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Washington, DC. The subcommittee met, pursuant to call, at 10 a.m., in room 334, Cannon House Office Building, Hon. Jack Quinn (chairman of the subcommittee) presiding.

Present: Representatives Quinn, Hayworth, LaHood, Filner, Evans, Mascara, Reyes.

OPENING STATEMENT OF CHAIRMAN QUINN Mr. QUINN. Good morning. The subcommittee will come to order and begin the hearing today on operations within the Compensation and Pension Service using the GPRA Principles. We'll also hear some testimony today on the VBA's processing of Persian Gulf claims and hear remarks as well about the Administration's legislative proposal to limit the VA's liability for smoking-related illnesses.

The Compensation and Pension Program distributes about $16 billion dollars annually to veterans and their survivors. Title 38 states that the mission of the compensation program is to provide monthly payments for disability resulting from personal injury or disease contracted in the line of duty, or for aggravation of a preexisting injury suffered, or a disease contracted in the line of duty in the active military, naval, or air service.

At the end of last fiscal year, there were about 2.6 million veterans receiving compensation and 305,000 survivors receiving Dependency Indemnity and Compensation and death compensation.

Section 1155 describes the method of determining these payments as a “schedule of reductions in earning capacity...based, as far as practicable, upon the average impairments of earning capacity resulting from such injuries in civil occupations.

The current rating schedule provides monthly payments ranging from $94 to $1,924, plus a wide array of supplemental benefits that

may raise payments above the $5,000 mark for our most severely disabled veterans.

Title 38 is less clear about the purpose of the pension program. However, it is clear that Congress intended the program to provide non-service connected, totally disabled wartime veterans a minimum level of income-about $8,450 for single veterans. There were over 372,000 veterans receiving pension and about 200,000 survivors receiving death pension in September of 1996. Last year, the average pension program benefit was about $4,225. Clearly, as all of us know, nobody in the program is getting rich.

Judging from the VA's budget submission, as well as the meetings between the VA and Committee staff to discuss the Department's progress towards compliance with the Results Act, it's clear that the VBA has spent considerable effort on the project. And today we will hear about additional progress, I'm certain.

We are also planning to review the VA's handling of Persian Gulf claims. There appears to be considerable interest in decentralizing Persian Gulf claims processing. And all of us are interested in what the stakeholders have to say on this issue.

I want to point out that each of the VSO witnesses today will criticize the way the VA has handled these claims. I also hope that each of them will be prepared to go beyond the criticism of the centralized processing system that the VA appears to be backing away from and address the more substantive issues like consistency, timeliness, management, and direction.

We want to all be assured that the VA now has a handle on that processing. It is unfortunate that the processing of these Persian Gulf claims has been characterized by what appears to be a lack of strategic direction. At least that's the characterization.

There also appears to be a lack of training, some poor outreach, inconsistent development of evidence, and some failures in duty to assist. Therefore, I will ask the GAO to review processing, with an emphasis on duty to assist and development of Persian Gulf claims, and report their findings back to the subcommittee as soon as possible.

There continues to be a strong perception that the DOD and the intelligence agencies are not telling everything they know. We want to get to the bottom of this, and we'll hold as many hearings as necessary to solve this problem.

Trust is the glue that holds this society together, and I'm deeply disturbed about the continuing revelations regarding chemical weapons incidents.

I'd like to ask the VA to provide a list of all projects they are sponsoring concerning Persian Gulf Illness—the funding for each, a short description of the project and the name of the principle researcher. In addition, I would appreciate a strategic plan describing how all of the research programs fit together to solve this issue.

To borrow a Results Act phrase, “compensation is not the desired outcome." What we want are healthy veterans and their families, and research is critical to that effort.

To round out today's hearing, we have asked our witnesses to discuss the VA's proposed legislation on not compensating certain veterans for smoking-related illnesses. VA has sent a draft bill to

the Congress that will place significant restrictions on who may be compensated for these types of illnesses.

We're sure that this is not the last airing on the subject, and we look forward to an open discussion.

Having outlined at least three different areas for us to hear testimony today, I'll turn to Mr. Filner, our ranking member on the subcommittee, for his opening remarks, and remind all of us that we have a full plate here this morning—a wide array of witnesses and folks that will bring us some discussion to all three areas.

Mr. Filner. [The prepared statement of Chairman Quinn appears on p. 41.)

OPENING STATEMENT OF HON. BOB FILNER Mr. FILNER. Thank you, Mr. Chairman, and good morning. It's so nice to see you at 8:30 in the morning. Put facetious in the remarks. I also would like to stress a few points after the Chairman's opening remarks.

I look forward to the discussion regarding VA's proposal to move the Persian Gulf War claims from the four Area Processing Offices to all the VA regional offices. This is a difficult issue. It will have profound effects on the lives of thousands of Persian Gulf War veterans and deserves, of course, very serious and forthright discussion.

In that discussion, I would like to know how VA reached its original decision to establish the adjudication responsibility for these claims in the four processing offices in spite of objections from Congress and veterans' service organizations at the time.

What actions did the VA take to ensure that the four APO's could do their jobs efficiently to guarantee their success? What additional staff and computer assistance were provided to these regional offices?

From our experience with educational—when the educational service designated four regional processing centers to adjudicate Montgomery GI Bill claims, these regional offices initially were not given the support they obviously needed to fulfill their responsibilities.

But within a year, the necessary assets were provided and it seems like the education RPC's have worked out reasonably well. Apparently the Persian Gulf APO's have not been given the tools and training necessary to meet their challenges, and I find that very, very disturbing.

And I want to know how and why this circumstance has developed. I'm additionally very skeptical, I guess would be the word, by assertions in your testimony today that the very complex problem of redistributing the thousands of Persian Gulf War claims to regional offices across the country can be accomplished by early June.

I'd like to know how you proposed to accomplish this because that's not described in your statement.

These are, I think, very important issues. I hope we'll get some satisfactory issues this morning because, as the Chairman said, in all issues surrounding Persian Gulf War veterans, we deserve candid, honest answers from the VA.

I noticed I had not heard the Chairman's opening remarks before he gave them. I had not read them earlier. But you provided, Mr.

Chairman, a list of things that you would like to have answers to. I thought that was a very good list.

And I would like to add, if you don't mind, in your questions about research and the programs—the research and questions involved with civilian–the civilians who have—now claiming that they have gotten Persian Gulf War Illness or some similar thing and would like a-some reasonable and candid, I think, approach to their problems.

When I was in my district this weekend, I had some particularly chilling meeting with some people who apparently, through casual contact with military during-military folks involved in the war, have come down with very similar, if not exactly the same, symptoms and illness and are regarded even with more skepticism by the military and apparently the VA then than originally was given to the to our military people.

That is, it's taken some time to break through and get a serious examination of Persian Gulf War Illness amongst the military, and now we have at least a reasonable period of-presumptive period to deal with it. But it looks like the civilian situation might be equally as chilling and equally as-equal reluctance of the military and the VA to even look at it seriously.

So I would like to add that to your[The prepared statement of Congressman Filner appears on p. 44.)

Mr. QUINN. Absolutely. To the extent that the--you know, the VA can get involved in those civilians, I'd be happy to have that added to the list.

Thanks for the suggestion.
Before we hear testimony, Mr. Reyes, any opening remarks?
Mr. REYES. I don't have any.
Mr. QUINN. Mr. Hayworth?
Mr. QUINN. Mr. LaHood?
Mr. LAHOOD. Nothing.

Mr. QUINN. So you've left Filner and me to do it all, huh? I'll tell you.

Thanks, gentlemen.

Our first witness is Ms. Kristine Moffitt, Director of the VA Compensation and Pension Service. She's joined by Assistant General Counsel John Thompson, and the VBA's Chief Financial Officer, Bob Gardner:

As we begin, Bob, we want to thank you and your staff for the way that you've dealt with the committee and the subcommittee on the Results Act. We appreciate it very much. And it's a chance for me publicly to say to—at least for me and on behalf of the subcommittee, say thanks for the briefing we held earlier this year over at your place where we were for a few hours. But it seemed like just a few seconds, it was so, you know, spellbinding.

Ms. Moffitt, please begin.

Ms. MOFFITT. Thank you.

Mr. Chairman, members of the subcommittee, I'm pleased to be here to discuss implementation of GPRA, the adjudication of Persian Gulf claims, and VA's proposed legislation on tobacco-related disabilities.

With me, as you noted, are Mr. Jack Thompson, Assistant General Counsel; and Mr. Bob Gardner, Director of VBA's Office of Resource Management.

The Government Performance Results Act is the primary vehicle though which the Compensation and Pension Service developed a business plan that was combined with the business plans of the other services within VBA into one comprehensive VBA business plan.

For fiscal year 1998, the VBA business plan was used as our annual budget request. We are now in the early stages of the fiscal year 1999 business plan process. The Compensation and Pension Service's fiscal year 1998 business plan was based upon our business processing reengineering project.

This established a vision of how compensation and pension claims will occur by the year 2002. We have developed a number of goals, performance objectives, and performance measures for fiscal year 1998.

For '98, we plan to achieve and maintain a 92 percent accuracy rate. Also for fiscal year 1998, we will reduce the time required to process claims. For example, our goal for original disability compensation claims is 106 days. We'll reduce the time required to prepare an appeal and reduce the remand rate.

We will improve communication and outreach and be responsive to our customers' needs. We plan to train all employees in their positions in order to maintain a highly skilled, motivated, and adaptable work force. And we will reduce the overall operating costs to ensure best value for the taxpayer's dollar.

Our visions and goals correlate directly with those of VBA and the Department. We designed an ambitious plan. Our goals are set high enough to inspire improvement, but not so high as to guarantee failure.

With regard to the Persian Gulf claims-in November 1994, the President signed Public Law 103–446 which authorized us to compensate Persian Gulf veterans for chronic disabilities resulting from undiagnosed illnesses. In February of '95, we published regulations to implement the statute.

By early 1996, after nearly a year's experience with undiagnosed illness claims, we reviewed a sampling of these claims denied because the disabilities first appeared after the two year presumptive period.

We found several instances where recent medical examination or lay statements had not been requested. We also found instances of incorrect information being provided in our Persian Gulf tracking system.

On the basis of these findings, in July 1996, we instructed our four Area Processing Offices to undertake a readjudication of some 10,700 cases identified in our tracking system. The purpose of the readjudication was to ensure that proper weight was being accorded to lay evidence and to be sure that the information in our tracking system was correct.

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