MADAM CHAIRWOMAN AND MEMBERS OF THIS SUBCOMMITTEE:

On behalf of the 2.3 million members of the Veterans of Foreign Wars of the United State s and our Auxiliaries, I would like to thank you for the opportunity to testify before this distinguished body.

Today, as we consider the veterans’ issues of transition and stabilization -- employment, housing and education -- I ask that we briefly reflect on a historical comparison.

In 1973, following the Vietnam War, the all-volunteer force was implemented.  In order to fill the ranks of a military worn down by years of fighting in Vietnam, recruitment standards were reduced. In 1976, thePost-Vietnam Era Veterans’ Educational Assistance Program (VEAP) was created as a recruitment incentive to help fill the ranks. However, relative to programs that came before VEAP, it provided the least amount of education benefits to veterans.

From 1973-1985, the military had lowered recruitment standards and meager transition benefits, resulting in a group of veterans that is three to four times more likely to be homeless than their non-veteran counterparts. In contrast, Vietnam veterans prior to this time period are only 1 to 1.4 times more likely to be homeless than their non-veteran counterparts. Currently, the most common attribute of a homeless veteran is not combat, it is their age and relation to public policy.

“The commonly held notion that the military experience provides young people with job training, educational and other benefits, as well as the maturity needed for a productive life, conflicts with the presence of veterans among the homeless population.” –Libby Perl, CRS Report RL34024

If we are to use history as a marker, we might suggest that a robust, attractive, initial education investment would have alleviated many of the issues America and its veterans are coping with today.

If we fail on the front end with hand-up programs such as education, job training, and vocational rehabilitation, we miss an opportunity to create a sound stabilization and transition program. In the end, the American people pay for expensive programs that are difficult to administer, produce limited results, and often fail to achieve their objectives.

We ask that Congress closely monitor and consider the future implications of lowered recruiting standards. Raising the initial educational benefit could offset some of the reduction in recruitment standards while providing the best tool to transition from the military to the civilian workforce. With the war fast approaching its fifth year, veteran educational benefits have not been adjusted to reflect the cost of an education. Almost daily, a new media article about the failure of the GI-Bill to pay for veterans’ education can be found nullifying what used to be the DOD’s most effective recruitment tool.

We have been down this weary road before; DOD is lowering recruitment standards, and the value of the GI-Bill, continues to falter. We ask that Congress be proactive in their approach to veterans, the military, and our future.  

Incarcerated Veterans Transition Program (IVTP)

According to the Department of Labor (DOL), the Incarcerated Veterans Transition Program, managed by DOL and Veterans’ Employment and Training Service (VETS), is designed to help ex-offender veterans who are at risk of homelessness to reenter the workforce. The program provides direct services – through a case management approach – to link incarcerated veterans with appropriate employment and life skills support as they transition from a correctional facility into the community.  

We are supportive of the spirit of the program, but we need to see assurances of its effectiveness.  If DOL can substantiate that IVTP has been effective in helping veterans stay out of prison and/or jail the VFW supports IVTP.

Uniformed Services Employment and Reemployment Rights Act (USERRA)

According to the Office of Special Council (OSC), USERRA prohibits discrimination against persons because of their service in the Armed Forces Reserve, the National Guard, or other uniformed services. USERRA prohibits an employer from denying any benefit of employment based on an individual’s membership, application for membership, performance of service, application for service, or obligation for service in the uniformed services. USERRA also protects the right of veterans, reservists, National Guard members, and certain other members of the uniformed services to reclaim their civilian employment after being absent due to military service or training.

The VFW appreciates the rigor that the four departments (DOJ, OSC, DOD, DOL) have taken in ensuring that veterans are not discriminated against based on military status. The VFW agrees with recent testimony from the GAO’s Brenda Farrell that “suggests Congress make a single entity accountable for maintaining visibility over the entire USERRA complaint resolution process. Designating one single entity would, in GAO’s view, enhance efforts to improve overall program results.”

Demonstration Project on Adjustable Rate Mortgages

The VFW is happy to support legislation that would make permanent the authority to provide increased financing opportunities to veterans under the VA Home Loan Program by allowing VA to offer conventional and hybrid Adjustable Rate Mortgages (ARMs).  Under P.L. 102-547, the VA secretary was authorized to begin a demonstration project to begin offering adjustable rate mortgages through the VA Home Loan program that are similar to the Department of Housing and Urban Development’s (HUD) programs. 

ARMs allow the mortgagee to periodically adjust the interest rate in accordance with the provisions of the mortgage.  ARMs have proven to be very popular alternatives to conventional home financing.  They typically offer a lower-than-normal initial interest rate, which may make it easier for our veterans to obtain affordable financing.  Moreover, if interest rates drop, the homebuyer can save thousands of dollars above what they would pay using a conventional mortgage.

Despite these advantages, there are some drawbacks.  If the interest rates increase, the homebuyer may end up paying more than they normally would, even with the reduced initial interest rate.

We feel that Title 38, Section 3707 does an excellent job of safeguarding our veterans from some of the negative consequences this type of mortgage can have.  The law contains both periodic and overall interest rate caps to help protect the borrower.  Periodic caps limit the amount that interest may increase from one year to the next, while overall caps prevent the interest rate from increasing above a certain amount over the life of the loan.  The current VA program limits the periodic cap to one percent and the overall cap to five percent over the life of the loan.

The VFW believes that permanently expanding the financing opportunities for our veterans is the right thing to do as it helps assure them of the opportunity to pursue the American Dream of home ownership.  The advantages of the ARM program may make it a viable alternative for many of our veterans, while the safeguards in the program lessen their chances of harm and, further, it brings veterans in line with what is available to non-veterans through HUD.

Post-Vietnam Era Veterans’ Educational Assistance Program (VEAP)

The Post-Vietnam Era Veterans’ Educational Assistance Program was the first educational benefit created as a recruiting tool. If the veteran contributed a total of $2,700.00 he/she could receive up to $8,100.00. If the $2,700 contribution is deducted this equates to roughly $150.00 a month for 36 months.

The VFW believes that this benefit is inequitable relative to other educational benefits available.

A $150 monthly benefit would cover roughly 9% of the average cost of education at a four-year public institution. Only 1% of all VA educational claims are administered through VEAP and the VFW believes that remaining and future claims should be administered as a Chapter 30 benefit.  

Survivors and Dependants Educational Assistance (Chapter 35)

According to the VA, Dependents' Educational Assistance provides education and training opportunities to eligible dependents of certain veterans. The program offers up to 45 months of education benefits. These benefits may be used for degree and certificate programs, apprenticeship, and on-the-job training. If you are a spouse, you may take a correspondence course. Remedial, deficiency, and refresher courses may be approved under certain circumstances.

Chapter 35 benefits make up 14.78% of the educational benefits used in 2007. The VFW strongly supports this program, and would like to see its funding continued.

Thank you for the opportunity to testify.  I would be happy to answer any questions that you or the members of the Committee may have.