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this hearing will come to order, and i want to welcome everybody to the v.a. committee room, to talk about the 2014 budget requests for the department of veterans affairs.

as everybody already knows, this budget is a couple months late. comes after the house and senate have both passed their respective budget resolutions, and i would just say that unfortunately it's a little late to influence the house and the senate? budgets that have already been passed, but i'm sure we have appropriations and authorization work that is ahead of us, and so our oversight on this request is still very, very important. mr. secretary, thank you for being here. welcome. as you know, commitee members -- this is not on you but committee members have had less than 24 hours to review some of the details associate width the budget request in advance of this hearing. it's likely, therefore, that we will have followup questions after we have had a chance to look a little bit closer at the detail. i appreciate your attendance

today and ask for your cooperation in getting timely answers to the committee so that we can move forward. my initial reaction to the budget is mixed. on the one hand we see a proposed 1.3% increase of discretionary spending midst declining budget requests for other agencies, most, unlike v.a., have had to absorb sequester cuts and that represents that v.a. funding is a priority in a tight fiscal climate. on the other hand i'm kearned we are not seeing the results for the money the congress has provided to the v.a. the budget proposes a 7.2% increase for expanding mental health services. i'm still waiting, mr. secretary, for information

from v.a. showing veterans with mental illnesses are getting help with the resources we provided. after all, know that's an outcome you and this entire commit year both after. temperatures pettle, i ask the that question of you at our enemy health hearing two months ago, and we're still awaiting a response so ask if you would help news getting an answer to some questions. then we again into the funding requests for the veterans benefits administration, which is a 13.4% increase over the current year. but i'm at a loss because we are seeing performance that doesn't match the dollars, that have been put forward. despite already high record investments in technology, record numbers of employees

available to process claims, the situation is worse today than it ever has been before. when last year's budget was released. v.a. issued a press release saying that with the funding provided -- and i quote -- by 2013, no more than 40% of compensation and pension claims will be more than 125 days old. here we are today, and we have 70% of claims out there that are older than 125 days. and the same is true for briar budget requests, what many of us would say are lofty promises, excitement about new initiatives and technology, but lackluster at best results. and we don't have what this committee would contend was a positive trend. v.a. has missed its own performance goal every single year, and i think most committee

members here are really very tired of the excuses that we keep hearing from those that come before us to testify. look, i understand that more claims are being filed and those claims are complex. but that's been true for decades. we all know that. the work load created because of good decisions that you made for agent orange veterans, mr. secretary, congress provided resources for an it solution you requested to help with that effort, and by establishing presumptions for combat post traumatic stress and gulf war illness, to the claimses, most of which would have been filed anyway, should have been easier to process. not cited as a contributing cause of the perennial failure. as for technology improvements, i know many are pinning their hopes on the vbms system, which we hey already spent close to half a bill dollars on and have

already had reports of problems from the v.a.'s inspector general. we also have reports of the system crashing this week because all raters were caused to temporarily transition back to their old computer system. but what is worse, i've looked at the backlog numbers for the regional offices where the system went live last year, and 14 of the 18 offices have a higher percentage of backlogged cases now than when dbms came online. the other four have seen marginal improvement but nowhere close it knees to be to meet the goal of 2015 you established. i have been outspoken in my efforts to protect v.a. funding and we have worked for over a year to ensure that v.a. was in fact exempt from sequester. i introduced a bill, along with the ranking member, to advance fund all of v.'s budget to protect it from the effects of continuing resolutions or

threatened government shutdowns. i'm proud of the efforts this committee has made to protect resource that are important to v.a. but the point of the effortses to ensure improved services and benefits to the veteran office this country and right now i'm not seeing the improvement is want to see in many key areas. i'm seeing the opposite. and mr. secretary, we have got to see results, and i'm sure you want the same thing. we need to see the outcomes the administration has promised, with the resources congress has provided. no more excuses. i have supported you and your leadership up to this point. i believe that this committee and the congress has provided you with everything that you have asked for, and it's time to deliver. so, with that, mr. secretary, i will yield to the ranking member, for his opening statement. >> thank you very much, mr. chairman. mr. secretary, i'd like to thank you and your staff for being here today.

i look forward to your testimony on the funding needs of the v.a. also like to thank the dso representatives who are also going to be testifying in the second panel. the committee has relied on the veterans community and the vsos testifying next, to provide additional insight into the needs of v.a. you help us understand the pressing solutions facing our veterans and their families, but you also help us find solutions to the current problems we currently have. i especially appreciate the independent budget that you prepare as well. mr. secretary, i applaud the administration for providing a concrete example of the priority that our mission gives to our veterans. the chairman mentioned in the time of austerity, a $2.5 billion increase over fiscal year 2013 levels represents the nation's ongoing

commitment to those who have served and sacrificed. the key question today is, does this budget give you the resources that you need to complete your transformational efforts? the independent budget has recommended nearly $2 billion more than your fiscal year 2014 request. many of your transformational initiatives will come to true mission the next year and a half. this includes your goal of eliminating the v.a. claims backlog by 2015. so, again, does this budget give you the resources you need to complete your transformational effort? specifically achieving elimination of the backlog in 2015. if the answer is yes, i will definitely work closely with you. my colleaguings on this committee and congress do get the resources you.

can remember sitting on this committee when i first got elected congress. we asked the former secretary whether he had the resources to provide the help he need for our veterans. he hesitated, and his answer was, he requested additional billion dollars but he'll live what if he received. so that's why it's important that we know whether or not you have what you asked for. but to who much -- when you look at in a time of forced budget cuts and sacrifices within other agencies, you do have an increase with these fund in these specific times, come an increase in responsibility to show that tangible return on investment we are investing in the v.a. it is imperative that over the next year, we have an open dialogue about the accomplishments and achievements that this funding will give you

and your agency. there must be a robust discussion of the programs you're making -- moving forward, particularly the transformation system. we need high dat -- hard data and information if we can share your confidence the backlog will be addressed. this year you're asking for an additional $157.5 million in medical service funding. to me this indicates the need for better and more detailed planning in programming. the process of putting a budget together and making informed policy and program decisions is a fundamental management tool. as we begin the discussion of providing advance appropriations for all of v.a. discretionary accounts, we need to also discuss whether the v.a. has the management processes and infrastructure in place to make strategic decisions that can

inform budget estimates far into the future. i believe we would all like to see a planning program and budgeting process that is driven by the long-term strategic needs of the v.a., all too often v.a. has been working on a crisis by crisis mode, and not the long-term vision and we need that. it should be one that also would assist v.a. leadership at the very highest level as well to make the tough and smart decisions to improve on how we provide benefits and services to veterans and to evaluate the successes of failures of efforts over the long haul. you have requested a large increase in informational technology as well. i understand the critical nature of i.t. spending. this is especially important within the context of your transformational effort but i want to be assured we are wisely

spending i.t. resources. for example, as part of your proposal, proposed increase, you requested 251 million to fund the required development activities within the iehr, interagency program office. in light of the recent decision by dod and v.a. regarding the integrated electronic health records, is this funding still required and would these resources be better spent to support your claimed backlog initiative? i would also like to mention, acting on an administration proposal that actually i opposed,es the administration budget includes proposal to utilize whats calledded a change cpi in place of the current method of calculating inflation. the administration believes that the $44 million in savings over five years and 230 million over

ten years. i line up with different veterans groups, and the senate chair of the veterans affairs committee, and to oppose this cpi change. i'm not convinced it is a sounder manner in which to calculate inflation. until i am convinced of that i will be opposing it. i believe it would be a real damaging effort among many of our vulnerable citizens, including veterans and their families. so, once again, mr. secretary, i want to thank you, the staff, for your leadership. i know these have been very tough, difficult times, as you go into the transformation, and look forward to working with you as you move forward over the next two years. once again, thank you very much, mr. chairman. i yield back. >> thank you very much to the ranking member. our first panel this morning, we've got the honorable eric

shinseki, secretary of the u.s. department of veterans affairs. mr. secretary, your complete statement will be made part of the record, and i will forego introducing those you have with you at the table and should you choose to introduce them, would welcome that. you are recognized now, sir, and the clock is not running on you today. >> thank you, mr. chairman. chairman miller, ranking member, distinguished members of the committee, thank you for this opportunity to present the president's 2014 budget, and 2015 advance appropriations requests for v.a. we value your partnership, always have, and that will continue. your partnership and support in providing the resources neededed to assure quality care and services for veterans. let me also acknowledge other partners here today. our veterans services organizations whose insights and support make us much better at our mission of caring for

veterans, their family and survivors. let me take the time to introduce members of the panel sitting with me. to my far left, your rate, stephway, our acting assistant secretary on information technology. next to hem, todd graham 0, chief financial officer. to misright, dr. randy petzel, the undersecretary for health, and to his right. allison hickey, the undersecretary for benefits and, and to the far right, mr. steve muiro, our undersecretary for memorial affairs. thank you for accepting my written statement for the record. the 2014 budget and 15 advanced appropriations request demonstrates the president's unwaiverring commitment to our nation's veterans. i thank the veterans to your own commitment to veterans as well and seek your support of these requests. the latest generation of veterans is enrolling in v.a. at a higher rate than previous ones. 62% of those who deployed on

operations enduring freedom and iraqi free dam, afghanistan, and iraq, have used some benefit or service from v.a. v.a.'s requirements are expected to continue growing for years to come, and our plan must be robust enough to accommodate that. we must be ready to care for them. the president's 2014 budget for v.a. requests $152.7 billion. as the chairman indicated, $66.5 billion of that is in discretionary funding, and 86.1 billion in mandatory funds. the increase of 2.7 billion in discretionary funds is 4.3%, as the ranking member indicated, above the 2013 level. this is a strong budget, which enables us to continue building momentum for delivering three long-term goals we set for ourselves, roughly four years ago. increase veterans access to benefits and services. eliminate the claims backlog in

2015 and end veteran homelessness in 2015. these were bold and ambitious goals then. they remain bold and ambitious goals today. but our veterans deserve a v.a. that advocate for them and then puts muscle into the word. of the roughly 22 million veterans more than 11 million receive at least one benefit or service from v.a., an increase of a million v.a.s in four years. that has been achieved by opening new facilities, renovating others and increasing telehealth and send using every means available, including social media, to connect more veterans to v.a. increasing access is a success story for us. the backlog. too many veterans wait too long to receive benefits they deserve. we know this is unacceptable and no one wants to turn this situation around more than the

workers at our veterans benefits administration. 52% of them are veterans themselves. we are resolved to eliminate the claims backlog in 2015, when claims will be processed in 125 days or less at a 98% accuracy level. our efforts mandate investments in vbas, people, processes, and technology. people more than 2100 claims processes have completed training to improve the quality and productivity of claims decisions. more are being trained on the new employees complete more claims today than their pred desare sos. use of disability benefits questionnaire, the dbqs, online forms for submitting medical evidence. has dropped average processing time for medical exams and improved accuracy. there are enough three lanes for processing claims, an express lane, 30% of our claims go through that. for those that will take less

time. a special lane, special operations lane, if you will, for about 10% of the claims for unusual cases, those rearing special handing, and then roughly 60% of the processing is done. technology is critical to ending the backlog 0, paperless processing system, veterans benefits management system will be faster, improve access, drive automation, reduce variants. 33 regional offices use vbms. homelessness, the last of our three priority goals ex-is to end homelessness in 2015. since 2009 we have reduced the estimated number of homeless veterans by more than 17%. the january 2012 estimate is the latest available figure and that has the number at 62,600. there's more work to be done here but we have mobilized a

national program that reachs into communities all across the nation, and partnered with the experts in those communities on dealing with homelessness. prevention of veterans homelessness is a major effort and that will be the followon major effort to the rescue mission we have given ourselves to 2015. we're committed to the responsible use of the resources you and this committee provide. again, thank you for the opportunity to appear here today and for your support of veterans. we look forward to your questions. >> thank you very much-mr. secretary, for your item. i'm going to start with a question that doesn't have anything to do with the backlog but we'll get there. there's a witness in the second panel and their testimony from vfw that observes that major construction project backlog is upwards of $25 billion, and the -- at the current rate it would take some 40 years to fully fund. this budget proposed $342 million for major

construction, putting us on a course, i believe, for completion of all the projects in 70 years. so what i want to know from you, mr. secretary, what is the plan going forward in league of the severe funding restraints in this particular area? and do you think we need a strategic re-assessment of v.a.'s capital asset program going forward? >> mr. chairman, let me just say the budget request that we have submitted is for construction, $2.39 billion for major and minor construction, nonrecuring maintenance, and medical lease programs. these programs remain stable with an emphasis on providing safe, cushion sustainable, and accessible facilities for our veterans. our construction requests is for $715 million, an increase of 17% compared to 2013. the reason minor construction

receives attention from us is, it is the program that impacts more v.a. facilities and delivers services to veterans more quickly. medical lease requests. $626.7 million, an increase of 12% compared to 2013. allows v.a. to provide services closer to where veterans live. major construction requests, 342 million, as you indicated. with those funds we intend to purchase three new national cemeteries and n central east florida, brevard county, omaha, nebraska, and tallahassee, florida, and also funds the completion of a mental health building in seattle to replace the one that is seismically unsafe in terms of nonrecuring maintenance request 7.9 million remains stable compared to 2013. the funds projects and condition

deficiencies and another category in which hospital directors can make quickest use of that kind of funding. >> mr. secretary, apologize. my time is short and i appreciate. i was talking specifically about the major construction. and so that is -- do we need to look at the capital assets plan again? we discussed the issues on some leasing problems with -- i see there's 14 in the budget. we already have 12 plus three bag logged because of cbo and what they're requiring us to do in regards to an offset. but again, do we need a strategic reassessment of v.a.'s capital asset program going forward? >> mr. chairman, we have a process by which we review all of our construction projects. i think you know that we created a construction review council

that didn't exist before. we also have a process by which we strategically look at our capital infrastructure plan, and those reviews are ongoing. i would say that we do look at these closely, and i'm happy to share with you the results of those studies. >> thank you. let me real quick, the v.a. submitted a strategic plan to eliminate the compensation claims backlog. that plan was submitted in january of this year. in which is forecast expected numbers of claims that will decide in the year 13, 14, 15, and now three months later the budget assumes a lower number of claims will be decided. for example, the strategic plan assumed 1.6 million claims would be completed in 2014. but now the budget has been submitted assumes only 1.32 million will be completed. so, i think this is consistent

with my opening statement, where i said we talk about bold predictions about performance, year after year, but the results aren't backing up, and my question is, it happens all the time. the goalposts keep shifting. and i'd like to just -- as brief an answer as possible because weol to a second round of questioning and talk about the backlog further. why does the goalpost keep moving on one of most important issues that are out the within the veteran community today, and that's the backlog. >> fair enough, mr. chairman. i'm going to call on secretary hickey to provide some detail. but i would say anytime you write a long-term, large plan that describes solving a complex problem, they are assumptions-based, and we rely on those assumptions being fulfilled. one of which there are no additional complicators added to the work load.

and another assumption is that we're going to be funned for the thing wes say we need. if either of those things change it's going change the work flow. i believe the plan that you're referring to, the common operating plan, delivered in january, did not include vei as part of the discussion. the current estimate does. and so there is an additional requirement that we have accommodated. i think we can explain the difference in those two numbers. we have a resource plan now with submission of this budget, and i believe our latest estimates are accurate. let me just see if secretary hickey has anything to add. >> mr. chairman, we do create a plan, and then we look at our

actuals and i know that most of you all have our individuals that are checking our weekly reports we send to you through the monday morning work load report. i will tell you we try to adjust for what we see in real life and you will see right now there is a slight decrease in applications being made for claims compensation, not a ton but a little bit of a decrease. it is -- these are objectives we look at. these are estimates for the future in terms of past veteran behavior. we have to base what we're looking at in the future in terms of what we are seeing and adjust for that year over year. so we'll be making those adjustments on a regular basis, and as we start to see changes we'll certainly keep the committee and you up to speed on where we are. >> mr. chairman, just add, i believe i'm correct that the cop you saw in january did not have vei in it. this set of latest estimates does.

>> i've got a followup to that but i'll do it in the second round. mr. michaud. >> thank you very much, mr. chairman. once again i want to thank you, mr. secretary, and your team for being here today and for what you're doing for our veterans. one of the issues i have been skeptical of the 2015 backlog issue, and primarily -- because when you look at your plan you put forward, i believe part of that plan also requires that the department of the defense to move forward in a different mode as far as that seamless transition between dod ask the v.a. that where the concern i have. i know we have a new secretary of dod. my question to you is, have you had any recent discussions with the new secretary of the department of defense, and are they willing to move forward with that seamless transition, i.e., are they willing to accept

the system vista that v.a. owns and operates. the dod system is actually -- they purchased that system -- you you'll have to correct me -- so is dod willing to accept the vista system? and if so, how soon? >> thank you, congressman michaud. the v.a. decided the vista is our core system and we are moving forward on the ihr and still focused on the usual operating capability of 2014. and as you might expect this has been a topic of discussion with the new secretary of defense, secretary hagel. he is getting into the discussion. it is a complex one, and he wants to be sure he is structured correctly. he and i have discussed this as

recently as yesterday. i believe we're on the same path here, and that is to look to develop a single common joint integrated electronic health record that is open and nonproprietary in design and all of those terms or code word to get to us where we believe, a seem last transition demands we make the right decisions and the investments. secretary hagel is working this hard personally. i know that and i look forward to our next discussion. >> if they're not willing to accept it, what will that do toward the to 2015 issue -- breaking the backlog by 252015 -- itch canada done do it. >> when we were building the

automation tool for benefits processing, we have also had a parallel discussion with other agencies, but primarily with dod because, as i've said before, what we work on in va originates here, most of it originate in dod so this partnership between not just our two secretaries but our to departments, entirely important if we're going have to other seam lost transition where all our energies are focused on the focal being the young individuals serving in uniform and that individual coming to us as a veteran. shoot be seamless. they shouldn't have to do anything about it. we should adjust. so while we're talking about the integrated electronic health record, that's one piece of this larger discussion of a digital hookup with dod. as we're developing dbms we have consult with dod and indicated to them in 2014, when we are dbms'd, we're looking for digits

from them and they're committed to working to make that happen. >> my last question actually deals with how you calculate claims. when you look at the dbms, you can have a claim that might have four medical conditions, a claim that -- i've seen some that have 100 medical conditions, i think that's outside the norm but normally if you have a claim that has 20 medical conditions, my concern is how do you really calculate it? how do you determine productivity among the employees by dealing with just the claim versus breaking it down to the medical conditions which you have several in one claim? >> let me call on secretary hickey hear to give us a short synopsis of the issue versus claims discussion, and i'll look to close up. >> thank you, congressmember. you well notice there have been a change in terms of what the

content of a claim is. in the past we might have found one or two medical issues inside of a claim. our current veterans coming back from iraq and afghanistan, are claiming at much higher levels. 12 to 15 medical issues per claim. what we have done here of late, we have taken the claim and our employees, and we're now capable of going down inside the claim and assessing how they do at the individual medical issue level, giving different points for claims that have more medical issues in it, so that the different complexity and work load associated with the claim meets -- has an expectation for our employees of additional work load acknowledgment. i well tell you, as i look at the claim, level of quality versus the medical issue quality, which is what the veteran care is about today, veteran care, we are doing his knee or headquarters -- or hearing, we're across the nation

at 59% -- 95% on the quality level on how we do a claim. >> just to close up. you bring up a good point. if you're dealing with a claim with ten issues and you solve nine of them and you're taking care of that veteran, but the one issue remains open, that claim is still unresolved, and yet 90% of it has been decided in favor of the veteran. so, there is this distinction between getting 90% of your work done or just counting the claim and it's a one or zero result. we need to be better at this, and how we explain it. but we will do that with the help and insight and support of the dsos, who have a great experience here. >> appreciate very much. thank you, general, for

testifying today. thank you for your service to our country, and thank you for your commitment to our veterans. i'd like to elaborate on the process that the va uses to re-evaluate projected that have already been funded and appropriated. as you know, james haley, the medical center in tampa, the most highly trafficked va trauma center in the nation, not only smurf constituent but also severely injured veterans across the nation. years ago they developed a proposal that would allow hem to build a brand new hospital in lieu of rennovating their existing facility, using major construction fund already appropriated to the location. if started now, the hospital will save the new hospital will save $500 million over 30 years. very significant. without interrupting current hospital operations. while better serve the future needed of our veterans. yet the va has not allocate

funding for this cost-saving project. in fact i notice that the budget request, that this proposal was a priority 78, with no funding requested. why has the va been reluctant to prioritize such projects and if there are a other similarly meritorious projects on the horizon, that will better serve or nation's v.a.s and will save hundreds of millioned of dollars over time. what obstacles must the va overcome to consider such projects and assure taxpayer dollars are used widely. >> thank you for that question. let me call on -- >> let me give you the latest update on the tampa project. and as you know, originally the proposal was to rennovate the -- the construction that was going to be new. we reaassessed the situation in

tampa and both the network and the facility have come to the conclusion they do need to build a new bed tower. a proposal to re-scope that project is working its way now through central office. and when it's approved, we will then begin the process of evaluating that project. i believe there's enough money left so that we're not going to have to ask for additional money. it's matter of just re-scoping it. that is in process. >> there's enough money left and then some. can i follow up with you on this? >> certainly. >> thank you very much. i yield back. >> mr. brown. >> thank you, mr. chairman. and ranking member. mr. secretary, let me thank you for your service to the country and to the department of veterans affairs. as i look out in the audience, and in the room, my first thought is whether we're doing all we can for the veterans.

since we enacted the advanced appropriations policy three years ago, veterans healthcare has not been the subject of the whims of the congress, and for that i am very grateful. i want to thank the doctor for coming to jacksonville to open up the clinic, as the secretary said the clinic is probably one of the best clinics in the entire country, and that is -- we'll be able to do 90% of the procedures right near this clinic and that's the future of how we want to too our -- to do our patient clinics. i do most of my health care at bethesda, and it would be good for every member to have the opportunity to go out there and visit, because the veterans that's there, their injuries are so different from what they was 20 years ago, ten years ago. it's a lot more serious.

when you say one issue. they have a multiplicity of issues and what are we doing as a department to work with the local agencies to help deal with the problems we have? i really don't feel that the veterans can do it by themselves. it's like the partnership we had down in florida where we were working with the university of florida. what are we doing to forge those relationships? >> do you understand my question? >> i'm going to -- let me try took place it. i'm going to ask dr. petzel to describe what we have done and are doing and establishing a poly trauma system of care so you see this end is military members who are severely injured. and by the way, today i think we have six quadruple amputees and

just very, very difficult situations. what we have created in v.a. are five poly trauma centers that ring the country. tampa, richmond, minneapolis, palo alto and san antonio. this where is the patients are initially hasn't off in the military to us. poly trauma, a word we created to describe serious injuries where it's not just one thing but multiple injuries. and then as part of the hearing, as they come through that first phase of stabilization, so they are not there forever. there has to be a second tier that moves them closer to home. third tier, and finally get them as close to home as we can. let me ask dr. petzel to describe the effort here and then the numbers, the facilities, and people we have dedicated to this. >> congresswoman brown, thank you, mr. secretary -- as the sect described, it's a tiered

system, begins with a very intensive five poly trauma centers. we have three poly network site reasons the country which is the next level of care as the person moves closer to their community. then we have 86 poly trauma support teams so that when you put this together, most all of our medical centers have a poly trauma program that is relatively close to the individual's home. the goal here is always to deinstitutionalize people and get them into their home. the 86 poly trauma support teams and then the other 39 poly trauma points of contact are the connection that the patient and his family has with va system and medical care. we'll do whatever we need to in order to support somebody at home. mate be buying care in the community or providing that care ourselves but the goal is to return people into the community and into their homes.

>> congresswoman, just take a second here. our effort here in connecting v a's electronic health record system, takes these five poly trauma centers as a priority, and it's in the next coming step. and connected to bethesda. so we have that electronic nookup between the premiere military hospital in the country -- and there may be a couple others -- but certainly our five poly trauma centers. >> thank you. orlando florida hospital status report. >> let me call on dr. petzel. >> congress woman brown, work is progressed apace at orlando. they're now over900 people on the site, working, and we are in discussions with the contractor

of about completion dates and continuing the project. we're optimistic that this is going to get done, and is a said, it is proceeding apace. >> thank you very much. i was just there less than a month ago, reviewing the project. i wanted it completed yesterday, but thank you, as we move forward together. and thank you, mr. chairman. >> thank you very much. >> thank you, mr. chairman. and thank you, secretary shinseki for being here this morning, along with your team. i guess my concern is, to tell you the truth, mr. secretary, is i know how difficult it must be managing a bureaucracy of the size of the veterans administration, and i guess my concern is about the management of these projects that are going

on here. we're constantly being told that we're just not making it, we didn't get the i.t. thing done, we didn't get this thing undone, but we're working on it, it's going to be better. i just wonder if -- is there any system in the management plan which rewards or disincentivizes people for not meeting these goals? i just get a little frustrated when i see that -- we had a goal for integritied i.t. thing and now it all broke down and now we're looking at it again. it seems to me that if i have somebody in charge of a project and the project is a mess and i have to explain it, like you have had to do, i would make sure that the person was no longer in charge of that project, or there's some incentive for somebody if they say share going to do a project,

they get it done like they say, and you end up being an apologist for what your staff and the administration of the whole projects under you, because you can't be doing it yourself. so i'm wondering what exactly is in place from -- in your management team to incentivize people in charge of these projects. i seive it as a difficulty in management. could you go through that with me a little bit? >> sure. congressman, thanks for recognizing it's a large and complex operation, and if you want to do everything well, you have to go at the whole organization, and think about change. when i arrived, i took a good look at the level of training we provided our people. it wasn't what i thought it needed to be, and in the four years that's been validated. so you'll see in our effort

tremendous expenditure of resources and commitment to get our people trained. it's difficult to hold someone accountable for a standard if you have not trained them to it. all you do is keep changing out the players. so for us as an organization we're after building a competent organization, not just at the top but throughout the organization, and to do that, we must train people on the jobs we expect them to do. get them to that standard, and then we can hold them accountable by measuring performance against that standard, and usually in a training discussion, that gap between the standard and an individual's performance is what is called the training gap. that's what you have to train on. if we train them to the standard and they don't perform, then we have some action -- >> at what point -- isn't there some point that training is over? you're on the job? you haven't performed. i mean, i'm a surgeon.

i'm responsible for the stuff i do. i have a training period, but after a while, your train is over and you get better as you go on, but to me the answer of more training does not ring true. >> there's sufficient turnover in an organization that training is an ongoing process. but the ones we have trained, definitely. we can hold them accountable. and then we provide them the tools to do their job, and earlier there was some discussion about vbms having crashed this week. the term "crash" is not an appropriate description. when you field a large i.t. program, we started with vbms1.0. we're now up to 4.2, and in the 4.2 program there was one of those patches that didn't take, and so as we fielded 4.2, two weekends ago, we noticed the patch wasn't working, and we

pulled the patch offline to work it but the rest of 4.2 went in and functioned and dbms was now available. we have now fixed the patch and put it in place and it's functioning. it's a powerful tool in the hands of -- >> i guess that's not -- i'm just -- i don't have a person on the ground dealing with a program, that's an employee. i'm talking about the management of this -- of these individual sectors. just seems to me if you keep missing your goal, does anybody change? does management change? you're changing somebody out? the people held responsible for not meeting their goals or the answer is, well, you couldn't meet the goals and that was an unrealistic goal we have to re-assess it. that's the answer we get all the time. there is never a situation that arises where somebody is incompetent?

>> in 2009, this department rated executives above 53%, all of them were rated outstanding. today, those ratings are around 25%. >> i think there needs to be some sort of incentive program for producing a goal that you get, or a disincentive program, and -- do you understand what i'm saying? to me doesn't seem as if there's any consequences for not getting these things done. >> fair enough. i'd like to have a discussion with you on that. i'm open to suggestions. we have to train our leaders as well as our work force, and that's been an ongoing process as well. >> thank you, sir. >> recognized for five minutes. >> mr. secretary, i'd also like thank you for your service and what you have described as a

very ambitious set of goals and agenda that is matched with the muscle necessary to implement, and i know that part of what we're considering today is the addition of the muscle of resources you can allocate towards achieving these goals. i also want to thank you personally and your undersecretaries for their responsiveness on issues we brought to their attention, and case in point is the 19.5 fulltime mental health positions that have gone unfilled for far too long in el paso, since bringing that to your attention we're town to 11, which is progress, and we road like to see it get down to sear row. i appreciate your help with that. another issue we brought to your attention is the poor performance of the regional office in waco, serving benefit claims throughout dispks the 80,000 veterans who live in el paso. the average wait time is 439 days. 80% of the claims are over 125

days. so, from the new resources being requested in the president's budget, how will you use those in regional offices like waco, to improve performance? >> i'm going to call on secretary hickey here to talk about waco. i would just say, congressman, if you recall, back in 2010 we made a decision to provide agent orange service connection for vietnam veterans 40 years ago, who were experiencing diseases. that increased our work load. waco was one of those sites where a large number of those claims were brokered, and as a result, they had an increased work load, unlike others, and so it took them two years to work through that, and it slows the other claims processing.

unfortunate. no veteran should wait but the decision made in 2010 was the right decision take care of vietnam veterans. that's the background on waco. let me ask secretary hickey to address details about hugh it looks going forward. >> congressman, waco is actually in the process of going through several of the transformation initiatives to start with. we're running all of the individuals who are new to their position through the the challenge training which allows people to be -- new employees coming into the system with the new challenge, to do 150% more claims and 30% increase in quality than their predecessors could. effectively making them much more helpful rater or claims evidence gatherer, earlier in their career. the second thing is we have put quality review teams in waco as well as other regional offices, reducing the amount of cycle time we have for errors we catch

downstream. i can tell you nationally we reduced the number of errors we have found on our exams by 12%, and i can tell you nationally we have reduced the number of errors we found on our letters by 23%. those are both things that take time and create some long wait periods for our veterans that we want to get rid of so we do it right the first time we have put waco into our new organizational models. all of our regional offices nine months ahead of schedule. they now have the express lane, the core lane, the special operations lane. they had a number of claims that could have been done in the express rain. once we broke them into the lanes we could see that, lift that work that is faster and easier to do because it has one or two medical issues. they're pushing right now on the express lane really hard and staffed that lane to make sure it happens. the last thing is my precious to the state of texas, the texas veterans commission for the

partnership they're providing us in brings us more fully developed claim and they help us fine the evidence we need make the decision. they have been particularly helpful in finding private medical records and my appreciation to the state for what they're contributing in helping us. >> thank you for your answer and your attention to this, and as i said before in previous hearings, we look forward to working with you make sure we can do a better job out of waco. i have very limited time, mr. secretary, but i am interested in hearing your response to how we can protect low and moderate income veterans from the negative consequences of changed cp and i make sure we still take care of them and 'don't introduce an undo hardship to them and their families. >> congressman, i would just say -- and here again, it's consistent with what the president has done elsewhere, and that's the desire to protect the vulnerable populations, the

proposal excludes means tested veterans pensions which are provided to wartime veteran whose are age 65 or older or who are under age 65 but remain totally and permanently disabled as a result of conditions unrelated to their military service. the budget proposal also excludes certain veterans education benefit programs, for example, post-9/11 g.i. bill, montgomery g.i. bill active duty. these programs are decide bid the national center for educational statistics. >> okay. >> thank you, chairman. and thank you all for being here and all the veterans here today. and again, to echo, thank you all for your service, in the room. you mentioned, and as i read your testimony last night. you wanted to increase access to

veterans benefits and services and eliminate the claims backlog and homelessness. i would add another and that is to reduce the alarming rate of suicides among our active duty veterans and active duty military and veterans. you and i when we spoke six weeks or so ago looked at the budget, the va budget, and just from a 40-year look since i was in the military, and looking at the last ten years we have gone from $100 billion now to thing budget request, 152 billion. you told me you thought you had the resources to do what you needed to do, and i believe i have never seen the va provide more services than it has right now at this point in time. never has. so, i think that's a good thing, and certainly this committee will continue to do that. there are lots of problems in a bureaucracy this big, and as i've listened, one of the things that was brought up is that if

you hear about an issue and miss brown had an issue, it seems like it's a squeaky wheel that gets some noise. we bring it to you, it gets alonged. i think the doctor made a great point. there ir19 places unfilled, why did that happen? an issue i brought to you six weeks ago was when a veteran do is, and that's'm no discussion about that. you have a death certificate. this veteran dies this, spouse takes months, maybe as much as a year to get their benefits. that's absolutely unacceptable and you have a veteran out there, spouse, man or woman, and they're especially the older veterans that are out there that live on the very meager income: ...

10% above veterans patients. as you all look forward, you have the resources going forward to take care of this veterans you expect to come in? another's resources there. >> congressman, let me touch on the issue i am equally

unconcerned by having to do this. we are looking for a way not to revalidate ballasts of the death of a veteran. regarding our research gain for iraq and afghanistan. over the next five years, and 2 million veterans will be leaving the military and becoming veterans. based on that, we have at least described what that floor rate will be as best we understand it and provided a request for the 13, 14 piece of that. we are in the process of developing a five-year look at our budgeting process. so we look at the planning phase

beyond the two-year budgets. we are fortunate to have because of the congress. but then i programming and a budgeting execution phase gives us a way of describing what i required are going to be when we come the budget. based on what we know today coming to hear that we provide accommodates what we expect will be the flaw. >> another question i have is the integration between dod and va on electronic health records and the benefit. should have a joint meeting between dod and i realize secretary hagel has a lot of the display in the middle east right now. but this is one of my concerns have a think this will get it back burner again. we're going to be sitting here in you and i've spoken about it and it remained that way. are we going to be sitting here a year from now or two years or

three years? because it's not a resource. to be able to integrate the systems, it's become very frustrating to me to sit here iraq are your come unless the voters have a different idea, i plan to be here in 2015 and see if we complete these things were going to do. is it fair? >> yeah, secretary hagel and i have discussed this on at least two, maybe three occasions. he is putting in place a system to assure the way ahead for him to make this decision to be the partner we need here. he is committed to an integrated electronic health record between the two partners. the pa has made it assessment on the poor. >> somebody has to blame. obviously, we can't integrate

him, so it has to be one system or the other. he decided the va will stay with what it has. that means he's going to have to blink. >> said the va system is government owned, government operated. we have put this into the open architecture so anyone who wants to use it can use it that's used in other countries. i believe there's a powerful system and i am just awaiting a discussion with secretary hagel. >> thank you, mr. chairman. i yield back. >> thank you are your words on this day. i would or might he doesn't know my colleague at the we are working on another joint meeting with both secretaries specifically on this issue because i am encouraged by some of the words have received regarding secretary hagel and his willingness to move forward. he's been involved in a for a long time and it may move in the

right direction. mr. waltz, you recognize five minutes. >> thank you, mr. chairman. mr. secretary and your team, thank you for being here. i am grateful for the work were doing, but as you all know, intel is a veteran has served at the highest level we can, we work to do. i know the team understands that clearly. i am hopeful now that the public understands the need to care for our veterans. the silver lining the backlog is not to the attention of the american public and that's a good thing. even some of our colleagues have noticed have been outside of this committee using terms like seamless transition. that's good. it's important to maybe chance to remind them they're not the first people to think of it. this complexities to this that have been thought about and the committee process works in at least this place, remembers her

trying to find it looking through this. i'm grateful for that, but i also know you sent the frustration. you have figures of nicu express that and i said it. i'm convinced we got the right people there, but we've got to bust this thing. it's an opportunity to talk the american public and for us to talk about what we do break him of an opportunity for us to work on getting paid better. not to miss the opportunity for my wheel to squeak. i think it's different in that come in general. i just have a question. looking at the budget, there's no mention in here and dr. petzel, this may be for you for rehab provisions that are though tonight. congressman those minutes over here, we worked on this. it is the ambiguities in the law to move beyond the holistic approach, to move beyond

physical, get these folks back. mental needs, long-term recovery process. i see no hint this provision is implemented in the budget proposal in the medical program projects a reduction in tpi care for oef for 2014 and 2015. other than the nonrecurring maintenance, the chairman spoke no other program will see a reduction. so we passed the bill, senate find it in their and was crafted with the caregivers. it was to make sure our warriors are brought back to the highest level possible as the research catches up and takes them forward. looking at the budget, it's hard for me to see how we will implement that. he is parochial, but an issue we all care about is returning care of this warriors, especially

tpi. >> adalat something to close. >> congressman walz, thank you very much. we are anticipating the acute tbi cases are going to be decreasing, and we will not see as many people coming for the acute care, but we do have in the process a plan for the holistic long-term care you describe before and there will be a certain result and a few i.q. patients will be money available to develop a program. >> i know what we were asking for is listed va often does is almost unprecedented. we were asking for an approach to care that is not that cutting-edge as i was going. how are you seen that implemented? what are some of the things we do to move them beyond just getting them back to physical baseline. how are we moving further on all

those aspects of their life? >> first of all, it starts at the acute rehabilitation phase, where you don't just have physical therapist doing physical therapy. you have behavioral scientists, recreational therapist. you have people who are even at that point in time, working to reintegrate these people into their community and working with families to do that. each one of our poly trauma centers now has a transition unit if you will, an apartment that is suited to teach people how to survive and live by themselves or with the minimal help. all these other more things in a person's life are integrated into that that individual does. as mentioned earlier when we're talking a poly trauma, we progressively removing people towards their community and

towards their home. i'm pleased the huge majority of the people we see are now back in their homes being cared for by home-based primary care, et cetera. >> do you feel at what this act that has been incorporated into the cultural treatment at how we see now what our responsibility as clicks >> yes, i believe inc. >> i appreciate that. >> just one small point. i think you are aware that our poly trauma centers have an awakening awareness program in here is where most severely injured, and rain injured veteran go. most of them are deeply comatose when they arrived they are, through great work, cutting-edge work at these poly trauma centers i believe they're about

69% of those deeply comatose and in some case declared vegetative patients are being brought back to consciousness and worked back into the capability to communicate and go on living a life that has more independence with it. >> appreciative of that. i yield back. the mac nothing right now, mr. chairman. >> thank you, mr. chairman. and thank you for holding this hearing. general shinseki, great to see you again. thank you. i want to cover two objects in nine or 10 mature. the first is a cultural shift similar to one were just discussing. ave. member of congress and i'm extremely concerned about the treatment of women in the

military when we have one out of every three women and a fair number of men experiencing sexual assault and the trauma that comes with that. i'd like to hear from you about your mental health treatment and how you intend to incorporate the very sensitive and cutting-edge treatment models for the dems of sexual assault, particularly in a circumstance where there may or may not have the opportunity to properly adjudicate those claims and they may have been really nice in the process, separate from survey scout is separated their unit. i would like to hear from you what of those services are available throughout the veteran system?

>> congresswoman, i am going to secretary hickey to talk about the claims that go on because they think her insights will be helpful. i would say the use of your term as he did come sexual assault is an appropriate description of what we are dealing with. other terms make it sound like it is a condition. this is a crime and we have to look at it that way. and leaders that you take charge here. i would just point out that in this year's budget, if we were to look back to 2009 and come forward through our budgets, women's veterans programs have been increased by 134%. so much of your concern about are we paying attention here and doing the right hands, i think we are us reflect that in the budget, but we are always open

to insights on what we should be doing better with regard to disability claims, we are going back to look at decisions that may have been rendered earlier and checking ourselves. finance secretary hickey to take that one on. >> me tell you when i write here, one of the first things i did in the first two weeks would have a comparison of our race between ptsd associated with sexual assault and all the other major conditions, combat fear, terrorism. i did note in june 2011 and action i took of my own accord that we had a disparity between the ways in which we grant and deny those. we put in some very fast action. it is together a dha and epa action. we identified specific people to deal with the situation. we heard from veterans dealing with this issue.

is now a dedicated person who handles these claims. we have trained together both those on the health side who are working with their victims here and put into place in their processes. i can tell you every quarter i ask for an update. page in the next year come were clearly apart with the way we grant and deny other ptsd environments. i continue to assess and make sure it has been. dr. petzel provides the ongoing health care for the sake is to ensure they are cared for in that perspective as well. >> thank you very much. my tan is very short, but i would love to work with you and i and others others on this committee and throughout the congress that would like to work with you on that subject. this is a much more parochial subject, but probably impacts

other areas. i have a rural part of the north country of new hampshire. recently with the new hampshire delegation sent a letter to you about that they tell a help and a clinic in colbert, new hampshire, but more broadly i'd be interested in a conversation about disabilities one day a week and any information you might have to share with us about the new patient centered community care program in new hampshire and above to work with you and your team going forward to increase access to service for veterans living in the rural community. thank you. >> i would just say, let me call him dr. petzold to provide as much details. i don't have a plan to come back with, but let me see what dr. petzel can provide. >> thank you, mr. secretary.

we are very empathetic with the rural mess of northern and sure. telemedicine is a burgeoning part of the way we deliver care to motivate to talk about the way we increase the visibility of those services. we have places where we do this in the veteran service, whether telemedicine is there and connected to either a hospital or large-scale clinic. there's many come in many ways we provide the service and would like to talk to you. >> i would like to add pizzazz to address the kind of things you're talking about. in this areas where we don't link while porto have a presence, we do have non-bea care is an available option to go when the local economy and veterans can be served. we have over $5 billion into

pain v. care costs. >> thank you very much. >> ms. hill's camp is recognized for five minutes. >> thank you, mr. chairman. i apologize for stepping in here. i want to follow up on the last comment about the issue about non-va fee basis care. you give us the numbers, mr. secretary, nationwide. can you describe how often it's used but i'd like to follow up on your response. >> i just gave you the rest members nationwide. its about 5.9-liter dollars. decision is done locally by attending physicians that decide whether to and how much. let me call on dr. petzel. >> thank you, mr. chairman. it is a widely used program is

particularly in rural areas, but not exclusively. the decision is made on the part of the physician they're prescribing in the community-based outpatient clinic with a medical center or may not be conveniently located and that's when the authorization is asked for. in kansas specifically, the wichita va medical centers spend $15 million the year on fee care program. as you know, we have in kansas project arch, which is a pilot project using fee care more extensively to bring care to rural communities. we think it's a very important tool to provide better access for telemedicine, outpatient clinics and other things we

have. >> i presume that is in reference to the project in kansas. >> that's correct. what's the local response? a few months ago it didn't seem very positive. when i was hearing has since been redistricted out of my congressional district you don't have as much contact. do you have more information click >> there's 223 as of january overusing project arch and the feedback i've got is very satisfying. there may be people not involved to want to get involved in all find out about that. >> how many patients? >> has changed considerably, but back on the issue of the va fee basis. my congressional district is so big that two days ago the difference in temperature was

75 degrees from end to end. negative two degrees on the western edge and 73 on the other end. it is a big area and pratt being close to wichita will be consider rural in terms of access. it's a 200 or 300-mile. of patient care, they were spending 30 minutes filling out paperwork for every patient and the responses we can't do that. we just can't do that. i'd like some more information. these incredible potential matches for the veterans themselves. as for the spouse is taking a drive and the volunteers that drive. thanks for finding a physician and liberal kansas and filling out really appreciate that as

the top 250-mile drives her volunteers and and spouses. pathetic little more information about the success of the non-va fee basis because it seems like it's underutilized particularly because of the happy paperwork requirements. >> we will follow up about the requirements. in addition to fee basis, will help the souls of the parts of the country is very popular and rapidly growing by delivering, especially care particularly. >> i yield back. >> night the homelessness is a serious problem in a district and other districts. how many housing birchers do you

anticipate what will be funded way to 270 elion. >> thank you, mr. secretary. they are in an the 14th at another 10,000 additional vouchers and that will bring a number of vouchers we have two over 46,000. >> my second question, as you mention in your testimony to number one in veteran enrolled in the health care has increased 22% 2009. what is the va's timeline for increasing the number of facilities that have women's clinics beyond the current 50%? >> another good question, congresswoman macleod. the va has three ways we meet the special needs of women

veterans. the first is a comprehensive women's clinic that we find in places that have over 1000 women patients, bringing together services needed to want clinical setting. mental health, ob/gyn primary care. we have 86 of his clinics around the country. the next level is having a primary care clinic that is designated specifically for women in which the primary care providers are specially trained to recognize and manage issues that might be specific to women veterans. and most of our large outpatient clinics, we have that circumstance. the last area in small places we have one or two providers we've

trained about 2500 physicians and nurse practitioners in the special needs of women may have a nice way to it. so we have the three levels and whenever we can be a large enough number, we will set up into set up a comprehensive women's clinic. i want to point out the budget devoted specifically to limit me how it's grown since thousand nine by 134%. >> because the number of uninsured and the forces and coming home. >> that's correct. >> thank you. >> thank you very much, dr. windstream. >> thank you, mr. chairman. secretary shinseki, we met maybe three or four weeks ago and i

was wondering if you could update us. we talked about putting an place ways to increase the efficiency of the clinics in the ior inner va hospitals, from the standpoint of physicians having too much of mistreated duties that virtually anyone could do it takes them away from patient care and we could allow health h care providers see my patients come into more surgeries. if you give me an update on that. >> i'm going to call on dr. petzel to provide detail here. this list or discussion of of the patient align team, where a physician is the focal point surrounded by other members to concentrate what he or she does best and that is to see patients can take care needs and the tracking of pharmacy requirements of standby others, all a part of that team.

it is called patient align care team, our initiative and we are implementing not as a resource it. dr. petzel. >> thank you, mr. secretary. congressman, we absolutely agree that getting the most out of the people we have and operating the most efficient manner is very, very important. as the secretary described, were involved in trying to set up a circumstance where people first of all working teams and secondly, were each individual works at the top of their layson and they're only doing those things positions have to do. they were only doing those things and administrative personnel, pharmacies.

the secretary mentioned we are moving this talent to do this in orthopedic op herbology in other subspecialty clinics and cardiology. it's the way we have to operate and the way things need to be done as well as any of the other procedure rooms. we agree with you and are embarked on trained to do that. >> i can offer you my time to participate in that process as a physician and surgeon u.s. private practice as well as serving the dod and might help to build a bridge between us in here. >> congresswoman, the value of the physicians time if you think

about a network of health care we provide, the last thing we need to do this but that position in a road getting someplace to see a patient and that's why investments in tele- health and telemedicine, about $460 million is intended to allow patients to come to the nearest facility at the specialist isn't there, the system hooks them up to the specialists they need to see to get the initial consult going into site for there what needs to happen next. >> thank you. i yield back my time. >> thank you, mr. chairman. thank you, mr. shinseki for your parents and your transformational vision. does this 2014 budget reflect all the resources you need continue? >> congresswoman, thanks for the

question. we described a bold and ambitious plan. if the plan restores and is one that would give us the 2014 object is we need to deliver on leading to 2015 and i'm not. it does give us the resources we need. >> t. have any concerns or expectations you need additional funds to to meet those goals, especially to reduce the backlog by 2015? >> i will say as i said earlier, the plan was made out is an assumption days plan that we know the variables out there. if there's a sudden urge and the arrival of patients on the we have to adjust. the department of defense or the next five years, up to a million servicemembers will be leaving the military had we been given an understanding they spake on

day one or day last incentive accommodated that flaw. if that changes, we will adjust the plan indisputable come back. >> is my concern. in a system that has backlog. i really have a concerned and will be watching that process. obviously you factor that in your budget and you're making those changes. >> all the more reason we have to automate now. we been a paper too long. all of this effort is not to automator systems, they get others to provide digits so we have a seamless handoff. >> thank you. i yield back. >> thank you very much. ms. polar ski. >> thank you, mr. chairman. good to see you again.

the va is open an additional 50 community-based outpatient clinics and as you are aware, a new one is planned to open in 2015. since i saw you guys, my understanding is that project is behind. is there in a status report you could provide to the veterans as to the status of that? >> i'm going to: dr. petzel here. >> thank you. >> i have information and that is as i understand it -- that as i understand it did have a delay, but i find told is back on pace. we will get back to you and see if we can do that. >> i appreciate that. is there some kind of a timeline

where we can expect a status report? >> immediately. i'll have someone get back to in the next week at the latest. >> thank you, mr. chairman. i yield back a time. >> thank you, mr. chairman. or the work you're doing. it's great to see you again. i want to initially follow up with the comment to ensure the paper were positions have to do is not only problem in the va, but the very end would be a good way of looking at how we can cut down the amount of physician spans on the paper were. one of the things we've done as seen on an emergency medicine physician is to utilize off in times premeds getting in the va

system. medics who can deal with the paperwork, the forms that have been trained that allow physicians more time to spend with the patient is called a fee. i'm hoping the motto at the end the pact team is specifically address the paperwork in a form that physicians have failed. i want to talk about the claims backlog in a know this is a complicated system in order to address this in the efficiency we break down different part of what a veteran has to go through from initially understanding what their benefits i enter the end result. and that's the senate process, what in your opinion is one or two bottlenecks in the system

that takes a long time? >> the biggest bottleneck is finding the evidence. whether that is basically two big pieces we need the dod medical records while in fairness. but if the personnel records for the character of their service, dede 214 and under snow dates and times and how they say it would have qualified and private medical records. we estimate vha, but that's the easiest thing to do. we bitterly have access into the medical record. if this other three-part to make it very difficult to do. >> thank you. and that is why this significant after two digitally cannot va to

dod. right now we rely on veterans to provide so much of this information and they shouldn't have to carry that burden. we had to deal to do this it apart and that is what we're working on. >> very good point. i spoke misadventure in an most of them are seniors and they have a difficult time getting to their hearing parklands due to financial, transportation, et cetera. let me ask you, is videoconferencing and efficient way of decreasing that burden on our seniors? >> i'm going to ask secretary

hickey to have some detail here. virtual machines are a way we are able to cut down on travel and increase efficiency in decision-making. when we review reviewed the face-to-face hearing and what happens on the virtual hearing, the results are comparable. there is no disadvantage, so this would be our preference to resolve the issue you describe, but veterans have a choice and i know somewhat preferred to be face-to-face and they accommodate when that request is made. >> congressman, the only thing is our partners are critical to our ability to assist our utterly patients. under the veterans and survivors and family members. we do work closely and i say county service facilitate the

safe hands and we see a very large increase in willingness to take that process and we see that if they could being. the other thing i would share with you about 40% of our effort to do teleconferencing -- to do the face-to-face at the appeals process are done via the vtc environment. >> thank you. i appreciate the work you do and i yield back my time. >> mr. secretary, i know i promised a second round of questions, but we are running out of time and i doubt you have been here for an hour and a half and i made legislative time. we all the time in the world to help you solving the problems that exist today. a lot of the members have expressed the desire to send additional questions. we will try and bring them all together into one document if we

can to make it easier for you and your staff to respond. we appreciate you being here this morning. >> thank you for this opportunity to present our budget. we appreciate the past support and look forward to your support on this one as well. >> thank you very much. you are no excuse. as the first panel is, want to write the second panel to make their way forward if you will and we will refer introductions until folks are seated at the table. [inaudible conversations]

[inaudible conversations] [inaudible conversations] >> if i could ask the members to take their seats, we would like to continue.

[inaudible conversations] [inaudible conversations] >> thank you. we will look on the second panelist at the table. but this this morning, jeffrey hall, assistant legislative director for the disabled american veterans. kara blake, national legislative or the veterans of america. diane said not to come a national legislative tour. ray kelley, legislative director for foreign wars that the united states and mr. lewis kelley, legislative director of the american link. your written statements will be made a part of the hearing this

morning. i would say we didn't receive the legions until less than an hour before this hearing. that's never happened that i'm aware of. so hopefully we won't have to. it's very difficult when we get the president's budget late and then comments or marketization slate, makes it difficult for members to observe the testimony you're getting here today. your complete written statements will be made part of the hearing record. you're recognized for five minutes. >> thank you, mr. chairman. chairman miller, ranking member of the committee, on behalf of tv, and pleased to present recommendations of the independent budget for fiscal year 2014 related to veterans benefits administration.

this year contains numerous recommendations to improve benefits programs in the claims processing system. i will be highlighting a few. the dba commended to the claims of less than 125 days with 90% accuracy by 2015, they have their work cut out for them. vba is all in a new models and practices and continues to deploy new technologies almost daily. in the midst of the massive transformation comic to be hard to get or keep proper perspective measure whether they will achieve ambitious goals. we'll transformation be completely successful? simple answer is we still think it's too early to tell. we do believe vba is on the right path and has made progress for continued support of the current transformation offers.

mr. chairman, now is not the time to stop or change direction and congress must perform aggressive oversight of the new i.t. programs, but also provide sufficient funding to complete the transition away from a prayer. additionally, in the middle of the transformation come including the new system, which changes the roles and responsibilities of epa's employees come it is difficult to determine whether staffing levels are or will be adequate to handle the workload. for that reason, they are not recommending a claims processing and fiscal year 2014. however, we are recommending modest staffing increases for the veterans appeals as well as the vocational rehabilitation and employment service. although the board is authorized to have up to 544 full-time employees and fiscal year 2011, it's appropriated budget fell short and could only support 532 full-time employees that year.

in fiscal year 2012, the numberless readers to 510 in a present for fiscal year 2013 budget may be able to support as many as 518 full-time employees. however, based on conversations with the board, while adjusting the productivity gains, the independent budget recommend the board provide funding for a fate hundred 44 full-time employees before fiscal year 2014 in order to reduce backlog in the wait times. also, these vocational rehabilitation and employment program known as that success program participant programs at 12.3% more than fiscal year 2011 anticipates a 10% workload

increase for fiscal year 2013 and 2014. to meet this need, we recommend they provide funding for approximately 230 additional counselors in fiscal year 2014 to meet the rising workload demand to reduce their counselor to client ratio down to their stated goal of one counselor for every 125 veterans. in the past year there's been much discussion about replacing the formula used for calculating the new formula commonly called the chained cpi tiller the federal deficit since it's also applied annually to dic, this would also mean a reduction in benefit. they urge congress to reject in any scheme to reduce the federal deficit on the back of america's

wounded heroes. finally, mr. chairman, the call on congress and how disabled veterans and spouses are treated under current law. repeal the inevitable requirement of the longevity be offset by the amount equal to disability conversation possessing 50% in the same that exist for those 50% or greater. finally, congress must repeal the offset between dic and no duplication between these two benefits. they are separate and distinct and congress should enact legislation to enable survivors of 55 for all surviving houses. other happy to answer any questions. >> thank you, mr. chairman. on behalf of the co-authors are they to take the opportunity to be here to testify. i'll say up front we believe the

administration is committed to delivering timely quality health care benefits to veterans. an increase in funding does not lead to the assumption is sufficient funding is provided. i limit the independent budget released a recommendations back in february and for the first time included is a superb ration recommend nations for fy 2015 for health care. i'm going to limit my comments to the 2015 advance appropriations. based on a quick analysis of the administration numbers released yesterday, you see they provide for products that went to one of dollars in total medical care dollars from what was recently enacted for 2014 to 2015. certainly that's not a small amount of money, but we don't believe $1.1 billion is sufficient to meet current services increase. medical care inflation in general terms about 3% right now. one by one of dollars is 1.9%,

so i question whether the increased a project would meet current services. that's without considering the fact they want to reduce spending and medical facilities, particular the expense of nonrecurring maintenance. i know my colleagues in the vfw looking into that. i think there's some sound reasoning and the utilization. one concern we have been in the past about ois, oes nu nv for 2014 and 2015 the same number for both years. my immediate concern would be we are well or the status of the military funding projected a plan to not only start withdrawing from afghanistan in 2014, but to start to draw down the military, which is going on right now and they believe they'll have some sort of an in fact when utilization in the va.

a couple of particular concerns with collections. we voice this many times in the past as well. ultimately, the va continues to over project and underperform. last year the projected 2.9 and in collections. you now see from the budget request yesterday about 2.8 billion. 125 million. a small change in the context of a multibillion dollars budget, but our concern would be what's going to fill the gap now that by $125 million in collections they don't achieve. ultimately, dollars need to be found somewhere because 2.9 billion was the basis for providing care in the coming fiscal year. which are your attention to the fact this year and next year around 3.1, $3.2 billion to see if they can come close to projections. i suggest a track record to

suggest they cannot. over management improvements specifically says the appendix this year due to projected management improvements and 13, 14 and 15 they will reduce the need in 2014 and 2015. it's not clear how much they reduce their projections are needed appropriation. i suggested their budget they show $482 million in proposed savings for 2014 and 2015 and $1.3 billion for operational improvement. i don't know what this $2 figures are factored into that appropriation, but those two together equally large sum of money. i draw your attention to question that the affordable

care act. and 2014 day project and new cost associated with implementation, about $85 million, which suggests their assumptions are between the veterans did in the system and coming in is probably not a large effect. interestingly for 2015 the project of the dollars needed for implementation of the aca. we have concerns of funding for research for the fourth year in a row, research fund aimed is being kept flat in the three of $4 million increase over last year not stand show. that's flat. lastly, with a two thank you for hra 2013. the co-authors of the budget support legislation will move quickly. i also support legislation introduced that would extend the gao requirement on advance appropriations and without i

think two thank you and answer any questions you have. >> thank you, mr. blake for your information. in two weeks they will have an impact on va from a slew of commute to participate and be here to hear the testimony during that hearing. ms. amato, you're recognized for five minutes. [inaudible] i appreciate the opportunity to share their recommendations to an independent budget for fiscal year 2014. in light of the ongoing fiscal challenges facing our nation and growing demand for services, ipv and the administration make it their priority to ensure the va receives sufficient time and predictable funding. it's unfortunate the recommendations for the fiscal

year 2014 associate since appropriation recommendations for 2015 have been delayed by two months and those are greatly concerned about how va program funding may be impacted going forward. additionally, the breakdown of the appropriations process is a major concern i'm almost certainly have a negative effect on all va operations. in fiscal year 2014, a myriad of numerous recommendations to improve veteran programs and the processing system. however, i'll focus my remarks on employment. some of the reasons for the persistently high unemployment rate among veterans can be found in a june 22 study by the center for a new american security unemployed americans that there is it examines the former service members have given these

to their employment opportunities and while there are many positive reasons listed in the report are hiring veterans, it also noted that there were several challenges facing veterans when they are out seeking employment. the focus of that list they have difficulty in skill translation. there's a problem of negative stereotypes. skill mismatch, the fear of employers if they hire national guard and reserve troops they will be deployed. these difficulty in acclamation in many employers say they can't find veterans. in the many challenges facing the transition veterans, it appears the toughest barrier right now is employment and transitioning veterans seeking employment, especially those

with health issues facing unique obstacles, including the process of the licenses and credentials required by some professions. the issue of veteran license thing and credentialing continues to be of concern to those within a military and veteran community and is made especially difficult for veterans due to highly parochial nature, complexities within the credentialing system itself, the fact that each of the military services has its own unique training and credentialing programs. they need to overcome real or perceived gaps in military training, experience and education. ambiguity about which of the roughly 4000 credentials are most important to civilian employers mehsud family, literary occupations unlike civilian equivalent have no credentialing requirements.

military service and training are provided at both the state level for members of the national guard or the federal level for active-duty and reserve personnel. in light of this, and massive collaboration between dod, va as well as department of education and individuals days will be required. they applaud the fact the administration has offered his support to ensure servicemembers did the military career rady by proposing the following. increase and disable tax credit, charge to yours to commit hiring or training veterans and the career rady military which calls for dod and va to lead a joint task force at the white house economic and domestic policy teams and agencies.

to develop proposals and are averse boot camp to transitioning veterans through american job centers, including improved workshop. i'll be happy to answer any questions. >> mr. chairman, members of the committee, thank you for the opportunity on behalf of the auxiliary to be here today. as a partner of independent budget, the vfw is in charge of the portions will limit my testimony that. for the past years have testified on how transparent the skip has been in identifying gaps and safety, utilization and access and how the plan outlined

to accomplish to close those gaps within a decade. i still believe skype is an exceptional tool based on industry models in its practices. at the same time, the iv called for funding levels to close these existing gaps in 10 years. this model has not been met and interiors the level of funding for major construction projects has fallen from 1.2 billion in fy 2010 to 532 million in fy 13. ..

specifically, seismic deefficiency. there are currently six project on the va's fy2014 that are seismic safety projects. all the projects have been initially funded. one is the earliest, fy '09 but none funded in this year's budget proposal. only one project in the 2014 top 20 list is receiving funding at all-but to the va's credit this will replace seismic deficient facilities with newer facilities. the president has requested in his larger budget proposal that $50 billion be spent on capital infrastructure. the ib suggests a discussion be had to close the size milk safety gaps within va.

what is more important, repairing potholes or ensuring or veterans and staff are protected from the horrors that took place in california when a 6.6 magnitude earthquake collapsed a va hospital, killing 49, and costing $2.8 billion in today's dollars, to fix those damages. the idea is also concerned about the current state of capital leasing. prior to 2012 the congressional budget office treated major capitol leasing as short-term leases for already, existing facilities or renewal of leases. in evaluating the costs of va major construction authorization at the end of 2012, cbo changed their perception of the leases. under the new rules, va will have to fund all major lease projects like cbok, treatment centers and research facilities in the first year of the lease. under the current va's budgeting

practices, this is impossible. the ib understands this committee and va are exploring every option to find a way for va to continue the pre'12 leasing practice while staying within the current budget rules. however if a solution cannot be found it's recommended the congress forego it's ebb rules to assure the leases move forward and without further delay while a long-term solution is found in closing the ib would like to thank va for requesting funding for activation costs for new medical facilities. this will take the pressure off the va to make facilities operational once they're completed. that concludes my remarks. >> thank you. >> the american legion has spent thousands of hours intimately working with the department of veteran affairs. we appreciate their willingness

to be transparent while we reviewing their portion of the budget last night, and we proud the president's important commitment to increasing va funding in areas that will help eliminate the growing backlog as well as care for the wounded veterans. chairman miller, ranking member michaud, members of the committee, on behalf of commander counts and the two and a half million members of the american legion, we welcome this opportunity to comment on the federal budget and specific funding programs of the department of veteran affairs in october of last year, national commander jimmy counts provided the committee, the american legion guidance budget that adequately provides for the healthcare and benefits for veterans of all wars during this period of difficult financial times. as thousands of troops return from deployments from afghanistan and elsewhere in the world, the united states shifted

policies in iraq and afghanistan, thus producing a new national security focus. the american legion reminds the committee the national security changes do not change the fact the veterans of these wars, as well as prior conflicts, must be taken care in the aftermath of these wars, and this care will extend for these veterans and their caregivers for the next 60 years. while grateful for prior va funding the american legion is vigilant to make sure the va is not going to be short-changed of the funding it needs. the lack of funding will endanger veteran care and veteran benefits. the american legion has for years been testifying before the congress of the united states, reminding them the cost of the war, especially prolonged war, is expensive, and that the true costs are only realize decades after the war is over. last month the harvard kennedy school issued a report that projected the total costs of the

current conflicts to cost between four and six trillion dollars. the american legion is encouraged with the proposed increasing in the areas of claims, claims processing, electronic records development, and medical care, and believes this is a step in the right direction. lastly, as this committee just pointed out earlier, and my colleagues have highlighted, va received sufficient appropriations to continue to fund, lease and operate facilities in 2012, but in 2013 the appropriations for the same facilities was eliminated due to a scoring change initiated by the congressional budget office. as a result of the cbo adjustment in scoring review, congress refused to introduce an fy2013 appropriations required to keep these community-based centers open. as these leases now become due, there are 15 major medical facilities forced to close

unless congress acts quickly to provide the appropriate funding to these centers. the merge here john urges congress to fund the centers immediately and continue to prove the medical support to veterans in these remote areas. based on the very short time we have had to review this budget proposal, we have prepared our preliminary review, which is reflected in our written testimony, and we look forward to answering any questions the committee may have. thank you. >> their, mr. celli. we'll now begin the first round of questions. i guess i'll start. mr. hall, on behalf of the independent budget co-authors you testified we believe there has been sufficient progress to merit continued support of the current transformation effort. can you demonstrate some of these evidences of progress? i'm frustrated, as you have probably listened to my questions. i'm a little frustrated by

changing goals, and tell me what you see as a positive. >> well, there are several things. thank you for the question. several things but it's not certainly inclusive of others that i could mention. simple things like the dbq process. which didn't exist, which is helpful to the discovery of evidence in a claim. qrts, quality review teams. that's been a positive step in the right direction towards accuracy. the benefits, the stakeholder enterprise portal, all really good things that matter to the system. all of them are in motion and still being work out didn't. so we understand the frustration but these are things that we feel are positive in the right direction. as well as the veterans claims intake processing, the vcip for the scanning, so those are things when i say sufficient

progress. >> thanks. i want to get from you all -- my question to mr. shinseki debt what incentives are there for the administrators of the program to fulfill these goals? do any of you have input how this could be better managed that we don't have a moving goalpost all the time and the projects the va starts gets finished on time or people are responsible for the failure of getting things done on time? does any one of you have an idea how to better manage that? you've been at this longer than i have on a regular basis and dealing with that frustration. so take a meant -- a minute and how i can change the va to make it work better. >> well, just simply say that

vsos enjoy an open, collaborative effort with the va at different levels. given the different programs i highlighted in my previous comments, service organizations are stakeholders are able to provide that input. number one. so, do they listen to it? they listen to a lot of the recommendationses, more sew, it seems to me, after 20 years of working in the business, this administration is more open towards receiving our recommendations and not only receiving them but actually implementing them. and when it comes to your question of accountability, if there's a problem, they don't normally ask us -- >> not going to ask you but i'm asking you. >> if we provide them feedback and say, you got to hold these folks accountable, that's something that is a little bit elusive at this particular time. >> i know that. blake, do you have any comments? >> first i would echo the

comments of mr. hall. we were fortunate to have the opportunity to participate in dbmf as they're working out the bugs in that, too, and i think, having met with the head of the benefits department, he feels comfortable they're really heading in the right direction. to your actual question, when you asked the question earlier i told my colleague, sounds like the question out to be, can you fire a federal employee? i'm not sure that's -- as hard as it is to hire federal employee, it's probably equally as hard to fire a federal employee. i'm not suggesting that is what needs to happen but points out to the accountable in a hard hard-knocks approach. i don't envy the senior leadership of va because i can't imagine the tasks they're responsible for, and particularly for general hickey. i mean, that's -- that might be

the toughest job in washington in my importance given the responsibilities placed on her and what the expectation and outcome is supposed to be. it's certainly not an easy answer. i'm not suggesting anybody should be punished there should be incentives and disincentives in some fashion. >> it just seems to me that there be better accountability, and better reward, carrot and stick for the managers. the managers should be more accountable. because i see mr. shinseki's job is very tough. anybody else have a comment? >> the vfw would be very oregon to further discussion how to do that accountability. we think it's very important to have leaders held accountable to -- >> i look forward to some conversations in the office. thank you. >> i just wanted to say that

with the multitude of programs the department of veterans affairs has, there's a lot of work to be done. the fully developed claims project that the american legion is involved with, with the department of veteran affairs, is the result of the collaboration that the va has had with the vs os. we think the transparency needs to continue. we feel comfortable that at this time the department of veterans affairs has opened and welcomed us in to try to work with us on some of their problems. with regard to oversight, that's your area. >> thank you very much. >> thank you very much, mr. chairman. once again, like to thank the panel. when you look at accountability and part of that is to make sure i believe that the employees know what the clear standards are, the met tricks -- metrics they're going to be held accountable to and for.

and my question -- i want to follow up on what dr. roe mentioned during the first panel when he looked at the survivors' benefits and the widows claim, and he is absolutely right, the backlog has increased tremendously, which you wouldn't think it would, particularly with those particular types of claims. and my big concern is actually, as you know, this is a high-performing ro. we used to do the pension claims. however, va decided to centralize that in pennsylvania, and unfortunately, since it went to pennsylvania, all we're getting is complaints now from the veterans in maine, and that is concerning, and the thing that gets back to training, making sure employees are trained properly, get back to turnover rate, whether or not you have an ro that's really -- have a high turnover rate, and in those particular facilities.

so i guess my questions for each of you folks is, what do you think the va should do as far as metrics and dealing with the backlog? as you notice, my first question with the secretary is, you got a claim that could have several medical conditions, and another claim that actually might have 20 or 10 compared to one that might have five. do you think we ought to be looking differently how we calculate performance of an employee and that is a better standard to hold them accountable for? i guess each one of you -- if you can do a quick yes or no. the way it is done now or focus on medical conditions? >> there should be some changes in the way they do that. to answer your question a little

bit more, if you're counting a claim that contains eight contentions in that, you know, and in the past it was -- or currently, an error in one of those issues is an error for the claim. if you're going to change that and make that metric each contention now is worth -- where their error is counted but the overall claim is not. those are things they need look at, and i know the va is looking at different ways. but in doing so, the employee has to know exactly what it is that they're responsible for or the complexity of it. what i'm getting at is, if you're going to score an employee and you have a senior rater that is getting inherently the more difficult or more complex claims, the special ops claims type issues, i can't see how va is going to be able to

credit their employees or give them credit for their daily workload without changing how they score that. >> i'm certainly not the expert on the benefits side. i'd like to take some time talking to the head of the benefits department but it's my understanding the va is looking at -- and i think mr. hall reverendded this -- looking at the way they view a claim -- we complained in years past about the numbers game associated with claims protesting and finishing a claim is getting a one for that, and so that puts an emphasis on moving claims quickly, which leads to getting the easy stuff done quickly and the harder stuff is left behind, and i understand itself may be moves toward a claim has ten issues and each issue us is scoressed separately as a positive or negative, and that's the right way to go and we have always argued that made more

sense. because you're -- you created a disincentive to do the hard work if you only get one credit for a ten-issue claim versus one credit for a four-issue claim. >> yes, there needs to be changes. carl and jeff summed it up, so i'll return your time. >> we agree, yes, and the american legion has actually submitted a comprehensive proposal the department of va affairs last week which works similarly to a checkbook system where the claims are rated based on the difficulty and actually negative points are given when the claim is adjudicated improperly. >> could you also provide that to the committee as well? >> we'd be happy to. >> thank you. thank you, mr. chairman. >> thank you, mr. ranking member. mr. walls. >> thank you, mr. chairman. i appreciate it. thank you all for being here,

your service, and most importantly, thank you for being there every minute of the day for decades to make sure we get this right and bring this expertise to it. and i'm grateful in looking at the ib, some of those things, and i know mr. hall, it's sometimes hard to find the positives in things that are frustrating, especially the backlog of claims. i think it's important to understand the outcome is what matters. effectiveness matters and we have to look at this. we all wanted fixed, and i'm glad their there now. this is an issue and they want to get it fixed. but we have to do it in a manner that works so i'm very appreciative of you doing that. and think this issue of accountablity we all want it. when we figure this out, let us know so we can apply it to the congress and we can get thinks going. i have a specific question again coming out of the critical issues report. it's an issue. it was on page 27, where it

talks about the dod and va should act on the recommends provided in the institute of medicines report the long-term health effects as a result of airborne hazard. do changes need to be made -- if you have an expertise on this -- need to be in the way they partner with va? this looks like solid study, win we have been waiting on and looking at, and we're starting to see some implications there i think the impolice indications are generationol and we have never controlled that path, and i we may have to what are the implications on the children or these exposures. are we getting this right? iom laid out what i think is sold evidence. what's going to happen with it? >> no. i think the issue is, much like any other kind of report, done a

number of great studies over the years, and whether those recommendations necessarily see the light of day, i'm not sure. i don't know if that has to do with the connection that exists between va and iom. i'd be surprised if anybody can tell you what the connection is. but to the specific report, certainly there's some great ideas that the va needs to look at, but the same statement has been made bat number of things over the years, too. >> of course, i worded my question in a very good minnesota passive aggressive fashion. i agree with you but i don't think at it being implemented. i don't know it's going any further and i have deep concerns on numerous but this one specifically. i think we're moving and the va is taking a very aggressive approach to addressing whether it was agent orange. this seemed to open the door for more collaboration, more

transparency for us to look at, and then to do it. this is a door we haven't -- i think we need to go through to see with what are the implications genetically on exposures to these. with that i appreciate again all of you being here, and i really think it's important you're here with the independent budget, focusing on the whole spectrum of care to veterans. i their dr. roe summed it up right. i don't think any of us have seen the level of services being provided by the va. many of them are top quality, best practices, verified, and some of them are not. i think it's important for us to never lose the focus. if we spend too much energy in one area at the expense of others, then we all know that's detrimental to the veteran, and i know you get that, and i appreciate you being here. >> thank you, mr. walls. we're just about out of questions.

mr. michaud asked to ask another question while you're here. >> one quick question. i know you support the advance appropriations for all the va. would you also support -- my biggest concern with just giving budgets on a yearly basis or two-year basis, is the long-term planning. would you support requiring, if we're going to two advanced appropriation for the rest of the va, they have to provide a five-year plan? i think dod does that. i'm wondering if you think the va should do the same thing, long-term planning. >> no comment. i think it's a reasonable idea. the federal -- when they release the entire federal budget it's done on a long-term plan. a fear would be that we wouldn't want that to set down the benchmarks for the preceding years. if the va was to wrote jacket next year and three or four years beyond that as dollar figures, what we wave essence

with advance appropriations now is the va projects appropriations and very little change occurs in the next year when we're looking at it in that current year. >> that's not what i'm asking. i'm talking about a plan. for instance, if you look at the aging population among our veterans, vietnam veterans, for instance, and you look at the budget, it's actually a decrease in state veteran home reimbursement rate. so the long-term plan, five, ten, 20 years down the road, going to be more need for long-term health care. when you look at five, ten, 20 years down the road, moyer of the soldiers coming back from iraq and afghanistan, have traumatic brain injury or ptsd. prosthetic issues, probably will increase. i'm not talking about setting a budget to it beyond the two years. i'm talking about a plan beyond the two years, because that

plan, the budget might say we're going to do transform makal for the next to years, but the third year out they plan to have a huge increase in the budget because that's the implementation of it. so i'm not talking about the budget. i'm talking about a plan, where they plan on going. >> i would say that va already does that to some extent, especially with their capital infrastructure, which does take into account where veterans are going to live, how many of them are going to be migrating from one area to another, what specialty needs they may have. and i think they do that should it be expand or roared? be happy to discuss that. >> we're certainly proponents of prior planning. we just wouldn't want to see a situation as brought up by colleague, where the tail is wagging the dog and in future years we need a service or we need some additional support that wasn't in the plan, and

then we're now afraid to introduce it because it wasn't pre-thought of. >> i want to thank you all for being here today. there's going to be a further written questions from the commitee to you all, and we look forward to those answers, and i look forward to you coming to me and bringing forthsome of the questions you didn't want to testify about today. you're all excused. i want to reiterate my thanks to all the witnesses, particularly secretary shinseki for being here and i ask unanimous consent that legislators have five legislative days days to extendr remarks remark include straining -- extraneous material. the hearing is now adjourned.

>> outgoing assistant secretary of state an true shapiro sat down for an interview today. he a former advisor to secretary of state hillary clinton. this lasts about an hour. >> good morning, and welcome.

this is a reminder, this is on the record, and so greetings to everyone watching. i'm a professor of national security at the perry center at the national center and i will be your presider. we have the great honor and privilege of having secretary andrew shapiro here. i understand you're the longest serving, in the history of the state department, and you have been with us in a very auspicious time because it's unprecedented the collaboration between the state department and the defense department, secretary gates and secretary clinton talking about defense and diplomacy. so what do you think of two or three top highlights? >> i think you hit it right on the head. certainly one of the most

significant accomplishments has been restoring the balance between the state department and the department of defense. after 9/11, we were at war, and a lot of the traditional missions and authorities in the state department migrated to the department of defense, and when to the obama administration came into office, they made at it priority to rebalance that relationship and mandate that secretary clinton gave me, when i took the job as assistant secretary of state for political military affairs. i think we made a lot of progress in that respect that and the relationship between state department and the defense department has never been better. military affairs is often referred to as the principle link between the state department and the department of defense, and so at its core, our mission is to make sure that

relationship goes smoothly as well as ensuring that what the defense department is doing is consistent with u.s. foreign policy. and so we made progress in increasing personnel exchanges in rebalancing the authority, and in a variety of different interactions. the relationship is more intimate and closer than ever before, and it's not just with the office of secretary of defense policy. what my bureau deals with all the different organizations wind dod, the defense cooperation agency. the defense technology agency and all these agencies take actions which can have impact on u.s. foreign policy, and we rebuilt the capacity of the political military affairs bureau to enter act with dod on its own terms. so at it one of the things that

is a real accomplishment. another issue that we have had to focus on has been the geopolitical changes that have really occurred during the last four years. so that means, for example, we have had tremendous changes in the middle east. so-called arab spring. and that has led to enormously complicated issues, from challenges in libya, egypt, the gulf, yemen, syria, and so -- that has had implications for our security systems policy, as well as the way that the department of defense enter acts with those countries as well, and the political military bureau is designed to make sure that dod and state are well synced. it has impacted our analysis, and ability to think about

israel and. under law, the united states has to consider every region for the impact on israel's military edge, and in a time of dramatic change in the middle east, it means that we have had to refine our analysis and think about how these dramatic changes will impact israel's qualitative military edge, and in response to that we have developed new structures of communication and coordination with the israelis so that we understand how they see the world, and they understand how we see israel being in the region, are able to take that into account when we make these type decisions. the other big geopolitical issue is the rebalance of leadership,

and there it's an area where the bureau has really played more of a role on issues than any time in its history. when the political military affairs bureau was created it was during the cold war so a lot of of its mission dealt with russia. i remember talking to my predecessors from that era, and they spent a lot of time negotiating launch control agreements with the russians or thinking about how nuclear proliferation could impact our policy in europe and elsewhere. after the cold war, the bureau's focus shifted to the middle east. obviously iraq invaded kuwait in 1990, and the bureau was a part of developing the agreements that enabled us to have bases from which to operate from in

response to that crisis. and then obviously in the post-9/11 era that's been the primary focus. now we're starting to play a larger role in asia. and my primary area i traveled to is asia. but the second area, the second most amount is asia and at it -- when i took the job i didn't anticipate that but it's just the necessity of going to asia, building relationships, interacting with these partners, made it a priority in this job, and the final point is what we have done for control reform. and early in my tenure we were able to get the treaties capped with the united kingdom and australia, and those are coming into force and we're seeing those being used but the broader evident which is presidential

initiative, is just now going to be -- we're going to be moving item from the state department control list to the commerce department control list and that's going to happen next week. the first two categories and that's a significant accomplishment. we're going through all 19 c.a.d. categories on the missions -- 19 categories on the mission list and scrub them so to make sure the things on the list are things that we need to protect and deserve the highest level of protection, and those that still need to be controlled but don't need as high level of protection. and the categories that we're looking at to move next week are aircraft and engines. and we think that thousands of licenses will be moving from the

state department and we think when we are done with this process, thousands more will move at well and that will have a real impact on our economy at a time when competition is even more fierce, and at a time when our manufacturing base could really other use a boost. >> that's a great way to start out for our conversation. speaking of -- i think it's auspicious that today, mr. secretary kerris actually in seoul, and one of these things nobody anticipated the timing and the tensions arising on the korean peninsula. you have been spending time traveling to asia. i fells the question, your insider view, how would you actually describe our partnerships with south korea, japan, and china, particularly as we are reaching these very interesting dates, anniversaries that are particularly of interest to north koreans which for some reason could she trying

north america terms of them trying to show their strength in pyongyang. >> well, as you point out, secretary kerry is in the region and just had a press conference in seoul and it's important to remember we're at a unique time in northeast asia in that the leaders of japan, south korea, north korea, and china, are all relatively new. so this is a very timely visit by secretary kerry to establish those relationships, to consult on a tense time on the korean peninsula. and to make clear our resolve in standing by our partners, as well as communicating with the chinese about the best approach vis-a-vis north korea, and it's important to recognize we have been through these cycles with north korea before, and we need to continue to show our partners that we will stand by them and

continue to make the case that we need -- that north korea will not benefit from this type of behavior. i have went to korea a couple of times in this job, opposite with secretary clinton and secretary gates for what we call a two plus two meeting, which is the defense secretary and secretary of state meet with their counterparts, the foreign minister and the defense minister in south korea. also during a time of some tension on the korean peninsula. and i remember visiting the dmz, which is literally -- you good to the dms and you're stepping back in time, and we went 0 -- to the little cabins they have that literally straddle the dmz in half, and when secretary gates and secretary clinton went into one of those cabins, there's a famous picture of a

north korean soldier looking in, peering in as they were getting briefed on the situation and gives you a sense when you go up there, this is a very unique place. in that -- that is still stuck in the cold war, and so we need to continue to demonstrate that we will stand by our partners. the second time i went, i was honored and privileged to serve on the presidential delegation to the celebration of the 60th 60th anniversary of the liberation of seoul. i went with veteran secretary and army secretary mchugh, and the korean government flew in on their own budget korean war veterans who could participate in the celebrations all of them

in their later years of life, and they sat at every banquet table at every dinner so you would be sitting with the defense minister of korea and several korean war veterans and many of them had not been back to seoul since the korean war, and they -- many of them were taken aback with emotion when they saw how seoul changed since -- from what they remembered, and this is what they were fighting for. to have the south korean people an opportunity to have freedom, and to enjoy a productive life. and so it is the history of our involvement in korea is one that often can be forgotten, but we lost a lot of blood on behalf of protecting freedom in south

korea, and we need to continue to keep our commitment to the south korean government and people and that's what secretary kerry is doing in his trip now, is demonstrating our resolve and commitment to south korea. and also sending a strong signal we'll stand by our partners. >> we talked about actually 12 hours -- not 24 hours -- you had the reading of this report from dia allude though fact that the koreans -- the north koreans have the capability of perhaps delivering. the question is if they could deliver it in terms terms of reliability, a nuclear weapon, via missile, as well as yesterday the carnegie endowment, a leader talked about it's time for south korea to talk about becoming nuclear armed and that created an interesting backdrop for

secretary kerry's meeting while in seoul and obviously that has also fueled a lot of the rhetoric, and you're involved in this education going down there. your colleagues would be taking a look at the possibility of discussions of that going down the road. >> well, i'll just make a couple points first. obviously, dni director clapper had some comments about the dia report, and that it did not necessarily represent the consensus of the intelligence community, and i think i'll let his comments and the comments from the hearing yesterday speak for themes. i will -- it does remind me, eight years ago i was senator clinton's senior defense adviser ask there was a similar interaction with the director of the cia and a similar public

response when she asked a question about the ability of the north koreans to put a warhead on a missile. and so the more things change, the more they stay the same. this was an issue eight years ago we were concerned about. and at it one that we're still concerned about and one obviously that our intelligence community is considering and thinking about. in terms of the nuclear issue related to south korea, it would not be something i would directly work on. one of my colleagues is our assistant secretary for nonproliferation, former principle deputy at the political affairs bureau, and i think that -- i don't think we view that as a formal statement of south korean policy, and as such, i don't think that it's appropriate for me to respond to

that comment. but i imagine that tom is following it closely. >> why don't we pivot to the middle east and take a look at egypt. as you know, egypt is the second largest beneficiary of u.s. aid, both in military and economic assistance, but under the scrutiny of the morsi government, there are a lot of critiques about whether or not we should be thinking about rebalancing. it's predominantly military aassistance we have been giving the government of egypt. and it should be a rebalancing to use your words, of more economic and be tied to the respect for human rights and democracy, particularly religious freedom we have been on serving in egypt, and you have traveled to that part of the world quite a bit:...

we have interests in preventing weapons. said they are a number of issues where it's important to work with the egyptian government towards addressing our own interests.

sorry security system in asia is not the work we had. it is in furtherance of our national security interest. the analysis we put an end to assist continued to serve our national security interests. in our view at this point it does. and so, we are seeing progress in addressing the border issues. and so, they've taken steps to prevent the smuggling. we want to help them develop that capacity enhance our security assistance to further their ability to prevent smuggling. we want to continue to the military in egypt is an

important player can have a relationship that enables us to communicate and discuss sensitive issues as they arise. we've been very clear to the egyptian that we have sparked daily use our systems properly and we have not seen any indication it is for misuse family price that, issues related to human rights, free down, for women, press freedom and where they don't meet standards, we address them. said this is that we'll continue to look at close leave.

at this particular time, our assist ends is still furthering our insurers that we will precede going forward with an analysis that has desire system server ensures that we will continue to have a conversation with them on how to make sure that his nerves are mutual security interests. >> there's a lot of scrutiny but their existence to package and and how willing and how evil a partner. it seems to always be one this time of national security thinkers or was thinking about. have you spent time on pakistan and rethinking the idea of conditionality when it comes to carrots and sticks, particularly military assistance?

>> as we now come our relationship with packers and mentor challenges the last couple years. we had the osama bin laden made, the border incident were pakistani soldiers were killed. and so, we went through a period, a difficult. where there is not a lot of assistant and our communication was not great. we are now on a track where the communication has started to occur a cad that we are making progress. but we have to be realistic in our assumption and expectations. we can expect the pakistanis to act when it is in their interest. and now, they have had a number

of incidents and attacks by extremists that directly impact their interest and also our interests. so it makes sense to work with than where we have mutual interests to provide them with assistance will go after the bad guys. assembly will continue to have these conversations with them about the best way to use the systems. early on in my 10 year, there is a bit of a debate over who should manage security assistance center of government. the department of defense issue direct related to efforts in afghanistan or should it be the state department? ultimately, the state department transitioned into pakistan counterinsurgency capability. i think what we demonstrated as

one of the state department's couldn't manage such a fraud, which was not like the foreign military financing account, design for longer-term capacity to help pakistan immediately in their fight against terrorists. but we demonstrated is that it's just that, the state department had technical expertise and ability to manage those funds to which gets back to a talked about earlier commendably balance between the state department and department of defense. we have seen unpromising time in our dialogue with pakistan that we think make it worthwhile to continue our security assistance . >> the city center your prayer worked hand-in-hand every day

talking about sequestration and the defense programs we have in the international arena. just muncher views on the ground and the aspirations you had during your secretary. >> it hasn't fully kicked in yet, so we are planning for it. obviously our security assistance account will happen across the board cut of 5% and foreign military financing is similarly important partners. we'll see a cut. at a time when we are trying to build partnerships overseas, when we are saying we would like our partners to do more so we don't have to do as much, it seems counterproductive to across-the-board cut our security assistance.

it doesn't seem in line with their interest. more practically, my bureau funds humanitarian mining programs around the world. those will be cut. in terms of u.s. industry, we rely on expertise for the department of defense when we review licenses. they attacked blacksburg who can tell us the impacts were technology and security concerns. the department of defense has to furlough civil servants. that will mean we will not get an answer as quickly. so that means processing times at a time when we try to compete for contracts overseas and preserve our own industrial base, it seems an interest for an across-the-board cut to lead

the furloughs for the licensees to be processed. while there's been a lot of attention focused on the impact of sequestration on the department of defense, it impacts more than the department of defense and will have in my an impact of national security and broad policies and sequestration kicks and fully. >> you're just about to finish her tenure as assistant secretary. is there one thing you wish you had accomplished or impress upon your successor and the sameness whose home estate in terms of a not successor is named and confirmed, what do you think you would want to impart to you been working on that she did not have the time to achieve? >> there certain things

happening that by my successor will by necessity have to focus on. syria, for example, in this issue that will demand planning in the future, working with dod. my bureau handles conventional weapons, proliferation is a serious issue. one of the things that was sent by google to get across the finish line, but i hope will happen soon after i departed that we've been reviewing our conventional policy, which we use to determine whether we're going to serve particular weapons system to a particular country. it has not been updated in over 17 years. it was after the end of the cold war and there's still a lot of reference is to cold war era terminology and so it was time, particularly given the changes that have occurred, time to take

a look. we've been reviewing permit passage of the arms trade treaty to make sure our transfer policy is consistent with the sea treaty, which we think it will be. i think that this will be some pain that will update a policy that is at the core of our political and military policy, which is what type of assistant ireland to provide to our partners and where do we draw the line in terms of the assistants were going to provide? how do you take into account non-proliferation, human rights, developing a part or? how do you balance all this? we started that process under my 10 -- tenure.

>> let's turn the audience for questions and answers. if you wait for the microphone and speak clearly into the microphone comes to your name and affiliation and finish your question with a question mark as opposed to exposition. i appear in. >> thank you very much, andrew. you'll be congratulated -- >> your affiliation? >> global insights. sorry. >> early in the administration was a great deal of talk and policies towards bringing state and dod together as a more united in terms of approaches. it was a major initiative on the

part of secretary clinton and i'm sure you were at the center of that, the quadrennial review and so on. in the last two years, let's put it that way, and it's come out that dod has been increasingly a good and foreign policy areas. in particular, special forces, which if you read the recent testimony, you really see a global approach to special forces. some of independent, let's put it that way, a very close state guidance on the special here. secondly, the cia had turned out has been very active in packet and announced where, making decisions with military components for sure, but also foreign policy components.

said that puts into question the whole emphasis of integration a state or foreign-policy expense and raises the question of where is the engine in making the foreign-policy decisions now and what is the direction compared to perhaps the direction in the beginning of the administration? >> thank you for that question. i know there's been a lot of interest in the press over what our special operation forces are doing and what their future will be. i will say one way in which we've responded to the global foot print a special up --