waiver process. So there was no equality.
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    This legislation meets our criteria and goes further. We support the fact that it codifies, with some exceptions, the eligibility already in law. I believe this bill testifies to the integrity of its sponsors. By supporting this bill, Congressmen Stump and Evans are precluding themselves as well as their peers.
    And, I'd like to make a response to Secretary McLaurin's statement that, under this legislation, Robert Kennedy and Oliver Wendell Holmes would not be eligible to be buried in Arlington. That's not really true, because it does state that, if you honorably serve, that your remains, cremated remains, could go into Arlington. So, that's a little bit of a fact there.
    We also objected to other non-veteran memorials in Arlington. This bill clarifies that. Only memorials honoring military service may be placed at Arlington. We agree with this point.
    Although we support this legislation, we'd like to add two more points for thought. Given that Arlington will run out of space, we would also recommend that the VA and Congress support a marketing strategy and major construction plan to make Quantico National Cemetery a desirable and well-utilized alternative to burial in Arlington. We'd also like to see Congress enact legislation guaranteeing that all veterans buried in national cemeteries receive appropriate military honors, including an honor guard, rifle salute, and playing of taps. Congress should direct a transfer of funding from the Department of Defense to the VA that would be sufficient for VA to contract these services. Contracts would be with active-duty military, national guard, and reserve units.
    Thank you for the opportunity to express our views on this bill. If you have any questions, I'll be glad to answer them.

    [The prepared statement of Ms. A'zera appears on p. 125.]
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    Mr. QUINN. I believe, if it's okay with Mr. Rodriquez, that we'll hold questions until all of you have had a chance. I do have a couple, but they're in the nature that they're to everybody. So it'll be easier to ask, I think, when we're finished.
    The VFW, sir, please.

    Mr. MANHAN. Thank you very much, Mr. Chairman. The VFW is very proud to be here this morning. I represent about 2,100,000 veterans, half of whom are now World War II veterans. First of all, the VFW is proud to be identified with and positively supports both bills, H.R. 3039 and bill H.R. 3211.
    I'll address what we like particularly about 3039. There are three innovative new concepts that we think are worth trying. The first is the monetary arrangement to invest some monies in financial instruments that will yield a little more profit or return that then can be used for the transitional housing; second point, those not-for-profit lenders who have demonstrated that they can do the job will be prime operators of this effort. After all, nothing succeeds like success.
    The third point that we very much like, is the fact those tenants, the homeless veterans, who will take advantage of this temporary shelter, will then be encouraged to become alcohol-free and/or drug-free and be required to seek, and then obtain employment.
    In sum, this bill is an attempt to do something that the Federal Government up until now has not been able to do. And that is to provide temporary or transitional housing to homeless veterans who are willing to help themselves. I don't think anyone's thought of looking at the old homeless problem in this manner before. And as said, this is a demonstration project.
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    Second bill, H.R. 3211 regarding burial in Arlington National Cemetery. If the VFW had had the opportunity to sit down with a blank piece of paper to write a bill, this is the way we'd do it. The VFW absolutely support everything that is in H.R. 3211. Said another way, the VFW's absolutely supports the no waiver language, and we specifically support the intent not to inter other distinguished Americans who may have had an outstanding career in the Executive, the Judiciary, or the Legislative branches of our government. Maybe a different cemetery would be necessary to honor these individuals, but certainly a military cemetery is not such a place, in our judgment.
    This summarizes the VFW position, Mr. Chairman. I will be glad to answer any questions.

    [The prepared statement of Mr. Manhan appears on p. 129.]

    Mr. QUINN. Thank you, Bob. We appreciate that very much. Next on the panel, Larry, the Non Commissioned Officers Association.

    Mr. RHEA. Thank you, Mr. Chairman. Good morning. Let me begin by extending, in two ways, salutes to you, Mr. Filner, Chairman Stump, and Mr. Evans, and the other members of this subcommittee and full committee that have worked so hard to bring these two bills to this point today.
    In short, the Non Commissioned Officers Association supports both of these bills. That was not always the case. On H.R. 3039, as you recall, we had some objections in the beginning, but as a result of the dialog, particularly with your staff, and the hard work that they did, the Non Commissioned Officers Association is satisfied now that our objections—or the objections that we have—have been removed, and we fully support the bill without qualification.
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    We've identified the problem here relative to homeless veterans and some of the things that needs to be done. The one comment that I would like to make though is that I think we all have to recognize that we cannot help individuals who do not want to help themselves. And in saying that, we are pleased that H.R. 3039 assigns responsibility and accountability to the veterans who will participate in this program. We believe that's crucial. We believe that that needs to be mandated, and that that should be the outcome that we seek. Otherwise, all of the best intentions that we have in the world will be futile.
    One thing that we certainly don't want to see is this, or any other Federal program, created that ends up focusing more on self-perpetuation than on the goals of its original design. So I would hope that as we proceed here in the process of this demonstration, that we would demand that outcome and carefully evaluate those results before we go to any further expansion.
    NCOA is not a newcomer on the scene to Arlington National Cemetery, sir. More than 5 years ago, some in this room recall that we set before the House Veterans' Affairs Committee and asked that the eligibility requirements for Arlington be codified. We were concerned then that the sanctity of Arlington was being sacrificed. This Association believed then, as we believe now, that it is wrong to entomb or memorialize non-veterans at Arlington National Cemetery. We believed then, as we believe now, that it's wrong to memorialize or commemorate non-citizens who are not veterans of United States Armed Forces at Arlington National Cemetery. So therefore, in our view, deciding who is eligible for burial at Arlington National Cemetery should be taken completely out of the subjective realm.
    The waiver process does not need to be formalized or perfected; it needs to be eliminated. The eligibility criteria, if properly structured, in our view, should be so clear and so explicit that determinations of eligibility could be made by the Superintendent of Arlington and the Superintendent of Arlington alone. There should never be a case, in our view, if we do this legislation right, for referral to the Secretary of the Army, the President, or anyone else in determining who's eligible. And reservations should be eliminated altogether, except those reservations that have already been approved under prior regulations.
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    We took the opportunity, Mr. Chairman, knowing that this is going to be an abbreviated session of Congress, to identify one other issue that we feel very strongly on and we think is related to the subject that we're talking about. Just as we believe that it's wrong to bury a non-veteran in Arlington, we also think it's fundamentally wrong to confer veteran status to non-veterans and to individuals who have never served in the Armed Forces of the United Stated. And what I'm referring to here, Mr. Chairman, is Public Law 95–202 that gives the Secretary of Defense certain discretionary authority in conveying veteran status to civilians, individuals, and groups for service that they've rendered during times of war. As the committee has concerned itself with certain ambiguities and somewhat discretionary guess work in the law relative to Arlington, the Non Commissioned Officers Association suggests to you that that same ambiguity and guess work exist relative to Public Law 95–202.
    Recently, Congress determined that award of the Purple Heart was an exclusively military declaration, and in doing that, Congress directed that an alternative be found for civilians in lieu of the Purple Heart. And by that same standard, that it's wrong to award the Purple Heart to non-military members, NCOA suggests to you that it is wrong to convey veteran status to individuals who have never served in the Armed Forces.
    So in summation, we believe that the term ''veteran'' and issuance of the DD–214 should be synonymous with—and exclusively for—service in the Armed Forces of the United States. Here again, no exceptions, no waivers, and no political influence.
    Thank you, Mr. Chairman.

    [The prepared statement of Mr. Rhea appears on p. 131.]

    Mr. QUINN. Thank you, Larry. We appreciate that.
    Your comment on the housing bill is something we heard when we were out at the hearings; it's called ''tough love . . . '' You put the burden on the individual, and that's where it belongs. It's not always easy to do that, not always pleasant to do it, but that's what would make the project work much, much better.
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    Moving down to the American Legion, Emil, could you begin, please. Thank you.

    Mr. NASCHINSKI. Chairman Quinn and Congressman Rodriquez, the American Legion certainly appreciates the invitation to share our views on the two bills that are under consideration today.
    H.R. 3211 seeks to codify waiver procedures and eligibility requirements for burial at Arlington National Cemetery. In view of recent events regarding the loose and reckless interpretation of waiver procedures, and the need to ensure that the remaining space at this National Shrine is used judiciously, the American Legion supports all provisions of H.R. 3211. In order to protect and preserve the integrity, sanctity, and honor of Arlington National Cemetery, we believe that Congress must enact this important legislation as it is currently written.
    With respect to H.R. 3039, the Veterans Transitional Housing Opportunities Act of 1997, this bill seeks to increase transitional housing for homeless veterans by offering Department of Veterans Affairs loan guarantees for private sector development of projects that are designed to be financially self-supporting.
    And what's interesting, Mr. Chairman, is that the delegates of the American Legion's 79th Annual National Convention passed Resolution 213 entitled ''Support for Homeless Shelter Funding.'' That resolution very, very closely mirrors the provisions of H.R. 3039.
    The American Legion understands that the innovative pilot program that the bill seeks to establish will not bring about an end of homelessness among this Nation's homeless veterans. We, nonetheless, believe that H.R. 3039 is a step in the right direction, and we want to publicly thank you and Congressman Stump, Evans, and Filner for its introduction.
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    Some of the provisions of the bill that the American Legion particularly favors are the requirement for a continuum of care for homeless veterans once inpatient treatment is completed, the requirement that program participants remain abstinent from drugs and alcohol, and the requirement for program participants to take active, to take responsibility for themselves by obtaining and holding a job, and paying for a portion of their care.
    The American Legion believes these provisions are necessary, appropriate, and will ensure the success of the pilot program. We also support the provisions of H.R. 3039 because they provide for the creation of a safe, stable, therapeutic environment that will greatly improve the participants chances for successfully ending their homelessness, and transitioning back into their rightful place in society. Another beauty of the legislation is that the proposed pilot program can be established with a minimum appropriation of taxpayers' dollars.
    In 1994, the VA changed its policy of allowing the transfer of funds for inpatient treatment programs to specialized outpatient outreach programs for homeless veterans. Because VA's ability to provide meaningful service to homeless veterans has significantly been reduced since instituting that policy change. The American Legion suggests that the Subcommittee consider amending Section 3772(b)(1)(b) of the bill to mandate that counseling and supportive services be provided.
    Because outreach has proven to be a very effective way of assisting homeless veterans, we believe this amendment is critical. Studies suggest that approximately 10 percent of all homeless veterans have a spouse and/or dependents who are also homeless. In many instances, these veterans and their families are homeless through no fault of their own. We believe that this is one of the most tragic aspects of the homeless issue—and suggest that the subcommittee consider a minor amendment to the current language of the bill to make it clear that the homeless spouse and dependents of the homeless veteran are entitled to services under the pilot program.
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    The American Legion's last recommendation is to add specific language that addresses the financial well-being of the monies to be used from the National Service Life Insurance Trust Fund. American Legion believes these funds should be invested in bonds rated at no less than investment grade and that the interest generated by that investment plan should be placed in a separate interest-bearing fund. When the amount earned by those investors reaches the amount borrowed from the National Service Life Insurance Trust Fund, the loan should be repaid. Once that goal is achieved, we believe that the remaining funds should be invested for at least 12 months to generate the additional capital necessary to run the program.
    In conclusion, Mr. Chairman, the American Legion salutes you and the Subcommittee for your ongoing concerns for America's veterans, particularly those that are homeless, and we want to once again thank you for inviting us to appear today.

    Mr. QUINN. Thank you. We appreciate your suggestions too, as well as your comments. And we've made notes. We know we have it in the testimony, but we've talked up here, and I think some of what you suggest is implied, but not outwardly said. Thanks, Emil.
    The Vietnam Veterans of America, VVA, Kelly.

    Ms. WEST. Yes. Good morning Mr. Chairman and Congressmen. VVA very much appreciates the opportunity to be here. Since my written statement is a part of the record, I will actually limit my remarks to H.R. 3039, which is a significant priority for our organization. My written statement does detail our position on the legislation regarding Arlington National Cemetery.
    I'd like to say at the outset, VVA has been involved in homeless veterans issues for many years and we like to consider ourselves innovative leaders in this arena. We also are members of the National Coalition for Homeless Veterans, and our national organization has a National Task Force on Homeless Veterans, chaired by Bob Piaro of Wisconsin. Mr. Piaro works very closely with Secretary Boland. VVA's expertise is developed from homeless veteran service providers around the country.
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    H.R. 3039 is, I think, a very creative measure aimed to put more tools into the hands of non-profit service providers who want to target homeless veterans. Our experience with HUD funding, where the bulk of all Federal homeless assistance dollars lie, has been less than satisfactory. Many homeless service providers who target veterans are unable to access HUD funding, and I think recent statistics show that less than 3 percent of HUD's homeless assistance funding goes toward veteran-specific projects. It's our belief that if those monies were being spent effectively on veterans, you wouldn't see such disproportionate numbers of veterans among the homeless population.
    The programs like Mr. Cantwell's and Secretary Boland's, that provide a rigid structured environment to assist these veterans in rehabilitating themselves, have proven successful and are much more effective than warehousing these individuals. It's a terrible tragedy. Human potential is lost. And from a purely fiscal perspective, the money that's wasted as these individuals are forced to circulate in and out of assistance programs because their unique needs are never fully addressed, and their unique capabilities of achieving rehabilitation are never fully tapped into and maximized. As such, H.R. 3039 is a very creative way of putting more tools into the hands of the people who can help resolve this problem.
    In addition to this bill, I'd like to bring to the committee's attention two bills which sit outside of your jurisdiction, but certainly merit your strong and active support. H.R. 1754, introduced by Jack Metcalf from the State of Washington, is titled ''The Robert Stedola Homeless Veterans' Assistance Act.'' His bill would earmark 20 percent of all HUD homeless monies toward veterans programs. Working through the Banking Subcommittee on Housing and Community Opportunity, Mr. Metcalf worked closely with Chairman Lazio of New York to get certain veteran specific provisions into his broader homeless consolidations program bill, H.R. 217. I understand this will come before the full House within the next couple of weeks.
    Just to briefly summarize what those veterans provisions would do, they would identify veterans as a special needs population, would require State and local planning boards to have representation of veterans' organizations or veteran service providers, and would require coordination with the VA. Equally important, I think, the bill would require statistical reporting on not only numbers of veterans served, but also what types of services are provided from all homeless providers.
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    Currently, it's our understanding that HUD grant recipients are able to check a box saying ''yes, we serve veterans,'' but there's very little accountability. We enthusiastically support H.R. 3039 and urge this committee to work on those other two bills as well.
    I'd be happy to respond to any questions. Thank you.

    [The prepared statement of Ms. West appears on p. 144.]

    Mr. QUINN. Thank you, very much. Move to Disabled American Veterans, Ron.

    Mr. DRACH. Thank you, Mr. Chairman, and Congressman Rodriquez, thank you for being with us today.
    I would like to take this opportunity to provide some—DAV's comments on both the Veterans Transitional Housing Opportunities Act of 1997, H.R. 3039, and H.R. 3211, a bill to establish eligibility requirements for burial at Arlington National Cemetery.
    Mr. Chairman, I think we all know the numbers and problems associated with homelessness, but, I think, all too often we tend to overlook, in part, because we don't the hard numbers of the homeless veterans who may be living with a parent, a relative, or a friend either on a regular basis or on a temporary basis. And also we're hearing more and more anecdotal information that homeless veterans' families are presenting themselves through shelters, and regrettably, most of the shelters that I'm aware of do not have accommodations for females, be they be female veterans or female spouses. And all too often, that female presenter—presents herself—is usually referred to a battered woman's shelter. We think that, whenever possible, we should make accommodations to have a family stay together. Because, among other things, it presents a support structure that's not available in the shelter itself. I know it's difficult, but I think it's something that needs to be looked at very, very closely.
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    We know that there are many reasons for homelessness, and that there are no simple solutions, there must be a multidisciplinary approach to solving the problem. I was somewhat surprised when I read your information that the VA reports that 26 percent of their inpatients are homeless.
    I know several years ago we talked about some of the problems associated with hospitalized veterans, and the fact that many of them were being discharged to a homeless status. We suggested then, and suggest again now, that the VA look real hard at discharge planning, and try to do whatever possible to assimilate discharging hospitalized veterans into the community, that they're not put on the streets, but rather into shelters or other transitional housing.
    We think that H.R. 3039 is definitely a step in the right direction, but we do have some concerns, including the funding mechanism. We're not sure that the insurance trust fund is appropriate. You know, it's the veterans' money—we're not sure that it should be used for programmatic purposes. If the money is taken and put into higher yield returns, should we not perhaps give a higher return to the veteran on his or her insurance premiums—or policy.
    The other concern that we have is maybe it's not a concern; it's more of a question that we'd like to get some clarification on at some point. The authority that the Secretary shall enter into contract with a qualified non-profit organization, and the bill further defines a non-profit organization, but we have some questions. What amount would the Secretary be authorized to enter into with such a contract? How many non-profit organizations meet the qualifications? Would this be a competitive contracting process? Would there be an RFP go out, or would it go through the current 8(a) Small Business Program for set-asides? And where will the funding for the contract come from?
    If this does go forward, we believe that preference should be given to a qualified veteran-owned contractor. Another concern that we have is the fees or the rent that the veteran must pay. We've had, again, anecdotal information over the years that disabled people, and veterans included, when they present themselves to a homeless shelter, they're often asked to sign over their social security check or their compensation check. We think strong safeguards need to be implemented to make sure that that does not happen. And it would take an awful lot of oversight to make sure that that happens. Also, what happens if the bill does require or provides for reasonable rent to be charged—what happens to the individual who presents him or herself and has no income at all? Would there be a waiver provision available for that individual?
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    With regards to H.R. 3211, Mr. Chairman, we do not have a resolution on that bill, and therefore, we have no official position. However, we do appreciate the clear definitions of who would be eligible in the bill, and we totally agree with those clear definitions. We have absolutely no objections to the bill whatsoever.
    That concludes my statement, I'll be happy to answer any questions.

    [The prepared statement of Mr. Drach appears on p. 155.]

    Mr. QUINN. Thank you, Ron. Just a couple quick observations and then I'll yield to Mr. Rodriquez. In terms of some questions—both Ron that you raised and others—my first reaction, while we can get technical help on those, would be to take a look at what has worked in California and Wisconsin for answers—not always exactly transferable to the Federal situation, but I think that would be helpful. The VVA, in fact, has some people—as you point out, Kelly—that are working with Mr. Boland. So, we can begin there, I guess, for starters.
    Interesting the VVA member from Buffalo, Bill Lyons, who was right in this room when I first came here 4 1/2 years ago to testify on the homelessness issue; 3 percent, about 3 percent of the vets are getting the HUD money, and yet, a third of them are homeless people or veterans. I just talked with Mike, here, to see if we can't discuss with my colleague from New York, Mr. Lazio, some way to tighten up on that, if we can.
    Sir, I just have a general question; then you can have the floor. We've talked today in terms of the homeless bill, not Arlington, but let's move to the homelessness bill. We've talked about assisting; we've talked about cooperating, we've talked about collaborating; we've talked about not-for-profits, and State, Federal, and all those other things. I want to ask it the correct way, the easiest way, I guess—this is my school teaching days not—do any of your groups—would you imagine would have a problem participating in this collaboration, cooperation and assistance? Anybody want to raise their hand and say, ''We won't help?''
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    [No response.]
    For the record, have the record show, no one raised their hand—not in the audience, not on the staff, not anybody. My point is that I think we've got all kinds of help out there, with your membership as well as other experts in the field, and we'd like to tap into that when it's appropriate. Thank you.
    Mr. RODRIQUEZ. I've just got to know in discussion of that initial bill, that some data, you know, is discussed regarding how many, you know, life expectancy of the facilities that we have in terms of the number of veterans we have out there. And, I know that you probably have other recommendations as to how we can meet that need as we move forward. And I don't know the data in terms of the number of people that are Vietnam veterans that will be reached in that age that are required to be buried—or might seek to be required to be buried. And I was wondering if you might have any comments in that area because you mentioned—what, at about 20 or 30, or 20/30 expansion? I mean life expectancy of the site there. Or maybe I should seek another term. [Laughter.]
    And in other places, I know that there is usually a tendency to just try to seek a location or place where there's another base locator. And in some of those areas, it's probably kind of difficult to find enough property and enough, and I was wondering if anybody had any recommendations or if there's anything in the loop right now that's being recommended for some additional cemeteries or sites. Because I know in South Texas there's a big need; I just don't know how to go about it in terms of trying to make something happen.
    Mr. RHEA. Before I pass it over, let me just make a comment on that. You're hitting right upon a problem that I know concerns the Non Commissioned Officers Association and the budget. There are four cemeteries planned in the budget, but when you look at VA's plans beyond the activation of the four cemeteries that they currently have planned, they really don't have any initiative or thought going, as we can tell, relative to the National Cemetery System. They do have a proposal in there relative to expansion or some changes to the State Cemetery Grant Program, but on the national front, you know, we've been sharply critical of VA and what their plans are to do with this. So we certainly know what the major impact is going be on the national cemeteries over the next few years, and even with the activation of the four that are in the current budget, that's not even enough to bury—we know, right now—our World War II era veterans.
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    Mr. RODRIQUEZ. Because I was just looking at my own numbers. I have, personally in my District, about 50,000-something veterans, and I know Congressman Henry Bonilla has another 50,000-something, and I know Lamar Smith and Bonilla that are also in the San Antonio area have another, you know. So we have easily over—over 100,000 just in the San Antonio area—not to mention the other counties in South Texas that don't have any site where to be buried.
    Ms. A'ZERA. As part of the independent budget, AMVETS is responsible for the cemetery section—which we have the specific numbers in there that you are asking for. And, shame on me, for not bringing a copy with me, but I can make sure that we get that to you, and it's got the specifics on burial sites left and our recommendations as far as to the VA on what they need to be able to implement—to be able to provide space for burial to our veterans.
    Mr. RODRIQUEZ. Can I apologize, because I'm real naive about—you know, I've been on the committee now about 8 months, but I do know that request has been asked of me from south Texas, to look at another site, and I need to see what I need, you know, maybe talk a little bit more with some of you—give me some ideas as to I might need to do.
    The only other comment I had was in reference to—and I agree totally—about adding spouses and children, because we do have a lot of families that are homeless, as a whole, and I think that that's a good suggestion, you know, in terms of looking at that legislation.
    Mr. QUINN. Thanks Mr. Rodriquez. And not only will AMVETS, I'm sure, be ready to help you with that information, but I'm sure staff here—did someone else—did I cut someone off? Somebody else want to comment? I'm sorry.
    Mr. NASCHINSKI. I just wanted to say, Congressman, the American Legion has some thoughts about your question. Unfortunately, it's not an issue that I deal with on a day-to-day basis.
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    Mr. QUINN. Excuse me, Emil, could you just move the microphone over?
    Mr. NASCHINSKI. So, what I would like to do is respond to your question in writing—if that's acceptable.
    Mr. QUINN. Thank you, sir. We appreciate that. And I was about to say besides the Legion and AMVETS and others that can help you with that, I think staff here that we've got can give you a hand with all that too.
    We're just about finished here. Before we make an announcement or two, let me just sort of pinch hit for Mr. Filner who, I understand, is not able to make it back. Maybe we're lucky he can't make it back—he was a little bit perturbed this morning at some of what we received. But let me—Keith Pedigo, thanks for staying for the second half or the third or fourth panel here, and I know your team, Tom and Peter, stayed with you—Bob's asked me to make a request, and I know you're not at the table right now, but if we could ask the VA to come back, get back to the subcommittee, and of course, Mr. Filner, with some funding suggestions as it relates specifically to the housing homeless bill today. Bob asked for that response in about a week or so; I'm going to take some executive privilege in his absence here and ask you to do that by March 6—I think that's a Friday—so that it would be actually more than a week. It's about 10 days, but that way it'd be the ending of a work week, by Friday, March 6.
    Would you, maybe, talk that over a little bit? If you have a problem doing it by the 6th, let us know.
    If not, the committee and Mr. Filner would expect to hear some suggestions on the funding from you by close of business on the 6th. Is that ok?
    Mr. PEDIGO. We'd be happy to do that.
    Mr. QUINN. Thank you, Keith. Thanks very much. Then also point out—as I thank the panel, the six of you, for allowing me to combine us here—there's more than enough room at that table, by the way, these people are all friendly, they don't mind sitting with each other here. We appreciate your views on both the bills and want to announce that there will be a markup on H.R. 3039 and 3211, the two bills we dealt with today—that markup will be on March 5 of the Subcommittee. We're also going to deal, that day, with H.R. 3213 which talks about making some technical changes to USERRA, United Services—Uniform Services Employment and Reemployment Rights Act, and that's scheduled for March 5.
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    And hearing no further business, we are adjourned. Thank you.
    [Whereupon, at 12:43 p.m., the subcommittee adjourned subject to the call of the chair.]