Chairwoman Herseth Sandlin, Ranking Member Boozman, and members of the Subcommittee, PVA would like to thank you for the opportunity to testify today concerning the status of veterans’ employment.  The Global War on Terror has produced a large number of men and women that have served the country and have returned to civilian life.  Paralyzed Veterans of America would like to thank Congress and this Subcommittee for helping to make this transition successful. 

At a time when our nation faces record unemployment, the veterans’ community has been hit especially hard, with unemployment rates among today’s veterans eclipsing the national average by more than two percent. Our veterans have made tremendous sacrifices for our nation, which is why our leaders must make a concerted effort to ensure that veterans have access to education, employment, and training opportunities to ensure success in an unfavorable civilian job market.

EMPLOYMENT DISINCENTIVES

Employment policy is vital to veterans and veterans with disabilities in today’s environment where work is critical to independence and self-sufficiency.  Many veterans who serve this country honorably and are discharged in good health later acquire significant disabilities. A veteran that has sustained a catastrophic non-service connected injury is identified in the VA medical care system as a Priority Group 4 veteran for purposes of receiving health care from the VA.  If that veteran has the appropriate work credits under Social Security, they will likely qualify for Social Security Disability Insurance (SSDI).  New SSDI beneficiaries will also qualify for Medicare after the initial 24 month waiting period.   If these veterans’ income is low enough, they will qualify for VA pension. Each of these programs, however, contain within them considerable work disincentives.

For the non-service connected veteran on SSDI, he or she can attempt a return to work and will continue to receive SSA disability benefits for a 9 month trial work period.  Beyond that trial work period is a 36 month extended period of eligibility in which they will continue to get a Social Security disability check only in those months when the veteran’s income falls below SSA’s “substantial gainful activity” (SGA) level.  Should the veteran continue to earn above SGA, they will lose the SSDI cash benefits, but will retain access to Medicare for 93 months.  However, if the veteran’s work effort proves unsuccessful and they are separated from employment within 60 months of SSDI benefit termination, they can use SSA’s expedited reentry process.  This allows SSDI beneficiaries the ability to go back on the rolls without reapplying for benefits.  If, however, the veteran on SSDI has been off benefits longer than 60 months, he or she would be required to go through the SSDI application process all over again.

Not surprisingly, these Social Security work incentives are complicated and cause considerable anxiety on the part of SSDI recipients who would like to go to work.  PVA has long supported proposals for improving work incentives within the SSDI program that would address some of the dilemmas faced by beneficiaries who wish to enhance their economic self-sufficiency.  Two such reforms are removal of the SSDI “cash cliff” and continued attachment to the disability benefits system.

As noted above, once someone on SSDI reaches SGA, their disability benefits are completely cut off causing an abrupt decline in income.  This discourages many individuals on SSDI from trying to work. Establishing a $1 for $2 earnings offset in Title II to parallel the provisions in the Title XVI Supplemental Security Income (SSI) program would eliminate the “cash cliff.”  SSDI beneficiaries who are able to work and help ensure that individuals are financially better off by earning than by not earning.

Many SSDI beneficiaries, including veterans fear working to their full potential because it might cause a permanent loss of cash and/or medical benefits. This is a particular concern for beneficiaries who have relapsing/remitting conditions such as mental illness or many chronic illnesses, need accommodations that may be available in one employment setting, but difficult to obtain in the future.  PVA believes that these Social Security disability beneficiaries should have a “continued attachment” to the programs as long as their impairments last, even if they do not receive cash benefits because of their work earnings.

The Veterans Pension Program is often likened to Supplemental Security Income under Social Security. However, unlike SSI, VA pensioners face a “cash cliff,” in which benefits are terminated once an individual crosses an established earnings limit. Because of a modest work record, many of these veterans or their surviving spouses may receive a small Social Security Disability Insurance benefit that supplements their VA pension. If these individuals attempt to return to the workforce, however, not only will their SSDI benefit be terminated, but their VA pension benefits will be reduced, dollar for dollar, by their earnings.

More than 20 years ago under Public Law 98-543, Congress authorized VA to undertake a four-year pilot program of vocational training for veterans awarded a VA pension. Modeled on the Social Security Administration’s trial work period, veterans in the pilot were allowed to retain eligibility for pension up to 12 months after obtaining employment. In addition, they remained eligible for VA health care up to three years after their pension terminated because of employment. Running from 1985 to 1989, this pilot program achieved some modest success. However, it was discontinued because prior to VA eligibility reform, most catastrophically disabled veterans were reluctant to risk their access to VA health care by working.

The VA Office of Policy, Planning and Preparedness examined the VA pension program in 2002 and 7 percent of unemployed veterans on pension and 9 percent of veteran spouses on pension cited the dollar-for-dollar reduction in VA pension benefits as a disincentive to work.  Now that veterans with catastrophic non-service connected disabilities retain access to VA health care, work incentives for the VA pension program should be reexamined and policies toward earnings should be changed to parallel those in the SSI program.  Work disincentives in the Veterans Pension Program should be reexamined and consideration given to changes that would parallel Social Security work incentives such as a trial work period and reduction in benefits as earned income rises.

CENTER FOR VETERANS ENTERPRISE

In a recent hearing this Subcommittee addressed the role of the Center for Veterans Enterprise (CVE) with assisting veteran owned small businesses.  This program was created to serve the veteran owned small business and the service-disabled veteran owned small business as they attempt to contract business with the federal government.  The Subcommittee was informed of problems that veterans have encountered when seeking assistance from this program.

Perhaps a vacancy in the leadership position of the Department of Veterans’ Affairs, Office of Small and Disadvantaged Business Utilization (OSDBU), which is responsible for this program, can account for the lack of communication with participating veterans and the lack of assistance to veterans from the CVE.  At that hearing the Subcommittee was informed that the complaints directed toward that program are being addressed.  The new Executive Director of the OSDBU is aware of the problems with the program and is committed to make improvements to enhance their assistance to veteran owned small businesses.

At that hearing several VSOs testified that they believe CVE needs dedicated funding within the VA budget to better address their increasing responsibilities.  With its new dedicated leadership and with adequate, dedicated funding in the future, CVE will be able to direct their efforts toward helping small veteran owned businesses.  This can only have a positive effect on the issue of employment for veterans, since we know that veterans often hire other veterans when possible.

DISABLED VETERANS OUTREACH PROGRAM AND LOCAL VETERANS EMPLOYMENT REPRESENTATIVES

Another issue of concern for PVA and some VSOs is the lack of results the federal government receives for the employment efforts for veterans from the Disabled Veterans Outreach Programs (DVOP) and the Local Veterans Employment Representative (LVER) programs. These programs are the responsibility of the Department of Labor, Veterans Employment and Training Service (VETS) program that created these positions to fulfill their role as required by law.  DOL’s primary responsibility is to fund and monitor these programs.

These positions are funded by grants to the states from the budget of the VETS program.  There is insufficient accountability for the approximate $168 million that is distributed to states for the DVOP and LVER positions.  These positions report to the local state employment office manager who determines their work actives.   The issue of unemployed veterans may not be a high priority for a state office. Often the DVOP and LVER positions are lower paying positions within the state employment system and often considered a position to begin employment within the state system.  Currently some states facing budget problems have a hiring freeze for new employees.  The DVOP and LVER positions will continue to be filled since these positions are federally funded.    Whenever a higher paying position becomes available within the state or civilian work environment, the DVOP or LVER leaves for more money and this contributes to the high turnover rate. These professional positions should not be a temporary job where the employment specialists start their careers

DVOP and LVERS require an understanding of the workplace environment and how a veteran or veteran with a disability can contribute to the workplace.  This role as an advocate for veterans and disabled veterans is critical for those who are returning to employment after several years away or looking for their first non-military job.  DVOP and LVERs primary mission should be getting the man or woman who has served their country back into the workforce.  Achieving this mission is made more difficult, if not impossible, if the veterans employment representatives must function with limited goals, lack of travel funds, or restricting policies of the local state employment office.

DOL tracks a states performance by the number of registered persons entering the workplace.  They also track the number of veterans among those registered with this information collected by the DVOP and LVER program.  DOL does not track the number of veterans that gained employment solely as a result of assistance veterans received from a state’s employment programs.  In many employment situations these programs have limited input into the veteran’s employment and often they have no input at all.  When the veteran becomes employed, even in situations of underemployment, this is registered as a positive result of the states efforts. 

If these positions were made federal positions under the Veterans Employment and Training Service the salaries could be increased and the training improved and expanded.  As it stands, Congress may be hesitant to increase the funding of programs such as the DVOPs and LVERS that have very limited evidence of their effectiveness.

Perhaps DOL could conduct a pilot program in several states to follow up with the veteran after they leave the unemployment roles.  Although this may be a labor intensive exercise, it may help determine if the states’ efforts are producing the results that are intended for veterans.  Such a pilot could answer several important questions. Has a veteran found employment or has their unemployment benefit expired, in which case they are no longer counted?  Is the veteran “underemployed,” making minimum wage to survive?   Did their state employment office, including the efforts of the DVOP or LVER, have any input in securing that job for the veteran? 

The Government Accountability Office (GAO) has never examined the states performance of these programs of helping veterans find employment.  Congress should ask the GAO to report on the effectiveness of this federal funding.

PVA'S EMPLOYMENT PROGRAM

Paralyzed Veterans of America has successfully placed veterans in employment using our new Vocational Rehabilitation Employment Program.  Beginning less than three years ago in Richmond, Virginia, it has expanded to Minneapolis-St Paul, Long Beach, California and San Antonio, Texas.   This year the program will continue to grow as PVA opens an office in Boston, Massachusetts and Augusta, Georgia.  Each location functions in the VA hospital and is privately funded by a partner from the business community.

Placing paraplegic or quadriplegic individuals into employment is a difficult task.  The placement rate for these individuals is low.  It is much easier for voc rehab counselors and employment placement personnel to find employment for less disabled individuals. In most state, federal, and nonprofit environments these dedicated individuals are evaluated not by the difficulty of an employment placement, but by the number of persons placed. It this system it is easy for the severely disabled individuals to be overlooked.

Using experienced placement counselors that understand the challenge and have knowledge of the workplace, PVA’s program is finding careers for these individuals.  Recently PVA’s placement counselor in Richmond, Virginia told me that through his networking in the business world, he has located positions for disabled veteran throughout the nation.  He also explained that most corporations want to hire veterans, but cannot dedicate the time to specifically look for veterans.  PVA’s experienced employment counselors must be active in the community, must be knowledgeable of state, federal, and local government employment opportunities and on occasion travel to corporate headquarters in other states throughout that region to explain the value of hiring a disabled veteran.  

SERVICE MEMBERS OCCUPATIONAL CONVERSION AND TRAINING

To address the needs of today’s veterans, Congress might consider reimplementing a program similar to the Service Members Occupational Conversion and Training, (SMOCTA) program.  Although this program was funded by the Department of Defense, it was administered by the VA and the DOL. This was considered one of the better programs to serve transitioning military personnel.  SMOCTA was established during the downsizing of the military for veterans discharged after August 1, 1990, to help those veterans that had limited transferable job skills.  A similar program would help many of the younger men and women transitioning from the military today, and those Reserve and Guard members reentering the workforce following deployment. 

This program provided assistance in the form of reimbursements to employers who provided job training for veterans that required new skills necessary for permanent employment with that employer.  The program also included funds for assessments, development of training plans, and supportive services for the trainee.  The DVOP and LVER staff was responsible for development of the employment and training plans.  Veterans eligible for assistance were those with military occupations that were not transferable; those that were unemployed for a long period of time; and those with a 30 percent or greater service-connected disability.

Critics of this program have expressed concern that employers will participate in this program primarily to receive this funding to supplement their payroll.  In these situations when the funding ends, the veteran’s employment would be terminated.  This would be another example of the potential value of the DVOPs and LVERs who would monitor

these employment training positions.  These employment professionals should be familiar with employer’s needs and the nature of the training.  Their involvement in this program would be the determining factor in the value of and the sincerity of the employers training program.

Madam Chair, Ranking member Boozman, Paralyzed Veterans of America would like to thank you for this hearing to discuss the issue of veterans employment.  We thank you for the opportunity to share our concerns on this issue and will continue to work with you to address this problem.  That concludes my testimony and I would be happy to answer any questions you may have.