DEPARTMENT OF VETERANS AFFAIRS
AT A GLANCE:
2006 Discretionary Budget Authority (with collections):
$33.4 billion (Increase from 2005: 3 percent)
Major Programs:
• Health care for veterans
• Disability compensation
• Pensions for low-income veterans
• Vocational rehabilitation training and employment services
• National cemeteries
MEETING PRESIDENTIAL GOALS
Promoting Economic Opportunity and Ownership
• Providing timely compensation and job assistance to veterans with disabilities.
• Helping veterans and active-duty members own a home.
Supporting a Compassionate Society
• Providing health care to veterans with service-related injuries.
• Serving veterans through homeless assistance programs in all 50 States.
Making Government More Effective
• Providing health care services in more convenient locations, using information technology to
serve patients more quickly and more accurately.
• Working with the Department of Defense to help service members gain access to veteran services
and benefits.
263
264 DEPARTMENT OF VETERANS AFFAIRS
PROMOTING ECONOMIC OPPORTUNITY AND OWNERSHIP
Replacing Lost Income for Disabled Veterans
Veterans’ disability compensation is a monthly benefit payment to veterans who are disabled as a
result of their military service. It is the workers’ compensation program for military members, which
complements retired pay and disability annuities provided by the Department of Defense (DOD). In
2006, 2.7 million veterans will receive $26 billion of these tax-free benefits from the Department of
Veterans Affairs (VA), 57 percent more than when the President came to office.
When President Bush took office, the number of claims waiting to be processed had risen to more
than 600,000. As a result, many veterans were waiting an average of over 230 days for a claim to
be processed. One of the President’s top priorities was to significantly reduce this processing time.
VA trained nearly 1,800 employees in proper claims processing procedures and created specialized
teams to process claims for those veterans who had been waiting the longest. Uniform measurement
tools were established to evaluate quality and timeliness, and employee evaluations were re-designed
to hold VA personnel accountable for meeting the President’s goal. Further, VA worked with both
DOD and the National Records Center in St. Louis to expedite the exchange of information needed
to process claims. As a result, the number of days to process a claim will drop from 230 when the
President took office to an average of 145 days in 2006—an improvement that the Department is
committed to continuing in the years ahead.
Providing Education Opportunities to Veterans
Vocational rehabilitation counselors visit patient.
The Vocational Rehabilitation and Employment
(VR&E) program helps disabled veterans
find suitable employment, so they can live independently.
The program provides comprehensive
services and assistance, such as tuition, books,
vocational counseling, and assistive technology.
In March 2004, a comprehensive review of
the VR&E program was completed which led to
several changes now underway. For example,
instead of waiting for veterans to contact
the VR&E program, counselors visit service
members at military and VA hospitals and
also call recently discharged veterans to offer
their services. In 2004, 11,000 veterans were
successfully rehabilitated with approximately
8,300 veterans employed and the remaining 2,700 achieving independent living goals, an increase
of approximately 1,500 veterans above those successfully rehabilitated in 2003.
For almost 20 years, the Montgomery GI Bill has provided education benefits to help members of
the Armed Forces adjust to civilian life after leaving active service. On December 27, 2001, President
Bush signed into law the Veterans Education and Benefits Expansion Act. The Act contained several
improvements to the Montgomery GI Program, including an increase in the maximum monthly
benefit amount of more than 46 percent by 2003 (see accompanying chart), a broader choice of education
opportunities, and an expansion of education programs paid for by the scholarships to include
THE BUDGET FOR FISCAL YEAR 2006 265
2000 2001 2002 2003 2004
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Maximum Education Benefit has Increased
Source: Department of Veterans Affairs.
Dollars per person
non-traditional educational settings such as
software certification programs and distance
learning courses. As a result, approximately
421,000 veterans, service members, and
reservists used their benefits in 2004 to
obtain degrees, certifications, and licenses, an
increase of five percent since the President
took office. In 2004, President Bush requested
legislation to increase monthly education benefits
for reservists mobilized for 90 days or more
in response to a war or national emergency
declared by the President or the Congress.
Veterans are also receiving faster service.
Since 2001, claims processed have increased
from 89,000 to 105,000 per month and the
maximum monthly benefit has increased by
almost 50 percent. In the same period, the average processing time for education benefits dropped
from 50 days to 26 days for original claims. The 2006 Budget provides almost $3 billion to assist
veterans, active duty members, and reservists for educational benefits.
Promoting Home Ownership Among Veterans
The Veterans Housing Benefit Program provides guaranteed home loans to veterans, active-duty
service members, and reservists. In addition to the loan guarantee program, the Veterans Housing
Benefits Program also includes assistance to veterans living on Indian Reservations and veterans
needing wheelchair accessible homes that are specially adapted to their needs.
There is no limit to the number of loans issued in a year. In 2006, VA expects to issue 300,000
guaranteed loans for nearly $46.2 billion, including 183,000 no down payment loans. The program
also offers options with 5-percent and 10-percent down payments.
266 DEPARTMENT OF VETERANS AFFAIRS
SUPPORTING A COMPASSIONATE SOCIETY
Providing Medical Care to Veterans
Treating veterans with military disabilities, low incomes, and special needs (such as substance
abuse or spinal cord injury) has historically been VA’s core medical care mission and its highest priority.
The President is fulfilling his promise to deliver high-quality, accessible health care to these
veterans. As shown in the accompanying chart, the President’s 2006 VA medical care budget is more
than 47 percent greater than when he took office, and VA will treat about 950,000 more patients in
2006 than it did in 2001. The Budget assumes that most new veterans enrolling in the VA medical
care system will fall under VA’s core medical care mission, and that all other veterans will pay an
annual enrollment fee and increased prescription drug co-payments that are still low but more in
line with other public and private health care programs.
2001 2002 2003 2004 2005 2006
0
5
10
15
20
25
30
35
Medical Care Budget Increasing
Billions of dollars
Source: Department of Veterans Affairs.
Appropriations
Collections
The best way to guarantee that veterans understand
the benefits to which they are entitled
is with outreach and education. VA instituted
a program to provide information on all veterans’
benefits—not just medical care—to service
members as they leave military service, especially
those with service-related special needs.
This outreach effort includes a special emphasis
on Reserve and National Guard personnel
called to active duty.
To date, about 32,000 returning service
members from Iraq and Afghanistan have received
medical care from VA, and all returning
service members receive a day of orientation
on VA benefits and programs. At the major
To assist and complement the work of VA staff, the Department coordinates a large volunteer
program. Last year, 133,000 Americans donated about 14 million hours of their time to volunteer at
VA facilities, providing transportation to and from VA hospitals, delivering mail and medical records,
and visiting patients.
DOD hospitals, injured service members are assigned a VA case worker (stationed at the hospital),
who assists them in accessing their VA benefits and easing their transition to VA hospitals if needed.
Case workers also assist the families of injured service members. VA and DOD now electronically
share medical information, thus providing these patients with better, more timely care.
VA has been a leader in implementing health information technology to improve patient care. Patients
have benefited from innovative safety and quality systems implemented by VA. For example,
VA has developed a bar-code drug dispensing system—similar to that used in most stores today.
This system assures that patients receive the correct drugs at the right times, and prevents them
from receiving potentially dangerous drug combinations. In addition, VA has implemented a patient
safety program that encourages physicians, nurses, and other providers to report problems or errors
in care. As a result of the many innovative programs that were introduced in recent years, in 2003
the Institute of Medicine recognized VA as a leader in assuring patient safety and providing quality
and cited VA as one of the best Government programs based on a 2004 national survey of customer
satisfaction.
THE BUDGET FOR FISCAL YEAR 2006 267
VA prepares patient for independent living.
VA’s research program is known worldwide
for its work in areas such as prosthetics,
spinal cord injuries, and diseases such as
Parkinson’s and diabetes. Care provided at VA
facilities also helps patients have the medical
equipment and understanding they need to
live independently. For example, many VA
hospitals have rooms set up similar to an
apartment to prepare veterans to live on their
own.
Helping Homeless Veterans
VA estimates that there are more than
250,000 homeless veterans in the Nation, or
one-third of the adult homeless population. VA’s homeless assistance programs now constitute
the largest integrated network of services in the United States and serve approximately 40,000
homeless veterans annually. The Budget provides $231 million to directly support VA’s homeless
network and an additional $1.5 billion for medical care to homeless veterans.
Almost three-fourths of homeless veterans suffer from a mental illness and/or substance abuse
problem, making it difficult for them to keep a job and live independently. VA’s programs provide a
continuum of services including mental health care, substance abuse counseling, and employment
training. These comprehensive programs often require VA cooperation with Federal, State, and local
governments, and the private sector.
VA has expanded community grants to all 50 States and the District of Columbia to improve access
to housing and health care for homeless veterans. In addition, VA has created partnerships with the
Departments of Health and Human Services and Housing and Urban Development to support new
initiatives that provide permanent housing, a full range of medical care, and support services for
chronically homeless veterans. VA, in partnership with States, continues to support transitional,
community-based housing in a program that emphasizes stronger collaboration with community
organizations, including faith-based organizations.
National Cemeteries
In 2006, approximately 100,000 veterans and eligible family members will be buried in the national
cemetery system. From 2001 to 2006, there is estimated to be a 21-percent increase in the number of
burials due to the advancing age of ourWorldWar II, KoreanWar, and VietnamWar veterans. In the
next 20 years, one-third of our veterans will pass away. To make sure these veterans are accorded
a proper burial, VA continues to evaluate the national cemetery system to make sure we have the
appropriate number and location of national and State cemeteries. The 2006 Budget provides over
35 percent more funding for burial services and national cemeteries than five years ago. The 2006
Budget provides funding to acquire land to build six new cemeteries, including one each in Alabama,
Pennsylvania, California, South Carolina, and two in Florida. VA has also expanded its partnership
with States over the last four years to give veterans more burial options. Grants for construction and
equipment are provided to establish or improve State cemeteries in areas where national cemeteries
do not exist. In return, these States agree to adhere to VA standards of eligibility and maintenance.
The Department takes pride in the service provided to the families of our veterans; a recent survey
of family members and funeral directors showed 95 percent rated the service they received from our
national cemeteries as excellent.
268 DEPARTMENT OF VETERANS AFFAIRS
MAKING GOVERNMENT MORE EFFECTIVE
Providing More Convenient and Timely Medical Care
Many veterans have moved to the South and Southwest, yet VA maintains underused hospitals
throughout the northern and eastern regions of the country where fewer veterans live. VA completed
a nationwide study of its facilities in 2004 to better align resources with patient needs by
increasing services where veterans live, and converting large underused hospitals to more efficient
clinics. Construction decisions were completed, and VA will spend $1.5 billion in 2004 and 2005 on
this effort. The 2006 Budget includes an additional $750 million for this purpose.
When President Bush took office, waiting lists for new patients were six months or longer. At one
point, the number of patients waiting for care peaked at 300,000. There was no system in place
to ensure that veterans with military disabilities, low incomes, and special needs received prompt
treatment unless they were facing a medical emergency. VA moved to prioritize those waiting for
appointments and implemented a temporary program to fill non-VA prescriptions for the first time.
This year, the list of veterans waiting more than six months for an appointment for basic medical
care has been essentially eliminated.
VA is a leader in developing electronic medical records to ensure that critical patient information
is not stored in a paper file somewhere but is accessible easily to all providers that may see a veteran,
while appropriately protecting medical privacy. When a veteran receives care at VA, the doctor
or nurse quickly enters all important information into a computer system and reads information on
the patient’s test results, drugs, and other vital information. As a result of these and other improvements,
in most situations veterans can go to any facility for care and know that the medical staff
can immediately access their records. They also receive drugs more quickly, safely, and easily. For
example, after having an exam, a patient can go directly to the pharmacy and pick up any needed
drugs that were electronically ordered by the physician.
Increasing Coordination Between DOD and VA
DOD medical staff treat veteran patient.
President Bush has placed a great emphasis
on improving cooperation between DOD and
VA in providing care to our veterans. Both
Departments have made significant progress
in meeting this goal. VA and DOD established
a high-level Executive Council to develop and
implement significant collaborative efforts. The
council has focused on three major system-wide
issues: 1) sharing “real-time” computer information
on the enrollment and eligibility status
for services and benefits; 2) continually placing
all critical medical information for each patient
in computer files that can be shared by DOD
and VA; and 3) increasing the number of places
where DOD and VA share medical facilities and
staff.
Sharing information and technology speeds up service, ensures safer healthcare, and informs veterans
of earned entitlements and services—such as eligibility and enrollment status formedical care,
THE BUDGET FOR FISCAL YEAR 2006 269
disability benefits, home loans, life insurance, burial benefits, vocational rehabilitation, and education
benefits.
The Departments are aggressively moving towards electronic patient medical records so both DOD
and VA doctors and nurses have rapid access to patients’ records. Since all veterans start out in the
military system and almost 700,000 use both systems annually, this coordinated effort is critical. The
first phase was implemented in June 2002 with an electronic exchange of former military members’
patient health information available at VA. The next step, expected in 2005, is the two-way sharing
of this information.
DOD and VA are working together to solve mutual problems in the Greater Chicago area, where
five VA hospitals and one DOD hospital are located. DOD originally planned to build a new hospital
within walking distance of an underutilized VA hospital. DOD nowplans to shareVA’s hospital—ensuring
military members, their families, and veterans will have access to quality care in a fiscally
responsible way. In addition, the two Departments have made progress in sharing personnel. In
some locations, such as Albuquerque, New Mexico and Chicago, Illinois, they share many personnel.
In other smaller areas, one or two shared staff may be key to maintaining critical capacity. For example,
the Air Force Base in Grandforks, North Dakota needed a doctor for its family practice clinic. An
agreement was reached for a VA doctor to provide care to service members at the military hospital.
This lowered overall cost to taxpayers and improved access to care at the military hospital.
DOD and VA are working together to ensure that all separating service members who file a VA
disability claim at discharge sites receive a discharge physical that meets requirements of both the
VA and the Services, prior to separation. This allows one physical examination that saves time later.
Update on the President’s Management Agenda
The table below provides an update on VA’s implementation of the President’s Management Agenda
as of December 31, 2004.
Human Capital
Competitive
Sourcing
Financial
Performance E-Government
Budget and
Performance
Integration
Status
Progress
Arrow indicates change in status since evaluation on September 30, 2004.
While VA continues to make progress on many aspects of each of the initiatives, its overall status in
implementing the President’s Management Agenda has remained largely unchanged over the past year. VA
developed a comprehensive human capital plan, completed testing of an on-line self-evaluation program,
and redesigned an appraisal system for many of its employees. Ongoing negotiations with the labor union
have resulted in some delays in implementing the new performance appraisal system for all employees.
Improvements in financial performance and E-Government were delayed due to serious failures in the rollout of
a new financial management information technology system. VA is assessing its options for next steps but has
halted implementation of this massive system and has reverted back to its old system. VA has been unable
to use Competitive Sourcing to achieve efficiency improvements since under law it is not able to carry out
any such comparisons. The Administration is working with the Congress to find a solution so that resources
can be better spent on direct services to veterans.
270 DEPARTMENT OF VETERANS AFFAIRS
MAKING GOVERNMENT MORE EFFECTIVE—Continued
Initiative Status Progress
Real Property Asset Management
Eliminating Improper Payments
Coordination of VA and DOD Programs and Systems
Arrow indicates change in status since evaluation on September 30, 2004.
In regard to the Real Property Initiative, VA has an Asset Management Plan where it has inventoried and
proposed changes to right-size its massive network of buildings across the Nation to ensure that veterans are
treated in the most convenient places for the veteran. The total dollar value at risk of Improper Payments at
VA is approximately $43.6 billion. After its initial assessment, VA determined that six high-risk programs exist.
Of those six programs, four have completed remediation plans that are actively being implemented and the
remaining two plans are likely to be completed in the second quarter of 2005. (Because this is the first quarter
that agency efforts in the Eliminating Improper Payments Initiative were rated, progress scores were not given.)
As discussed earlier, VA and DOD have taken numerous steps to improve the coordination of medical care and
transition of injured service members to VA for healthcare and other benefit programs.
THE BUDGET FOR FISCAL YEAR 2006 271
Department of Veterans Affairs
(In millions of dollars)
Estimate 2004
Actual 2005 2006
Spending
Discretionary Budget Authority:
Medical Programs ................................................................................................ 27,365 28,784 28,903
Medical Services.............................................................................................. 18,468 19,764 19,789
Medical Services Collections (non-add)
Existing law ................................................................................................... 1,708 1,953 2,164
Legislative proposal ................................................................................... — — 424
Medical Administration................................................................................... 4,027 4,377 4,439
Medical Facilities .............................................................................................. 4,004 3,858 3,888
Medical Research ............................................................................................ 866 784 786
Benefit Programs.................................................................................................. 1,429 1,453 1,548
Disability Compensation................................................................................ 659 652 701
Pension ................................................................................................................ 143 138 148
Education............................................................................................................ 76 90 100
Vocational Rehabilitation and Employment ............................................ 124 139 147
Housing................................................................................................................ 157 156 157
Insurance ............................................................................................................ 4 4 5
Burial Benefits ................................................................................................... 265 272 290
Departmental Administration............................................................................ 343 371 401
General Administration .................................................................................. 280 301 330
Inspector General ............................................................................................ 62 70 71
Total, Discretionary budget authority (no collections).................................. 29,137 30,607 30,852
Total, Discretionary budget authority (with new collections) ..................... 29,137 30,607 31,274
Total, including all collections .............................................................................. 30,845 32,560 33,440
Total, Discretionary outlays ................................................................................... 28,497 28,408 30,428
Mandatory Outlays:
Medical Programs:
Existing law.................................................................................................... 29 33 35
Legislative proposal.................................................................................... — — 424
Benefit Programs and Receipts:
Disability Compensation................................................................................ 26,297 31,153 30,643
Pension ................................................................................................................ 3,334 3,674 3,470
Education ............................................................................................................ 2,137 2,454 2,579
Vocational Rehabilitation and Employment ............................................ 551 604 632
Housing................................................................................................................ 218 1,904 65
Insurance ............................................................................................................ 1,260 1,298 1,330
Burial Benefits ................................................................................................... 153 168 171
Other Receipts and Transactions............................................................... 2,771 1,650 648
Departmental Administration............................................................................ 151 — —
Total, Mandatory outlays ........................................................................................ 31,057 39,638 37,853
Total, Outlays.............................................................................................................. 59,554 68,046 68,281
272 DEPARTMENT OF VETERANS AFFAIRS
Department of Veterans Affairs—Continued
(In millions of dollars)
Estimate 2004
Actual 2005 2006
Credit activity
Direct Loan Disbursements:
Vocational Rehabilitation Loans...................................................................... 3 4 4
Native American and Transitional Housing Loans.................................... 6 9 26
Vendee and Acquired Loans ............................................................................ 123 915 1,675
Total, Direct loan disbursements ......................................................................... 132 928 1,705
Guaranteed Loan Commitments:
Veterans Home Loans ........................................................................................ 35,315 43,802 46,173
Total, Guaranteed loan commitments................................................................ 35,315 43,802 46,173
