STATEMENT OF KENNETH A. STEADMAN BEFORE THE WASHINGTON, DC FEBRUARY 12, 1998 MR. CHAIRMAN AND MEMBERS OF THE COMMITTEE: Once again, the VFW is proud to be a co-author of the veterans' Independent Budget. As in the past, our contribution lies in the construction portion. But, as an organization of two million, the Veterans of Foreign Wars obviously is concerned for all aspects of the VA's budget. With that, I feel an obligation to first mention our deep concerns with this budget. I will then conclude with some specific comments on the VA construction program. The budget proposed by the Administration for the Department of Veterans Affairs in Fiscal Year 1999 is potentially devastating to our nation's veterans. Indeed, because it ignores our past warnings and that of the Congress about serious underfunding, this budget may be the worst in recent years. The proposed health care budget falls $1.1 billion dollars short of what we believe is necessary to meet current health care needs of veterans who are already mandated for such care. An $18.178 billion appropriation is needed to allow VA to properly care for today's veterans while preparing for the future. For the third year in a row, the health care appropriation is flatlined at just over $17 billion, providing for absolutely no increases to cover either new programs or inflation. Historically, annual increases ranging from $700 million to $1 billion have been required just to cover the costs of inflation and other uncontrollable spending increases. The Administration's VA health care budget is worse than a no growth budget; it's a "negative growth" budget. The Administration proposes to make up the difference in health care appropriations with the collection of funds from third-party payers, such as insurance companies. Fiscal Year 1998 is the first year that VA had authority to collect and retain all collections, yet in the first quarter of FY98, the VA was running $9 million or seven percent short of their goal for this year. We suspect it is because the VA does not have the proper infrastructure in place to meet their goals. Last year, this Committee and Congress put into law a "safeguard" for the current fiscal year providing that any third-party collection shortfall in excess of $25 million will be covered by appropriated dollars. No such protection is in place for FY99. The VFW strongly urges that the Congress make such a safeguard permanent. Receipts from third-party insurance companies should be used to grow the health care system, not substitute for appropriations. These receipts should enable non-mandatory veterans to gain access to the health care system. The Veterans Benefits Administration budget fails to provide adequate resources. They are projected to lose 125 personnel at a time when more resources are necessary to continue the recent improvements in the timeliness and quality of decisions made on entitlement and benefit claims. The Independent Budget projects an increase of 500 FTE for VBA to have any chance of success on their Business Process Reengineering plans and objectives. Mr. Chairman, we join you and the other members of this Committee who are expressing concern about the Administration's proposed legislation to deny compensation for certain tobacco-use related disabilities. The VFW is on record by resolution and past Congressional testimony in opposing this proposal. We believe smoking related claims should be adjudicated under the same criteria as all other potential service-connected disability claims. Further, the Administration's assertion that some $17 billion would be saved over five years by denying such claims is a baseless exaggeration. Since the previous 1993 moratorium on tobacco-use related claims was lifted on January 28, 1997, and as of November 1, 1997, only an additional 2,600 claims were filed for a total of 6,800. Of these, 1,100 had been adjudicated with just 85 granted compensation. In return for our support of this legislation, the Administration proposes a 20 percent increase in Montgomery GI Bill benefits at a cost of $1 billion over five years. My question to the Administration is "What is it doing with the other $16 billion it proposes to save by denying veterans' claims?" Four new cemeteries (Chicago, Dallas, Cleveland, and Saratoga, NY ) are planned but--in agreement with this Committee--we believe this expansion is not sufficient to avert the lack of available burial space by the year 2005. All this is occurring at the same time the Administration is projecting a budget surplus and proposing billions of dollars of spending for new programs but the Montgomery GI Bill increase is the only new program of substance for veterans. It is very disturbing that there is such a lack of concern for veterans especially when the Administration now wants to expand the overall government spending levels. Fiscal Year 1999 will be a watershed year for the VA. I say that because both Eligibility Reform and the VBA's Business Process Reengineering in the Compensation and Pension Service will be at the flood-tide of implementation. We are going to see whether medical care funding will be equal to expected enrollment. Let me now address the VFW's primary responsibility on the Independent Budget. Most VA construction activities are funded through the Major Construction appropriation, which finances projects costing $4 million or more, or the Minor Construction appropriation, which pays for projects costing less than $4 million. A third appropriation finances the Parking Garage Revolving Fund. Veterans Health Administration construction accounts for most expenditures fall within all three appropriations. VA also provides grants for constructing state extended-care facilities and state veterans' cemeteries. The creation of VA's Veterans Integrated Service Network (VISN) system comes at a time when congressional appropriations for major and minor construction will be minimal. As VISNs reconfigure programs and shift resources in an effort to integrate networks efficiently, the risk of local shortages in service capacity increases. We recommend that network directors be given the authority and flexibility to alter their priority lists of proposed major construction projects without fear of losing construction dollars. Network directors must develop five-year construction plans taking into consideration the impact on capital requirements of mission changes, the Veterans Equitable Resource Allocation, and Eligibility Reform. We believe that VA's construction program must emphasize expanding primary care access, making facilities more modern and attractive, and increasing long-term care capacity in non-institutional and institutional settings. The need for enhanced outpatient and extended care facilities and infrastructure improvements has replaced the need for additional hospital beds. Unfortunately, many renovation projects are threatened because costs will exceed the Minor Construction project ceiling of $4 million. Therefore, we recommend that the Minor Construction Cost Ceiling be adjusted annually, using an inflation-adjusted matrix, so funding shortfalls due solely to inflation of any costs do not continue to occur with each passing year. We also ask the Committee to urge the appropriations committee to provide the remaining $20 million required to complete the 100-bed Tampa, Florida Replacement Spinal Cord Injury Center. The project has been in the planning stages for over 25 years. The Veterans Affairs Committees have authorized this project two times. Most importantly, VA has already spent $6 million in design funds and $20 million on the first phase of the project. This important project should not suffer any further delays. The Enhanced Use Leasing Program seems to be an extremely useful, asset management tool, allowing VA to acquire needed facilities, goods and services that would otherwise be unavailable or not affordable. We recommend that Congress make the Enhanced Use Leasing Program permanent. We also recommend that VA require all such leasing projects to fully comply with the stated mission and, therefore, benefit veterans by improving both access to and the quality of patient care. Additional community-based outpatient clinics are needed to reach veterans who would otherwise travel long distances to obtain VA health care. VHA must ensure that eligible veterans have equal access to timely, quality health care throughout the nation. Thank you, Mr. Chairman. |