The Official Voice of Vietnam Veterans of America, Inc. ®
An organization chartered by the U.S. Congress

July/August 2005

The Continuing Fight For Adequate VA Funding


What has become abundantly clear is that there is a widespread, concerted, and coordinated effort to delegitimize veterans in order to cut medical care funds as well as veterans’ benefits (primarily compensation and pension) funds in order to save money for other priorities.

VVA has no opinion as an organization on those other priorities, whether they be the war in Iraq or the large tax cuts that became the first tax cuts of any kind during wartime in our nation’s history. But it appears that the pie is shrinking deliberately for all other needs. Therefore, the growth of spending for veterans—by those lights—must be held below inflation or reduced to fulfill those other priorities.

Undersecretary of Defense David Chu’s remarks in February that “the cost of veterans, retirees, and survivors is really hurting” the nation’s ability to defend itself is just one example. The campaign to delegitimize zero percent service-connected veterans and category 8 veterans by many in Congress and some in the administration in order to keep these deserving veterans out of the VA system is another.

Now we have the Inspector General weighing in with a report supposedly on disparities in adjudication of veterans’ claims that is being used by the administration to question the validity of PTSD claims, instead of trying to fix their very broken adjudication system. And we have the four-year failure of the Department of Labor to publish regulations even to try to enforce the Jobs for Veterans Act, which would give veterans, particularly disabled veterans and recently separated veterans, priority of service at all programs funded by or through federal funds from Labor.

Sound and Fury

The President’s nationally televised speech in late June came at the apex of what has become partisan warfare following the widely publicized revelation that funding for the medical operations of the Department of Veterans Affairs was at least $800 million short in the current budget year, and at least $1.5 billion to $ 2.6 billion less than would be needed in the fiscal year that begins in October.

Defending his commitment of American troops in Iraq, President Bush did not mention once in his 28-minute speech on June 28, the need to provide adequate resources to meet the healthcare needs of more than 100,000 recently returned veterans not to mention the five million other veterans who use the VA’s health care facilities.

VVA was not surprised, because we have been trying to focus attention on the shortfall in funds for medical care, which is much larger this year than the $975 million estimated by the House of Representatives or the $1.5 billion used by the Senate. The shortfall of funds is chronic and systemic, and it gets more critical each year as critical infrastructure and staffing shortfalls have a negative impact on medical care and procedures.

Congress Finally Comes Through

In a hearing held by the House Committee on Veterans’ Affairs on funding the Veterans Health Administration, Chairman Steve Buyer (R-Ind.) asked a question of Undersecretary for Health of the VA that uncovered what was said to be a $975 million deficit for the current year. This was widely reported and resulted in Senate action on June 29 to appropriate additional dollars to get through this year.

Buyer scheduled a follow-up hearing on June 30 and was the key actor in the House who worked with Rep. Jim Walsh (R-N.Y.) and the House Republican leadership to produce a bill for $975 million that both the House leadership and the White House endorsed. Buyer successfully shepherded this legislation through the House that same night, June 30, prior to the July 4 recess.

Democrats in Congress (and many Republicans in private, out of earshot of their formal leadership) had endorsed the position of VVA and other veterans service organizations that had predicted the shortfall. The Republican leadership, however, endorsed the President’s request, adding just under $1 billion to the FY 2006 appropriations after intense pressure from the VSOs and from the Governors Association for State Veterans Homes. With the President delivering a message of “stay the course” in Iraq, Congress did all it could to contain the political fallout.

After much wrangling, the Senate passed a $1.5 billion supplemental appropriation to cover the current shortfall, and the House weighed in with $975 million. Even here, the partisan politics remained strong. Sen. Patty Murray (D-Wash.), who has championed the veterans’ cause in the upper chamber and who has been trying to add more funds, proposed a $1.4 billion appropriation to mitigate the shortfall. Her amendment was defeated. Sen. Rick Santorum R-Pa.) then played one-upmanship. His $1.5 billion amendment was passed, enabling the GOP to say it is the true friend of veterans, even though the record shows otherwise.

By the time you read this, a conference committee will have come to a compromise on this year’s supplemental appropriation, and Members of Congress from both parties will have enacted legislation to “fix” the projected $1.5 billion shortfall in the next fiscal year.

What they will not have done is embrace the reality that the current method of funding veterans health care is inadequate. The true structural shortfall in funds for this year, next year, and into the future also has yet to be addressed. Congress needs to act to prevent similar shortfalls from occurring in the future.

“VVA and our partner veterans service organizations have argued that the method of funding the VA’s medical operations is flawed. We have urged that Congress hold hearings to establish a new mechanism that would guarantee sufficient and consistent funding for veterans health care,” VVA President Tom Corey said.

What is needed is a method of direct funding of the VA’s medical operations, a method that would be based on the per capita use of the VA health care system, a method that would insure a sufficient, sustainable, reliable, and predictable funding stream every year. Without such a change, the VSOs will fight the same fight every year to secure the funds necessary to ensure that veterans receive appropriate and timely care when they go to a VA medical center.

VVA applauds those in Congress—especially Sen. Larry Craig (R-Idaho), chair of the Senate Committee on Veterans’ Affairs, and Sen. Patty Murray, who serves on that committee—who are outraged at the apparent duplicity exhibited by VA officials who repeatedly assured them the administration had requested enough funding to care for the VA’s caseload.

VVA estimates that an appropriation of $31.4 billion is needed in FY06 to maintain the current level of VA medical operations. This is $2.4 billion more than the VA acknowledges it will need. We urge Congress not only to appropriate these additional funds, but to take the action necessary to insure that such a situation never occurs again.


The reluctance of some in the administration and in Congress to fund veterans’ health care fully is, we believe, indicative of a concerted effort to limit access of veterans to the VA health care system—despite the law that gives them access.

“The federal budget cannot and should not be balanced by taking away what veterans have earned by virtue of their service to our nation,” Corey testified before Congress in April. “If it is the will of the American people to constrict the benefits to which veterans are statutorily eligible, then VVA challenges Congress here and now: propose, introduce, hold public hearings, and debate the question of whether Americans want to limit access for certain veterans who fulfilled their military duty to country yet are now deemed to be unworthy of access to VA health care.

“We have said this before, and we’ll say it again: The cost of caring for those who served in the military is an integral part of the cost of the national defense. Caring for veterans is not a Democratic cause. It is not a Republican effort. It is an American issue, one that cuts across all party affiliations.”


In their zeal to contain the costs of veterans’ health care, the administration and congressional leadership are searching for ways to cut the number of veterans who receive health care from the VA. The White House has proposed to levy a user fee of $250 for certain veterans who use VA medical facilities. They have also proposed more than doubling the co-pay of prescription drugs, from $7 to $15. These proposals have not been embraced by Congress.

The last Congress, swayed by the influx of veterans onto the VA rolls, created the Veterans’ Disability Benefits Commission, chaired by retired Army Gen. James Terry Scott. Its mission is to examine three specific issues, as stipulated in the legislation that empowered the commission:

1. the “appropriateness” of compensation and other benefits for disabled veterans and for the survivors of veterans who died from causes related to military service

2. the “appropriateness of the level of such benefits”

3. the “appropriate standard…for determining whether a disability or death of a veteran should be compensated.”

At its second public meeting, held June 9, the commission sought information from the VA to understand the current status of disability compensation. Ruth Whichard, director of the Office of Performance Analysis and Integrity of the Veterans Benefits Administration, gave a presentation, “VA Profile of Compensation Beneficiaries,” that was full of tables and graphs.

One observation from one of the commissioners was the “vast difference” between the types of disabilities of World War II veterans and those of Vietnam veterans. Chairman Scott said that the commission would look very carefully into this disparity. He also noted that this was the “first significant look at veterans benefits since the Bradley Commission 50 years ago.” VVA believes that perhaps former VA Secretary Anthony J. Principi, who chaired the three-year effort known as the “Transition Commission” in the late 1990s, might disagree with that statement.

Another commissioner requested that Whichard present key data in graphic form to discern trends not easily discernible in the multitude of tables and graphs.

Bill Russo, chief of Regulations for the VA’s Compensation and Pension Service, gave a presentation on Individual Unemployability. He explained that the VA had established a policy that all veterans unable to secure and hold a substantially gainful occupation because of a service-connected disability will be rated as totally disabled. While IU was established in 1941, regulations do not define what a “substantially gainful occupation” actually is.

Russo noted that the number of veterans rated totally disabled on the basis of IU has doubled in the past six years. Veterans with PTSD and other mental conditions account for some 88,000 of the more than 213,000 veterans who currently receive IU.

Deputy Inspector General Jon Wooditch and Assistant IG Mike Staley presented the results of the IG report on variances in VA disability payments. Ron Aument, Deputy Under Secretary for Benefits, gave the Veterans Benefit Administration response to the IG report.

There is a significant disparity in compensation payments to veterans. Illinois is at the back of the pack, with an average of $6,961; in New Mexico, the average is more than $12,000. The national average is $8,370. Why does this exist? It’s mostly a matter of demographics, the VA representatives explained. Also, a veteran represented by a veterans’ service officer receives on average $5,000 more than a veteran who represents himself. Enlisted men and women receive some $1,775 more than officers. Military retirees receive more. Vietnam veterans receive some $2,300 more than veterans in the next highest period of service.

Although some variance in compensation “is to be expected,” Wooditch said, the magnitude of the variance needs looking into. The IG’s preliminary conclusion about why there is such inconsistency in benefits ratings cites several likely culprits. First and foremost is what he called “an antiquated rating schedule.” Since over 90 percent of the rating schedule has been updated since 1990, this is not an accurate statement.

Wooditch noted that the problem is not in ratings for physical wounds; these are consistent from state to state. The inconsistency lies in evaluations of PTSD and other mental-health conditions. He said that PTSD compensation rose from some 120,000 cases in FY1999 to some 200,000 cases in FY 2004. He said that the cost of PTSD compensation has risen from some $1.7 billion to more than $4 billion over the same time period. He said that compensation for PTSD, which represents 9 percent of all compensation cases, is 21 percent of the total compensation outlay. He also said that of some 2,000 cases that the IG looked into, they found an error rate of about 25 percent, accounting for some $824 million in 2004. Part of the problem, Wooditch opined, is that there is a “disincentive to get better.”

The IG sent a questionnaire to 1,992 rating adjudicators; 1,342 of them responded. Fully 25 percent reported insufficient staff as the main problem. Wooditch, echoing administration statements, said that one possible remedy is to give lump-sum payments to any veteran with a disability rating of 20 percent or less. This could free up staff to do quality work on other compensation cases, he said.

VVA believes that it might also help VA to adjudicate PTSD claims more equitably if they used their own manual and protocol for the Compensation and Pension exam, which they do not, because they say it is too expensive. They also do not use that manual in training their adjudication staff. It is no wonder, since they do not follow their own procedures, that there is no consistency in the ratings from regional office to regional office, or even adjudicator to adjudicator in the same office.

Wooditch said that fraud is also one of the culprits, but “we do not know how much fraud exists.” In a five-year period, the IG’s office discovered some 8,500 cases of fraud totaling some $600-plus million. He did not go into great detail, however, seemingly preferring to let the media and others draw the implication that all these problems may be the fault of veterans, instead of an ineffective system.

In the very brief public-comment period, a former VA adjudicator said that this perceived disparity is familiar. “It’s the same problem now as in 1980,” he said. He noted that more than 90 percent of all claims are handled without any criticism. “PTSD and other mental disorders are driving this train,” he said.

Labor’s Love Lost

Veterans had “priority of service” re-established as a conceptual right by means of Public Law 107-288, enacted November 7, 2002, with much fanfare. Since that time, however, the Department of Labor has not published any regulations, meaning that the Act is virtually meaningless and totally unenforceable at the local level, just as young veterans and National Guard and Reservists are returning from overseas.

Not every veteran returning from Iraq or Afghanistan will need a Vet Center, or medical care, or even Montgomery GI Bill educational benefits. But every one of them will need a job. They deserve every opportunity possible to obtain meaningful jobs that pay a living wage for an honest day’s work, and they deserve all of the federally funded assistance we can give to them. Proper implementation of the Jobs for Veterans Act would be a significant tool to help achieve that goal.

It now turns out that this long delay was not the usual bureaucratic incompetence, but a conscious policy deliberately not to promulgate the needed regulations as a way to insure that there is no clear definition of what “veterans’ priority of service” means at the state and local levels.

Apparently, the Labor Department has declared the law a success and moved on, with no meaningful measurement, enforcement, or compliance mechanism in place, nor even plans to pursue it.

VVA has been asking for some time to see the Annual Report that the Assistant Secretary of Labor for Veterans Employment and Training must, by law, deliver to Congress each year. The administration, under intense pressure from Rep. John Boozman (R-Ark.) and Rep. Stephanie Herseth (D-S.D.) of the new Subcommittee on Economic Opportunities of the House Veterans’ Affairs Committees, has finally submitted the reports, at least in part. No reason was given for the lack of accountability. The leadership of this new Subcommittee is to be commended for setting a fast pace and for carefully reviewing the Hire Veterans Committee, The Veterans Corporation, and other programs to determine whether additional federal dollars should be spent on these programs.

The Department of Labor did, last October, launch the Disabled Veterans Lifeline Program to much fanfare. It turns out the entire program consists of stationing one Disabled Veteran Outreach Program (DVOP) worker at Walter Reed Army Medical Center, one at Bethesda National Naval Medical Center, and one each at a few other medical facilities around the country. While every little bit helps, this is simply not a program. The few DVOPs are funded with money returned by some states from the regular DVOP program. The men and women wounded in Iraq and Afghanistan deserve better. They deserve a national program, with clear goals and measurable objectives, set with legal authority, that is both extensive and intensive enough to fit the needs they have now and in the coming months.

The Senate will hold hearing on July 14 to confirm a new Assistant Secretary for Veterans Employment and Training. VVA expects straightforward and complete answers to all questions before any nomination is recommended for approval to the full Senate.


VVA’s special adviser in Government Relations, Joe Wynn, was honored by the Small Business Administration as Veteran Small Business Champion of the Year. Wynn, a longtime advocate for veterans’ initiatives since his discharge from the Air Force in 1974, is the president and CEO of the Veterans Enterprise Training and Services Group. VETS Group provides entrepreneurial education, supportive services, training, advocacy, and technical services to veterans interested in starting, expanding, or purchasing their own small business.

Wynn, who consults on projects relating to Veterans’ Preference in employment, vocational rehabilitation, and small business development, previously consulted for the Service Disabled Veterans Business Association, a non-profit program affiliated with the Association for Service Disabled Veterans. As program manager of SDVB’s first federal contract for facilities management at VA headquarters, he received a Distinguished Service Award in 2002 from the Center for Veterans Enterprise.

Among his other duties and appointments, Wynn serves on the Veterans’ Disability Benefits Commission.


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