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Funds for Health Care of Veterans $1 Billion Short
2005 Deficit Angers Senate Republicans, Advocacy Groups

By Thomas B. Edsall
Washington Post Staff Writer
Friday, June 24, 2005

The Bush administration, already accused by veterans groups of seeking inadequate funds for health care next year, acknowledged yesterday that it is short $1 billion for covering current needs at the Department of Veterans Affairs this year.

The disclosure of the shortfall angered Senate Republicans who have been voting down Democratic proposals to boost VA programs at significant political cost. Their votes have brought the wrath of the American Legion, the Paralyzed Veterans of America and other organizations down on the GOP.

"I was on the phone this morning with Secretary of Veterans Affairs Jim Nicholson, letting him know that I am not pleased that this has happened," said Sen. Larry E. Craig (R-Idaho), chairman of the Senate Veterans Affairs Committee. "I am certain that he is going to take serious steps to ensure that this type of episode is not repeated."

The $1 billion shortfall emerged during an administration midyear budget review and was acknowledged only during lengthy questioning of Jonathan B. Perlin, VA undersecretary for health, by House Veterans Affairs Committee Chairman Steve Buyer (R-Ind.) at a hearing yesterday.

"We weren't on the mark from the actuarial model," Perlin testified. He said that the department has already had to use more than $300 million from a fund that had been expected to be carried over to the fiscal 2006 budget, and that as much as $600 million for planned capital spending will have to be shifted to pay for health care.

At a noon news conference yesterday, Sen. Patty Murray (D-Wash.), a member of the Senate Appropriations subcommittee covering veterans affairs and the lead sponsor of Senate Democratic efforts to add $1.9 billion to the VA budget, accused the Bush administration of unwillingness "to make the sacrifices necessary to fulfill the promises we have made to our veterans."

In a rare display of bipartisanship on the polarized issue of veterans spending, Craig appeared with Murray at the news conference and said he agreed with many of her comments.

Murray cited an April 5 letter written by Nicholson to the Senate in a bid to defeat her amendment: "I can assure you that VA does not need emergency supplemental funds in FY2005 to continue to provide timely, quality service that is always our goal," he had said.

Murray aides said they obtained a draft copy of the midyear review in early April, suggesting that the department knew of the budget problems at the time Nicholson wrote the letter.

VA spokesman Terry Jemison refused to release a copy of the document, saying, "We don't provide information about pre-decisional budget passback and midyear reviews."

Nicholson issued a statement yesterday: "The health care needs of America's veterans are among VA's highest priorities. Working with our partners in Congress, I'm confident that VA's budget will continue to provide world-class health care to the nation's veterans."

Craig and other Senate and House Republicans declined to say how much the fiscal 2006 budget would be raised above the level proposed by the administration. They said any attempt to supplement the current fiscal 2005 appropriation will have to await more detailed information on the shortfall this year. Craig said he plans to hold a hearing next week on VA funding needs.

Sen. Kay Bailey Hutchison (R-Tex.), chairman of the Senate Appropriations subcommittee on military construction and veterans affairs, said she had just been informed of the $1 billion fiscal 2005 shortfall.

"We can never fall short on our promises to those who have sacrificed so much," Hutchison said.

The House has already approved a $68.1 billion Department of Veterans Affairs appropriation for fiscal 2006 that has been sharply criticized by the American Legion, the Paralyzed Veterans of America and the Disabled American Veterans.

Richard Fuller, legislative director of the Paralyzed Veterans, said the money problems this year and next were obvious to anyone visiting VA clinics and hospitals.

"You could see it happening, clinics shutting down, appointments delayed," Fuller said.

Joseph A. Violante, legislative director of the Disabled American Veterans, said Perlin's testimony yesterday confirms the veterans' assessment that the administration is "shortchanging veterans."

The Bush administration and House Republicans have been the main focus of anger among veterans organizations.

Their "policies are inconsistent with a nation at war," said Steve Robertson, legislative director of the American Legion. They violate the basic military value of "an army of one, teamwork, taking care of each other," he said.

The administration and Congress, Robertson said, are promoting policies that "subdivide veterans into little groups, the ones that 'deserve' and the ones who 'don't deserve.' "

Veterans groups are particularly angry with Buyer, who was specially chosen by the House leadership to chair the House Veterans Affairs Committee to keep spending down. Buyer was selected to replace Rep. Christopher H. Smith (R-N.J.), who had alienated House leaders by pushing for high levels of spending on veterans programs.

Buyer recently sparked new controversy in an interview published by the American Legion Magazine in which he said the department should concentrate on serving a "core constituency," and he disputed assertions that "all veterans are veterans and all veterans should be treated the same."

The Indiana Republican has defended the House's fiscal 2006 spending levels for veterans, contending that VA health care would actually grow by $1.6 billion under the House legislation.

American Legion National Commander Thomas P. Cadmus countered that nearly $1 billion of the $1.6 billion increase would be achieved by cutting other medical accounts: $533 million from the medical administration account, $417 million from medical facilities and $9 million from medical and prosthetics research.

Yesterday, Buyer called on the Senate to "drill down" into VA money problems to determine the legitimate needs for fiscal years 2005 and 2006.

In addition to their unhappiness with spending levels, veterans groups are bitter over the changes initiated by the Republican leadership in the jurisdiction of appropriations subcommittees. VA funding was shifted from the subcommittee that includes housing and NASA programs to the subcommittee on military quality of life and Veterans Affairs and related agencies, which forces the Veterans Affairs Department to compete for limited funds with such programs as Defense Department health care, military cemeteries and military construction.

"The American Legion is not about to write Congress and say 'take away from DOD heath care' [in order to boost VA funding]. That's completely unacceptable," Robertson said.

The veterans lobby has already beaten back two controversial Bush administration proposals: a $250 enrollment fee for veterans joining the health care system and an increase in the prescription co-payment, from $7 to $15.

Leaders of the American Legion, the Paralyzed Veterans and the Disabled American Veterans all noted a striking partisan division in Congress on veterans issues, with Democrats giving them much more support than Republicans.

Traditionally, Violante said, "Republicans have been supportive of defense," but he said Bush administration policies and votes in the House and Senate suggest that the GOP does not view the care of veterans as "a continuing cost of war."

In the 2004 election, exit polls showed that voters who had served in the military were decisively more Republican than those who had not. President Bush carried the one out of five voters who had served by 16 percentage points, 57 to 41, while Sen. John F. Kerry (D-Mass.) barely won those who had not served, 50 to 49.

The Bush administration's priorities are "a little bit different now and veterans aren't a priority," Violante said. He described this as "terrible -- I think it's unconscionable."

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