FOR RELEASE: February 14, 2002

BIPARTISAN SKEPTICISM GREETS 
VETERANS’ BUDGET

BUSH PLAN TO CHARGE VETERANS $1,500 DEDUCTIBLE FOR HEALTH CARE OPPOSED

Washington, DC -- The Bush Administration budget for veterans was met with skepticism from both Republicans and Democrats yesterday as VA Secretary Principi presented the plan to the House Committee on Veterans Affairs.  Committee members questioned whether the $1.4 billion increase, earlier touted as “historic” by Bush, even covered the costs of inflation and uncontrollable expenses. 

Reflecting the opinions of many lawmakers, Lane Evans, the ranking Democrat on the Committee, called the President’s budget proposal “a major disappointment”.   Evans, whose district contains much of Western Illinois, claimed the VA has many serious problems and warned Secretary Principi that failure to address them could become his “legacy”. 

“VA needs about $26 billion in appropriations for medical care next year,” said Evans.  “Some here will say we can’t afford it.  Appropriating $26 billion for veterans’ medical care next year will increase the deficit.  It will increase the budget deficit by something like 5/100s of one percent.  Not only can we afford it, we must afford it,” Evans continued.

A Bush Administration plan to charge a new $1,500 annual deductible for some veterans receiving medical care from VA also drew strong opposition from lawmakers.  In response to questioning, Principi acknowledged VA expected fewer veterans would obtain their health care from VA because of the proposed new $1,500 annual deductible.  If, as expected, Congress rejects the new $1,500 deductible proposed by Bush, an additional $1.1 billion will be needed to fund veteran health care services. 

The VA Secretary was also questioned about a Bush budget proposal to shift the cost of funding retirees’ benefits to VA from the Office of Personnel Management.  The Bush budget describes this shift in costs as providing more resources for veterans’ medical care.  In contrast, some Committee members pointed out that none of the funds for employee retirement benefits will be used to provide veterans’ medical care. 

Members expressed similar concerns about the transfer of veterans’ training programs from the Department of Labor to VA.  The Administration proposed transferring funds and employees to VA, but lacked a detailed plan to transfer the significant veterans’ training program. 

VA has already proposed “management efficiencies” to address the shortfall expected in 2002 and, under the President’s budget, would be expected to identify additional efficiencies in 2003.  Referring to the potential savings procurement reform may offer, Principi praised Evans for introducing H.R. 3645, the Veterans Health-Care Items Procurement Reform and Improvement Act of 2002.  While Evans supports systemic reforms that can reduce taxpayers’ costs, he emphasized the need to seek adequate appropriations, including a supplemental for 2002 promised earlier by President Bush, instead of seeking further savings. 

Bob Filner (D-CA), the senior Democrat of the Health Subcommittee, also referred to the Administration’s proposed budget as “smoke and mirrors”.  Further, labeling the budget as historic or unprecedented, he told the Secretary, makes it difficult for Committee members to advocate a substantial and greatly needed increase in VA programs. 

Veterans’ service organizations agreed that VA would need substantial increases (up to $3.1 billion) in the medical care budget and also rejected the Administration’s deductible proposal.          

Evans said he intended to support a major increase in funding for VA for 2002 and also advocated an appropriation of $26 billion plus reimbursements for fiscal year 2003 to fully fund veterans medical care.

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