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Statement of Joseph Thompson Under Secretary for Benefits Department of Veterans Affairs Before the Subcommittee
on Benefits House
Committee on Veterans’ Affairs July
10, 2001
Mr. Chairman and Members of the Committee: Thank
you for the opportunity to testify today on several legislative items
of great interest to veterans. Accompanying
me today is Dr. John Feussner, Chief Research and Development Officer. H.R.
862
The first measure I will discuss, Mr. Chairman, is H.R. 862.
This bill would amend section 1116 of title 38, United States
Code, by adding diabetes mellitus (Type 2) to the list of diseases
presumed to be service connected in veterans exposed to certain
herbicide agents. In view
of final rules recently issued by VA concerning this subject, we
believe this bill is not necessary.
Section 1116(b)(1) of title 38, United States Code, directs VA
to establish presumptions of service connection for diseases shown to
have a “positive association” with exposure to herbicide agents. On May 8, 2001, VA published in the Federal Register a final
rule which adds Type 2 diabetes to the regulatory list, contained in
38 C.F.R. § 3.309(e), of diseases VA presumes to be service
connected in veterans exposed to certain herbicide agents in service. This final rule effectuates the purpose of H.R. 862.
Section 1116(a)(1)(B) of title 38, United States Code,
expressly establishes a presumption of service connection for each
disease that “the Secretary determines in regulations prescribed
under this section warrants a presumption of service-connection by
reason of having a positive association with exposure to an herbicide
agent.” Inasmuch as the
statute already incorporates by reference the diseases identified in
VA regulations issued pursuant to section 1116, and VA has
included diabetes mellitus, Type 2 in those regulations, we believe it
is unnecessary to amend section 1116 to specifically mention diabetes
mellitus, Type 2.
Congress has not amended section 1116 to include specific
reference to each disease for which VA has previously established a
presumption of service connection by regulation.
For example, in 1996, VA issued a final rule establishing
presumptions of service connection for prostate cancer and acute and
subacute peripheral neuropathy in veterans exposed to certain
herbicide agents. We see
no need for legislative action ratifying these regulatory
determinations.
Because H.R. 862 would merely reiterate requirements of
existing statute and regulation, its enactment would result in no
additional costs to VA. H.R.
1406
The “Gulf War Undiagnosed Illness Act of 2001,” H.R. 1406,
would amend section 1117 of title 38, United States Code, which
governs compensation for certain Gulf War veterans.
We cannot support the enactment of section 2 of this bill, but
we support the enactment of section 3.
Section 2 of H.R. 1406 would amend section 1117 to include
“fibromyalgia, chronic fatigue syndrome, a chronic multisymptom
illness, or any other ill-defined illness (or combination of
ill-defined illnesses)” among the illnesses for which a presumption
of service connection may be established for resulting chronic
disability suffered by Gulf War veterans. Currently, section 1117 provides that the Secretary may
pay compensation to any Gulf War veteran suffering from a chronic
disability resulting from an undiagnosed illness (or combination of
undiagnosed illnesses) that became manifest during active service in
the Southwest Asia theater of operations during the Gulf War or became
manifest to a compensable degree within a presumptive period
(currently ending on December 31, 2001) as determined by regulation.
With regard to fibromyalgia and chronic fatigue syndrome, under
current law service connection may be established on a direct basis
for disability resulting from either of these conditions.
Each is recognized as diagnosable under VA’s schedule for
rating disabilities. Accordingly,
we cannot support the inclusion of either condition in section 1117.
With regard to other “conditions” that would be added by
section 2, the descriptions of those conditions (“chronic
multisymptom illness” and “any other ill-defined illness”) are
very vague and would result in great uncertainty regarding proper
implementation. The
Department is pursuing multiple research initiatives intended to
identify diseases or conditions that may be associated with service in
the Gulf. The results of
this research will provide a scientific foundation for decisions on
possible presumptive service-connection of diseases or conditions
found in veterans of the Persian Gulf War.
Section 3 of the bill would authorize the Secretary, with
respect to medical research projects sponsored by VA, to render a
determination that medical information derived directly or indirectly
from the participation in such a project by a Gulf War veteran who is
in receipt of disability compensation under either section 1117 or
1118 of title 38, United States Code, may not be used in adjudicating
such veteran’s entitlement to such compensation.
Such determination would be based on a finding that it is
necessary for the conduct of the project that Gulf War veterans
participate without fear of loss of compensation.
The Secretary would be required to publish in the Federal
Register a notice of each determination made under this authority with
respect to each medical research project concerned.
This authority would be available for the Secretary’s use
with respect to any VA medical research project whether commenced
before, on, or after the date of enactment of the bill.
Veterans who suffer from undiagnosed illnesses should not be
discouraged from participation in significant research projects that
may result in a better understanding of illnesses associated with Gulf
War service or in beneficial treatment of their disabling conditions.
In addition, if significant numbers of Gulf War veterans who
suffer from undiagnosed illnesses refuse to participate in such
research projects out of fear that their entitlement to compensation
may be adversely affected, the results of such studies may be rendered
unreliable. Accordingly,
Mr. Chairman, we support this provision.
H.R. 1406 is subject to the PAYGO requirements of the Omnibus
Budget Reconciliation Act of 1990, and, if enacted, it would increase
direct spending. We
estimate that enactment of H.R. 1406 would result in benefit costs of
$15.3 million in Fiscal Year 2002 and a total benefit cost of
$87.4 million for the five-year period from FY 2002 through FY
2006. In addition, we
estimate that administrative costs associated with enactment of this
provision would total $819,000 during that five-year period. Because undiagnosed illnesses of Gulf War veterans are
already subject to a presumption of service connection under 38 U.S.C.
§ 1117 and it is not clear whether any additional illness would
be service connected as an “ill-defined illness,” the estimates
reflected above relate only to the addition of fibromyalgia and
chronic fatigue syndrome as new presumptive conditions under that
section. H.R.
1435 & H.R. 1746
H.R.
1435 and H.R. 1746 address the same basic issue, Mr. Chairman, so I
will discuss these two measures together.
Both bills deal with VA having a centralized toll-free
telephone number that enables veterans Nationwide to receive complete
and accurate information regarding benefits for veterans from not only
VA but also from a variety of Federal and state agencies.
Although
we fully support this goal, we are unable to support H.R. 1435 and
believe we are already in substantial compliance with the implied
mandate of H.R. 1746. H.R.
1435 would authorize the Secretary to award a grant to a private,
nonprofit entity to develop and operate a national, toll-free
telephone hotline to provide information and assistance to veterans
and their families. This
hotline would provide general information about VA benefits, and also
provide crisis intervention counseling, information regarding
emergency shelter and food, substance-abuse rehabilitation, employment
training and opportunities, and small business assistance programs.
H.R.
1746 would require VA to provide a single toll-free phone number to
enable the public to have access to veterans benefits counselors. The
Secretary must ensure that these counselors have information about
veterans benefits provided by all Federal and state agencies.
We
would first note, Mr. Chairman, that the Veterans Benefits
Administration has had a national toll-free number, 1-800-827-1000,
since 1993. This number
is listed in the blue pages of telephone books under the heading
“benefits information.” Veterans
call this number every day and receive information not only about VBA
benefits, but also benefits administered by the Veterans Health
Administration and the National Cemetery Administration as well as
benefits offered by other Federal and State agencies. VBA’s
telecommunications concept is based on three customer service
objectives: ·
Accessibility
(the call gets through); ·
Responsiveness
(get call to the right place); and ·
Reliability
(VA gives the correct answer). Our
goals for our telephone system include: ·
Reduce
abandoned calls to 2 percent; ·
Reduce the
volume of calls and misdirected calls; and ·
Direct
calls to program experts based on business rules. While
VA believes our efforts substantially comply with the intent of H.R. 1746,
we recognize that there is more we can do.
For this reason, we continue to monitor and modify our
telephone service to ensure veterans receive the highest quality
service from VA consistent with these goals and objectives.
In May, the Secretary directed the Department to explore
establishing a cost-effective centralized call center available on a
24/7 basis which would be able to respond to general inquiries about
the full range of veterans benefits and health care services.
That study is ongoing and will be completed shortly.
VBA is also currently implementing initiatives, such as Virtual
Information Center and Case Call Routing, that will improve telephone
service and utilize our Veterans Service Representatives more
efficiently. Case Call
Routing will allow callers to call their case management team.
Virtual Information Centers (VIC) allows us to adopt a Service
Delivery Network (SDN) strategy to handle general calls. We
also developed the State Benefit Reference System in FY 2001.
This system provides VA employees computer-based information
about veterans benefits offered by State agencies.
We are investigating the development of a similar system for VA
and non-VA federal benefits for use by VA counselors and veterans
self-service on the internet. VA
should have the flexibility to use the latest technologies in a way
that will be of the greatest assistance to our veterans and other
customers. Certain types
of benefit issues may require a separate toll-free number to direct
calls to subject-matter experts.
In addition, the issue as to whether a private entity, as
envisioned by H.R. 1435, rather than VA personnel should operate such
a system requires further study.
We
would be pleased to meet with your staff and discuss VA
telecommunications concerns and initiatives.
H.R.
2359
Section
1 of H.R. 2359 would authorize the payment of unclaimed National Service Life Insurance (NSLI) and United States Government Life
Insurance (USGLI) proceeds to an alternate beneficiary.
VA supports the enactment of section 1 of this bill.
Under current law, there is no time limitation under which a
named beneficiary of an NSLI or USGLI policy is required to file a
claim for proceeds. Consequently,
when the insured dies and the beneficiary does not file a claim for
the proceeds, VA is required to hold the unclaimed funds indefinitely
in order to honor any possible future claims by the beneficiary.
VA holds the proceeds as a liability.
While extensive efforts are made to locate and pay these
individuals, there are cases where the beneficiary simply cannot be
found. Under current law,
we are not permitted to pay the proceeds to a contingent or alternate
beneficiary unless we can determine that the principal beneficiary
predeceased the policyholder. Consequently,
payment of the proceeds to other beneficiaries is withheld.
A majority of the existing liabilities of unclaimed proceeds
were established over ten years ago.
As time passes, the likelihood of locating and paying the
principal beneficiary becomes more remote.
In fact, the older the liability becomes, the more unlikely it
is that it will ever be paid even though other legitimate heirs of the
insured have been located.
This bill would grant the Secretary authority to authorize
payment of NSLI and USGLI proceeds to an alternate beneficiary when
the proceeds have not been claimed by the named beneficiary within two
years following the death of the policyholder or within two years of
this bill’s enactment, whichever is later.
The principal beneficiary would have two years following the
death of the insured to file a claim.
Afterwards, a contingent beneficiary would then have two years
to file a claim. Payment
would be made as if the principal beneficiary had predeceased the
insured. If there is no
contingent beneficiary to receive the proceeds, payment would be made
to those equitably entitled, as determined by the Secretary.
As occurs under current law, no payment would be made if
payment would escheat to a State.
Such payment would be a bar to recovery of the proceeds by any
other individual.
Section 1 of H.R. 2359 would apply retroactively as well as
prospectively, and is similar to the time-limitation provisions of the
Servicemembers’ and Veterans’ Group Life Insurance programs and
the Federal Employees Group Life Insurance program.
Insofar as payment to beneficiaries is made from the insurance
trust funds, there are no direct appropriated
benefit costs associated with this section.
The liabilities are already set aside and would eventually be
paid, either as payment to beneficiaries that eventually claim the
proceeds, or released from liability reserves and paid as dividends.
There are approximately 4,000 existing policies in which
payment has not been made due to the fact that we cannot locate the
primary beneficiary, despite extensive efforts. Over the years, the
sum of moneys held has aggregated to approximately $23 million.
On a yearly basis, about 200 additional policies (with an
average face value of $9600, or approximately $1.9 million annually)
are placed into this liability because the law prohibits payment to a
contingent beneficiary or to the veteran’s heirs.
It is estimated that approximately two-thirds of the 4,000
policies will eventually be paid as a result of this legislation.
Additionally, in anticipation of the fact that about one-third
of these policies will not be able to be paid, nearly $7 million has
already been released to surplus and available for dividend
distribution.
This section is subject to the PAYGO requirements of the
Omnibus Budget Reconciliation Act of 1990, and, if enacted, it would
increase direct spending. The
Administration estimates that its enactment would result in PAYGO
costs of $15 million during Fiscal Years 2002-2006 and a total of $25
million during Fiscal Years 2002-2011.
Adjudication of these 4,000 policies would entail
administrative costs of approximately $154,000, representing two
full-time employee equivalence (FTE) in claims processing and support.
Approximately 94 percent of this cost would be reimbursed to
the Veterans Benefits Administration’s General Operating Expense (GOE)
account from the surplus of the trust funds, leaving about $9,000 in
government costs (which assumes that about six percent of the policies
are Service-Disabled Veterans Insurance, which has no surplus and for
which appropriated funds are used to cover administrative costs).
Section 2 of H.R. 2359 would extend, by 4 years, the sunset for
the VA’s direct loan program for Native American veterans living on
trust lands. VA strongly
supports this program, and favors enactment of this provision.
The
Native American veteran direct loan program, which was enacted in
October 1992, has enjoyed limited success.
VA has made over 200 loans under this program to Native
American veterans. The
majority of these loans have been to Native Hawaiians.
This program is currently set to expire December 31, 2001.
This provision extends the program until December 31, 2005. VA
recently participated in the Executive Branch’s One-Stop Mortgage
Initiative, which was an effort to develop a more consistent approach
to delivering home ownership opportunities to Native Americans.
VA is hopeful that this initiative will increase opportunities
and remove barriers to participation in the VA loan program for Native
American veterans living on trust lands.
VA is also aware of efforts by the Federal National Mortgage
Association to increase private-sector lender willingness to make
loans on tribal lands. VA
believes a four-year extension of the Native American veteran direct
loan program would give both the Executive Branch and the Congress an
opportunity to see how various initiatives regarding Native American
housing loans affect the ability of these veterans to obtain VA
financing, and whether further program modifications are indicated.
H.R.
2359 would also make two changes to the current law. First,
the bill would permit VA to make loans to members of a Native American
tribe that has entered into a memorandum of understanding (MOU) with
another Federal agency if that MOU contemplates loans made by VA and
the MOU generally conforms to the requirements of the law governing
the VA program. Current law requires a tribe to enter into an MOU with VA
before we can make loans to members of that tribe.
The bill would also modify the current requirement that all VA
loan and security instruments contain, on the first page of each such
document, in letters two-and-a-half times the size of the regular type
face used in the document, a statement that the loan is not assumable
without the approval of VA. H.R.
2359 would require that this notice appear conspicuously on at least
one instrument (such as a VA rider) under guidelines established by VA
in regulations.
Those two amendments would implement recommendations by the
One-Stop Initiative. These
changes would reduce the administrative burden on Indian housing
authorities and bring more uniformity in federal loan program
processing procedures. Eliminating
the requirement for a separate MOU between each tribe and VA should
expand the number of Native American veterans eligible for VA
financing. The extremely
strict loan assumption notice requirement in the current law has
prevented VA from approving the use of uniform loan instruments now
used in FHA, “Fannie Mae,” and “Freddie Mac” transactions. We
recommend that section 2 of H.R. 2359 be further amended to repeal the
requirement that VA outstation, on a part-time basis, Loan Guaranty
specialists at tribal facilities if requested to do so by a tribe.
We have consolidated loan processing and servicing operations
from 46 regional offices to nine Regional Loan Centers, and do not
have the resources to outstation loan personnel at various tribal
locations. VA continues
to make periodic outreach visits to all tribes, and provides training
to tribal housing authorities. We
believe that we can provide all necessary services to Native American
veterans seeking VA housing loans without outstationing employees in
remote tribal locations. We
estimate that enactment of section 2 of H.R. 2359 would not require
any additional appropriation of loan subsidy.
Public Law No. 102-389 appropriated $4.5 million “to
remain available until expended” to subsidize gross obligations for
direct loans to Native American veterans of up to $58.4 million.
We estimate that sufficient funds would be available to cover
projected Native American veteran loan volume until at least FY 2005.
This section is subject to the PAYGO requirements of the
Omnibus Budget Reconciliation Act of 1990,
but we estimate the annual cost to be less than $500,000
annually over five years.
Section 3 of H.R. 2359 would eliminate the requirement for
appellants to furnish the Secretary of Veterans Affairs with a copy of
the notice of appeal filed with the United States Court of Appeals for
Veterans Claims (CAVC). VA
supports the enactment of section 3 of this bill.
Section 7266(a) of title 38, United States Code, provides that
a claimant adversely affected by a decision of the Board of
Veterans’ Appeals (Board) must file a notice of appeal with the CAVC
within 120 days after the date on which the Board mailed notice of the
decision to the appellant, in order to obtain review of the Board’s
decision. Subsection (b)
of section 7266 requires such a claimant to furnish VA with a copy of
the notice of appeal that he or she files with the CAVC.
Failure to comply with the requirement to file a notice of
appeal with the CAVC within 120 days of receiving notice of an adverse
Board decision ordinarily will result in a dismissal of the appeal for
lack of jurisdiction. Unfortunately,
in a number of instances, appellants have mailed their notices of
appeal to VA, but not to the CAVC, thinking that they have complied
with the statute. Some such appeals have been dismissed because the notices of
appeal were not received by the CAVC within the required 120 days.
We believe that removal of the requirement that an appellant
furnish the Secretary with a copy of his or her notice of appeal will
clarify to which entity the notice must be provided, thereby resulting
in fewer cases in which appellants, through inadvertence, lose their
opportunity to appeal. Removal
of this notice requirement will not impair VA’s ability to respond
to those appeals that are properly filed with the CAVC, because the
court routinely notifies VA when an appeal has been docketed.
This notice is normally provided to VA within a day or two of
the receipt by the CAVC of the veteran’s notice of appeal.
There would be no costs associated with the enactment of this
section. H.R.
1929
Mr.
Chairman, H.R. 1929 would also extend the sunset for the Native
American veteran housing loan program and amend the requirements
concerning MOUs. Unlike
section 2 of H.R. 2359, it does not address the loan assumption
notice. Accordingly, Mr.
Chairman, we prefer the language of H.R. 2359, with the additional
amendment we have recommended. H.R.
2361 The
“Veterans’ Compensation Cost-of-Living Adjustment Act of 2001,”
H.R. 2361, would authorize a cost-of-living adjustment (COLA) for
Fiscal Year 2002 in the rates of disability compensation and
dependency and indemnity compensation (DIC).
Section 2 of this bill would direct the Secretary of Veterans
Affairs to increase administratively the rates of compensation for
service-disabled veterans and of DIC for the survivors of veterans
whose deaths are service related, effective December 1, 2001.
As provided in the President’s FY 2002 budget request, the
rate of increase would be the same as the COLA that will be provided
under current law to veterans’ pension and Social Security
recipients, which is currently estimated to be 2.5 percent. We
estimate that enactment of this section would cost $376 million during
FY 2002, $7.1 billion over the period FYs 2002-2006 and $28.5 billion
over the period FYs 2002-2011. Although
this section is subject to the PAYGO requirement of the Omnibus Budget
Reconciliation Act of 1990 (OBRA), the PAYGO effect would be zero
because OBRA requires that the full compensation COLA be assumed in
the baseline. We believe this proposed COLA is necessary and appropriate in
order to protect the benefits of affected veterans and their survivors
from the eroding effects of inflation.
These worthy beneficiaries deserve no less. Mr. Chairman, this concludes my statement. I will be pleased to respond to any questions you or the members of the Subcommittee may have. Back to Witness List |
