VA Requests $87 Billion for Veterans in Landmark FY '08 Budget

February 05, 2007

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WASHINGTON - Continuing to honor the nation's commitment to meet the needs of America's veterans, Secretary of Veterans Affairs Jim Nicholson announced today that President Bush will seek a landmark budget of nearly $87 billion in fiscal year 2008 for the Department of Veterans Affairs (VA), with health care and disability compensation for veterans receiving the majority of the spending.

The FY '08 proposal represents an increase of $37.8 billion, or 77 percent, from the budget in effect when the President took office.

"This landmark budget will allow us to expand the three core missions of the VA -- those being to provide world-class health care; broad, fair and timely benefits; and dignified burials in shrine-like settings for our nation's veterans," Nicholson said. "This budget also allows us to continue our progress toward becoming a national leader in information technology and data security.

"With the right resources in the hands of the right people, anything and everything is possible when it comes to caring for America's veterans," Nicholson said. "At VA, we already have the right people -- 235,000 dedicated employees. With the President's proposed landmark budget, we will have the right resources."

Under the new budget, VA will begin a new initiative to provide priority in processing claims for disability compensation from veterans of the Global War on Terror. Secretary Nicholson also announced plans to create a special Advisory Committee on OIF/OEF Veterans and Families, which will advise him on the full spectrum of issues affecting VA and the veterans and families of Operation Iraqi Freedom and Operation Enduring Freedom.

The FY '08 budget proposal calls for $42 billion in discretionary funding -- mostly for health care -- which is the largest amount ever requested by a President. It also would provide $45 billion in mandatory funding, mostly for compensation, pension, educational assistance, home loan guaranties and other benefit programs.

Highlights of FY '08 Landmark VA Budget Request

The President's landmark FY '08 budget request for $86.75 billion for the Department of Veterans Affairs (VA) honors the nation's commitment to America's veterans. Most of the budget is targeted for the Department's health care system and disability compensation programs.

This budget proposal represents a 77 percent increase from the overall budget in effect when the President took office in FY '01 and more than an 83 percent increase in health care spending.

The budget continues the President's commitment for VA to work closely with the Department of Defense to ensure that service members returning from Iraq and Afghanistan and their families receive timely, high-quality services and benefits.

VA will continue to provide world-class health care to an estimated 5.8 million patients, including 263,000 veterans of Operation Iraqi Freedom and Operation Enduring Freedom.

The FY '08 budget proposal includes $750 million for capital improvements to its health care facilities, bringing the total to $3.7 billion during the last five years. The FY '08 proposal includes funding for major construction projects in Denver; Las Vegas; Lee County, Fla.; Orlando, Fla.; Pittsburgh; and Syracuse, N.Y.

The FY '08 budget request calls for nearly $3 billion in mental health services to continue improvements in access to a full continuum of care for veterans with mental health problems, including comprehensive treatment for post-traumatic stress disorder (PTSD).

Funding for extended care services will reach $4.6 billion in FY '08, of which 90 percent will be for institutional long-term care and 10 percent for non-institutional care.

The FY '08 budget proposal includes nearly $192 million in construction funding to support VA's burial program. Resources are included to establish six new national cemeteries in Bakersfield, Calif.; Birmingham, Ala.; Columbia-Greenville, S.C.; Jacksonville, Fla.; Sarasota, Fla.; and southeastern Pennsylvania. This budget also includes funds for a gravesite development project at Fort Sam Houston National Cemetery in San Antonio and $32 million in grants for the construction of state veterans cemeteries.

Ensuring a Seamless Transition

The President's FY '08 budget request provides the resources necessary to fulfill a commitment making as smooth and seamless as possible the transition of service members from the active duty military to civilian life.

Secretary Nicholson announced plans to create a special Advisory Committee on OIF/OEF Veterans and Families. The panel, with membership including veterans, spouses and parents of the latest generation of combat veterans, will report directly to the VA Secretary. The committee will focus on the concerns of all men and women with active military service in Operation Iraqi Freedom or Operation Enduring Freedom, but will pay particular attention to severely disabled veterans and their families.

VA has placed workers at key military hospitals where severely injured service members from Iraq and Afghanistan are frequently sent for care. These include counselors who help service members obtain VA benefits as well as social workers who facilitate health care coordination and discharge planning as service members transition from military to VA health care.

World-Class Health Care

The President's FY '08 budget proposal requests $36.6 billion for VA's health care program. This is more than 83 percent higher than the FY '01 budget in place at the beginning of the administration.

With these resources, VA will be able to treat an estimated 5.8 million patients. In 2008, about 75 percent of all veteran patients are expected to be those who count on VA the most (Priority 1-6 veterans).

The President's budget request also includes $750 million to continue the recommendations of a 2004 report designed to modernize VA's health care system. This historic transformation means that VA will be able to provide greater access to high-quality care well into the future. For example, the FY '08 budget includes funding to complete construction of a new $600 million VA medical center in Las Vegas.

VA's health care system continues to be the nation's leader in delivering safe, accessible, and high-quality care that sets the national benchmark for excellence in health care. Last year, Harvard University recognized VA's computerized patient records system by awarding the Department the prestigious "Innovations in American Government Award." VA's electronic health records have been an important element in making VA health care the benchmark for nearly 300 measures of disease prevention and treatment in the country.

In addition, for the seventh consecutive year, VA has set the public and private sector standard for health care satisfaction on the American Customer Satisfaction Index conducted by the National Quality Research Center at the University of Michigan. Patients included in the study gave VA health care higher marks than those received by private-sector facilities for medical services provided in both inpatient and outpatient settings.

Responding Financially to Disabled Veterans

The President's budget proposal for FY '08 will enable VA to address the large growth in the number of claims for compensation and pension benefits, while at the same time increasing the processing accuracy of these most challenging and increasingly complex compensation claims. The Department expects to improve the timeliness of processing these claims to 145 days in FY '08 while raising the accuracy of adjudicated claims to 90 percent.

The budget includes funds for disability payments to more than 3.7 million veterans and surviving family members in FY '08, or more than 5 percent above the number at the end of FY '06.

Key program improvements will affect both the education, and vocational rehabilitation and employment programs. The timeliness of processing original education claims will significantly improve during the next two years, falling from 40 days in FY '06 to a projected 25 days in FY '08. In addition, VA expects to increase to 75 percent the share of disabled veterans successfully completing the vocational rehabilitation and employment program.

Cemeteries are National Shrines

With the resources requested in the FY '08 budget, VA will expand access to national and state veterans cemeteries. The Department will increase the percentage of veterans served by a burial option in a national or state veterans cemetery within 75 miles of their residence to 84.6 percent.

The FY '08 budget proposal calls for nearly $167 million in operations and maintenance funding for national cemeteries. These resources will ensure VA continues to meet the burial needs of veterans and maintain its national cemeteries as shrines dedicated to preserving the nation's history and honoring veterans' service and sacrifice.

Becoming "Gold Standard" in IT Security

VA's FY '08 request provides $70.1 million for cyber security to support the Department's objective to become "the gold standard" in IT security. This ongoing initiative involves the development, deployment and maintenance of a set of controls to better secure VA's IT systems.

In addition, VA's budget request contains $34.1 million for a new state-of-the-art human resource management system. It will result in an electronic employee record and the capability to produce critical management information in a fraction of the time it now takes using paper-based systems.