Page 1       TOP OF DOC

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

    The subcommittee met, pursuant to notice, at 10:02 a.m., in room 335, Cannon House Office Building, Hon. Jack Quinn (chairman of the subcommittee) presiding.
    Present: Representatives Quinn, Hayworth, Filner, Mascara, and Rodriguez, and Evans (ex officio).

    Mr. QUINN. Good morning. Good morning, Mr. Filner.
    Mr. FILNER. Good morning.
    Mr. QUINN. We're here today to receive testimony on a draft omnibus bill which includes improvements to several areas of veterans' benefits. Following our witnesses this morning, we will markup the draft bill, which includes a revised version of H.R. 3212, addressed in our hearing here on June 11, at some quite length. I think we went through with a couple different rounds of questions.
    Your legislative assistants for the members who are here were given advance copies of the bill last week and revised versions this week. They were also briefed yesterday by the committee staff. I want to note that we do not have a CBO estimate at this time. There are bound to be paygo issues that may make some of the provisions not doable. I'd like to suggest that we address those issues prior to the full committee, which will happen next week. But in an effort for us to keep going forward today, we plow through. I realize this is not necessarily routine, but we are trying to save some time because of the limited legislative calendar.
 Page 2       PREV PAGE       TOP OF DOC
    At this time, let me briefly outline the draft bill, mostly for the record. Probably everybody here who's in the room knows exactly what it's about, but it's more a formality than anything else. Let me say that Section 101, the COLA, would provide a cost-of-living adjustment for compensation, DIC, and related benefits. It would be computed using the same percentage increases given to Social Security recipients.
    Schools currently receive a $7.00 reporting fee for veterans attending under the GI bill. Section 201 would change the way schools calculate the number of veterans for whom they will be paid from the current snapshot on October 31 to the total attending throughout the full academic year.
    And Section 202 would make advanced payment of 40 percent of the work study allowance optional to the veteran. Section 203 would allow the VA to consider up to 12 hours of academic credits granted for life experiences as meeting the eligibility requirements for the MGIB. Section 204 would require a veteran to hold an FAA Class II physical at the beginning and the end of VA-paid flight training. The veteran would no longer be required to maintain Class II physical throughout the entire period of flight training.
    We all also know, I think, that we need to add some flexibility to the MGIB, so Section 205 would authorize a 2-month accelerated payment at the start of the academic year in addition to the normal payment process. These additional payments would reduce the total entitlement on a pro-rata basis.
    We move to Section 206 and there we would exempt job training programs, typically those for law enforcement and firefighter personnel, which are operated by Federal, State, and local governments from the minimum percentage of journeyman wage requirements. Section 207 would require the VA to notify a servicemember of the eligibility requirements for the Montgomery GI Bill upon completion of the $1,200 pay reduction and periodically thereafter, as determined by the Secretary.
 Page 3       PREV PAGE       TOP OF DOC
    We have also received reports that some personnel are taking early discharges without considering whether they have accumulated enough time in service to qualify for the MGIB benefits. Therefore, Section 208 would require the services to counsel members volunteering for early discharge concerning their eligibility for these same benefits.
    Title II of the draft bill includes provisions from H.R. 3212 that I mentioned just a few minutes ago, by request from the Court of Veterans Appeals. The major provisions of H.R. 3212 would authorize a staggered early retirement for several of the current judges. Without that option, the Court could experience the departure of up to five judges within about a full year, which would effectively shut down the Court. Unless a member at this point prefers to do a section-by-section of Title III, I'd like to move on to Title IV at this point. I'll send it over in the mail.
    Title IV of the draft bill makes improvements to several areas of benefits. Section 401 would require full and open competition for housing management contracts for the VA portfolio for foreclosed homes, another good hearing we had. Section 402 would make the current VA loan guarantee program for Selected Reservists permanent.
    Until now, members of the Selected Reserve are not eligible for a burial flag. To recognize the increased contribution to the national defense, Section 403 would authorize a burial flag for any reservist who dies while in the Reserves or who has completed one enlistment and has an honorable discharge.
    Section 404 would change the funding formula to authorize VA to pay up to 100 percent of the cost of constructing State veterans' cemeteries and initial equipment needed to operate the same cemeteries. The current formula authorizes VA to pay up to 50 percent of the cost of the land and construction. States would continue to be responsible for the operating costs.
    Under current law, Disabled Veterans Outreach Program Specialists, DVOPS, would be a Vietnam veteran era—excuse me, Vietnam era veteran. Section 405 would remove the Vietnam era requirement. The draft would also base the number of DVOPS in the State on the total number of working-age veterans, the ages between 20 and 64. This maintains the current level of total authorized DVOPS.
 Page 4       PREV PAGE       TOP OF DOC
    Section 406 would reauthorize the VA to retain pension funds in excess of $90.00 paid to dependentless veterans who are being cared for in VA nursing homes. These funds would be used to augment the operating funds of the home providing the care. Then, finally, Section 407 would change the title of the Board of Veterans' Appeals members to Veterans Administrative Law Judges and clarify employment reversion rights for Board members who are demoted and who have prior civil service as an attorney. Again, a topic that we discussed just a few weeks ago.
    I believe it's a good bill. It's a bipartisan effort, for which I am grateful to the members, not only here this morning but that have been at the subcommittee hearings, as well as work by staff on both sides of the aisle. I hope that we'll be able to take all of the provisions to the full Floor of the House. And I'd like to yield to Mr. Filner, the ranking member of the subcommittee, for comments he may have at this point. Bob.

    Mr. FILNER. Thank you, Mr. Chairman. We have a couple of things to get through, so I'll be very brief.
    Mr. QUINN. Thank you.
    Mr. FILNER. The bills we are reviewing and marking up this morning will significantly improve and enhance several of the most important programs we provide for America's veterans. In recommending to the full committee a provision to increase compensation and DIC benefits, we are fulfilling our first and primary responsibility, to care for those who are disabled while serving in the military and to care for their survivors. In approving provisions which will improve veterans' education programs, we are fulfilling our commitment to the millions of young Americans who have told us that, at least in part, they volunteered to serve in our Armed Forces because of the opportunity to earn money for college through service to their country. And in approving provisions to improve the State cemetery grant program, we are fulfilling our responsibility to honor America's veterans, even at the end of their lives.
 Page 5       PREV PAGE       TOP OF DOC
    So I look forward to hearing from our witnesses. As always, your observations this morning will be very helpful and important to us. And, Mr. Chairman, I ask unanimous consent to submit for the record a statement from the assistant secretary of labor for veterans' employment and training in support of Section 405 of the draft bill.
    Mr. QUINN. Without objection, so ordered.
    [The prepared statement of Mr. Borrego appears on p. 21.]

    Mr. QUINN. Mr. Rodriguez, any opening comments?
    Mr. RODRIGUEZ. In all honesty, I just want to thank you and I want to apologize in advance because I do have another 10 o'clock with the National Security Committee that's being held and ask that you just—if you can beep us if there's a vote coming up?
    Mr. QUINN. Absolutely. And, we mentioned it to staff before we got started. We're going to take a short break in the action and page all the members to get from that important meeting back here in between the markup and when we're finished with the hearing to get you. Mr. Mascara.
    Mr. MASCARA. I'd like to reserve the right to place an opening statement into the record, Mr. Chairman.
    Mr. QUINN. Without objection, so ordered.
    [The statement of Congressman Mascara follows:]

Prepared statement of Hon. Frank Mascara
    Thank you Mr. Chairman. I appreciate your calling this hearing and marking up this bill. I believe this bill is a fair bi-partisan measure, which affects these honored retired veterans from the moment they leave the military in their educational pursuits and in job training. It continues with a much needed cost of living increase for those brave men and women who gave their health for this country, and ends with changes in the State cemetery grant program and the burial tributes. I hope this is only the beginning of the progress we can do for our esteemed veterans.
 Page 6       PREV PAGE       TOP OF DOC

    Mr. QUINN. Very well. Thank you, gentlemen. And let us move on to the first panel and invite our witnesses in the American Legion, the Paralyzed Veterans of America, the Veterans of Foreign Wars, and the Non Commissioned Officers Association to take their places at the table, please.
    Gentlemen, how are you? Welcome. Nice to see you all again. Harley, last time you were here you took—we started from your end of the table. If you don't mind, I'll start that way again this morning. Give you first shot. And I want to thank you, again, for the last hearing, for staying around to answer some questions that we had later. We sort of had a second go-round and with the second panel we actually had some questions for all of you and it was very kind of you and thoughtful to stay for those questions. So we appreciate it.
    As we work our way across the table, we would ask you to keep your oral comments to about five minutes or so. Of course, your full testimony is on the record and with us. So you may begin.


    Mr. THOMAS. Thank you, Mr. Chairman. On behalf of the Paralyzed Veterans of America, I appreciate this opportunity to once again address this committee on the Veterans' Benefits Improvement Act of 1998. I would like to, for the record, state that our written testimony references title III versus title IV. The copy of the draft bill that we have does not have title IV references in it. Okay.
 Page 7       PREV PAGE       TOP OF DOC
    Although PVA has no opposition to many of the provisions in this legislation, we are strongly opposed to Section 407 (a), found on page 19, line 7. PVA is opposed to allow members of the Board of Veterans' Appeals to assume the title of ''veterans administrative law judges'' without also undergoing the rigorous process and meeting the detailed requirements necessary to become an administrative law judge.
    Four years ago, we supported increased pay for BVA members as a way of encouraging better results and as an aid to retaining experienced and qualified members. But we also urged tying increased pay to improved performance. Sadly, over 60 percent of the decisions before the Court of Veterans Appeal is remanded back to BVA for error.
    BVA should not be rewarded for consistently making mistakes in the decisions it does render. To enable Board members to assume the mantle of administrative law judge without meeting the requirements mandated for administrative law judges is demeaning to administrative law judges and would not lead to any demonstrated improvements for veterans. The BVA simply cannot have it both ways.
    As we testified before this subcommittee on June 10, we are gravely concerned about Board involvement after it has rendered a decision and a veteran has appealed to the Court of Veterans Appeals. As we stated, ''The BVA's clandestine participation harms veteran appellants, is not authorized by law or statute, and leads to concerns over the impartiality of the process. PVA asks that you address this troubling situation.'' We certainly do not think that allowing BVA members to style themselves veterans administrative law judges adequately addresses the serious matter.
    PVA looks forward to a hearing on this and the possibility of legislative action to correct this matter. If Section 407(a) remains in this bill, we will find it extremely difficult to support this legislation.
    The increase in rates of disability in DIC: PVA supports this proposed increase and compensation. However, PVA opposes the provision of making permanently the rounding down to the nearest whole dollar of compensation increases. We have opposed this in the past and we will continue to do so in the future. Veterans should not be asked to do what others are not in pursuing of a balanced budget. Further, PVA asks you to bear in mind that the Consumer Price Index may not adequately reflect the true cost increase borne by disabled veterans year in and year out.
 Page 8       PREV PAGE       TOP OF DOC
    Section 201: PVA has no objection to adjusting the date for calculation of reporting fee based on total veteran enrollment from October 31 to during the calendar year. Section 404, State cemetery grants. We do not oppose this provision. We do, however, wish to draw the subcommittee's attention to a probable drafting error. Section 304 (b), page 17, line 4, should probably read ''2408(e)'' rather than ''2408(c).'' You probably already found that, but my copy had that error in it.
    Section 405, DVOP Specialists. PVA has advocated for this change in previous testimony and applauds this committee for its inclusion in the bill. Section 406. We're in total agreement to restoring this provision. Again, Section 407, as I have stated, we strongly oppose Section 407(a) and call on you to remove this provision during markup.
    Mr. Chairman, this concludes my testimony and I'll be happy to answer any questions you may have.
    [The prepared statement of Mr. Thomas appears on p. 22.]

    Mr. QUINN. Thanks very much. John, American Legion.

    Mr. VITIKACS. Good morning, Mr. Chairman, members of the subcommittee. I would also point out that the copy of the draft bill that we have includes three sections as opposed to four sections.
    The American Legion appreciates the opportunity to testify on several measures under consideration this morning. These are: the Veterans' Benefits Act of 1998; veterans' housing, employment, and education benefit programs; and the State cemetery grants program. Mr. Chairman, the American Legion commends the subcommittee for working to ensure that the right programs and benefits are available to former members of the Armed Forces and their widows and dependents. The draft bills under consideration today will extend and advance many of the earned benefits of our nation's veterans.
 Page 9       PREV PAGE       TOP OF DOC
    The American Legion believes the draft Veterans' Benefits Act of 1998 is proper and has no objections to the measure. We would note that much-needed improvements were made to certain veterans' benefits programs through the recently enacted Transportation Equity Act. The American Legion is disappointed that Congress was only able to provide these improvements by taking away rights and compensation and medical benefits from other equally deserving veterans.
    The American Legion supports Section 302 of the draft bill to make permanent a pilot program that allows former members of the Armed Forces reserves the opportunity to use VA's Home Loan Guarantee Program.
    Mr. Chairman, the American Legion conditionally supports Section 305 of the draft that changes the formula by which disabled veterans outreach specialists are assigned to the States. The Legion supports the change as long as the age requirement for the DVOP formula includes veterans between the ages of 18 and 62. The bill currently would include only those between the ages of 20 and up to 64.
    The American Legion is thankful for this subcommittee's efforts to improve education benefits and services for veterans. As previously commented, the Legion is grateful for recent increases in veterans' education programs, however, we are disappointed about the manner in which this increase was accomplished.
    Mr. Chairman, the American Legion has no major concerns with title II of the draft bill regarding veterans' education programs. The American Legion supports Section 303 of title III regarding the furnishing of flags for deceased members and former members of the Selected Reserve. We sincerely appreciate the subcommittee's efforts in this matter.
    The American Legion supports the efforts to strengthen the State cemetery grants program. This program is critical in helping the national cemetery system meet the increased burial needs of America's veterans and their eligible dependents. As we have previously testified, we believe the legislative proposal was incomplete until the current plot allowance paid to the States is increased to reflect current operations and maintenance costs. In order to construct the best legislative package, we suggest that the subcommittee conduct a survey of existing State cemeteries to determine whether the current $150.00 plot allowance is adequate and also survey potential new States to assess whether this concern is truly valid.
 Page 10       PREV PAGE       TOP OF DOC
    Mr. Chairman, that concludes this statement.
    [The prepared statement of Mr. Vitikacs appears on p. 26.]

    Mr. QUINN. Thanks, John. My guess is the—I can guess what the survey might come back as, as you suggest.
    Before you begin, Bill, let me just say that both of you have mentioned—Harley and John—that you only had three out of the four titles. The reason, of course, is that the fourth title is a whole discussion of H.R. 3212, which is the Court, which you were all here for last week and testified on. That was quite a long, helpful discussion, by the way, but I wouldn't want anyone to think that we've left anything out on purpose. By the time we got everything finished with the hearing, it only did include three, but we're looking at four and the fourth would be addition of the Court discussion, H.R. 3212.
    VFW, sir.

    Mr. FRASURE. Okay. Good morning, Mr. Chairman, and members of the subcommittee. On behalf of the 2.1 million members of the VFW, I am pleased to appear before you today to provide our views on the Veterans Benefit Improvement Act of 1998. This legislation is marked by common sense and vision and stands to benefit veterans from all generations. The many technical changes proposed in this bill would serve to strengthen existing benefits by making them more applicable to society now and in the immediate future.
    The VFW ardently supports this legislation, however we do have one concern that I would like to briefly expound on. Section 304 of title III greatly increases the amount of a Federal grant to State veteran cemeteries. While this is indeed a measure we approve of, we caution that these grants should not replace or diminish the existing national veteran cemetery system. I want to reiterate that the VFW believes that, overall, this legislation is beneficial to America's veterans and we urge its swift passage.
 Page 11       PREV PAGE       TOP OF DOC
    This concludes our statement. I welcome whatever questions you and your colleagues may have. Thank you.
    [The prepared statement of Mr. Frasure appears on p. 30.]

    Mr. QUINN. Thank you, Bill. I appreciate it very much.
    Larry, good to see you again and please begin.

    Mr. RHEA. Thank you, Mr. Chairman. Good morning to you. Good morning, Mr. Filner, Mr. Mascara. The Non Commissioned Officers Association is pleased to be here this morning and the Association salutes the bipartisan cooperation and leadership of this subcommittee, both on the issues under consideration today and on all of the other issues that come before this committee. We appreciate that deeply. We also appreciate your consideration of our complete statement, as presented in written form.
    Generally speaking, we're very pleased with the draft bill. Several of the issues addressed in the draft represent Association initiatives or changes that NCOA has been advocating, in some cases for several years now. But first let me deal with the one area in the draft bill that causes NCOA the most concern. And I'm referring to the proposal regarding the State veterans cemetery grants program. It's no secret that NCOA is opposed to the proposal, at this time, as embodied in Section 304. Our opposition today is the same as that which we first took when the President made this proposal last year in his Fiscal Year 1998 budget submission.
    It is our belief, implementing this proposal at this time is at best premature. NCOA makes that statement on the basis of a lack of a comprehensive long-range plan for the national cemetery system. As we have testified before, NCOA believes that such a plan needs to be in place before this proposal is further considered and certainly before it is enacted. And, as we have testified previously, such a long-range plan needs to include initiatives for new cemeteries in the national cemetery system complemented by a State cemetery veterans program. Absent such a plan, we are opposed to Section 305 and our request is that it be stricken from what we consider to be an otherwise excellent piece of draft legislation.
 Page 12       PREV PAGE       TOP OF DOC
    We certainly are pleased with the various proposals contained in section II relating to improvements in the education benefit. We view each of those sections in a very positive light and we would urge the subcommittee's favorable consideration of all of those sections. We did make one recommendation relative to Section 207 that deals with the education outreach services. We're inclined to believe that the general language as stated in the draft bill which would require the Secretary to provide the information as soon as practicable needs strengthening. We would suggest that the legislation provide a specific time period for the Secretary to provide that information to the members and we recommended 90 days in that regard. And it's our understanding that VA might be able to accomplish it within that time frame. But, in our view, that would just tighten it up just a little neater.
    Relating to Section 303 of the draft, which incorporates H.R. 2887, we certainly have no objection to the contracting provisions that you're dealing with. And we're very pleased with sections 302 and 303. The Selected Reserve home loan program, in our view, has been a resounding success and Section 302, to make that program permanent, is wholeheartedly supported by NCOA. And Section 303 responds to an initiative that NCOA undertook almost two years ago and we are indeed grateful for including that in the draft and we believe the change embodied by Section 303, to modify current law regarding burial flags for certain members of the Selected Reserve who are not otherwise eligible, is clearly the right thing to do and in consonance with the total force that we now operate under.
    For my final comments, Mr. Chairman, the change proposed in Section 305 relating to the disabled veterans outreach program specialists. There again, I think as everyone else at this table—we've been after those for several years now. They're right. They make good sense. And we should proceed and go ahead with it.
    In closing, thanks again for this opportunity, sir. Your consideration of our written testimony and our oral comments is sincerely appreciated. Thank you.
 Page 13       PREV PAGE       TOP OF DOC
    [The prepared statement of Mr. Rhea appears on p. 32.]

    Mr. QUINN. Thank you, Larry. Thank you very much. And I want to thank all of you for your testimony this morning, the written testimony as well as your comments.
    And, Larry, you're kind enough and generous to thank this subcommittee. I appreciate the bipartisan nature in which we proceed. But let me also, for the record, thank all of you. I mean, many of the changes that I briefly outlined when we started and Bob and I have put together, many of them have come from you and staff and others. So we thank you as much as—it's a two-way street and we appreciate some of those technical suggestions as well as what you here, from your members all across the country, so it's more than just the bipartisan nature, I think it's the cooperative nature in which we're able to hear testimony and make changes at your suggestion. So from all of us here in the subcommittee and the full committee, thank you. Appreciate it.
    I have no questions. Bob, questions? Mr. Mascara, questions at this point?
    Mr. MASCARA. Thank you very much, Mr. Chairman. I did take a little bit of time last night to read the statements and I was as confused as you are because you were mentioning Section 307(a) and page 19, line 7, and I'm looking in the bill and I can't find it but I go along further and it is Section 407, so I finally reconciled the differences in the bill. I did have the latest bill. You didn't apparently. (Laughter.)
    For Mr. Thomas, on page 2 of your statement, you mentioned you would oppose Section 407 of the bill or oppose the bill if it remained in the bill. While your other colleagues, in reading their testimony, don't seem to have the same problem. Am I correct in saying that? The other three gentlemen——
    Mr. THOMAS. We're not opposed to the whole bill, sir. We would be hard pressed to support the bill, this section of the bill, if that verbiage remains in there.
 Page 14       PREV PAGE       TOP OF DOC
    Mr. MASCARA. And the other three gentlemen, I read your statements, I don't see that you have a real problem with that?
    Mr. VITIKACS. Would we clarify the subject of that section?
    Mr. THOMAS. That's regarding BVA being judges.
    Mr. VITIKACS. Correct.
    Mr. MASCARA. So you don't have a problem, Mr. Vitikacs but you do have a problem, Mr. Thomas. Could you be more specific? We held hearings last week, and talked about this problem and you used the words ''clandestine,'' ''collusion,'' ''cozy,'' and I was concerned at the last hearing about the use of those adjectives in describing the relationship between the courts and the BVA. Can you speak to what your problem is more specifically so I'll better understand what you're talking about?
    Mr. THOMAS. Basically I was just referring back to what we testified on last week and there were—a lot of dialogue was brought before the committee, both from VSOs and also from the folks from the BVA. And we believe that the process that is currently utilized to pass information back and forth between the appellant and the court is not proper. We don't believe that should be done and that's why we have that type of verbiage in there.
    With respect to administrative law judge titles, here again, without going through the appropriate process to be actually qualified to be an administrative judge, we don't believe someone should just arbitrarily be able to have that title. From the standpoint of the schooling required and training for judges, it just doesn't seem appropriate to be able to just assume a title without going through the proper process.
    Mr. MASCARA. And you gentlemen don't have a problem with that?
    Mr. RHEA. No sir. The Non Commissioned Officers Association didn't. We stated that we didn't have any objections to the provisions, but, in complete honesty, we had more of a concern with the reversion rights, that section in there. Because we couldn't sort out completely how that was going to work for these folks, okay. But that section of it has caused us more concern than, certainly, the name change. But we have no objections to any of it at this point.
 Page 15       PREV PAGE       TOP OF DOC
    Mr. MASCARA. Mr. Thomas, you spoke about the Consumer Price Index. Do you want to speak further on that? Do you have some concerns about the calculation of the CPI? Because there was some talk about reducing the CPI as being prepared by the Department of Labor and I have some concerns about it too. Can you speak to that?
    Mr. THOMAS. Our biggest concern is not specifically just using the CPI as a calculation, but we believe there should be some sort of an offset taken into consideration for catastrophically injured veterans. The cost associated with equipment, day-to-day living, training, schooling, et cetera, far exceeds what the average individual is requiring and there needs to be some kind of a provision or option for those people that fit into that category. The average individual doesn't have to—is not faced with those exorbitant charges.
    For those individuals that are not service-connected, the category C veterans, if you've got third party insurance, the insurance companies are getting to the point to where they will pay less and less and less. Many insurance companies will not pay for wheelchairs. Some insurance companies have a $200 limit, per year, on equipment. I spend more than $200 a month on equipment and these type of situations need to be taken into consideration.
    Mr. MASCARA. So there should be some adjustments to the CPI to reflect that?
    Mr. THOMAS. Yes.
    Mr. MASCARA. Because the CPI—or the expenditures by those veterans are much higher than the ordinary expenditures for citizens throughout the country.
    Mr. THOMAS. Yes, sir.
    Mr. MASCARA. Good. Thank you. Thank you, Mr. Chairman.
    Mr. QUINN. Did you—any spelling errors in your reading last night, Mr. Mascara, that we——
 Page 16       PREV PAGE       TOP OF DOC
    Mr. MASCARA. In fact, I did.
    Mr. QUINN. I depend on you, you know.
    Mr. MASCARA. You know, I can get through it—I'll find spelling errors. (Laughter.)
    Mr. QUINN. Thank you very much. Gentlemen, thanks. We have no further questions and we appreciate it. We're going to move to our second panel from the VA now, please.
    While we're doing that, the ranking member of the full committee, Congressman Lane Evans, was here and had to leave to go to another meeting. So, without objection, I would just submit his opening statement and have it become part of the record today. Without objection, it's so ordered.
    [The statement of Congressman Evans appears on p. 19.]

    Mr. QUINN. Thank you. I want to make sure you're in the right spot, Keith. Got the right name tag out there?
    Mr. PEDIGO. I did remember my name.
    Mr. QUINN. Well, it's happened to me before and I'm going to blame someone else for something you said this morning. Hi, Nora, how are you?
    Ms. EGAN. I'm fine, thank you, Mr. Chairman. How are you?
    Mr. QUINN. Good to see you back here this morning. Good. Good morning, Bill.
    Mr. JAYNE. Good morning.
    Mr. QUINN. We're now going to hear from our second panel, the last panel this morning, from the Department of Veterans Affairs and the Veterans Benefits Administration. If you have planned on who begins your testimony today, you may begin. If not, Nora, I would suggest you may want to start. We ask that you—of course all your testimony is here and part of the record, that your opening statements be about five minutes, if you can. Thank you.
 Page 17       PREV PAGE       TOP OF DOC


    Ms. EGAN. Yes, sir. Mr. Chairman and members of the subcommittee, it's my pleasure to appear with this panel today to represent the views of the VA on the draft bill that would impact veterans' benefits programs administered by VBA, the National Cemetery System, and the Board of Veterans' Appeals. Before I begin, I do want to apologize, Mr. Chairman. It has been brought to my attention that our testimony, our formal testimony, was not received in the most timely manner and I do apologize for that.
    As you acknowledged when we sat down, accompanying me today on my right is Celia Dollarhide, who is the Director of our Education Service. To my left is Keith Pedigo, who is the Director of our Loan Guarantee Service and, to my far right, Bill Jayne, who is the Director of the State Cemetery Grants Service.
    Since we did provide the formal written testimony and there are numerous provisions to this bill, I thought what I would do very briefly is just touch on them so that any time that would remain would be available for questions, that you or the other members may have. I'm going to divide it into three areas. One, the provisions which we support. Let me start with those.
    Clearly, we support the cost-of-living allowance for the service-disabled veterans and the survivors of those veterans whose death is service-connected. In fact, you should have received a copy of a transmittal today that went from the Secretary to the Speaker in which we included our own recommendations on the COLA increase.
 Page 18       PREV PAGE       TOP OF DOC
    I'm also very pleased with the committee's bipartisan efforts to enhance our education program. VA's been the proud steward for over 50 years of the education program and I believe it has been the hallmark on which many other education programs, both in the Federal and private sector, have been modeled. I am pleased to support these enhancements. There are two in particular, if I may, that I would like to comment on. One is opportunity for an accelerated payment option for our veterans.
    And the other one is to the Section 206, which would exempt Federal, State, and local government training establishments from meeting the incremental wage increase requirements currently in place. I believe this is important because it not only benefits our veterans who are in the program, but it offers them the opportunity to continue in public service by enrolling in programs that train police and local health care officials.
    Section 404 would make State cemetery grants more attractive to States. We support these provisions and, in fact, it's very similar to legislation the VA had previously introduced. We believe that the expansion of the opportunities for State Veterans' Cemeteries enhances and complements our National Cemetery Program.
    Section 406 would make permanent VA's authority to deposit into VA medical facility revolving funds amounts of pension that are not paid to veterans as a result of payment limitations that apply to certain veterans being furnished nursing home care by VA. We absolutely do support this.
    Section 407 is that which addresses both the titling of the Veterans' Administrative Law Judges and the retreat rights for certain members of the Board and the VA clearly supports this.
    There is one Section that we do have some reservations on. That is Section 401, which would require the contracts for goods and services with respect to property VA acquires under the housing loan program to meet the requirements of the Federal Property and Administrative Services Act of 1949, referred to as FAR.
 Page 19       PREV PAGE       TOP OF DOC
    We understand the concerns of the committee. However, we do not believe that such coverage for our program is necessary. We believe that the provisions that we currently use in the procedures mirror those of the FAR and provide us with some flexibility in that the average repair expenditures for homes that we sell is about $2,500. We believe that most of our contractors have been very satisfied that we have a fair process. If there were complaints to be filed, as a result of the proposed legislation and they go the formal route, then we might be delayed from selling property in a timely manner. This would have an adverse impact, we believe, on the government's return on investment. That said, if the committee feels strongly about it, we would not oppose it.
    There are also several provisions on which we would like to defer position at this time. Section 403 is the provision which would make permanent the Housing Loan Entitlement currently given to members of the Selected Reserved. I must say the VA's been very pleased with this program. We find that it has been beneficial to those involved. However, there are some potential PAYGO issues which we still need to address before the Department would be able to take a final position on that.
    The other Section on which we defer at this time would be that in which the Secretary would provide burial flags for certain members of the Selected Reserves. Again, we support this in concept, but there are some issues regarding the impact and implementation that we would like to discuss with DOD and CBO. And we'll be working with the staff on that, primarily so we can get a handle on the number of individuals about whom we're speaking so that we can do an accurate and adequate cost estimate on it.
    Mr. QUINN. May I interrupt for a second on that?
    Ms. EGAN. Sure.
    Mr. QUINN. And it's my time, so we'll give you some extra if you need it. I know of your concerns on the flag and there's discharge paperwork that has to be done. Just to let you know, I've talked with Steve Buyer, Congressman Buyer, who's the chairman of the National Security Subcommittee on Personnel, and I asked him to see if he could work with DOD a little bit on that. He's agreed to do that to see if we can't come up with a quicker way to do all of that.
 Page 20       PREV PAGE       TOP OF DOC
    And I understand where you're coming from. Hopefully we can, working together with Mr. Buyer and his subcommittee and those of us over here, you, with the people at DOD, before we go to conference with the Senate, we hope we're going to have something that allows us to be—for you to feel more comfortable with that.
    Ms. EGAN. I appreciate that. And I look forward to it.
    Mr. QUINN. Okay.
    Ms. EGAN. You know, one of the last things you want to do is make a bureaucratic, administrative nightmare out of something with such good intent. So I look forward to working with him on that.
    Mr. QUINN. You couldn't be more correct. I mean, that's what has built this place. Good ideas turn into bureaucratic nightmares.
    Ms. EGAN. Correct.
    Mr. QUINN. And we don't—but I think Mr. Buyer has expressed—understand the issue and said he'd like to give us a hand with it, so we're looking forward to that.
    Ms. EGAN. Thank you, Mr. Chairman. I appreciate that. The only other two issues that I wanted to address are that we would defer also on Section 405, the disabled veterans' outreach program specialists and we, clearly, would defer to the Department of Labor on that. As well as we would defer to DOD for Section 208, which is to make sure that those who leave the service before their minimum requirement is up, at the convenience of the service, are made aware of the impact on their entitlement to education benefits. I would like to add, though, that we'd be happy to work with DOD to make sure that we provide them with whatever information they need to advise those servicemembers.
    That concludes my oral statement, sir, and I'd be happy to answer any questions that you have. I have a raft of very talented and knowledgeable people here with me. I hope we will be able to address your issues and concerns.
 Page 21       PREV PAGE       TOP OF DOC
    [The prepared statement of Ms. Egan appears on p. 42.]

    Mr. QUINN. Well, thanks very much. Did—Keith, we're you going to—are you just accompanying today? Or did you have a statement to make?
    Mr. PEDIGO. No, I'm just accompanying.
    Mr. QUINN. And the same with you Bill?
    Mr. JAYNE. Yes.
    Mr. QUINN. What a team. My gosh. You outnumber me. It's just me and Mr. Mascara here today, you know. But I got the best and the brightest. You're welcome. I do want to ask a couple of questions, if I may, and a couple are for the record. Bob Stump also asked me to ask questions, just to get more clarification then anything else.
    In terms of the State cemetery program, is it the administration's view that—do you consider the State cemetery program as a substitute for constructing additional new national cemeteries? And I ask that all the time, but I've got to get it on the record.
    Ms. EGAN. And I appreciate that. Absolutely, sir, we do not. We view the opportunities to expand State cemeteries as a complement or an enhancement of the national cemetery program.
    Mr. QUINN. Thank you. Also, what are the remaining locations of high-need areas for a national cemetery? And then the follow-up question would be: Can we expect to see any funding for them in the President's next budget? And I know that's a bit of a crystal ball for you, but have you had any discussions with the administration on this?
    Ms. EGAN. I'm going to defer to Mr. Jayne, if I could, to answer that question.
    Mr. QUINN. Sure.
    Mr. JAYNE. In the 1994 study that we sent to Congress, we identified 10 areas of the country, Chicago, Detroit, Cleveland, and so on; there were 3 new areas in that study, compared to 1987. It was Atlanta, St. Louis, and Sacramento, California. So those three would be added to the list that are under consideration, that will be evaluated, along with Western Pennsylvania and Central Oklahoma, Detroit, and Miami, the others that have not been addressed so far. They still continue to be under evaluation and we expect that the road map that you asked for by August 21 will address those issues, by that time.
 Page 22       PREV PAGE       TOP OF DOC
    Mr. QUINN. Okay. That's fair. Thank you. Mr. Stump wanted me to just ask a little bit about the national cemetery program, if I may. And I guess the question is: How do we make certain that the National Cemetery System ensures that States understand the cost associated with operating and maintaining the State veterans' cemetery, which is built through the State program, is the responsibility of the States? We have discussed this a few times here at hearings and even one of the sections in this discussion this morning says that the State still has some responsibility. I guess—and I've talked to Bob about this myself, I mean, what are we doing to make sure that they understand that that's still their responsibility?
    Mr. JAYNE. Right from the beginning in outreach, whenever we respond to questions on the phone, in writing, from veterans, we stress very, very hard that it's a real partnership with the States, that the States take on a real responsibility here. We do collect some data from the States and I don't think it's complete or totally accurate in terms of their actual costs. Many of the State cemeteries are associated with State veterans' homes, so some of their administrative overhead is not clearly identified.
    But we do, right from the first, stress that it is a substantial cost. I've used, for example, recently, talking to Pete Wheeler of Georgia, the figure of at least $250,000 a year, and that's in my view pretty much a minimum it would take to operate a State cemetery. There are a couple that don't spend that much, but they're extremely small, not very active, and have some unique circumstances where they get a lot of help from another State agency. But I think the answer is that we are very, very careful to stress that fact to everybody we talk to right from the beginning.
    Mr. QUINN. Thank you. And you would hear complaints to the contrary. Are you satisfied with those efforts, then?
    Mr. JAYNE. Yes, I think I'm satisfied, sir, with our efforts to get that word out to people who are interested in State veterans' grants. I think that the responsibility for operating the State cemeteries does remain with the States and we have a very limited responsibility and limited authority to affect how they actually operate the cemeteries.
 Page 23       PREV PAGE       TOP OF DOC
    Mr. QUINN. And I agree. Not that we'd want to get into that whole situation, either. I guess the concern is that they understand their responsibility and you've said that they do, so that's good enough for me. I'll pass it along to Chairman Stump.
    Mr. Mascara, a question?
    Mr. MASCARA. Thank you, Mr. Chairman. First of all I have a version of your statement. Is there something newer than that? A completed statement, Ms. Egan?
    Ms. EGAN. I believe that there was a statement that arrived here about 5 o'clock yesterday.
    Mr. MASCARA. Were there any material changes from the version I have to the final statement you gave today?
    Ms. EGAN. I believe that there were several changes but I think that I've addressed them in my oral testimony.
    Mr. MASCARA. And I would like to amplify, for a moment, the chairman's questions regarding the cemeteries. Perhaps you have more faith in each of the States living up to their responsibilities as it relates to doing the right thing in their new-found duties of looking after our veterans' cemeteries. And I believe you said, Mr. Jayne, that we have the quote, ''limited authority and responsibility,'' to see that that happens. And I'm just wondering who has the oversight and who has the responsibility to make sure that each of the States will do the right thing in relationship to making sure the cemeteries are properly maintained. Would anyone like to comment on that?
    Ms. EGAN. Mr. Mascara, I appreciate your concern and I will defer and ask Mr. Jayne if he would address that question.
    Mr. JAYNE. Sir, we do have a responsibility to—inspect maybe too formal a word—but to at least visit these cemeteries that we've assisted, every three years and we work very hard to do that. I, and people on my staff, don't always get to these cemeteries, but we have national cemeteries out around the country and area offices where we've sent people to the cemeteries.
 Page 24       PREV PAGE       TOP OF DOC
    The only problems that I've seen and that have been brought to my attention with regard to State veterans' cemeteries are the normal sorts of problems that you run into with operating cemeteries with regard to weather, with regard to emergency sorts of problems that come up. They're rather normal. I haven't seen anything that would lead me to believe that any of the States are taking that responsibility lightly. We do everything we can to make them understand that it is a big responsibility when they take it on and, as far as I can tell, they are following through on that.
    Mr. MASCARA. So you're comfortable, then, with the proposal that's in the bill?
    Mr. JAYNE. Yes, sir, I think it'll help us complement the national cemetery system and it'll help us bring service to a lot more veterans.
    Mr. MASCARA. Because Mr. Rhea wasn't. And I don't know if he's still here or not. You were not comfortable with the setup. I'm trying to get both sides to comment on this issue. Is it all right, Mr. Chairman, to have him comment?
    Mr. QUINN. It's fine with me. We can't hear him and he's not on the record, so if he could come up and speak into one of the microphones. Turn that one on, would you please? That's the problem. You're like a phantom voice, unless you're on the record here. Alright.
    Mr. RHEA. The Non Commissioned Officers would feel much more comfortable if we had a long-range plan for the national cemetery system that we could hold up, say, in our left hand and in our right hand hold up the proposal that we have here for the State program, look at them both, and see how they're going to go together. And then, in our view, when we had that, to put it together, then we could see how we're going to meet the burial requirement for our veterans. We cannot see that right now because we're only looking five years out in the national cemetery system.
 Page 25       PREV PAGE       TOP OF DOC
    Mr. MASCARA. We're looking at the unknown, then, and you want something more definite.
    Mr. RHEA. Yes, sir.
    Mr. MASCARA. Okay. Thank you, Mr. Rhea. I appreciate your comments.
    Mr. QUINN. Would the gentleman yield for just a second?
    Mr. MASCARA. Yes.
    Mr. QUINN. Following a hearing that we had here, Mr. Filner and I sent a joint letter asking for that same kind of information that Mr. Rhea just talked about. We were frustrated one day at a hearing here, as you probably heard and knew. So Bob and I put together a letter, sent it over, and asked for that plan that you need in the left hand, as Mr. Rhea points out. We don't have that yet. So we wanted it to go out to 2010 and we asked for that information and it's in the works.
    Ms. EGAN. Okay. As I understand, Mr. Chairman, you had requested and the Department, I believe, is committed to provide you that response in August.
    Mr. QUINN. Right. Yes.
    Ms. EGAN. By August of this year.
    Mr. QUINN. But we asked to have it—actually, Bob and I were thinking about it before the Fourth of July parade, but then we got rational and figured that if we could get it during August, it'd be ready for us when we returned in September for us to sit down and have the subcommittee take a look at it. And that's more fair, frankly, for you to get us better information.
    Mr. MASCARA. Thank you, Mr. Chairman. Thank you, Ms. Egan.
    Mr. QUINN. I just wanted to—thank you, Mr. Mascara. Jill, I don't know if you want the opportunity to ask any questions for Mr. Filner in his absence? We'll—if we needed anything we'll get to him. Okay.
 Page 26       PREV PAGE       TOP OF DOC
    Finally, the Department estimates the cost of the accelerated education benefits provision to be about $2 million over 5 years or so and I just wanted to ask if you could give us a ballpark figure or discuss a little bit about how you arrived at that figure, that number.
    Ms. EGAN. Yes, sir. I'm going to ask Ms. Dollarhide to—if she will address that, please.
    Mr. QUINN. Sure. Celia.
    Ms. DOLLARHIDE. How are you this morning?
    Mr. QUINN. Good, good morning.
    Ms. DOLLARHIDE. We currently have roughly two percent of our veterans who take an advanced pay and we were working with figures such as those when we did the costing. I understand that there have been some other assumptions and we would be happy to work with the committee on those. Those may be a little low, but between $2 and $4 million would probably be the cost for the current proposal to accelerate the benefits.
    Mr. QUINN. Okay. Well, we'd be happy to work with you. Thank you. Good morning, Mr. Hayworth. Thanks for joining us. I'd give you the opportunity, if you wished, for an opening statement or comment at this time.
    Mr. HAYWORTH. I'm pleased to be here. Appreciate your leadership. Thank the panel for coming to offer their testimony. Look forward to the markup and thank you very much.
    Mr. QUINN. Good. Thanks for coming. Thank you. No further questions from me. Okay. Thanks for being here.
    Ms. EGAN. Okay. Thank you.
    Mr. QUINN. Appreciate it. Now we had—you're excused, of course. I'll knock on something. Originally we had planned to move right to the markup, but we're missing some members who are at another meeting and I told them all that we would recess briefly for about 10 minutes so that they can be paged and get themselves over here if they're able to. So I'm going to declare the subcommittee in recess for 10 minutes. We'll reconvene at 11:05.
 Page 27       PREV PAGE       TOP OF DOC
    [Whereupon, at 10:54 a.m., the subcommittee adjourned subject to the call of the chair.]