It is noted that the Administration is requesting a change in the appropriation language which would provide $5 million to conduct OMB Circular A-76 cost comparison studies, an increase of $3 million over fiscal year 1985. These studies are to be conducted in accordance with title 38, U.S.C. 5010(a)(5). In light of the very austere nature of the medical care budget, the Committee strongly objects to this request and recommends that the Committee on Appropriations not approve any funding for this purpose and use these funds to provide health care services to eligible veterans.

The fiscal year 1986 budget also proposes drastic reductions in construction funds which will delay construction of major replacement/modernization hospital projects. Included in these delays are hospitals at Augusta, Georgia; New York City; Houston, Texas; and Philadelphia, Pennsylvania. These deferrals will not only delay the needed upgrade of health care delivered to veterans in these geographic areas, but will result in increased cost to taxpayers due to the inflationary impact caused by delaying construction.

Last year the Committee added $50 million to the medical care budget to provide an increase in the number of outpatient visits due to a freeze on that account from the previous year. This budget proposal provides a very modest increase of approximately two visits per day for each of the 226 outpatient clinics, and is an outstanding example of the "no growth" history of the medical care budget when adjusted to the Consumer Price Index. The following chart graphically illustrates the straight line effect of medical care funds since fiscal year 1975.

III.

VETERANS' BENEFITS AND SERVICES AS A PART OF THE TOTAL
FEDERAL BUDGET

The following table indicates total federal outlays, veterans' benefits and services outlays (function 700) and the precentage for benefits and services for fiscal years 1976 through 1986.

Source: Budget of the United States Government for Fiscal Year 1986, table 20.

The above table indicates that in 1976 the percentage of total Federal outlays spent on veterans' benefits and services was 5.0 percent. Since that time, there has been a steady decrease, with an estimate for fiscal year 1986 of 2.8 percent.

From 1950 to the present, the veteran population has increased by approximately 18.5 million to 28.0 million. Two major GI bill programs educated millions of veterans. Twenty-two major veterans health care measures were approved by the Congress, and 29 hospitals were added to the VA hospital system. Federal outlays for veterans' benefits and services have increased only by a ratio of 3 compared to 345 for Social Security and Medicare; 130 for health; 122 for education, training, employment and social services, and 28 for income security.

Source: Office of Management and Budget, Historical Tables, Budget of the United States Government, Fiscal Year 1986, table 3.2.

Federal spending for health and Medicare programs is expected to total $102,078 million in 1985. The following table displays the total Federal outlays for health, Medicare and veterans' hospital and Medical Care, and the percentage attributable to veterans. It is interesting to note the steady decline of Federal outlays attributed to veterans from 1976 to the present year.

a/ Outlays include a budget function 550. Does not include Medicare, Veterans Administration or Defense Department spending for health care.

Source: Budget of the United States Government for fiscal year 1986, table 20.