Congress and the Department of Veterans Affairs could be heading toward a showdown in coming days over whether to slash spending across the agency –including on medical care for veterans — to cover runaway costs for a new hospital in suburban Denver that’s now widely viewed as a boondoggle.
Just days before the troubled construction project runs out of money to keep workers on the job, House and Senate lawmakers are weighing a plan VA Secretary Robert McDonald sent them late last week to cover the remaining cost. The money could come from spending cuts across the sprawling agency of close to 1 percent, or from shifting money from dozens of construction and maintenance projects planned in members’ home districts.
Early this spring, VA officials asked Congress to allow them to spend $830 million to finish the hospital — but pared that to $625 million after lawmakers were aghast at the number. The 184-bed medical center in Aurora, Colo., now estimated to cost taxpayers $1.7 billion, three times its original budget, is the most expensive project in VA history.
Several lawmakers are concerned that “across the board cuts will not be palatable” to appropriators or House and Senate leaders, who are being briefed this week on VA’s proposal, said a congressional aide familiar with members’ thinking.
After a conference call with Deputy Secretary Sloan Gibson and several meetings in recent days, a bipartisan consensus has emerged in Colorado’s House and Senate delegation, as well as among lawmakers on the committees that oversee veterans’ issues, according to the aide and another one familiar with the discussions.
“Congress is going to want to put VA on a very short leash here, because there’s a fear of giving them a lump sum,” one aide said. “We don’t trust them enough to give them hundreds of millions of dollars at one time.” The aides requested anonymity because of the sensitivity of ongoing discussions among lawmakers.
A Band-Aid approach, rather than an infusion of cash VA is pushing for to finish the hospital, reflects a continuing mistrust lawmakers have expressed in the agency that serves veterans. Several other hospital construction projects are way over budget. There are other troubles, from accusations of retaliation against whistleblowers to a backlog of compensation benefits to reports that wait times for appointments in some parts of the country still haven’t improved after a scandal last year.
McDonald, appointed by President Obama to bring accountability to VA, has vowed to restore trust, particularly in the construction program. But after nine hearings on the Colorado hospital’s cost overruns and delays, lawmakers appear to remain skeptical.
The Denver project became an embarrassing case of poor planning and oversight, with half-built hospital doors that were supposed to cost $100 each but ran $1,400. Entire rooms had to be refashioned when medical equipment didn’t fit. An atrium and concourse came in well above $100 million.
One strategy lawmakers are contemplating involves rerouting $100 million to $150 million from VA’s fiscal 2015 budget to keep construction going through the summer, one part of the deal the agency is proposing. But the cash infusion would not complete the half-finished medical center, a 184-bed hospital that’s expected to replace an aging, crowded facility in Denver and serve veterans in Kansas, Montana, New Mexico, Utah and Wyoming as well as Colorado.
In his proposal to Congress, McDonald also included a list of reforms not just to improve how VA undertakes new construction projects but to show progress he has made in cutting waste and developing a more accountable culture that focuses on veterans.
“The delays and cost overruns that have plagued the Denver Replacement Medical Center are inexcusable,” he wrote. “VA has been discussing reforms to this project and the pending deadlines with Congress for months.”
“In the spirit of cooperation, VA is submitting a revised proposal that we believe is fiscally responsible, Veteran-centric , and executable.”
Construction was nearly suspended in May because of funding problems, but Congress kept work going for three weeks with a relatively small infusion of $20 million.
But the deal was fragile: Lawmakers have held several tension-filled hearings on how to cover the cost overruns at the project while minimizing the risk to taxpayers.
While lurching from one short-term funding deal to the next could further delay the hospital, some lawmakers believe it’s the best way to make sure the project gets proper oversight.
“There is concern that we want to keep them on a short leash so we can extract reforms,” the congressional aide said.