Public Law 98-160 mandated a study of the frequency of the Post-Traumatic Stress Disorder (PTSD) and other post-war readjustments problems in Vietnam veterans. The results of the study were released in January of 1989 and showed that about 15.2 percent of male and 8.2 percent of female Vietnam theater veterans currently have PTSD. At this time, there are 196 Vet Centers; 89 DVA medical centers have treatment programs specifically for PTSD. Approximately 20 percent of Vietnam veterans have received treatment through these programs.

The Department has stated that the fiscal year 1991 budget request, which includes funds for PTSD Clinical Teams and Specialized Inpatient PTSD Units, will enable the Department to continue to sustain its current PTSD workload. The Committee, however, notes that testimony received in related hearings showed that there are currently long waiting lines for admittance to these inpatient treatment units due to lack of resources, including funding. Some of those veterans being forced to wait are Category A veterans. In the funds appropriated for fiscal year 1991 to the Department of Veterans Affairs, the Committee expands the medical care budget by $7 million in new budget authority. These funds shall be available to carry out legislation to provide expanded treatment programs for veterans who suffer from Post Traumatic Stress Disorder, if legislation authorizing such programs is enacted before the end of the fiscal year.

Similarly, in the case of substance abuse, the DVA operates 123 specialized alcohol dependence treatment units and 53 drug dependence treatment programs, providing care to 58,900 individual veterans in 1989 for a total of 1,032,683 patient days of care. Another 41,500 individual veterans with alcohol dependence problems were treated in other DVA units such as general psychiatry. In 1980, the Department was given authority to contract with nonDVA community halfway houses for rehabilitation services for substance abuse services which were funded in fiscal year 1989 at $5.4 million. In fiscal year 1990, $50 million was appropriated to the Department for substance abuse treatment programs. However, the DVA medical program was "taxed" in the amount of $120 million to fund the national program from which DVA received its additional funds.

Since 1987, the Department has established two national health care programs for homeless veterans which currently operate from 43 medical centers for homeless veterans with psychiatric difficulties, and 20 domiciliary care residential treatment centers. The funding for these programs amounted to $15 million each in fiscal year 1990 and no increase over that level for fiscal year 1991 is requested in the proposed budget. However, the homeless veterans will continue to be eligible for and receive a wide range of DVA health care services.

The blind rehabilitation program, including its outreach components, now serves 150,000 blind veterans at five Blind Rehabilitation Centers, three Blind Clinics and a Visual Impairment Services Team at each DVA medical center. However, these programs must depend on the resources of the host medical center for funding despite their role as referral centers for many medical centers.

The Committee believes that a new way of funding, perhaps centrally or regionally administered, would better serve the veterans, the medical center and the system. The Committee is concerned with the growing demands on DVA resources from these special medical programs without Administration requests for substantial new funding.

Administration Legislative Proposals.-The proposed budget for fiscal year 1990 includes six legislative proposals related to dental care. There are proposals to raise from $500 to $1,000 the limit triggering the requirement for a second opinion for fee dental treatment; to authorize dental treatment to veterans currently active in a DVA treatment program without direct entitlement to dental care; to permit limited outpatient dental treatment to veterans scheduled for hospitalization; to authorize outpatient dental care to all former POW's; to authorize dental care to veterans receiving DVA Hospital Based Home Care and to authorize outpatient dental care to veterans of World War I. The total cost of these proposals is $5.5 million. The Committee supports these recommendations.

Another legislative proposal would authorize the DVA to provide renovation costs for ten child care centers in 1991 and a total of 50 centers by 1995. The Committee supports this proposal.

Also proposed is legislation which would authorize premium pay for Saturday work for nursing assistants on the same basis as is currently paid to registered nurses. The cost of this proposal is $1 million in fiscal year 1991. The Committee supports this proposal. Two other legislative proposals in the area of personnel compensation are included in the proposed budget: first, nurse pay reform is proposed and second, a physicians and dentists special pay plan is proposed. There are no details on either of these proposals although costs of $31.4 million for nurse pay and $38.6 million for physicians pay are projected. Therefore, the Committee cannot comment on them. The House has passed legislation recommended by the Committee to reform nurse pay, and the Committee plans to take up early in the Second Session of the 101st Congress a physician and dentist pay proposal.

Last, there is proposed legislation to require non-service-connected veterans in Category B and C eligibility categories to make a nominal co-payment per outpatient visit ($5-$10), per outpatient prescription $3-$5) and to make per diem payments ($9) for inpatient treatment; and to authorize recovery from third party health insurers for treatment of non-service-connected disabilities of insured service-connected veterans. The Committee cannot comment on these proposals since the Administration has yet to submit its legislative proposals to the Congress. Should the Administration's proposals be submitted by April 1, 1990, the Committee will investigate them as part of its agenda with regard to eligibility reform during the Second Session of the 101st Congress. The House has passed legislation regarding the recovery of monies from third party health insurers which includes provisions related to the costs of billing and collection. This measure is still pending in the Senate.

Committee Legislative Proposals.-As described throughout this document, pay rates for medical care professions present serious problems for recruitment and retention of the high quality medical

staff required for the DVA medical care system. The Committee has reported out and the House has passed legislation concerning the reform of nurse pay. The Committee is confident that resolution of differences with the Senate version of the legislation will occur early in the Second Session, and estimates the package to cost approximately $31.4 million in fiscal year 1991. The Committee will base legislation affecting physician and dentist pay to be considered early in the Second Session on the thorough testimony received during the October 25, 1989 hearing on recruitment and retention of physicians and dentists. The cost of such legislation is not expected to exceed $68.6 million.

VETERANS BENEFITS

INCOME SECURITY FOR VETERANS

Compensation.-In fiscal year 1991, it is estimated by the Administration that 2.15 million service-disabled veterans and their dependents will receive monthly compensation under existing legislation totaling $8.9 billion. Approximately 324,000 survivors of veterans whose deaths were service-connected or related to service-connected disabilities will receive an additional $2.4 billion. The total compensation requirement is $11.3 billion.

For fiscal year 1991, legislation is proposed by the Administration for a 3.9 percent indexed cost-of-living increase in compensation payments, effective December 1, 1990, at a cost of $347.3 million. This would bring the total compensation payments for fiscal year 1991 to $11.6 billion. As in prior years, the Committee rejects the indexing portion of this proposal.

The Administration also proposes legislation to limit the payment of benefits to certain incompetent veterans with no dependents. As proposed, payments of compensation and pension would be suspended when a veteran's estate from any source equals at least $25,000. Payment of these benefits would be resumed when the estate is reduced to $10,000. The purpose of the proposed legislation is to prevent the buildup of large estates, comprised mainly of veterans benefits, which would pass to heirs who may have had little or no contact with the veteran. The Administration estimates enactment of this proposal would result in savings of $170.7 million in 1991. The Committee wishes to emphasize that this proposal will not be reported unless the resulting savings are made available for discretionary programs in the veterans function.

The Need for a supplemental appropriation.-It is noteworthy that the Administration projects no need for a supplemental appropriation for fiscal year 1990. Given the budgetary impact ($425 million) of the 4.7 percent cost-of-living adjustment for compensation authorized by Public Law 101-237, effective December 1, 1989, and the fact that a supplemental of some $700 million was required in fiscal year 1989 to fully fund the compensation and pension programs, the Committee is reluctant to accept the Administration's projection. During a hearing conducted by the Subcommittee on Compensation, Pension and Insurance on February 21, 1990, the Administration witness indicated that the question of the need for, and the amount of, a supplemental appropriation for these programs will not be answered until May or June of this year. The

CBO estimates that a supplemental appropriation of at least $133 million will be needed for fiscal year 1990.

Pension.-Approximately 550,116 veterans and 509,717 survivors will receive monthly pensions totaling $3.76 billion in 1991. Pension payments are based upon financial need, and the budget estimate includes an indexed cost-of-living adjustment of 3.9 percent, effective December 1, 1990, at a cost of $121.6 million.

The Administration proposes legislation that would allow the Department to have access to certain Internal Revenue Service records for the purpose of verifying incomes of pension recipients. The Administration projects savings of $61 million for fiscal year 1991, but CBO projects only $46 million in savings.

The Administration also proposes legislation to revise the criteria for reduction of pensions based on nursing home or domiciliary status for certain veterans with no dependents. Current law requires a reduction in such veterans' pensions, to a maximum of $90 per month, after the end of three full calendar months of such care, for as long as the veterans remain in such facilities. The Administration proposal would lengthen the period of care before which a reduction would be required, from three months, to twelve months. It would also allow for the return of up to $10,000 of amounts withheld from veterans' payments after their release from care. It is estimated that enactment of this proposal would result in a cost of $13.5 million in fiscal year 1991.

Life insurance.-The life insurance programs administered by the DVA will provide coverage of nearly $204 billion for approximately 6.7 million servicepersons and veterans in fiscal year 1991. Proposed Committee_Initiatives for Compensation, Pension and Insurance Programs.-The Committee expects to report legislation providing a 4.1 percent cost-of-living increase, effective December 1, 1990, at a cost of $396.6 million in fiscal year 1991. This cost is based on the Congressional Budget Office baseline estimate of the expected change in the Consumer Price Index.

The Committee expects to report legislation similar to that proposed by the Administration relating to access to IRS data for income verification purposes. The CBO reestimate of the savings in budget authority resulting from enactment of this proposal is $46 million in fiscal year 1991, followed by savings of $181 million in fiscal year 1992 and increasing to $251 million for fiscal year 1993. There are administrative expenses associated with achieving these savings that are discussed in the General Operating Expenses section. The Committee wishes to emphasize that this proposal will not be reported unless the resulting savings are made available for discretionary programs in the veterans function.

The Committee expects to report legislation similar to the Administration proposal affecting the payment of benefits to certain incompetent veterans. The CBO reestimate of this provision reflects a savings in fiscal year 1991 of $150 million, increasing to $173 million by 1995. The Committee wishes to emphasize that this proposal will not be reported unless the resulting savings are made available for discretionary programs in the veterans function. In addition, the Committee expects to report legislation that will increase the estate limitations applicable to hospitalized or institutionalized incompetent veterans. Under current law, in the case of

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an incompetent veteran having no spouse or child, who is being furnished hospital, institutional, or domiciliary care by the United States, no payments of pension or compensation can be made if the veterans estate from any source exceeds $1,500 until the estate is reduced to $500. The Committee proposal would increase these estate limitations to $4,500 and $1,500 respectively. It is estimated that enactment of this proposal would result in a cost of $2 million in fiscal year 1991.

The Committee also expects to report legislation similar to the Administration proposal regarding the reduction in pension benefits of certain veterans in DVA nursing homes or domiciliaries. CBO estimates enactment of this proposal would result in a cost of $7.3 million in fiscal year 1991.

Finally, the Committee expects to report legislation that will increase the maximum amount of coverage under the Veterans Mortgage Life Insurance Program (VMLI) for severely disabled veterans who are eligible for specially adapted housing grants, from $40,000 to $90,000, and legislation that will increase the period of time during which veterans with service-connected disabilities can apply for insurance coverage under the Service-Disabled Veterans Insurance (SDVI) program, from the current period of one year from date of notification of the establishment of service connection, to two years from that date. The Committee estimates enactment of the proposal to increase the maximum level of coverage under the VMLI program would result in an increase in the annual subsidy for this program of $1.7 million for fiscal year 1991, with a total increase over the next five fiscal years of $10 million. Enactment of the latter proposal would result in an insignificant cost.

READJUSTMENT BENEFITS

The President's budget requests an appropriation of $502,500,000 to fund the Readjustment Benefits Account which makes payments to eligible veterans to assist in their readjustment to civilian life after military service. Payments to eligible dependents are also made from this account.

The Committee is concerned that this budget request does not contain a recommendation to increase the basic benefit paid under the Montgomery GI Bill (Chapter 30, title 38, USC, and Chapter 106, title 10, USC). The basic benefit has not been increased since the GI Bill was enacted in 1984, and significant increases in education costs since that time have eroded the value of the benefit. According to the Department of Education, costs of education at a public institution increased 16.2 percent between the 1984/85 school year and the 1987/88 school year. During the same time period, costs increased 26.7 percent in private education institutions. The Committee feels strongly that the Administration must recommend an increase in benefits in its FY 1992 budget request. If that proposal is not made, the Committee will urge the Committee on the Budget to make funds available for an increase effective October 1, 1991.