Veterans Affairs Committee on March 11th, 2009

[The Chair, Conservative, David Sweet]

Good afternoon, ladies and gentlemen.

Bonjour à tous.

We're ready to begin the meeting now.

Today we have with us, Leigh Ann Skeens, executive assistant to the deputy secretary for benefits, Veterans Benefits Administration.

Welcome, Ms. Skeens.

[Leigh Ann Skeens, Executive Assistant to the Deputy Under Secretary for Benefits, Veterans Benefits Administration, United States Department of Veterans Affairs]

Thank you.

[The Chair, Conservative, David Sweet]

Our tradition has been that we give guests the ability to make an initial presentation of about 10 minutes. But I'm looking at your deck right now thinking that your presentation is substantially longer.

Could you give me an estimate of about how long you think your initial presentation will be? We usually go to a round of questions after that. I understand that today we also have to split our call between yourself and Ann Patterson. Could you give me an estimate of your presentation?

[Leigh Ann Skeens]

Yes, sir. Generally, this presentation takes about 20 minutes. I'm not sure how you usually do things. I've done these briefings before where questions are thrown in as the briefing goes along. Either way, that's fine with me.

[The Chair, Conservative, David Sweet]

What we'll do is allow you to go ahead and make the presentation, and make it as efficiently as you can.

Members of the committee, because of the situation we're in today, where we have the first guest for only one hour and her presentation will be approximately 20 minutes, and then we'll have to make another call to another department, to Ann Patterson, my suggestion would be that our rounds will have the same rotation but will be limited to one question per member. Is that acceptable to everybody today?

[Some hon. members]

Agreed.

[The Chair, Conservative, David Sweet]

That's great.

Ms. Skeens, we'd love to have you begin.

[Leigh Ann Skeens]

Thank you very much for offering me the opportunity to present on veterans benefits to you today. I really appreciate that.

I would like to offer that if we don't have time to get to everyone's questions, I am happy to take any questions in writing and get those back to you or to schedule a follow-up video conference with you.

[The Chair, Conservative, David Sweet]

Thank you very much.

[Leigh Ann Skeens]

If you look at slide 2, this gives you an overview of the five benefit programs that we do offer in the benefits administration here in the U.S. The compensation and pension program is by far our largest. About 70% of our employees work in compensation and pension.

VBA has approximately 51% of the Department of Veterans Affairs' total budget; however, 50% of that goes to mandatory benefits. Only 1% of the budget allocated to us is discretionary for VBA.

VBA has 16,000 employees. That's a very small percentage of VA's total of about 285,000 employees.

The next slide shows you geographically where our offices are located. We do have regional offices in each of the 50 states. We have 57 regional offices, so some states do have more than one office. We also have a regional office in Puerto Rico and Manila in the Philippines. Compensation and pension benefits are administered in all of those offices, as well as vocational rehabilitation and employment. Other benefits--education, loan guarantee, and insurance--are consolidated into central locations.

On the next slide, I'm going to go through each one of our benefits and give you a high level of overview of what they do.

In the compensation program for veterans we have disability compensation, and as you can see from the slide, that is for veterans who have suffered injuries or illnesses as a result of their service or if they had injuries that were aggravated during their service. The ratings that we give on these disabilities are based on an average loss of earning capacity. That's how the program was set up originally and that's how it's still run today.

A disability pension program is actually an income-based program, and as you can see here, that is awarded to veterans who have wartime service. They have 90 days' active duty, with one day in what is described as a wartime period. Wartime periods are prescribed by Congress--the beginning and end dates for each of those. Veterans who are eligible for pension have to meet an income requirement as well as service requirements.

On the next slide are survivors benefits. Under the compensation and pension program we have dependency indemnity compensation, which is the program for those survivors of veterans who died in service, who had service-related disabilities during life and died from one of those service-connected conditions, or if they were service-connected for a disability at 100%, for at least 10 years prior to death.

A death pension is the equivalent of a life pension for veterans. Surviving spouses have to meet an income requirement that is a little lower than that for veterans and they have to be a survivor of a veteran who served in that same wartime period.

We also offer a burial allowance. That's partial reimbursement for expenses that are incurred for a veteran's burial and funeral costs. The burial benefit is up to $2,000 for a service-connected burial.

The next slide gives you some numbers of what we did last fiscal year. In 2008 we had 2.9 million veterans on the rolls receiving compensation benefits--$31.6 billion in benefits paid. You can see the numbers here for pension benefits and survivor benefits as well. The only thing this slide does not include as far as moneys paid are ancillary benefits such as clothing allowance or specially adapted automobiles.

In the U.S., too, as of September 2007, which is the date of our last veteran population data, we had 23.5 million living veterans. You can see the percentage of that total who are actually on our rolls today.

The next two slides show some rough statistics of veterans serving in the global war on terror, how those veterans have impacted our workload and what benefits we're paying to them. Obviously, this is our newest population of veterans.

If you look at slide 8, so far we have had over 300,000 claims from those veterans. You'll also see that over 294,000 of those claims were awarded service-connected benefits. We still have quite a few of those pending, and we have them coming in all the time.

The global war on terror, or GWAT, claims make up about 18% of our current workload. As of February 1999, for rating-related issues we had a pending inventory of close to 400,000 claims. Again, 18% of them are from the GWAT veterans.

The VA's education programs were originally set up to provide readjustment to civilian life after service. They also serve as a recruitment and retention tool for our military. Our Department of Defense reports that education benefits from VA are one of the top five reasons reported for joining the military right now.

The next slide shows our current Montgomery GI Bill education benefits. The Montgomery GI Bill was signed in 1944. We've had some updates to that. You've probably heard about our Post-9/11 GI Bill benefits. It's our new education program that I will get to a few slides from now. What you see on slide 10 are the two open GI bill benefits right now for those service members who had active duty service after June 30, 1985.

To give you an idea of the current rate for the Montgomery GI Bill benefits, those who are in full-time training and active duty receive $1,321 per month for schooling. Those in the selected reserve receive a much smaller portion of that because they have a lesser time commitment to the military service.

The Montgomery GI Bill right now is our largest education program. If you go to slide 11, survivors' and dependents' education assistance is our second-largest educational program. It is available to survivors of service members. We offer them educational assistance as well.

Slide 12 shows what was our newest education program before the new GI bill was signed last year. The reserve educational assistance program was established in 2005 by the Department of Defense. It was designed to provide educational assistance to members of reserve components. We found that in the new war we had many more reserve and national guard members serving on active duty, and our education benefits for those service members were not equivalent to those for members serving on active duty. However, in the new war we had these veterans serving the same amount of time as our regular active duty members, so we were trying to make benefits commensurate for the two populations.

In 2008 we spent $3 billion in educational assistance for about 541,000 veterans, reservists, and their family members.

If you go to slide 14, this is the beginning of the information on the Post-9/11 GI Bill, which is a much enhanced version of our Montgomery GI Bill as we currently know it. This program will go into effect on August 1, 2009. We are currently in the process of implementing it. It will be completely new. We have had to set up an entirely new system and write new regulations, policies, and procedures for that program.

We estimate that we will get about 458,000 participants this year. On the difference between this GI bill and the other one, your active duty has to be after September 11, 2001, and your tuition and fees will probably be totally covered, depending on what school you go to. The other big difference for service members under the 9/11 GI bill is that you can have an aggregate of service. Rather than needing to have three years of continuous active duty, if you're called to duty for a year, go back home for six months, and go back, you can aggregate 36 months of active duty to receive this benefit.

The next slide gives you a little snippet of what the GI bill offers. It gives 36 months of benefits. It covers the highest amount of tuition and fees charged for full-time undergraduate training at a public institution by state. It's very complex to administer, which is part of the reason why we are working so hard to get this into place by August 1. We offer a monthly housing allowance as part of this program, as well as a books-and-supplies stipend. These are two additional benefits that we have not offered in the past.

The last issue is that it's transferable. The law includes a provision to allow service members to transfer any unused educational benefits to their spouses or dependants during their lifetime, or even after their death.

If you look at the next slide, we move to the loan guarantee program. It also resulted from the 1944 GI bill. It provides home financing assistance. We offer supplemental loan servicing to veterans who are in financial difficulty, special adapted housing grant benefits, and direct loans to native Americans.

On some of the benefits of a VA home loan, they are no down payment loans with a negotiable interest rate and no mortgage insurance premiums. VA guarantees the loans. They're made by private lenders. The guarantee means that the lender is protected against any loss if the owner fails to repay the loan.

The next slide gives you an idea of the loan volume over the past almost 20 years. In fiscal year 2008 we guaranteed over 179,000 loans, and 91% of VA home loans are made without a down payment. With the end of the subprime mortgage lenders in the United States, VA is now pretty much the only place where you can get a loan with no down payment.

Slide 19 gives you a little idea of our specially adapted housing workload. This has increased, and we have changed these benefits a little for the latest population of veterans because we have many more returning veterans with amputations and special needs. Our specially adapted housing program offers money to adapt a house for a wheelchair or other needs for those veterans with severe injuries.

The next slide discusses vocational rehabilitation and employment. Our two main programs there are to achieve and maintain suitable employment under the vocational rehabilitation program. If a veteran is not job-ready when he gets out of the service and has injuries or disabilities that make him ineligible to pursue employment at that time, we can put him into an independent living program so he is retrained on how to take care of his daily needs. Once he completes an independent living program, he is offered the opportunity to go into the employment program. Pursuit of an educational degree is another option under vocational rehabilitation, besides job training skills.

On the next slide, the pink areas show you how many veterans completed vocational rehabilitation programs. The blue show those who completed independent living programs.

The next page gives you an idea of how many of our veterans are receiving assistance through this program. While we've had 11,000 complete the programs, we have about 97,000 who are in some stage of vocational rehabilitation programs.

Last year we spent about $616 million in benefits for that program.

Lastly, we have the insurance program. It's located in one central office in Philadelphia, Pennsylvania. On the next two slides you can see a brief description of what each of the programs offers. The one I want to highlight for you, in the interest of time, is our TSGLI program; that's traumatic service group life insurance. It's the very last one on slide 23. It's our newest insurance program. All service members who receive service members group life insurance coverage are now automatically covered for this traumatic injury protection. It was designed to help traumatically injured service members and their families deal with the financial burdens of recovering from those severe injuries. It's a lump-sum payment of somewhere between $25,000 and $100,000 for those service members who have experienced a severe loss, while they recover from it--whether they return to service or whether they get out of service and go home to find employment later.

The last slide gives you our other insurance programs. For our service members group life insurance, once an active duty member leaves the military, they can convert that life insurance to the veterans group life insurance. On the last slide you'll see what we've paid in the fiscal year 2008 under our life insurance program. VA's life insurance program is the sixth largest life insurer in the United States. We are very proud of our insurance program. They do very good customer service. We have about 7.1 million people insured right now under all of these programs.

That's a high-level overview, hoping to meet your time requirements. I am happy to take your questions.

[The Chair, Conservative, David Sweet]

On behalf of the committee, thank you very much, Ms. Skeens, for the time you've invested here in your presentation.

Now, as per agreement of the committee, we'll start with our regular rotation.

Madam Sgro will have one single question, and then you'll have a chance to respond as you feel fit to the question. We'll try to make sure that everybody gets an opportunity to ask at least one question in the 40 minutes we have.

[Judy Sgro, Liberal, York West, ON]

How long can the question be?

[The Chair, Conservative, David Sweet]

We'll try to keep them as brief as possible.

[Judy Sgro, Liberal, York West, ON]

Thank you very much for appearing before us today and being helpful in our understanding of the differences between our systems.

Could you please elaborate a little on what you referred to as a “major loss” when it comes to a lump-sum payment?

On the issue of the loan guarantees that are offered, are there any other requirements than having served and being a vet when you're applying for a loan guarantee for the purchase of a home?

[Leigh Ann Skeens]

Were you referring, by mentioning a major loss, to the lump-sum payment under the life insurance program?

[Judy Sgro, Liberal, York West, ON]

It's under the....

[Leigh Ann Skeens]

Okay. We have a list of traumatic injuries that make veterans eligible for it. To give you an idea, they include amputations, severe burns, loss of eyesight. It is that level of injuries that is included under it, if that gives you a better idea.

For the home loan guarantee program, you asked whether there was another criterion, other than being on active duty. Is that correct?

I'm having a little trouble hearing from your end.

[Judy Sgro, Liberal, York West, ON]

Yes, it was to do with the loan guarantee for individuals purchasing homes.

[Leigh Ann Skeens]

Active duty service members and veterans are eligible to apply for the home loan guarantee, and it is open to any service member serving in the military and also any veteran. You can reuse the home loan guarantee as many times as you want, but you can only have one guarantee at a time, if that makes sense. If you sell your house, you can get another VA home loan guarantee, but you can only have one guarantee on one house at a time.

[Judy Sgro, Liberal, York West, ON]

Thank you.

[The Chair, Conservative, David Sweet]

Thank you, Madam Sgro.

Monsieur André, vous n'aurez qu' une seule question.

[Guy André, Bloc, Berthier—Maskinongé, QC]

Good day, Madam. I have a quick question for you.

When a service member dies on active duty, what kind of support are his survivors—his family and children—entitled to receive not only in terms of health care benefits but in terms of education benefits as well? University tuition fees in the United States are extremely high. This is also true here in Canada, and it's becoming increasingly true in Quebec. Are education benefits provided for an extended period of time, or only on a temporary basis? For how many years can the family count on receiving such benefits?

[Leigh Ann Skeens]

Particularly if a service member dies on active duty, they are offered our dependency and indemnity compensation. That was mentioned in the briefing under compensation and pension.

Once they're eligible for that, they get it for life. That payment right now is at somewhere around $1,091 per month. A surviving spouse of a veteran who died on active duty would receive that for the rest of her life. She also can be eligible for education benefits, with 36 months of entitlement, which gives you roughly the four years that it usually requires to get a bachelor's degree here.

As far as health benefits go, I am going to defer to my counterpart in health, who I think will be meeting with you after me.

Does that answer your question?

[Guy André, Bloc, Berthier—Maskinongé, QC]

What is the amount awarded for post-secondary studies over the four-year period? How much is the child eligible to receive? Does the amount cover all university tuition fees?

[Leigh Ann Skeens]

I have those figures for you, if you'll just give me a moment.