Chairman ROCKEFELLER. Mr. Violante?

STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR OF THE DISABLED AMERICAN VETERANS Mr. VIOLANTE. Thank you, Mr. Chairman. I am pleased to provide the views of Disabled American Veterans on the pending legislation.

First, let me say we deeply appreciate and value the advocacy this committee has always demonstrated on behalf of the men and women of America's armed forces.

Although not on today's agenda, we have touched on the crisis of VA health care, and I would like to briefly talk about a possible solution. DAV has begun a campaign to guarantee that veterans who seek medical services provided by VA actually receive the care they need. Changing veterans' health care from a discretionary to a mandatory program would correct the existing problem, where annual funding of veterans' health programs falls far short of what is required to serve the enrolled veterans. Making veterans' health care mandatory would eliminate the year-to-year uncertainty about funding levels that has prevented the VA from adequately planning for and meeting the growing needs of veterans seeking treatment. I hope we can count on this committee's support.

My oral remarks this morning will focus solely on S. 2079. This bill includes important changes to law to make the judicial review process for veterans more efficient and effective. Given the special purposes of benefits for veterans, the process is designed to error in favor of the veteran when the VA must choose between allowance and denial in a close case. This principle is given legal effect in the statutory benefit of the doubt rule. VA can legally find against a veteran only when the evidence favoring the veteran is outweighed by negative evidence.

Although this bedrock rule is the foundation for the resolution of material questions of fact in veterans' claims, the Court of Appeals for Veterans' Claims rarely reviews VA decisions to ensure the rule was properly applied.

Under current law, the Veterans Court upholds factual findings by the Board of Veterans Appeals unless they are clearly erroneous. That means a veteran can be deprived of benefits when there is some slight evidence that gives the Government a plausible reason for denial, and it renders the benefit of the doubt rule meaningless. The amendment made by section 2 of this bill will give veterans their day in court, as originally envisioned by the Judicial Review Act.

Section 3 will make another important change to strengthening the appellate process for veterans by filling a void in the jurisdiction of the Court of Appeals for the Federal Circuit. As a matter of sound public policy, fairness to veterans and the overall effectiveness of judicial review, the jurisdiction of the Federal Circuit should be expanded to include ordinary questions of law. The American Bar Association and the Federal Circuit Bar Association supports this expansion, as does the Independent Budget and, of course, the DAV.

Section 1 of the bill addresses another void in the jurisdiction of the Federal Circuit. Although the Federal Circuit has jurisdiction

to consider petitions challenging the legality of regulations issued by VA, Section 502 of Title 38, United States Code, immunizes from judicial review an action relating to the adoption and revision of the schedule for rating for disabilities. Congress wisely sought to avoid opening this unique area of VA rulemaking to outside interference. Unfortunately, however, VA has full discretion now to do what they want, and this would provide an avenue when they are arbitrary and capricious in that decision.

Finally, we support the provisions for equal access to justice fees for nonattorneys.

Thank you, Mr. Chairman.

[The prepared statement of Mr. Violante follows:]

PREPARED STATEMENT OF JOSEPH A. VIOLANTE, NATIONAL LEGISLATIVE DIRECTOR OF THE DISABLED AMERICAN VETERANS

Mr. Chairman and Members of the Committee:

I am pleased to provide this Committee with the views of the Disabled American Veterans (DAV), an organization of more than one million wartime disabled veterans, on the numerous pieces of legislation pending before the Committee.

Today's agenda covers a wide range of issues important to the health and well being of our nation's sick and disabled veterans and their families. We deeply value and appreciate the advocacy this Committee has always demonstrated on behalf of the men and women who have served in America's Armed Forces. The agenda before us today abundantly demonstrates your commitment to our nation's veterans and their families.

Mr. Chairman, for the past eight decades, the DAV has been devoted to one single purpose: building better lives for our nation's disabled veterans and their families. During the past 82 years, the DAV has never wavered in its commitment to serve our nation's service-connected disabled veterans, their dependents, and survivors. Although not on today's agenda, I find the need to briefly comment on the crisis in the Department of Veterans Affairs (VA) health care system. I realize that this issue is not new to the Committee, and that you have recognized the necessity of increasing funding for VA health care in your recent "Views and Estimates." Quite frankly, however, our combined efforts to correct this serious problem have not been successful.

Mr. Chairman, the DAV has begun an all-out campaign to guarantee that veterans who seek medical services provided by VA actually get the care they need. Changing veterans' health care from a discretionary to a mandatory program, as we are proposing, would correct the existing problem where annual funding of veterans' health programs falls far short of what is required to serve all enrolled veterans. Making veterans' health care mandatory would eliminate the year-to-year uncertainty about funding levels that has prevented the VA from adequately planning for and meeting the growing needs of veterans seeking treatment.

I hope that we can count on your support to make timely, quality VA health care a reality for our nation's sick and disabled veterans, by changing VA health care funding from a discretionary to a mandatory program.

S. 2079

This bill includes four important changes in law to make the judicial review process for veterans more efficient and effective. Our laws, like the human relationships they regulate, are complex and ever evolving. Laws governing veterans' entitlements are no different. Indeed, these laws can be quite complex, especially where they deal with cause-and-effect relationships between military service and diseases and injuries, and the quantification of disability from those diseases and injuries for compensation purposes. Thus, in veterans' benefits, as it has often been acknowledged generally, law is not an exact science. The variables of human interactions and the corresponding nuances inherent in the factual bases on which legal rights rest require the intervention of human judgment. Such judgment is, of course, not infallible. Under our legal system, we therefore view the right to appeal as an important element of fairness and insurance against injustices that result from human error. However, the appellate process also benefits the institution and decision makers whose decisions are subjected to outside scrutiny. It serves as a quality control mechanism and a higher authority on the law for agencies like VA. Appellate courts also review regulations issued by federal agencies to ensure the regulations are con

sistent with the statutes enacted by Congress and within the authority of the issuing agency. Before I discuss section 1 of S. 2079, which deals with judicial review of VA regulations, let me turn to the provisions of the bill that affect appeals of claims decisions.

It has been said that appellate courts serve dual functions: first, they correct injustices for individuals, and, second, they decide and develop the law for uniform application across a system. Unfortunately, veterans have seen in practice an imbalance develop between these two roles of judicial review. With that imbalance, the system serves itself far better than it serves a veteran seeking a real and timely remedy for an erroneous denial of benefits. Provisions in S. 2079 will correct this imbalance and make justice for veterans the primary object of judicial review, without diminishing the secondary role of judicial review in developing legal precedent and a body of law for general application.

As I noted, where a decision requires human judgment, there is unavoidably a risk of error. Given the special purposes of benefits for veterans, the process is designed to err in favor of the veteran when an adjudicator must choose between allowance and denial in a close case. This principle is given legal effect in the statutory benefit-of-the-doubt rule. That fundamental rule in veterans' law mandates a grant of the benefit when the evidence neither proves nor disproves the claim. Section 5107 of title 38, United States Code, provides: "When there is an approximate balance of positive and negative evidence regarding any issue material to the determination of a matter, the Secretary shall give the benefit of the doubt to the claimant." As a consequence, VA can legally find against a veteran only when the evidence favoring the veteran is outweighed by negative evidence. This rule does more than mandate that VA give veterans the benefit of the doubt: it is the dividing line for determining whether a claim is proved or disproved in all instances.

Although this bedrock rule is the foundation for the resolution of material questions of fact in veterans' claims, the United States Court of Appeals for Veterans Claims (the "Veterans Court") does not review VA decisions to ensure the rule was properly applied. Because, by nature, veterans' appeals more often involve factual disputes than legal ones, this void in the review process leaves many veterans without any means to enforce this controlling provision of law, and they simply have no remedy for erroneous denials on this basis. The change made by section 2 of this bill will increase the chances that the truth will be discovered by a more probing appellate review than what is available under current law and practice.

Under current law, the Veterans Court upholds factual findings by VA's Board of Veterans' Appeals (BVA) unless they are clearly erroneous." Under the meaning given that term for application in veterans' appeals, a BVA finding of fact will not be disturbed if it has a "plausible basis." That means a veteran can be deprived of benefits when there is some slight evidence that gives the government a plausible reason for denial, and it renders the benefit of the doubt rule meaningless. The Veterans Court has shown a preference for deciding finer points of law that it can elucidate in scholarly discourse or for sending cases back to BVA on procedural grounds, while avoiding, in the overwhelming majority of instances, actually deciding veterans' appeals on the merits. This prolongs an already protracted appellate process in which indigent, elderly, and disabled veterans must go through multiple reviews and wait years for a proper decision. The amendment made by section 2 will give veterans their "day in court," as envisioned in the original 1988 judicial review legislation for veterans. It will make the process exist to serve them, not the convenience of the Veterans Court and VA. Rather than a court that, in a select few cases, uses a veteran's claim as a platform for an abstract exposition of points of law, veterans deserve a court that actually decides their appeals.

Section 2 amends section 7261, of title 38, United States Code, by replacing the clearly erroneous standard of review with a requirement that the Veterans Court must reverse a decision in which the benefit of the doubt was not resolved in favor of the veteran as required by section 5107. Of course, under section 5107, the veteran still has the burden to submit evidence that is sufficient to meet his or her burden of proof under the law.

Section 2 of the bill corresponds to a longstanding DAV resolution to require judicial enforcement of the benefit-of-the-doubt rule and a recommendation by the DAV and the three other veterans' organizations that present The Independent Budget each year. Accordingly, the DAV fully supports this provision in S. 2079.

Section 3 of S. 2079 will make another important change to strengthen the appellate processes for veterans by filling a void in the jurisdiction of the United States Court of Appeals for the Federal Circuit (the "Federal Circuit"). As a matter of fairness, public policy has been to afford at least one review on appeal of points responsible for the disposition of a case. However, under the current scheme of judicial review, the Veterans Court can decide a question of law for the first time or create

a new rule of law that is not subject to review by any other court. In such instances, no remedy for error exists.

The Federal Circuit is empowered to review an "interpretation" of a statute or regulation by the Veterans Court but not an ordinary question of law that does not involve statutory or regulatory interpretation. Appellate courts fill in the gaps in statutory law and procedures with "judge-made law," that is, law established by judicial precedent rather than by statute. Unless overturned by a higher court, these rules of law are as binding as those enacted by Congress. Through judicial precedent, the Veterans Court has created several rules of law. The Veterans Court also decides ordinary questions of law unreviewable by the Federal Circuit when it applies the law to facts. Whether an event occurred or not is a question of fact, but the legal significance of a fact is a question of law. When the legal significance of a fact is not governed by an interpretation of a statute or regulation, per se, it is an ordinary question of law not reviewable by the Federal Circuit. Obviously, this limitation on Federal Circuit jurisdiction shields decisions by the Veterans Court from review in a number of instances.

As a matter of sound public policy, fairness to veterans, and the overall effectiveness of judicial review, the jurisdiction of the Federal Circuit should be expanded to include ordinary questions of law. At our most recent annual National Convention, DAV delegates again adopted a resolution calling for this change in the Federal Circuit's jurisdiction. The American Bar Association has adopted a resolution calling for this change in law, and the Federal Circuit Bar Association also supports this expansion of the Federal Circuit's jurisdiction. In addition, The Independent Budget recommends this change.

Section 1 of the bill addresses another void in the jurisdiction of the Federal Circuit. Although the Federal Circuit has jurisdiction to consider petitions challenging the legality of regulations issued by VA, section 502 of title 38, United States Code, immunizes from judicial review "an action relating to the adoption or revision of the schedule for ratings for disabilities." Formulation of criteria for evaluating disabilities involves expertise in medical and vocational fields and is more practically dealt with through rulemaking by the VA Secretary. Similarly, unlike other matters of law, this is an area generally outside the expertise of the courts. Congress therefore wisely sought to avoid opening this unique area of VA's rulemaking to outside interference. Unfortunately, without any constraints or oversight whatsoever, VA is completely free to promulgate rules for rating disabilities that are arbitrary and capricious or do not conform to the basic principles prescribed by Congress for the rating schedule. While changed circumstances will understandably sometimes warrant changes in the ratings that are less generous than previously, VA has made some revisions to the schedule that are without underlying justification. Arbitrary and capricious or unlawful changes to the rating schedule should not be immune to correction. This change in law incorporates a recommendation by The Independent Budget, and the DAV supports it.

Finally, section 4 of the bill would authorize the Veterans Court to award fees under the Equal Access to Justice Act (EAJA) for successful representation by nonattorneys in cases before that court. Under EAJA, the government must pay a party's attorney fees when a party prevails in an action in which the government's position was not substantially justified. Through EAJA, Congress shifted the costs of legal fees to the government to facilitate enforcement of rights by individuals with moderate incomes, small businesses, and nonprofit organizations. The goal is to encourage citizens to assert their legal rights against the government and discourage the government from using public resources for unwarranted defenses of its actions. Although EAJA fees may be awarded for nonattorneys who assist or are supervised by attorneys in cases before the Veterans Court, such fees cannot be awarded for veterans' service organization representatives and other nonattorneys who are admitted to practice and who successfully represent appellants before the Veterans Court without attorney supervision. This anomaly is the result of a judicial interpretation of the term "attorney fees" as being broad enough to include fees for services of paralegals, law clerks, and other nonattorneys who assist or are supervised by lawyers but not broad enough to include the services of unsupervised nonattorneys who perform the same services as lawyers before the Veterans Court.

This puts veterans' service organization representatives at a distinct disadvantage and potentially harms the veteran or other appellant because it removes the incentive for VA to settle the meritorious cases of these appellants. VA is free to prolong the litigation in these cases even though the government's position is not substantially justified. This situation is extremely unfair. Moreover, provisions that discourage participation of qualified nonattorneys in the representation of appellants before the Veterans Court are certainly inappropriate given the added burden a high proportion of nonrepresented appellants currently places on the Court. Congress should

change the law to permit EAJA fees in cases where nonattorneys successfully represent appellants. For these reasons, The Independent Budget recommended this change in law. As mandated by DAV Resolution No. 20, the DAV fully supports section 4 of S. 2079.

The provisions of S. 2079 will greatly improve the judicial review process for veterans. The DAV believes this is one of the most important bills for veterans in the 107th Congress. We urge the Committee to promptly report this bill for consideration by the Senate.

S. 984 VETERANS' ROAD TO HEALTH CARE ACT OF 2001

This bill would authorize payment of travel expenses for treatment of nonserviceconnected disabilities, at facilities not associated with the VA, if the treatment is provided upon the recommendation of VA medical personnel, and is not available at the VA facility at which such recommendation is made.

In accordance with its Constitution and Bylaws, the DAV's legislative focus is on benefits for service-connected disabled veterans, their dependents and survivors. Our legislative agenda is determined by mandates in the form of resolutions adopted by our membership.

The DAV has no mandate on this issue.

S. 1113 AND S. 2025

Both bills would increase the amount of Medal of Honor Roll special monthly pension from $600 to $1,000.

The Independent Budget for fiscal year 2003 recommended that all veterans' compensation and pension programs be maintained, protected and improved, and that annual adjustments be made to offset the rise in the cost of living. As one of the co-authors of The Independent Budget, the DAV supports the proposed increase in this important benefit.

Though similar in regard to the amount of increase, both bills include unique aspects that would further benefit Medal of Honor recipients. S. 1113 would provide for an annual increase in the amount of Medal of Honor monthly special pension by the same percentage as benefits payable under title II of the Social Security Act. Annual adjustments are necessary to offset rising costs of living, as noted in The Independent Budget. S. 2025 would make the increase in the amount of special pension effective from the date that the recipient is awarded the Medal of Honor, and also increase the criminal penalties associated with misuse or fraud relating to the Medal of Honor. Though we have no resolution concerning this issue, it is clearly offensive and shameful to fraudulently claim such an honor. The DAV would not object to heavier punishments for this crime.

Hopefully, beneficial provisions from both bills can be incorporated into final legislation. Certainly, individuals who have gone above and beyond the call of duty deserve the utmost consideration of a grateful nation.

S. 1408 VETERANS' CO-PAYMENT ADJUSTMENT ACT

This bill would standardize the income threshold for co-payment for outpatient medications with the income threshold for inability to defray necessary expenses of care. We understand that section 3 of the bill is moot as a result of the changes made by VA establishing a three-tiered co-payment structure for outpatient medical

care.

DAV is opposed to co-payments for veterans' medical care and prescriptions. Unfortunately, the VA Secretary elected to increase medication co-payments from $2 to $7 for each 30-day supply of medication, despite strong objection from the veterans' community. DAV Resolution No. 218 supports the repeal of co-payments for medical care and prescriptions provided by the VA. We will continue to voice our objection to co-payments on the basis that they fundamentally contradict the spirit and principle of veterans' benefits. As the beneficiaries of veterans' service and sacrifice, the citizens of our grateful nation want our government to fully honor our moral obligation to care for veterans and generously provide them benefits and health care entirely free of charge.

The law authorizing medication co-payments is due to expire on September 30, 2002. We have urged members of Congress to oppose extending medication co-payment provisions beyond the sunset date. Our hope is that this legislation (S. 1408) will become moot if the law on co-payments is allowed to expire on September 30, 2002. However, if the sunset date were extended, there would at least be a provision in place that would be beneficial to some veterans. Therefore, we are not opposed to the Committee's favorable consideration of this measure.