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Hon. Bob Filner, Chairman, and a Representative in Congress from the State of California

Welcome everyone to the hearing on the Fiscal Year 2008 Budget Submission of the Department of Veterans Affairs.

Secretary Nicholson on Monday characterized the VA’s FY 2008 budget as a “landmark” budget. 

I applaud the VA for submitting a budget that calls for an increase for veterans’ medical care, unlike the budget it submitted two years ago, and I believe it presents us a framework from which to begin our analysis as to whether the VA’s budget submission will meet the needs of veterans in the coming fiscal year.  Our job as a Committee is to make sure that as we follow this “landmark” we are not led off course and lose our way.

The VA has requested an increase for VA medical care of $1.9 billion over the level provided for in the joint funding resolution.  This represents a 6 percent increase.  The amount we provided this fiscal year is 12 percent more than we provided in FY 2006.  The Independent Budget and The American Legion both recommend more than a 12 percent increase for FY 2008.  The Vietnam Veterans of America recommend substantially more.  I look forward to your explanations as to why you believe your 6 percent increase will suffice.

Your budget submission states that $1.4 billion of your increase for medical care is attributable to inflation.  Once this is factored in, your recommended increase leaves precious few dollars to meet the increasing needs of veterans. 

Although the waiting list for new enrollees has indeed declined, and I applaud you for that, I believe that no veteran should have to wait for a health care appointment simply because the VA does not have the resources to care for that veteran.  Can you assure this Committee that your budget request has the dollars you need to address this problem?

Last year, your budget request claimed an additional $197 million in “efficiencies” for FY 2007, for a total of $1.1 billion.  This year’s budget submission also claims clinical and pharmacy “cost avoidance.”  This Committee would like to know whether you believe you will achieve these “efficiencies” for FY 2007, and what exactly are your dollar estimates as to your “efficiencies” in these two areas for FY 2008.

In the area of mental health, I see that you are requesting an additional $56 million for a total of $360 million for your Mental Health Initiative.  Your budget submission also claims that the VA plans to spend $3 billion for mental health services.  The GAO has reported in November that you failed to fully allocate the resources you pledged in FY 2005 and FY 2006 for your Mental Health Initiative. 

In light of this report, will the VA fully allocate the $306 million for this initiative in FY 2007, and the $360 million for FY 2008?  Does the VA currently have the resources it needs to address the mental health care needs of our veterans, especially our veterans returning from Iraq and Afghanistan?

I must note that I am disappointed that you have once again brought forward legislative proposals as part of your FY 2008 submission.  Instituting enrollment fees and increasing pharmacy co-payments have been rejected year after year by Congress.  Last year you claimed that enactment of these proposals would reduce your need for discretionary health care dollars.  This year, your proposals are deemed “mandatory” spending and are taken out of your overall mandatory spending. 

I would like you to explain to this Committee why you have offered these proposals again, and the policy reasons for deeming the proposed receipts from these proposals mandatory dollars.

The VA is facing an ever-greater claims processing crisis.  In light of this I would expect your FY 2008 budget submission to aggressively request additional dollars to address this growing problem.  But I see that your request for General Operating Expenses, which funds claims processors, is close to $9 million less than the amount provided for in the joint funding resolution.  What steps are you taking to meet this challenge, and why has the VA not requested a sizable increase in this account in order to address the claims processing backlog?

Your VA research request seeks less than you will receive under the joint funding resolution.  You should be requesting at least an $18 million increase just to keep pace with inflation.  This is especially true when once again you are seeking more resources from other federal sources and the budget for the National Institutes for Health promises to be static.

I look forward to a full explanation of your Information Technology request, including transfers from other accounts.  We must ensure that the VA is moving in the right direction in IT and that the funding level you receive in FY 2008 will lead to better security, more innovation, and fewer incidences like the one that occurred in Birmingham, Alabama last week.

I note that you seek increases in both Major and Minor construction.  I know this Committee will be interested in learning how the VA selected the projects included in the FY 2008 request.

There is much work to be done to ensure that the VA has the funding it needs in the coming fiscal year, and to ensure that the VA spends the resources it receives diligently.  Mr. Secretary, we look forward to hearing from you this morning, and to working closely with you to make sure that the needs of our veterans, those returning from Iraq and Afghanistan, and the veterans from our previous conflicts, are met.