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Mr. DRIVER. Yes, sir. And we have done this with GSA all over the country for the past 15 years. The question of the priority of construction and when they will come along is something, of course, that is way beyond our ability to control. But wherever we are located in older space-and, of course, the St. Paul space is older space-World War II construction, in some cases, like in Los Angeles, we have submitted our requirements to GSA, and then several years later they come along with the construction.

But it is true that we have been working with them at St. Paul, we have been working with them in St. Louis, in Chicago, in Los Angeles. And it is the same story everywhere.

Senator ALLOTT. Well, I just wanted to spread this out on the record now that this committee is being asked to appropriate this money for this new facility up there. But as I point out again, Mr. Driver, you were not the Administrator at that time.

Senator MAGNUSON. We will thank you gentlemen for coming.


The subcommittee has received a letter, statement, and additional justifications which will be inserted in the record at this point.

(The letter, statement, and justifications follow:)



May 20, 1966.
Chairman, Independent Offices Appropriations Subcommittee,
U.S. Senate, Washington, D.C.

MR. CHAIRMAN: I enclose a copy of my letter to the Honorable William J. Driver indicating the urgent need for improvement of the Kecoughtan Veterans' Administration Center which is located in Tidewater Virginia near the City of Norfolk

I hope very much that he will present testimony concerning this program and that you will support me in the request for funds necessary to carry it out.

I realize that we are called upon to help a lot of people in foreign lands and we are also called upon to help a lot of people in our own country who are nonveterans and suffer from no disability whatever. In case the subcommittee should decide we cannot do all of the things we would like to do, I hope that you will agree with me that we should give priority to properly caring for disabled veterans. With best wishes, I am, Sincerely yours,



May 20, 1966.
Administrator of Veterans' Affairs,
Veterans' Administration,
Washington, D.C.

DEAR MR. DRIVER: My friend and valued constituent, Mr. Ralph P. Mayo, Commander of the American Legion Department of Virginia, informs me that a modernization of the Kecoughtan Veterans' Administration Center, including the replacement of the 50 year old boiler plant, is long overdue.

Your files will show that the Virginia Department forwarded to you last March a resolution in support of that modernization program and I understand that you fully agree that the program is needed.

Before the hearings before the Subcommittee on Independent Offices have been concluded, I would appreciate your kindness in presenting testimony concerning the need for the improvement of this veterans facility and an estimate of what the program would cost. With best wishes, I am, Sincerely yours,



COMMISSION, THE AMERICAN LEGION Mr. Chairman and Members of the Subcommittee, in general terms, The American Legion is gratified that the President's budget, and the action on that budget in the House of Representatives as shown in H.R. 14921, have met the immediate needs of the Veterans' Administration.

Such acceptance of H.R. 14921 is accompanied by the hope that the Congress will take prompt affirmative action on the matter of financing the cost of the operation of the Veterans Readjustment Benefit Act of 1966 (Public Law 89358). It is noted that House Committee Report No. 1477 contains reference to this matter in anticipating the submission of a request for a supplementary appropriation of $250 million to cover this cost.

It is pleasing to note, also, that H.R. 14921, as presented to the Senate, approves the appropriation of $4,000,000 for the construction grants program for State nursing homes. It is believed this appropriation item is important in permitting the Veterans' Administration to proceed in an orderly manner in the full development of the new medical program approved by the Congress in Public Law 88-450. Use of such funds will permit the Veterans Administration to assist the various States which have indicated an interest in becoming full partners in the operation of this significant new approach to the care and treatment of long-term patients.

There remain two fields in which The American Legion believes the Congress should give particular attention to the needs of the Veterans' Administration, The first is in the matter of construction funds for hospitals and domiciliaries. The Veterans' Administration submitted to the Budget Bureau a request for $92,025,000 for this program. The Budget Bureau reduced this request by $39,900,000.

The American Legion is aware of the thought that this is but a temporary deferment rather than a denial of the request for the larger sum of dollars. However, the advancement of this type of reasoning does not minimize the scope of the problem that is created by such an action. The planning and construction and modernization of VA medical facilities is a long and complex procedure. Interruption of this procedure by the temporary denial of funds increases the problem of providing medical and hospital care for the increasing number of veterans eligible for such care as a result of our military commitments.

There is the immediate problem facing the VA as a result of the 1965 closing of six hospitals and two domiciliaries. These six hospitals had an operating capacity of 1,796 beds as of June 30, 1965 and treated 11,500 patients in fiscal 1965. The two domiciliaires had 3,200 beds and cared for 3,200 veterans during fiscal 1965.

It seems hardly necessary to emphasize the fact that a new group of veterans eligible for care in VA facilities is already with us. Under Public Law 89-358, some four million additional veterans have been made eligible for medical and hospital care in the VA. In its statistical summary for March 1966, the VA reported that the number of veterans in civil life had increased to 25,451,000. This is 3,770,000 more than reported in the same publication for February 1966. The increase thus noted is but a part of the great increase that will be upcoming as a result of our Nation's involvement in world affairs.

There is another factor that is alarming to The American Legion. It appears that the United Medical Administration, as proposed by the first Hoover Commission, and denied by the Congress, has never left the thinking of the Budget Bureau. That highly important agency published this year a Rand Corporation Federal Budget program analysis that advocates program budgeting for the health agencies of the Federal government. It is the American Legion belief that, if the ideas of the Rand Corporation study were adopted, the magnificant type of medical, domiciliary, nursing home, and outpatient program of the VA would be submerged in an over-all program.

The National Commission on Community Health Services recently presented to the White House a 309-page report on the community approach to health services. One of the main recommendations of this study is that there should be a breakdown of all separate systems of health care such as for veterans, labor members, merchant seamen, and the medically indigent.

One small and significant quotation is taken from page 59 of that report: "Separate systems of health care now exist for many groups in the population such as veterans, labor organizations, merchant seamen, and the medically indigent. Welding of the separate systems into a community-wide program would preclude new construction or expansion of hospitals for separate population groups. The objective is a gradual integration of such facilities for the entire community.”

It cannot be said that the goals of The American Legion are indifferent to the medical needs of the whole population. The great preponderance of the veteran population is cared for, or suffers the lack of care, in the same degree that affects the whole population.

Nevertheless, The American Legion believes that this Congress is unwilling to be a party to the breakdown of the program operated by the VA Department of Medicine and Surgery. To destroy this magnificent system is not, per se, the answer to improving the medical care of other segments of the population.

The American Legion began to seek the modernization and updating of the care of veterans in its Boston 1940 and Milwaukee 1941 NationaÌ Conventions. The Congress approved ideas advanced by The American Legion and others in creating the Department of Medicine and Surgery in Public Law 293, 79th Congress, January 3, 1946.

Since that time the system of medical care developed in the VA has become a model not alone for the treatment of the veterans who came from our wars, but in training doctors, nurses, paramedical personnel, and social workers needed to supply that care. The association of the VA medical and hospital system with our medical colleges has been a fruitful and powerful stimulant to the improvement of medical and hospital care for other segments of the population.

The American Legion is fearful that, already, there have been subtle and continuous actions taken to weaken the position of the VA Department of Medicine and Surgery by the intrusion of nonprofessional authority into the operation of the whole system. It is in fields of this nature that the lay authority of the Budget Bureau extends its grasp, not alone of the dollar supply but of the actual programs to construct and operate the VA Department of Medicine and Surgery.

For all of the foregoing reasons, and for others that are most readily available to the Members of your Committee, The American Legion submits the recommendation that no finer act could be taken than to restore that $39,900,000 requested by the VA for the orderly advancement of its program of modernization and construction of its facilities.

The second field of VA needs to which we would like to call your attention is a difficult financial situation that occurs as the result of the Veterans' Administration's research and education activities. The aim of these programs is, of course, to develop new or improved techniques and methods for the treatment of patients. It sometimes happens that funds are authorized to permit, through research, a medical breakthrough, but funds are not thereafter available to put into practice the fruits of the achievement. For example, in a certain year, research funds made it possible to develop a technique for organ transplant. But, once the transplant operation becomes accepted medical practice, there are insufficient operating funds to support it.

We have felt for some time that it would be desirable to place at the disposal of the Chief Medical Director a contingency fund which he could use, at his discretion, to meet the situation described above. Since it is impossible to anticipate at the beginning of a fiscal year what medical breakthroughs will develop, it is impossible to anticipate what operating funds will be required to put those breakthroughs into practice. I believe a contingency fund would enable the Veterans' Administration to put immediately into effect and operation the product of its research and education program. Obviously, the beneficiaries would be the veteran patients whose lives would be saved and health restored.

The American Legion urges your Subcommittee to recommend sufficient funds to insure the continued successful operation of the Veterans' Administration.




The following table sets forth total budget requirements of the Agency for 1967 and the distribution of these requirements to the broad program categories of Administration, Benefits, Medical Services, and Construction.

Veterans Benefits is comprised of the following programs: (1) Compensation and Pensions; (2) Readjustment Benefits, which includes Education and Vocational Rehabilitation, Automobiles for Disabled Veterans, and Paraplegic Housing; (3) Insurance Programs; and (4) credit assistance for Housing under the Loan Guaranty and Direct Loan Programs.

Medical Services is comprised of the following programs: (1) Medical Care, which includes Hospitalization, Nursing Home, Outpatient, and Domiciliary Care; (2) Medical and Prosthetics Research; (3) Grants to the Republic of the Philippines for hospital care; and (4) Administration and Miscellaneous Operating Expenses which provides for the administration of the Department of Medicine and Surgery and Post-graduate and In-Service Training of medical personnel.

The Construction program includes construction of Veterans Administration Hospital and Domiciliary Facilities and Grants for Construction of State Nursing Homes.

General Operating Expenses provides for General Administration of the Agency, the Department of Data Management, and the Department of Veterans Benefits.


(NOA in Millions)
General Operating Expenses . $159.3

Total Budget $6,059.7 Benefits Compensation & Pension .......... 4,374.0 Readjustment Benefits .......... .142.4

Benefits Veterans' Insurance and Indemnities.. 4.2

74.6% Total 4,520.6


Med. Adm. & Misc. Oper. Exp. 14.2
Medical & Prosthetic Research 43.6
Medical Care....

Grants to Rep. of Philippines .4

Services Total. 1.323.6

21.9% Construction

$1,323,6 Construction of H & DF .......... 52.1


Construction Grants for Construction of State Nursing Homes.........

0.9% 4.0

2.6% Total ........






1967 REQUIREMENTS COMPARED WITH 1965 AND 1966 Total VA estimates for both 1966 and 1967 hover around the $6 billion mark. The 1967 estimate of $6,060 million exceeds estimates for 1966 by $57.4 million, but includes $100 million for proposed legislation to provide education and training assistance to veterans of recent military service. Exclusive of this additional requirement, estimates for 1967 are $52.6 million less than those for 1966.

The reduction of $42.6 million is comprised of decreases of $61.5 million in Veterans Benefits, $38.3 million in Construction, and $1.9 million in General Operating Expenses, partially offset by an increase of $59.1 million in Medical Services.

The decrease in Veterans Benefits of $61.5 million is attributable largely to the one-time cost in 1966 for gratuity payments for service-connected deaths under P. L. 89–214.

The decrease in Construction of $38.3 million is due to the difference in the volume of construction projects that progress to the point of design and construction contract awards in 1966 and 1967. There is no change in the scope of the longrange hospital modernization and replacement program begun in 1961.

The decrease of $1.9 million in General Operating Expenses reflects continuing emphasis on administrative cost-reduction programs and increased productivity of manpower.

The increase of $59.1 in Medical Services is due in part to increasing costs for medical care and some increase in the number of beneficiaries to be cared for. It will also permit some expansion in new medical treatment programs and strengthening in the ratio of medical personnel to patient loads, both of which are vital to continued high quality veteran patient care.

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NEW OBLIGATIONAL AUTHORITY_SUMMARY This appropriation finances the Office of the Administrator and his staff offices, the Department of Data Management, and the Department of Veterans Benefits which administers all non-Medical veteran benefit programs of the Agency.

The 1967 request of $159.3 million is $1.9 million less than 1966 appropriation requirements, despite additional statutory pay raise cost of more than $1.3 million. This effective reduction of $3.2 million is due primarily to (1) additional automatic data processing applications, (2) recent field station consolidations, (3) improved employee productivity and manpower utilization, and (4) other cost reduction efforts.

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