by Senator Randy Bass

Despite proposed increases, the President's Fiscal Year 2008 budget for the Department of Veterans Affairs (VA) does not provide adequate funding for the services and benefits our veterans have earned, nor does it address pressing management and operational challenges undermining VA efficiency and accessibility. The President's budget once again calls on veterans to pay more out of their own pockets for health care, underestimates the needs of service members returning from Iraq and Afghanistan, and under funds key research, training, and management programs necessary to provide efficient and quality service to veterans.

It is our fundamental obligation to ensure that the VA is able to meet the needs of returning service members, keep pace with growing operational costs and satisfy rising needs while also ensuring quality service. The Bush Administration often talks about its support for our troops yet it continues to fall short of its commitment to caring for our service members when they return home…


The President's proposed funding level for VA medical care is not sufficient to meet the needs of veterans and would attempt to levy unjust health care fees on many veterans, in an effort to help balance the budget. While the requested medical care budget is $2 billion above Fiscal Year 2007 levels, after factoring in health care inflation and increased patient utilization rates, it amounts to a mere .14 percent increase over last year's allocation. This minimal and inadequate increase raises real concerns about whether the proposed budget will be able to meet the demands of new enrollees or allow for vital new initiatives, including enhancements to mental health services for OIF/OEF veterans.

Specifically, the President's budget would:

Nearly double the prescription drug co-payment for approximately two million middle income veterans who suffer from non-service related disabilities (Priority 7 and 8 veterans), which would increase the cost of prescriptions for these veterans from $8 to $15 per month.
Impose a new enrollment fee on Priority 7 and 8 veterans, on a graduated scale of $250-$750 per year, based on veterans' family income level. While the Bush Administration claims the enrollment fee and co-payment increase would apply only to middle and upper-income veterans, the reality is that they would apply to Priority 7 and 8 veterans whose annual income is as low as $27,790. Further, for the first time, this year's proposal would use family income – rather than individual income – as the basis for calculating these fees. As a result of the enrollment fee and co-payment increase, the VA estimates that nearly 110,000 veterans would be driven away from the VA system.
Provide minimal funds for enhancements in specialized VA health care programs, including mental health/substance abuse treatment, rehabilitative care for critically wounded service members, and readjustment counseling.

Redirect revenues – an estimated $492 million – generated from increased prescription drug co-pay and enrollment fees to the U.S. Treasury, rather than reinvest in VA services, as proposed in past years. This transfer of funds appears to be an effort to help balance the overall budget.
Underestimate the needs of veterans from Operation Iraqi Freedom (OIF) and Operation Enduring Freedom (OEF). While the President's request of $752 million to provide health care services for returning Iraq and Afghanistan war veterans represents an increase over current spending levels for these veterans, it is projected that this allocation will fall significantly short of real demand. The Senate Veterans' Affairs Committee Majority staff estimates that VA projections that anticipate it will service only an additional 54,000 OIF/OEF veterans during Fiscal Year 2008 could be 50,000 patients short of actual demand. (Veterans' Affairs Committee Staff, 2/05/07)

Reduce the VA research budget by $2.7 million, to provide a total funding level of $411 million for medical and prosthetic research. The VA research program provides important contributions to the larger medical community and is one of the Department's key recruitment and retention tools.
Fall short of estimates provided by veterans' service organizations in their Fiscal Year 2008 Independent Budget.

Continue a ban on new "middle-income" veterans enrolling for care. Since the ban was enacted in Fiscal Year 2003, as many as one million veterans have been turned away from VA hospitals and clinics. (Veterans Health Administration, Office of the Assistant Deputy Under Secretary for Health).
Charge co-payments to veterans who already pay co-payments through third-party insurers which would, in effect, force these veterans to pay twice for the same coverage.
The Bush budget fails to provide a plan or sufficient resources for the VA to overcome its caseload backlog and mitigate the effects of anticipated baby boom retirees from the federal service. The President's budget would:

Fail to provide sufficient funds for staffing and training in the Veterans Benefits Administration to address a claims backlog that is quickly approaching one million. (Veterans of Foreign Wars press release, February 5, 2007)

Potentially underestimate the number of claims that will be filed in Fiscal Year 2008, due to the rising numbers of service members returning from Iraq and Afghanistan, and the pending outcome of the Haas case (concerning Agent Orange claims from Navy personnel in Viet Nam). VA has stated that if that case is not overturned, there will likely be 200,000 new claims filed.

Fail to provide sufficient funding for the recruiting, hiring, and training of VA staff to replace baby-boomer generation retirees from the federal service over the next five years, which will impact the efficiency and quality of claims decisions.

The Bush budget fails to provide adequate resources to train those who work with veterans to secure employment, or to help veterans to become employed. The President's budget for the Department of Labor would:

Freeze funding for the National Veterans' Training Institute, which provides specialized training and professional skills development to federal and state veterans' service providers' staff.
Virtually flatline of the Homeless Veterans' Reintegration Program, which provides grants to operate employment programs to reach out to homeless veterans and help them become employed.
Decrease funding for the Veterans Workforce Investment Program, which provides competitive grants for training programs and employment opportunities for veterans in high-skill occupations.
NOTE: Spending cuts are calculated relative to the CR for FY 2007 passed by the House of Representatives, adjusted for inflation.


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