veteran to cover his expenses. If any other payment was made, then the VA would be unable to reimburse.

Mr. IBSON. To the extent, then, that CBO's estimate of this particular provision rising to a projected $400 million in the last fiscal year is based on the experience of private health plans, wouldn't it follow that, to the extent VA has authority to set the rates and limit the rates, that VA's exposure might be considerably less than that amount?

Mr. HALL. If VA set their rates to reimburse at anything less than the market rates, then yes, there would be a significant discount.

Mr. IBSON. Wouldn't that be a prudent step for the VA to take? Mr. HALL. I would think so, if it met the purposes of ensuring we were the payer of last resort and stretching it as far as possible. Mr. IBSON. Thank you for that clarification.

Mr. STEARNS. Let me conclude by saying that it seems to me the only provision in this bill that creates a new spending mandate is the one directing VA to provide extended care to veterans who are 50 percent or more service connected.

I just think we have a moral imperative to do this. We have to take care of these veterans. So, by hook or crook, I think we have to go ahead and do it. If members on this subcommittee or members on the full committee somehow have a differing opinion on what we have heard from CBO and the administration, I don't think there's any difference of opinion about the moral imperative to take care of veterans who are 50 percent or more service connected with extended care. So I think we have to keep the big picture in mind, and we have to commit ourselves here, as a subcommittee and the full committee, to do this.

I want to thank all of you for coming here and giving us this very informative presentation, and we will take it forward.

The hearing is concluded.

[Whereupon, at 11:35 a.m., the subcommittee adjourned.]

APPENDIX

Statement of Representative Luis Gutierrez
House Committee on Veterans' Affairs
Subcommittee on Health

Hearing on Cost Estimates for H.R. 2116
The Veterans Millennium Health Care Act
June 30, 1999

Thank you, Mr. Chairman. I am eager to hear testimony today from our witnesses, Mr. Paul Van de Water from the Congressional Budget Office and Dr. Thomas Garthwaite, Deputy Under Secretary for Health at the Department of Veterans Affairs.

As we know from our past hearings, H.R. 2116 addresses several concerns that have been raised by our nation's veterans. This bill requires the VA to create a national plan to provide long-term care and expand access to VA health services. It also make improvements to our existing Veterans Health Care system. For example, this legislation extends VA's authority to make grants to assist homeless veterans. It extends the requirement that VA maintain special committees relating to mental illness. This bill requires the VA to establish a policy on the role of chiropractic treatment in the Department's care of veterans. It also requires that the VA report to Congress on proposed closures within a fiscal year of fifty percent or more of the beds in certain bed sections at any VA medical center and notify Congress annually about mission changes in bed sections.

I am pleased that an amendment I introduced during

markup of this bill passed unanimously and has been included in the Millennium Health Care Act. Section 108 of this legislation provides for counseling and medical treatment to veterans who were victims of sexual abuse or harassment during their military training or service. Language in the bill states that this program would be reauthorized until December 31, 2002.

Mr. Chairman, I believe we have before us a bill that helps address the need to improve veterans' health care as we move into the 21st century. While this bill has good intentions, we must ensure that funding is available to achieve our goals. On Monday, President Clinton announced that the surging economy will pump an extra $1 trillion into the government treasury during the next fifteen years. As we consider this new budget reality, all of us on this committee must rededicate ourselves to fighting for a fair and adequate veterans budget. We owe it to the men and women who have honorably served and sacrificed.

We are currently letting them down. A fully-funded Millennium Health Care Act is one vital way for this nation to repay our considerable debt to our veterans.

STATEMENT OF THE HONORABLE MIKE DOYLE (PA-18)

Subcommittee on Health of the Veterans' Affairs Committee

Hearing on CBO's Cost Estimate of H.R. 2116

June 30, 1999

Mome Doyle

Thank you Mr. Chairman. I want to express my thanks to you and other members of the Committee for promptly organizing this hearing in direct response to concerns that were raised during last week's full Committee meeting.

As members of the Health Subcommittee Committee are aware, we have been examining and talking about the substance of the Veterans' Millennium Health Care Act in relationship to potential costs for several weeks now. I feel these have been productive conversations in that we have exchanged ideas in a meaningful and productive manner and have come to resolve many important matters affecting the delivery of health care service to our nation's veterans. That being said about the bill from a policy perspective, we are still left to more closely examine the cost aspect of this initiative.

Like the majority of my colleagues who serve on the Health Subcommittee, I have voiced my concerns about the ability to support many provisions of the bill in terms of adequate funding. And like the majority of my colleagues who serve on the full Committee, I have repeatedly voiced my concerns about the failings to adequately fund current VA health care services. It can not be ignored that our best intentions in this Committee are in certain circumstances only as good as the level of funding provided by the appropriators.

As was demonstrated through last week's comments regarding the importance of
having an official CBO cost estimate on H.R. 2116 clearly this is an important aspect in moving
forward with the bill. This sentiment was also echoed in the letter that was signed by members
of the Committee members that has been sent to the attention of Dan Crippen, the Director of the
Congressional Budget Office. Thus, it would appear to be in the Subcommittee's best interest to
seriously discuss the cost estimate information that we now have before us this morning.

In the interest of improving VA health care, I would encourage my colleagues to make our discussion this morning a productive one and continue to work together in advancing our mutual goals.

Again, thank you Mr. Chairman.

LANE EVANS

Ranking Democratic Member
Committee on Veterans Affairs
Legislative Hearing on

Cost Estimates for H.R. 2116

"The Veterans' Millennium Health Care Act"

Thank you, Mr. Chairman. I appreciate your willingness to hold this hearing today. I'll keep my remarks very brief to accommodate adequate time for Members to question the witnesses.

Last week we began to mark up this Millennium Health Care Act. Many of our Members had real concerns about the costs of this important legislation. Unfortunately, the Congressional Budget Office did not have the estimate ready in time for Members to fully consider. I do not want to belabor this point, but I do want to reiterate the importance of timely estimates for Congressional consideration. I know I have requested estimates on bills that have languished for up to a year without an estimate. For instance, I requested an estimate on the Emergency Care bill I introduced in the 105th Congress a year ago from this past April and never received anything but a preliminary estimate. If CBO had done an analysis of that bill, a predecessor of the emergency care provision in the bill under consideration today, it may not have been so late in arriving at the estimate we now have. I think most of us here today share my frustration.

CBO will testify that VA is funded by appropriations so, to the extent that Congress does not appropriate the necessary funds they will obviously not be spent. CBO also assumes that nothing in Veterans Health Administration operations will change as a result of re-prioritization of activities. We can take two views of CBO estimates for discretionary funds. We can choose to view them as largely "advisory"-that is they give us some sense of the magnitude of spending required to fully implement the initiative if the organization makes no other changes to accommodate it. Or we can accept "high" CBO estimates as prohibitive of Congressional priorities it deems to be too expensive. We can argue about the credibility of the estimates, but our action or inaction boils down to how we choose to use them.

I choose to view CBO's estimates as advisory; the fact that I do not subscribe to nor fully understand its assumptions makes them somewhat more so. Let's not forget CBO works for us. Too often I think we allow the tail to wag the dog. If Congress chooses to create new priorities within the VA system-priorities that