sense is the european public's, and there's a breach of trust there. i think there has to be a broader conversation about this balance between what we need to do to defend our people against terrorism proliferation, and how to do that in a way that safeguards civil liberties, and i don't think we really have that conversation. i think europe today does not feel under threat from terrorism. it does not feel the way we do the risk of proliferation and the risk of nuclear weapons in the hands of terrorists. so i think we need to have a more adult debate. it's a tradeoff and a balance. and i think if we can have that debate in europe, the way that we're having it in this country now, we can come up with an understanding of what governments can do and what they need to do and what are the constraints on which governments operate. the key, i think, of this will be two things. let's have the debate, and let's have that in an adult way. not in a stick figure way. secondly, in any event, there's got to be a lot more transparency, which, again,

comes to the debate. people have to understand and know what is being done and not done in their name and be comfortable with it over time. we have a lot of work to do in terms of debate and discussion with our publics here at home and with publics in europe. >> snowden revolutions have been damaging, and it's been damaging on a number of die mentions, including in terms of state to state relations. i agree with steve. i think that over time because the relationships are mutually beneficial and they are deep i think those will be repaired. there are other aspects in terms of this that are not directly relevant here, which is to the commercial that's in the trust and our companies with respect to our internet and cloud and hardware products around the world, which is something that is going to be something we're

going to have to work on very hard and is a real threat. that damage i think is real and will need to be addressed. i agree with steve. with respect to the intelligence relationships we have, they are mutually benl and we can work through in a productive way. >> steve hadley, one of the arguments for negotiating with iran that was made privately to many of us was that the sanction regime was teetering. it was very, very effective, as secretary lew was suggesting, but that europe was not going to stick with it forever, that we had to negotiate with iran. i don't know where you come down on that in terms of secret negotiation. >> i don't think -- you know, there's always a problem when you use sanctions and diplomatic pressure and other things to put pressure on a regime. it's pressure for what purpose. and the purpose in this case was to try to get the iranians to

unilaterally give up their program or come into a negotiation and negotiate constraints to ensure that it's not a route -- >> do you have any doubt. shall we stipulate that there was no way they were going to come to the table without the sanctions? that the angsanctions work to that -- >> i think the sanctions were one of a series of tools in terms of diplomatic isolation, in terms of things directed at the program, which we can't talk about. i think it's been a very successful coordinated policy of pressure. i think it did bring them to the table. i think having come to the table we have an obligation to test and see if we can get a negotiated system that gives assurance that this is not going to be a path to a nuclear weapon. the tricky part is going to be, if the sanctions succeed, the challenge will be, how do you gradually unwind them in such a way that we still have options in the event that the iranians

cheat. someone said to me, if aran does not have a covert nuclear facility going in iran in some place, it will be the first time in 20 years that it hasn't. so there is a cheating issue, and one of the challenges of the agreement support just what's the agreement, but what are the things that surround the agreement in terms of snapback sanctions and preauthorized actions that will give iran an incentive not to cheat. so i think, you know, there are issues of sanctions if the agreements -- if they succeed in reaching agreement. there are harder issues of sanctions if there isn't an agreement. and the question is how did the negotiations break down. if the iranians walk out in a huff and say, we don't trust the americans, we're going to get a nuclear weapon, then it will be pretty easy to get sanctions back on the table and maybe even

some other things, like military action. but if it is a muddier outcome and the iranians go public and say we've made a reasonable offer to the americans, the americans didn't accept it and we can't accept it because it does not meet our thresholds, that's going to be the question. can we get to world to agree that we need for sanctions to make iran -- more reasonable or do you have a vladimir putten who decides to put himself once again center stage and announce that he thinks the iranians have given up on the breakdown in talks, and at that point the international consensus that is made sanctions so effective breaks down. that's a problem. >> is there a third option also? is there a third outcome where both sides say we've made a lot of progress and there are a lot of technical challenges

remaining? we're going to extend beyond july and then you're going to now when you say this is a very dangerous window, because this is when iran might start -- >> well, the interim -- >> -- posing the -- >> the interim agreement president for that expressly. the interim agreement based on when we're negotiating provides for a six-month rollover if both the parties agree to do that by mutual consent, number one. number two, the basis on which we do these negotiations is a sound basis on which to move negotiations. essentially, you have frozen the key aspects of the program. with respect to the medium risk for the iranians, you have rolled it back, and you have -- >> are you as confident -- how would you respond to steve's suggestion that iran has never not had a covert hidden plan that we couldn't detect? >> this is part of the ultimate deal you would make with respect to the size of whatever program is there, the distance they would be from being able to

achieve a nuclear weapon if they decided to break out and quite critically, the importance of the inspections of the regime that you might have and the ability to kind of, as steve was saying, to go back to sanctions in the event you see cheating on that side. the detail will matter. i disagree with the premise of your question that somehow it was broken down and that's the reason that the united states and iran got to negotiations. i don't think that's true. i think what happened is that as steve indicated, if you do an assessment of each time that the iranian government has made a strategic reversal, a strategic decision to go in a different direction, it has only been under extreme pressure, and we can go through each of those instances since 1979. the united states determined after a bona fide effort to do outreach for the iranian government in 2009 and to offer a negotiation at the highest level of the iranian government, we got nowhere. they were unable or unwilling to respond with respect to that. our understanding with our allies and friends and partners around the world, including the

russians and the chinese was that in fact after this bona fide offer of negotiations, the iranians were unable to do this or unwilling to do this, and that's what happened, that we would join in a pressure campaign. and as steve indicated, it was a multi-dimensional simultaneous, multi-element pressure campaign that was put on the iranians. ultimately that resulted in the election of rohani who then came to the table. essentially he ran on the prospect or the proposition that he would undertake to relieve the economic pressure on iranian society. the only way to do that was to engage in negotiation on the nuclear file with the west. i didn't see really any breakdown in sanctions regime. i saw, on the other hand, on the other hand here, rohani being elected on the promise of getting economic relief for iran and knowing the only way to do that was to come to the table with the united states and the rest of the international

community. that, by the way, leads me to another point here, which is that i think all the leverage is with the west right here right now. because the sanctions, the bulk of the sanctions remain in place. i don't think the iranians have gotten any sort of real kind of maximus boost here agreement, and the united states and the west should come to the table with that attitude that, in fact, sanctions remain, that rohani will not be able to make good on his promise to the iranian people, and that we have quite a bit of leverage here in these negotiations. >> will that leverage persist, steve? we saw the french and the germans and the other lined up in davos, and sending delegations to tehran. how long can we maintain the coalition? >> it's a problem. you know, we have seen this movie before, and there are differences, and we can talk about those. but, you know, we have been to the table with the iranians before, and we've had a nuclear agreement with them before. this was in the 2003-2004 time frame where it was pretty clear that the iranians thought, as

muammar gadhafi thought, that after afghanistan and iraq the united states was willing to use military force against iran over its nuclear program. and they suspended the program, the covert aspects of the program. they engaged in negotiations with eu-3, and we reached the paris agreement, which suspended enrichment pending a negotiation of the ultimate resolution of the issue. and then quite frankly they got bogged down in iraq. they had an election and he campaigns on the platform that the people entered into the eu 3 were traitors and ought to go to prison and he rolls the whole thing back. there's getting the deal and keeping a deal. and i think the administration has i hope in some sense has three task forces going, one is the task force trying to get the deal with iran, one is thinking

about what are the things outside of the agreement that will keep the iranians complying with it and then third is how to ensure that the rest of the country in the region that are friends and allies, that if there is an agreement with iran, we are not packing or trunk thinking our job is down and leaving our region free to iran who will have more money to back the things they're going to support terror, to disrupt iraq and afghanistan. this is a real challenge. and you know, getting the agreement is only the first step of a very challenging road. >> i agree with that. but with respect to companies and others being angst to do business with iran, the details matter here. and the nature of the sanctions that are in place right now will continue to force companies to choose between doing business in iran and doing business in the united states. and we've seen the -- one of the really i think important aspects of the sanctions approach is to put together by the u.s.

treasury department has been to take advantage of the centrality of the united states financial system. and to work with governments obviously but also with private entities who have to make these kinds of choices. that's what the sanctions do, the sanctions put together by the administration and implements congressional legislation really do force a company to decide, a bank to decide between doing business with iran and doing business with the united states. it's exceedingly powerful and i'm not in the government today but i think vi a pretty good guess that the treasury department will tell you while these are in place, they intend to enforce them. >> as we look at the arc of the treasury, taking the 30,000-foot view, steve when you first became first deputy national securitied a vier and then national security adviser, was

trushry always on the table? how did it evolve into becoming -- what is it now in terms of the relative position? >> my view was that treasury should be at the table because what we did in foreign policy had implications of things treasury did and because it was a clear head of someone who was actually not engaged in the day to day. it was not the treasury was there because they had an arsenal to contribute to solving the problem. and that's really the terrific story that they have told. that it was a real case of people in the government being free to innovate. and it starts 11 days after 9/11 with executive order 13224 which is an effort to target terrorist financing and those companies and banks that were laundering terrorists funds.

it's expanded and ben fairly successful and using in as a tool on the war of terror. someone comes in and says why don't we use it on proliferation. the first test is north korea where we got some hands around kim jong-un's personal funds. >> i was in pyongyang in 2006 and when they told me that i had to pay something like $75,000 in cash for the satellite tyke we had used or they wouldn't let me leave the country. i discovered that there was no way to make a transaction because of exactly what you had done. we had go to another diplomatic resource. >> we cut north korea out of the financial -- >> whatever you call it. >> and ultimately led them to come in 2007 to negotiate a following agreement which in the end of the day was never implemented. so the question was, it works in north korea, let's try it in

iran. one thing that needs to be said is there are several arrows in this financial sanctions givqui. one is the direct one, freezing people's assets and listing institutions that are laundering funds. the other one that stewart levy and hank polson used so effectively is when they went around to three, four dozen banks and financial institutions in europe and said, you know, you don't really want to be dealing with these iranian bankance dealing with the irjc because they're funding terrorists activity and proliferation activity, it's going to become public and your people and depositors aren't going to like it. they both have direct, indirect and representational effects. this was a whole -- this was a new frontier and it made

treasury a real player. as i said earlier, my concern now is it's become so good and they've become so effective people think it's a silver bullet rather than just one element of a comprehensive strategy. >> i agree with that. a couple things on the office. first of all, it really is a truly nonpartisan set of tools that have been used, bipartisan set of tools. one of the first personnel calls thatty made during the transition in 2008 was to track down stewart levy at an event with his kids and to beg him to stay into the obama administration and luckily he did. to steve's point, it resulted in continuity and building on the tools and the insights that had been developed in the bush administration that we built i think going forth. so it really is a bipartisan -- treasury is at the table and has

been at the table addressing some of our most important national security issues, whether it be the terrorists threat or the north korea challenge or the challenge in iran. i think the point that steve pointed to goes to the point of the strength of being at the center of the world financial system here in terms of our ability to do these things. in many ways, even our unilateral steps become multilateral steps. if you sit down with a bank ape say, all right, you have assets and transactions in the united states, they're subject to the treasury designations. but you also have to think -- and we're designating this bank in iran, for example, because of bad conduct and we can underscore you and show you to bad conduct. banks around the world are not going to take that risk of dealing with those entities after they've been designated with cause. and you will have this ripple

effect. it really has been -- this has been one of the great insights i think through the two administrations we've had with respect to the effective sanctions. it is way beyond, as the secretary of treasury said, way beyond trade 'em embargoes. >> had he lost any leverage post-2008 as many in europe andless where blamed us and our banking system being undercapitalized and our mortgage, the spreading of the mortgage crisis to europe? did we lose any leverage as china has risen relative to our strength? >> i'm not a financial type. there are other people here you can ask for that. my sense is, look, we took a hit, but we have recovered. it is true that i think one of the things that is the consequence of the financial and

economic challenge of 2008 is that almost for the first time it was developing nations rather than developed nations that actually led us in some sense out of that financial and economic struggle. but a lot of reforms have been put in place in the financial system in the united states and globally. and i don't think anybody thinks that there is any substitute in the short run for the dollar as the reserve currency. china has a lot of things it needs to do to make its currency truly convertible. and you know, europe has its own challenges and questions, you know, not two years ago we were thinking about whether there was a crisis of the euro and whether it was going to survive. at this state the united states system is still the beacon of stability in the international community and my sense is it's

going to be that way for a good while. >> i agree with that. number one, we obviously took a hit after the financial crisis. number one. number two, though, the policy response in the united states, both at the end of the bush administration and into the obama administration i think actually has been quite a success. indeed, if you look at our banking systems compared to banks systems in europe andless where in the world, you see a much stronger system here. and that's reflective in the fact with respect to capital flows and where money goes in the world, coming to the united states respectfully, with respect to the things we're talking about here. i haven't seen any demunition at all. since the financial crisis, most of our success with respect to work in the financial system. but a point steve made i want to get back to.

it's very important. because treasury can do things and they can do things quickly and they're identifiable and they're concrete, it's very important that they be part of overall strategies and that we remember that not every case is iran, for example. the iranian case where we've been effective with respect to bringing the iranian to the table is the unique set of circumstances. it is horrible conduct, it is clear violations of international law. it's a policy goal in terms of preventing iran from incurring nuclear weapon, including by the russians and the chinese. they were particularly v vulnerable with respect to oil and the banking sector. so it was a unique -- but even with all of that, it also took tremendous resources, tremendous resources both to work the governments mult laterally and work as we're referring to here, work with private entities around the world. so it's important that each of

these challenges be taken in their own context and not assume that can we can do an iran campaign in every case, because that's not going to be the case. additionally in the iranian case, we had the important collateral circumstance that we were able to do this at a time when the saudis were willing to increase their oil production and where the united states had had its energy future go in a completely different direction with us being on track to become the largest producer of oil in the world. and indeed the increased oil production by the united states during this period is one of the reasons that the costs were bearable here in terms of our cutting off and reducing by more than half the export of crude oil from iran. abtent that we would have had real cost issues, a negative impact on americans and the west from our sanctions. we were able to manage that because of our energy, changing

our energy futures and saudi actions. >> let me go down on china for a moment in terms of their increasing leverage and the cyber war and their -- they have no reluctance to use these tools and we were, i would argue, more vulnerable in this snowden leaks occurs only days before the summit in sunny lands where we're told the president was planning to make that a big part of his first meeting with the president. how has china evolved in terms of its economic and cyber tools against what we can leverage? >> well, drk and again i'm dealing with what's in the newspapers. but we have to -- you know, this is a case where we have to make some distinctions here and we have to have a conversation.

it is one thing to use cyber tools to get information to counterterrorism, to counter proliferation, to deal with threats against the country. it is another thing to use cyber tools to steal private corporate information for competitive economic advantage. we clearly do the first, we are not alone. there are a lot of other countries that are doing the same, some of whom are very outed by the disclosures of snowden and probably know more about what we do than what their own home countries are doing. but that is something countries do. what china is doing in this -- what some people call the greatest theft of intellectual property in history is really something we don't do and most other countries, not all other countries do not do. but china is doing in spades. and one of this things we have to do is get the chinese to

understand in their hard of hearts that they will not admit it publicly that there is a difference. but secondly, the chinese will not stop this activity in my view unless there is a penalty. now, this effort of indicting, you know, five pla people is an effort to try to impose a penalty. it has a lot of problems because one of the problems is it -- one of the unfortunate things about u.s. china relations is when we hit a political hiccup within one of the first thing the country does is cut off military to military ties. having military interaction is an important thing. and unfortunate that threatens that. i think we need -- keith alexander is here and you can ask him about this. i think we need to impose a penalty for cyber crime in

cyberspace. and there are legal policies and issues here. to take away the capacity of cyber criminals to conduct cyber threats. until the day they with can pose in some sense asymmetric penalties for this kind of thing, i think it's not going to stop. i think diplomatic interactions are not going to get us there. there has to be some real cost. and i would hope that there's a task force looking at what those costs could be because i think, you know -- i understand why they arrested the pla folks. i don't think that's going to be the best or the most useful tool. >> or charge them, not arrested because we can't get to them. >> sorry. di indicted them. my apologies. >> i gave the first public speech with regard to this in the spring of 2013 with respect to calling out china directly. and i had spent a lot of time with the chinese leadership and

they were surprised this came from me. but as steve said, we had massive and have massive state enabled cyber theft from the united states. and indeed we have on the engaged with the chinese on this and i think -- i talk a little more broadly about it. i do think there has to be a cost. the chinese didn't perceive any cost to this until the point it was raise. they used the snowden revelation as you pointed as a push back with respect to the dialogue that we've had with them. very important to get back to the dialogue and it's very important to reject the equivalence argument that the chinese might make between espionage and a criminal cyber activity and cyber enabled economic theft. they are very different things. and the conversation that takes place with the chinese has to go broadly bond cyber thief that says this is going to effect the overall quality, the relationship between the united

states and china. this is going to be raised repeatedly and directly with the administration of china with the most highest levels in the united states and it's going to affect the overall quality of their relationship. it's a conversation we have to have with the chinese directly. you didn't have a circumstance where you a $500 billion a year relationship between the united states and china and you have this scale of outright theft. this dialogue needs to take place. there needs to be a cost associated with it. it needs to affect the overall quality of the relationship and needs to be a direct set of conversations about what is allowable, what's on and what's off in terms of cyber activities. but rejecting this equivalence argument is a very, very important substantive point. >> what leverage do we have? >> we have a $500 billion relationship with the chinese, an economic relationship and there are a lot of element to the relationship that we have with the chinese. i wish there could be a cost. >> what i would be looking for

and what tom would be looking for is, you know, is smart sanctions too or financial sanctions. what is something that will happen to the chinese system. we don't have to talk about it. it will just happen. they will any it, we will know it and the argument quietly is if this continues, more of this stuff is going to happen. we can get at you. the question is what is that? i would rather have it -- i'd rather not have to put anytime the standpoint of the overall public trade relations. i think just raising at high level meetings is fine but i think we've got to look for some new tools that they will see that will hurt them in this cyber realm and that they will know that if they don't change their ways, more of that will happen. i don't know what it is. i'm not in that world anymore. but that's what i hope we're looking for. >> i have to ask you because jack lew started this off by

talking about 9/11 and the evolution of the treasury tools in response. there is a big debate today about whether releasing five very high level taliban prisoners is the right response to get back a prisoner of war. steve? >> i don't do this stuff anymore. look, it's very hard an the right questions are being raised. did we negotiate with terrorists? we don't. and for good reason. the problem is if you swap or pay to get your hostages back, you incentivize hostage taking. that's a problem. there were congressional statutes requiring consultation with congress. if we could consult on the operation against osama bin

laden why couldn't we consult on this. there are a whole series of questions that need to be raised. you know, again, my guess is that the dilemma the administration had was the following. we've turned over a lot of prisoners in afghanistan to afghan authorities and regrettably they have released a lot of them over the objection of our military people who are now released in afghanistan who killed americans. and that's a very troubling thing to happen. but that is what happened in afghanistan in dispose of those prisoners. our troop levels are coming down. and i think the administration probably was in a very difficult choice of look, we have an opportunity to get this guy back, the president has said i think regrettably that all of our dock bat troops will basically be out by the end of 2016. i think that's unfortunate to

have had this kind of arbitrary cutoff. i would much rather have condition space. if we're not going to get this guy back, when? and i think that was the dilemma. they basically said look, we lost control of all of these prisoners in afghanistan. these are five bad guys but at least we have a chance by giving them to them that we can keep them off of the battlefield for a period of time and that may be the only way we can get our guy back. that's probably the decision that came before the administration. you can have arguments object how it was handled. but my guess is that's the dilemma they faced. it's a hard one. >> we didn't do a preconsultation with the congress on the osama bin laden raid. but with respect to this, one there's a big difference between getting a p.o.w. back in a war zone and negotiating with

terrorists. it's entirely different context here. and that's what this is. this is essentially getting a prisoner of war back through a swap. it's a unique undertaking because, you know, the gutterries were mediating this and will take some steps to restrict the activities of these guys. they are difficult decisions though. with respect to incentivizing the taliban and others who we are at war with in afghanistan from taking prisoners, they don't need a lot of incentive. we've been there for over a decade and they know the value, frankly, of being able to, or of being able to take an american soldier captive. and i don't think that we they need any incentive the to odo that. we have that risk every single day in afghanistan and we deal with that risk.

you'll have others on the panel who can talk about this. so i don't know if it's an incentive problem. it was an opportunity, as steve said, to get back home the only prisoner of war in the conflict and there were constraints put on the activities of the guys who were going there and it's a different context. it's essentially getting back a p.o. wmt in a war zone context. >> and i take tom's correction. it's interesting because i read the press coming out of the sunday shows which said that we had consulted on the osama bin laden raid which was not my understanding. i thought that's interest pg. it is a point that if we did consult on that, why not here. it's important that that record be corrected publicly. >> i suspect -- >> i'm willing to make that correction. i know something about this. >> yes, indeed. >> i'm willing to make that -- i'm willing to take the opportunity to make that

correction public. there was a consultation. >> are you making a distinction on consultation on the months leading up to and no consultation during the week or days leading up to the actual raid? >> there was not a consultation with the congress with respect to any of the specifics around the raid. we had tremendous operational security concerns. and if in fact there had been a leak with respect to anything with respect to the osama bin laden raid, we would have, number one, probably not have had another shot for ten years and we would have put our troops in extreme risk. >> in the few minutes left i want to talk about places where you don't think sanctions work. we've talked about iran and the unique set of circumstances with

iran and to a certain extent with russia and ukraine, that you think targeted sanctions you think have already affected russia's economy and potentially putin's behavior. where doesn't it work, steve? syria? >> couple things. and i'm -- others can correct me on the numbers. but one of the issues that came, surfaced in connections with sanctions against russia on ukraine is people, you know, the united states generally has to lead on these things and encourage the europeans to come around. but i think germany is, i think, russia's number two trading partner. if you take the eu together, it's far and away the number one trading partner with russia. we're way down that list. one of the problems in sanctions is, you know, they need to be multilateral many times because the folks with the money, the

economic and financial relations may not be the united states of america. this is why it was so important to bring the europeans along which started in the clinton administration, to bring them along to see iran the way we did. we were sanctioned out in many represents initially on iran. now the two administrations have moved that goal post further. one is the question, you got to look at wh who's got the leverage. if you're really going to make these things work, then the folks with the leverage have to be at the table and have to be willing to sanction. because otherwise they're not going to be effective. secondly, you know, it is -- tools are cumulative in their effect. and if you can have a military element in addition to your diplomatic and all the rest, if you can have the threat of a military element, it is going to make sanctions for effective. this is the argument that we

made on iran. we cannot bring them stable with sanctions. we'll have to contemplate military force and nobody really likes that. it is true, nobody -- when russia went into georgia, when russia went into ukraine, no one suggested that the u.s. would engage russia militarily. but the fact that we have reinforced our presence in nato countries, the fact that hopefully the nato countries will begin to pay more attention to defense and to increase their own defense spending, this again is something that i think gives added leverage to sanctions context. finally, there's a question of for how many things are you willing to threaten sanctions? we've now been on terrorism, we've been on organized crime and drug trafficking. we've been on proliferation. there's now discussions sort of using it as a tool for human

rights. you know, one of the things you have to really decide -- because you can overuse these things -- what are the national interests and national values which are so important to us as a country that we're willing to use this tool and what are issues on which, you know, the advocates for this particular perspective wants you to use the tool but in some sense you've got to say, we've got to save this for the things that matter most to us and where they can be most effective. i think it's got to be an issue of priority in terms of values and interest and a considerations of effectiveness. because, you know, these things will become a wasting asset at some point. >> i think that's all correct. one is, with respect to where it hasn't worked, i think overuse is an important -- is very important concept to think hard about. not every case is going to be an iran case and you have to think about what your objectives are.

and it can't just be a reflex to go to this because again it's something that the treasury can do in a week and it's short obviously of military action. it seems to me that two or three contexts where it's difficult is where a country is unplugged from the world economy, you know, like north korea. the bush administration successfully was able to find a steam there, right, and a connection that was effective. but that's one of a few. so if a country is willing to live like north korea in tragedy and where their citizens are completely unplugged from the world and suffer, you know, that's a more difficult circumstance in terms of making -- you can make it more difficult for north korea and we have, frankly, to engage in proliferation efforts and we can make it more difficult for them to get the kinds of things that can advance their program. but you have some sort of limit.

if you have a limited effect when they're unplugged from the world economy. and the second thing is where you don't have multilateral support. for example, not an economic relationship between the united states and i ran and hasn't been since -- i don't know -- basically since 1979 or the early '80s. it was essential that we have a mul multilateral setting there. if you don't have multilateral support, you're not going to have an effective sanctions regime. >> i think our time with you has expired. but i want to just thank both of you for your collective wisdom and judgment and experience and for sharing with us today. it's been a great privilege for me. >> thank you for will being here. >> thank you so much. [ applause ] house republican leaders

today sent president obama a letter about delays in the veteran's health care system. the letter says, in part, quote, it is imperative that you lay out for the american people your vision for reforming what is clearly a broken system. are you willing to do whatever it takes pending the results of the investigations under way to ensure that our veterans get the care we owe them, even if it means shaking up the current bureaucracy and rethinking the entire system? that's part of a letter house republicans sent to the president today. officials with the veterans affairs department recently testified before a house subcommittee about efforts to reduce the backlog of benefits claims by veterans. new jersey congressman john ruin onchairs the veteran's subcommittee on disability assistanc assistance. good afternoon and welcome

everyone. the oversight hearing on will now come to order. today's hearing will focus on va's roll on the transition from service member to veteran with a particular focus on the integrated disability evaluation system commonly known as idez. as well as the benefits delivery at discharge and quick start programs. we'll seek information on va resources and production as well as timeless and quality of va's components in the process. further, i would like to hear today about the quality of communication both within transitioning service members as well as between the department of defense and the department of veterans affairs. first to address idez, time lines are improving but we want to start off that by making it clear why the continuing improvements matters.

i'm frequently contacted by service members who are frustrated with the process. they do not know how long it's going to take, when they will get answers and they don't know when they can make plans for their future. i understand that dod reports quite high satisfaction from service members undergoing idez but it does not reflect the stories that have recently been shared with me. i've also gotten the sense that the idez may not be a top priority for va because va has chosen to place what it seems to be exclusive focus on eliminating the backlog of claims to the debt meant of these transitioning service members. let's begin with the understanding that if this belief exists at va, it is not okay. these transitioning service members have served in recent years during a decade plus of wars in iraq and afghanistan

with multiple deployments and many with service connected injuries that prevent their continued military service. here i have correspondence from the past couple of months received from soldiers who are waiting the start of their post military lives. one soldier frustrated with his inability to pay for the future -- the plan for the future wrote, and i quote, it has been four years since i have shared a christmas with my family. it would mean the world if i could finally spend christmas with this year. i've gone through the board processes and am currently awaiting ratings. end quote. another reads, quote, i have been awaiting my rating for a long time now. i also been trying to contact my va reps. and the only way i can talk to them is if i go down to their office. i call and call and leave messages and e-mails but never get anything back unless i'm in

their office. this entire waiting game has been putting a very big strain on my family and i've been trying to convince my family that is going to come any day now. well it hasn't and now my life -- now my wife wants to get a divorce. i don't know what i would do without my two daughters and my wife. if there is anything you can do to help me out or get me some information, that would be great. end quote. and another infantryman wrote, i'm losing my mind trying to find out why it is taking my ratings to slong to come back from the va. i honestly wouldn't reach out if it weren't very important. but i've, under so much stress lately a that my blood pressure has shot through the roof, my process has been pruth putting me through hell more so than they trip to afghanistan in 2009. if there is anything you could do to assist me in figuring out

what is taking the va so long to rate me and possibly expedite the process, i would forever be grateful, end quote. these pleas are fdisgusting. we must do better. today's hearing is deevaluating the va's per force mance. and if nothing else, i want that to be the take away. defined expectations. these men and women have served honorably during a difficult time in the military. at the very least they deserve an open line of communication and deserve reasonable defined expectations as their timelines, their futures, their transition to the civilian world. more needs to be done to define expectations. in addition to the idez updates at the forefront of today's hearing, we also seek

information on the process including the uses of brokering as well as timelines and accuracy that benefits delivery at discharge and quick start programs. we'll hear about the va's anticipated new predischarge program which may consolidate the existing ddd and quick start programs. i look forward to hearing from today's witnesses and with that i will begin introductions. seated at the witness table we have all members from the first panel from the department of defense we have ms. nancy weaver, deputicy sis tant secretary of defense who is accompanied by mr. dave bowe next, director of health information technology. and from the department of veteran's affairs we have ms. diana rubins with the veterans benefits administration who is accompanied by mr. thomas murphy, director of compensation

services. upon conclusion of the first panel we'll seat two subsequent panels which include for panel two, ms. linda holiday, the assistant inspector general for audits u. suchlt department of veteran's affairs accompanied by ms. nor ma stokes, director of the inspections division and mr. roman figuero with the inspection division. panel three with consist of mr. eric jenkins who is here with the national va council, ms. debra gibson is here and is an individual service and she'll be introduced shortly. mr. geraldo avela, with the

american legion and mr. paul valero, and mr. one final point, all of the witnesses are present. i must advise pursuant to title 18 of the united states code section 1001, known as the false statement act, this is a crime to knowingly give false statements in federal jurisdiction including a congressional hearing. with that acknowledge, thank you all for being with us today. i yield to the ranking member ms. titus for her opening statement. >> thank you, mr. chairman. thank you for holding this hearing today. thank you for coming to provide us with needed information. today we are looking at the performance of programs that v.a. and d.o.d. utilized for determining fit for duty the

status for ill or injured service members as well as programs designed to expedite the adjudication of claims. particularly we are going to focus on integrated disability evaluation system, ides that benefits delivery at discharge program, b.d.d. and the quick start program. all of the programs have been up and running for a number of years. ides is a follow up to poor conditions and fragmented care exposed at walter reed army hospital. bdd was launched back in 1995 as a pilot program and became operational in 1998. bdd was to assist disabled service members in making a seamless and successful transition to civilian life by allowing them to get the claim completed as early as possible while they have all medical information readily available.

quick start was launched in 2008. it's similar in nature to bdd and was to provide an expedited disabilities process to those who would be discharged within 59 days. despite having long been established and having enough time to get over growing pain and problems in the early stages, all of the programs continue to face challenges and are performing far below expectations. the one similarity they have is they suffer from a continued poor performance in the adjudication of the claims in each of the three programs. of particular interest to see is a number of oh claims under the bdd and quick start that's dropped off. there are fewer claims than there used to be i'm concerned

that the reason for that is that service members are choosing to bypass the programs designed to provide an expedited system over concerns that participation actually delays the process of receiving benefits. in fact, quick start has been known to be called quick start and slow finish as a result of that. we have had highlighted for us by the oig about eliminating benefits backlog has shifted priorities and come at the expense of other benefits and claims such as ides and quick start which have been moved to the back burner. that's unfortunate. you have heard the chairman read some of the e-mails that they have the same ask, i'm in the army, waiting for a decision. my family and i need to get on with our lives. our staff witnessed first hand the poor culture often present

at the ides stations and wounded warrior battalions. i want to thank ms. gibson who is an army veteran, who recently went through the process and came to be with us to talk about the negative cure turin the programs and how we might address them. it's just a concern that the programs that are supposed to be so helpful really end up being harmful because they hold our service members' lives in bureaucratic limbo. an army reservist who enters today won't complete the program until august of 2015. 181 days will be spent waiting for a v.a. rater to pick up the claim, provide him or her with a rating. just to get a rating it takes that long. as our service members wait for a rating decision they are forced to delay critical aspects of their transition. they and their spouses hesitate

to relocate, to buy a home, enter a school program, find a new job because they don't know what's going to happen to them. we know service members face obstacles when transitioning out of the armed services. that's already difficult enough. the v.a. should be an asset, not a hindrance to that process. i think we need to take a hard look at the resources that we are dedicating to those programs and figure out how we can meet their goals today and not tomorrow. we need to take a fresh look at these programs. we recently with the staff recently looked at this and found 95% of service members who entered the ides program are found not to be fit to serve because of an illness or injury. so they know they're going to be discharged. 95%. if we know that many are not going back into the service,

shouldn't we take a different approach offering them some flexibility? some options while they are making that transition? i hope that those are the kind of things that we'll look at today in this hearing and see if we can't reprioritize and shift some of our emphasis on being flexible and making this work as opposed to just having families sit around waiting for the rating. thank you. i yield back. >> thank you. with that i will recognize the chairman of the full committee, mr. miller, for a statement. >> thank you very much, mr. chairman. i appreciate the indulgence. i want to make a few remarks on the service member transition process particularly in regards to ides. currently the timeline of ides induction to receipt of benefits is targeted not to exceed 295 days, but recent d.o.d. and v.a. reports place the average timeline at over 350 days. that's an average.

that means many service members take longer to complete. in an effort to address ides inefficiencies, i introduced an amendment to the authorization act that would do the following. first it would require the use of a standardized form set which would be approved by both the secretary of dod and va, as was envisioned by the commissioners recommendations. second it would co-locate certain dod and va personnel to allow for greater interdepartment collaboration and reduce delays and transfers of information. third, it would compel the usage of a bridging software solution between d.o.d.'s my ides and va's e benefits dash boards to allow service members greater

transparency as to where they are in the process at the current time. finally, the amendment would establish a working group comprised of various personnel of dod and va as well as private industry leaders to re-evaluate the program itself. the working group would then make recommendations on how to better serve those going through this process as well as how to better utilize the sources that are allocated. i do want to take a moment to emphasize the goals of my amendment are two followed. first, increased transparency to the service member and accountability to the respected departments. the issues of transparency and accountability are of utmost importance as we continue to investigate the ongoing delays and access in care at va health care facilities across this great nation. since the transition process whether through ides or quick start or traditional claims process is a service members first exposure to the va system.

we want to ensure that it is a positive experience for all who use it and those that it was designed to serve. those very people that have served our country. mr. chairman and members of the committee, thank you and i yield back my time. >> thank the gentleman and now we want to recognize mr. o'rourke for an opening statement. >> i wanted to actually introduce someone who is going to be on one of the later panels, debra gibson. i'm sad to say, mr. chairman, a former constituent of mine, she just moved out of el paso in march of this year. we're going to miss her. prior to that she was a former captain in the u.s. army stationed at ft. bliss and during her time as a commissioned officer, she served as executive officer for the transition unit, bravo company at fort bliss texas. medically separated from service

through the disability system or ides and here today to deliver a statement with her experience with ides and offer recommendations to improve the system and i want to be here to welcome her and introduce her to the rest of this committee. with that, i yield back. >> thank you. i don't believe any other members have statements. at this time i welcome our first panel. your complete and written statements will be entered into the record. miss weaver, you're now recognized for five minutes. >> thank you, distinguished members of the subcommittee, thank you for the opportunity to appear before you today to discuss the integrated disability evaluation system also known as ides. since 2007 the departments of defense and veterans affairs have collaborated to create an integrated and transparent disability evaluation system for

service members who have illnesses or injuries that may impede their ability to perform their military duties. today ides accounts for about 97% of all d.o.d. disability evaluation cases. in ides, service members receive a set of disability examinations conducted according to va protocols and disability ratings prepared by va. the departments of military departments determine fitness for duty and only compensate service members for conditions that compromise their ability to perform their military duties. va compensates for all conditions incurred or aggravated during military service. the advantages of ides compared to legacy systems include the

elimination of duplicate medical exams, consistency between d.o.d. and disability ratings and reduced wait times for va disability benefits since rating determinations are completed prior to service members separation. these advantages have contributed to improved service member satisfaction within the ides process. we're continuing to implement process enhancements such as improved policy and increased staffing levels and new training requirements for caseworkers. these and other improvements have enabled us to achieve and remain below our ides core processing goal of 105 days for the past several months. information technology can also help us gain more efficiency within the ides process. that's why we're working to develop a system that will support end to end case

management tracking, reporting and abide directional electronic case file transfer will continue to work with va to ensure system interface requirements are identified early. the department of defense is working diligently to support an integrated disability system that ensures service members receive timely and transparent compensation for injuries or illnesses incurred by the line of duty, today, tomorrow and in the future. thank you and we look forward to your questions. now next we'll hear from mrs. rubens, you're now recognized for five minutes. >> good afternoon, my testimony will focus on the status of the integrated ides and the quick start programs.

with respect to ides, va and dod's joint efforts over the past six years in the disability system, together the departments created the service members being medically retired or separated, this joint process was designed to eliminate the time consuming elements of the separating disability determination process within va and dod. the goals of our integration are to provide health care for separating service members through ides. we have worked to achieve these goals and currently there are approximately 29,000 service members for the four combined core steps va average processing time in april 2014 was 183 days. the lowest core time since april of 2014. our target is 100 days of that 2995 day combined va/dod target.

we created a plan to improve ides time limits that include the phased approach. the first was to meet timeliness standards by march of 2014 and this portion is focused on ensuring service members who are transitioning into the civilian world as veterans receive timely benefits to which they are entitled. the second phase of the plan is to meet the timeliness standards for the proposed ratings by october of 2014. we're on track to meet that goal and will do so. our continued partnership with dod is critical. we're committed to supporting the ill and injured service members through the ides process. the quick start programs are important elements, to provide traditional assistance for retiring service members and engage the service members prior to discharge. the goal is to ensure each service member separating from

active duty who wishes to file a claim with va for service connected disability benefits will receive assistance to do so. participation in the bdd program is available to service members who are within 60 to 180 days being released from active duty and able to report for exam prior to discharge. quick start made predischarge claim processing available to 100% of transitioning service members including those within 59 days of separation. like many of our regular nonpredischarge claims work, vba has made tremendous progress in the last 12 to 15 months but recognize we have work left to do. as of april of 2014, the average day spending for the quick start claims is 98.3 days, improvement of 137 days since may of 2012. as of april of 2014, the average days pending for bbd claims is 136 days and improvement of 55 days since april of 2013. claims accuracy is a key element of the transformation plan overall and we continue to improve in that arena as well. it is not measured specifically

for our bdd or quick start claims process that the free rating activity sites. the accuracy is measured for each regional office as a whole. as of april of 2014, our three regional offices processing bbd and quick start claims and their rating activities have three-month issue based quality between 96 and 98%. vba is working to redesign the predischarge claim process by building on lessons through the execution of our bbd and quick start programs. the new predischarge program will consolidate and replace the existing bdd and quick start programs. we'll be leveraging functionality now available in our veterans benefits management system to add convenience to both the application process and efficiency throughout the claims process. vba is committed to supporting our nation service members through improvements in our predischarge programs. we believe the continued enhancements are critical to

program success, nothing less than the service members and future veterans deserve. that concludes my statement. i'm happy to answer any questions you may have. >> thank you, i'll begin a round of questioning alternating between members as their arrival times. my first question is both for va and dod, miss weaver, you indicated that case workers keep service members informed of progress in their cases. this streamlined communication may exist in isolated cases, we know from speaking to large groups and several examples in my opening statement that service members at numerous installations, this communication is not occurring as a matter of routine. how is this communication going to improve and i would like both perspectives from both the d.o.d. and miss rubens at the va.

>> thank you, sir. we've recently increased our manpower and find that we've also improved the training. we have minimum training standards and we have required training for each of them providing them more information. as far as keeping the individual aware at the beginning of the process, each member who is enrolled or referred to ides is given a caseworker or a peblo. that individual interacts with the service member throughout all phases. at the beginning of the process the member is told approximately how long the process would take and is updated as they move

from phase to phase and keeps them aware of what they need to do and they are encouraged to keep family members updated or bring them in so that they are aware of what's going on through the process also. >> miss rubens. >> our military services coordinators are located at the intake sites along with the d.o.d. peblos in an effort to ensure not only referred conditions d.o.d. is referring to the process but any claimed conditions that that veteran wants to claim. our military services coordinators are there to help walk them through that application process and understand the process. they are also there frankly to serve if you will as a touch point or reach back to our rating activity sites so that if that veteran has questions, we're capable of also getting back to that rating activity site to share information that service member and or their family. >> i want to go back to miss weaver.

you said the interactions happen typically as they move phase to phase. are there huge gaps in timing of different phases or are they pretty standard as they would fall on a time line? say there's three phases in the process, does one take 3/4 of the year and next one take a month? typically? >> each phase that they go through has a goal in the process. >> are the service members made aware of the timeline in the phase or just the overall process? >> they are told of the overall as well as each phase. as they go through each phase, they can tell them where the next phase should be, however we don't have a case tracking system that will tell them where in the phase they are, if their

claim is being adjudicated and how long it's going to take before that's done. or when the informal is going to be completed and moved to the next one, next phase. >> i have one last question and then i'm going to go over a little bit. this is actually for mr. murphy. as accuracy is an overarching matter of importance, i would like to ask you a question about the quality component star. vba star program has several classifications such as benefit and entitlement decision, documentation/notification and administrative. however, vba's national rating agency is based solely on benefit and entitlement error. my understanding that star does

not count errors for instance with potential to affect veterans benefits, such as when a claims folder lacked required evidence, including a medical examination or opinion needed to make an accurate decision. can you comment on any of that? >> i would say that that is not an accurate statement. that the absence of an examination when one was needed would be called as a benefit entitlement error for us. we do have the classifications of errors you just described, but part of that is if there is something that should have been gained, evidence that should have been included in the final or reviewed that would have affected the outcome that would require a benefit entitlement error to be called. >> okay. i would like to recognize miss titus. >> miss rubens do you have an explanation for why the number of people going into the program

has dropped off? it's only a third of the transitioning members to use the programs and also if you think that if the va made the same kind of investment that the department of defense made in personnel, in some of the changes described by miss weaver, if that would help with the backlog. >> certainly i would tell you that i've heard particularly some of the concerns about the quick start not getting as many referrals as we anticipated. i would tell you that we know we had some challenges with timeliness. we made some dramatic changes to the resources that we provided to both the bdd and quick start processing in july of 2012. and in an effort to ensure that we closed on those performance, particularly around timeliness, numbers that we were seeing then. i reflected in my statement the improvements we've made and we continue to look for those to be

not only sustained but grown upon as we work to merge bdd and quick start from the standpoint of the expectation that that service member transitioning, whether they have 1 to 59 days and perhaps not able to get to a va exam prior to discharge or whether the 60 to 180 day mark can in fact complete the exam process to ensure timely processing of those claims as they transition to civilian life. >> the deadlines that you have for meeting the goals keep getting pushed back, don't they? one now been pushed back to october for meeting some of those time lines were supposed to be met in august? >> ma'am, the time lines that you're referring to i believe are for the ides program versus the bdd and quick start. we do look at those differently because of the nature of that service member and the ides program being boarded out for disease or injury. from that standpoint, in august

for the proposed ratings, we will close the inventory capacity that we need to. by october we will hit our deadline for providing that proposed ratings. and we're already for the final notification to that service member, we are now meeting the 30 days for that time period. >> okay. >> okay. with the average of 48 days, i think. all right. i would like to ask you about the fact that 95% of the people are going to be discharged to go into this program. is there not some way to address that? we've heard about segmented lanes and express lanes for other kinds of benefits. is there not some way to look at flexibility, if we will know 95% are not going to go back into active duty?

can't we find a way to prioritize those cases and move them out faster? >> i think that particularly around the ides program it has been a joint process with dod. we want to ensure that we're meeting the spirit and the intent which is to move that along as quickly as possible and i will turn to miss weaver to correct me to 100%, but i also think that there's the obligation of ensuring we've gotten them to the point where they are ready to be discharged and want to ensure that we work with dod and the requirements that they've established for ensuring that service member is ready for transition. miss weaver, i don't know if you would add to that. >> we are working with va to look at other opportunities and concepts to expedite the process. we do have an expedited process

for issing okay as catastrophically injured ill personnel. to date after briefing each member who was qualified, we have had no one who has opted to take that process. but we're looking to see if we can broaden that concept to those that aren't catastrophically but to seriously and see if we can expedite it. these are in concept stages and we are working with the va on that. >> okay. thank you, mr. chairman. >> thank the ranking member. with that the chair recognizes mr. cook. >> thank you, mr. chair. just a couple of comments and probably the same ones i had when i was chair of the veterans committee and the house in california. i look at it from the perspective of the veterans and people that you're dealing with. you know, just going through this paper right now we're

looking at the bdd, ides, pueblo, m.e.d., bdqs, kacavc, i know that one, that's assistant division commander and i knew m.e.b. the spy ship that was captured by the north koreans. i thought it was bda, battle damage assessment, but dbq, i can go on and on and on. and if i was a person being discharged, you know, i think i know more about clingon and that vocabulary than these acronyms. i think i know most of them. i try to forget most of them, after 26 years in the marine

corps then got into education and you learn all kinds of things. the point i'm making is that trying to communicate to people that you serve by using this foreign language, at least from my perspective is very, very difficult. and a lot of people don't get it. particularly the seniors, they have serious problems. miss titus talked about the 95%. when i see 95%, i think that's something we can make to stream line the process, we can do that. airlines notify people when their plane is going to be late or what have you, the technology now. i'm probably the worst one to talk about technology because i'm horrible at it. you know, thank god i'm married and have a wife who's very bright. i have grandkids who fix my computer, but the -- a lot of people are just brain dead when it comes to technology.

but you have to have a respect for some of these things that can streamline that and make the system more efficient. now, it just upsets me that it takes so long and i look at it and this is a statement more than a question, that when world war ii started, you know, where people had to enlist, go through the physicals and get trained beyond the front line, almost you know, so that we wouldn't lose the war, they did it and getting people in there, same thing with korea and other times where you get people in and you can expedite the process. and now we have the system on the back end where people -- i spent 26 years a lot of people spent a lot of years. it's a very, very cumbersome process that -- and i think part of it is that it's very complex, at least -- i don't think i'm the dumbest person in this group

maybe i am, but trying to understand all of this stuff when you're going through it, i think we've got to at least make it more user friendly. so that you can have the feedback easily. the language is very, very cumbersome. everybody that works in it, they have their comfort set of acronyms and vocabulary. the average person is too nice to say what's the impact. i'm dumb so i have to ask, and give me an explanation. but the average veteran that comes in there, a lot of them are used to taking orders and what have you, they are relying on that staff sergeant and master sergeant who, they are vital and then you come out of that and we're talking about the bureaucratic nightmare.

so i understand what you're trying to do and i applaud it. i just want to throw my two cents into, let's get it down to where at least somebody like me can understand it and other veterans. i think you would have much more cooperation and they could understand what's going on. thank you. i yield back. >> thank the gentleman. with that the chair recognizes the gentleman from texas, mr. o'rourke. >> mr. cook, you made me feel more comfortable with my ignorance. if you can admit it i feel more comfortable in admitting my own. >> but, mr. chair, earlier i had the privilege of introducing miss gibson who will be testifying in a later panel. i first met her in el paso when she was at the wtu. she organized a tour of that facility for me. in getting to tour that facility and meeting the service members

who were there, we first learned that we had soldiers at the wtu who literally had been languishing there for months and years because of delays within this ides system and specifically the dras in seattle. miss rubens, when we last had a chance to speak about this in february of this year, i talked about the va rating goal being 15 days and for the fort bliss soldier at the wtu, it was actually 143 days, the benefits goal being 30 days at that time. it was 87 days in reality. that was my focus and still my focus today because what i think i've heard you all say is that we're now meeting our benefits goal as of april of this year, but when i look at the latest data, which is 18th may of this

year, it shows that for the army, we're at 48 days instead of the goal of 30. and the fort bliss soldier is at 49 days. when i look at what you're committing to doing by august/october, and rating getting to 15 days, we're currently at 132 days armywide and 131 for soldiers at the wtu at fort bliss. explain the inconsistencies on the benefits goal you have already achieved and the numbers i'm seeing here for may and then how you can possibly achieve the goal for october given the wide variance between where you're supposed to be and where you are today. >> yes, sir, i would tell you that i think we're talking about the work we're completing in the current month versus the numbers you're reflecting are for the entire year, the average of

everything we completed. what we know about the work we're completing today as we look if you will behind it in the system, that work that's coming down the path is much younger. as we are now achieving for the benefits notification phase, we are now in a timely position, the capacity that we have will continue to maintain that timely output for those claims coming to us and that component of the phase. as we continue to work for the proposed ratings, similar issue, the capacity with which we're tackling the volume of work come august, we'll marry up the work flowing to those folks and going out the door will put us into a timely 15-day for proposed rating decision time frame as well. allowing us for the october number to catch up, if you will, on the average for the entire year. >> let me see if i can understand this because this is a difficult concept for me to

get and similar to the way you explained the backlog numbers when it comes to disability claims for veterans. and how we should be measuring the backlog, someone enters the system today and we'll use fort bliss as an example at the wtu there. at the benefits stage, they will wait no longer than 30 days at the benefits stage? >> at the end of the process, the final notification, when we get the final package back, the time it will take us to promulgate the benefits notification on average for the army is at 30 days. i'll need to look to see if ft. bliss is outside of that. but i believe we're looking at the timely situation across the benefits phase. >> i have limited time. the reason i'm showing 48 days armywide versus 30 days is that you still have those older cases in the system and as soon as they move out you'll be at that 30 day --

>> you're looking at information. perhaps i need to sit with one of your staffers to look at. are you looking at the average processing time across the course of the year -- as we worked the older ones out that means the days to complete had gone higher and look at the work coming in it's timely. >> it is something -- my time has elapsed -- and this is something that i'm going to ask my staff through this hearing to memorialize in a letter to you and get a written response back from you so i fully understand it and can go back to the wtu at ft. bliss and explain it in my own words, which i'm not yet able to do given your answer. i think you're saying what i want you to say and what we want to hear. i want to make sure what the expectation is and what we're delivering. appreciate that in advance for getting back to us. >> happy to do that or sit with anybody who may want to look at the bliss statistics. >> thank you. thank you, mr. chair. >> with that i recognize the gentleman from florida.

>> i think mr. cook is right on with his acronyms. but he's been saying it now for months really, let's sit down and work with this because it's so very important to the veteran. i'm 51 and to tell you the truth, i have to read these things twice to understand what they are. just for the good of the veterans, we owe them that so they can look at it and not have to have the computer training and what have you. my kids fix my computer too. i mean, let's get serious about this. i have a couple of questions here. miss weaver, you noted that by summer of 2014, military departments will be able to work from a much improved set of policy documents that will provide better guidance.

when exactly will these policy documents be issued? >> they are in the final processing and they'll start being published hopefully next month through the end of august. >> okay, would you be able to quantify their impacts on both quality and consistency of the decisions? how will that occur? >> we're implementing a quality assurance programs and that's one of the new policies we have that will help the department measure accuracy and consistency particularly in how policy is applied across the services. services perform two evaluations, osd performs one. we analyze the results and can see if policy has been applied or if policy needs to be revised. >> thank you.

>> miss weaver, you noted that 83% of service members are satisfied with the ids experience. can you tell us more about that? elaborate, please. >> each quarter we do a customer satisfaction survey, the survey is done at a sampling of nine of the major locations where ides -- where the members are enrolled and consensus of the remaining 131 mtfs and the survey is done after the medical evaluation board and again after the physical evaluation board. it's a volunteer survey. july through december we had 8,000 individuals who participated in the survey. and from the 30 questions four related to customer satisfaction.

83% indicated they were satisfied with the process. >> now, 8,000 of how many participated in the process? what percentage would that be? you said 8,000 participate. how many are in the process? 8,000 participated in the survey -- what would you say percentage is? >> i don't have that number but i can certainly get it for you. >> please, or would you like to estimate approximately. >> i don't have any number of how many -- >> can you please get that to me and maybe chairman and rest of the panel might want that information as well. >> i will. >> thank you, miss weaver, you highlighted the electronic case transfer system that was piloted in 2012 but you note until va develops its end of the technology it will not yield benefits and is not going to be timely in other words.

please elaborate on this and what does dod develop and what does va need to do? >> we've used the electric transfer and it was -- >> see what i mean? >> yeah. and it was a successfully piloted that we made the transfer in december of 2013. but what we're working on is a joint system, case management system called joint disabilities evaluation system that will allow us to track cases, monitor exactly where they are at and so we can go from phase to phase and know exactly where the case is and do a transfer to and from internal within the service from the meb or medical evaluation

board to the physical evaluation board, and from d.o.d. to va. we're in the concept phase, identifying the requirements and we think this is going to gain major efficiencies for a modern and efficient system. >> thank you very much. i yield back, mr. chairman. >> with that i recognize the other member from florida. >> no questions, mr. chairman. >> i'm going to ask one follow-up. thank you. this is the kind of question in the mold of colonel cook over here. we hear everything that's going mrs. weaver and mrs. rubens, what isn't going right?

what do we need to fix that would make a huge difference in the process? what can we really tackle? what are we going to get out of this hearing as colonel cook over here identified his flaws in front of everyone, that's what we want to know from you. what is the one thing that could change the trajectory of this whole process? >> i think we need to go back and look at our survey. we have a significant number of people participating in the survey. we're getting results that say as of december, 83% were satisfied with the process. as of the end of march, 4,000 more surveys, 84% were satisfied with the process, we're trying to make changes from the

information that we get to the survey. we may need to look and see whether or not we -- how we can reach out and touch the individuals who are expressing concern with either the time or the counseling that they are getting. >> miss rubens? >> i would echo some of those sentiments and it sounds as if our ability to communicate with service members soon to be veteran could be improved. vba has worked in the past year to pick up, if you will, another component of that transitioning service members who as he or she continues think about what's next, by placing our vocational and employment counseling area ides site as well to build the services around the transitioning service member. we want to continue to work together in that electronic interface to ensure that as dod across the services builds that

integrated case management system, it marries up, if you will, sir, into our new veterans benefits management system, our paperless environment to ease the process by which we share information, not only internally but with that transitioning service member as well as if they have selected a veteran service officer as we roll out our new stakeholder enterprise portal functionality in july of this year so that they'll have the ability to also support that service member and that communications standpoint. you. touched on that a little bit. >> this goes back to bill's question, what does the va need to do on your end of the electronic case transfer, file transfer to make it optimal? >> i would tell you there are some things we need to do from a -- the msc, military services

coordinator at the intake site and their ability to work within that environment, as well as from an electronic standpoint, the functionality of incorporating ecft into that, interface to ensure that's occurring and it is on a road map to accomplish that and as dod continues to build their new case management system, we want to make sure that we're there to incorporate that as well into bbms. >> and what part of what fiscal year is that happening? >> sir, i will have to take that one for the record. i'm not sure where it is on the road map. there are a number of things we're trying to import to building into to work into the functionality. >> one last question for miss weaver. you said you had an 83%

satisfaction rating, what was the percentage on the other side and the overall disappointment in the system? >> well, it ranged. a lot of the comments were that they did not get the information they needed. it was varying with the medical evaluation board and the fiscal evaluation, including the unsatisfactory rating that they got. they would like a different rating. and move from there. >> mr. o'rourke. >> thank you, mr. chair, i would like to follow up with miss

rubens on the line of questioning i was pursuing earlier about ides i think i may have questions that clarify this issue. on the benefits backlog portion of the dras process, you said in march you eliminated the backlog and by april you were hitting your target of 30 days. is that correct? >> yes, sir, we closed the capacity gap between what we had to work and what we had the capacity to do in march and in april the work we then began to see flow through was meeting that target. >> in the number i referred to earlier, i show that army wide we're at 48 days, not 30. that's the last three months. so that might explain the difference. my question to you is if we take this same measure three months from today, it will show 30 or under. >> yes, sir. we have built this in our projection and capacity and our modeling to ensure as we move forward we maintain achievement of the target. >> i want to ask the same set of questions as it pertains to the va rating part of this, which is

that the goal is 15 days the last three-month average shows 132 days. are you saying that by august you'll relieve the backlog and in october you'll meet the 15-day goal? >> yes, sir. >> three months from october when you look at the rolling three-month average, we'll see 15? >> and 15 for the proposed and 30 for the final notification, yes, sir. >> would you mind if again we were able to get that commitment from you in writing? >> not at all, sir. >> i really appreciate that. thank you. >> that's all, mr. chair. >> thank the gentleman. and no other members have any further questions. i ask that any of the questions that you all were taking for the record please submit them in writing. thank you very much. thank you all again. i think it's particularly helpful to have both the va and dod at the table in discussing

ides, you're excused from the witness table and we'll seat our second panel. welcome members of the

office of inspector general, we appreciate your attendance and your complete and written statements will be entered into the record. miss. holiday you're recognized for five minutes to again your testimony. >> thank you for the opportunity to discuss the oig's review of vba's predischarge program our testimony offers an independent assessment of the predischarge program. with me today, is the director in our atlanta audit office and two managers from oig's benefit inspections division in florida. miss stokes the director and ramon figure have experience working in key positions such as veteran service representative, rating specialist, decision review officer, certification test writer, star quality

reviewer and veteran service manager. the quick start program was designed to provide a seamless transition from dod to va's health care and benefit system. service members can submit claims up to 180 days prior to discharge under the program. further, the program makes it possible for veterans to receive va disability benefits soon after leaving military service. to assess the program's performance, we reviewed quick start claims completed in 2011 and then again in 2013. we found improvement in claims processing timeliness. during the period vba reduced the average days to complete quick start claims from 291 to 249 days. however, while timeliness improved, additional improvement is needed if they are to achieve the va secretary's fy-2015 target of processing disability

claims in 125 days. the delays in processing quick start claims resulted from inadequate program controls and redirection of resources to process other claims processing priorities. adequate resources and the proper allocation of resources are paramount for va to realize the benefits of its transformational initiatives. delays also occurred due to a lack of training to ensure staff properly identified quick start claims, which is the first step to initiate timely processing actions. our review results support that the quick start claims were at risk of processing errors such as erroneous disability evaluations or improper grants or denial of benefits. we projected vba staff accurately processed 62% of quick start claims in 2011.

while the accuracy rate for 2013 improved to 69%. these rates are still well below the secretary's 98% accuracy goal for fy-2015. delays in errors impact the receipt of disability benefit payments in two ways. first the processing delays in 2011 resulted in a number of veterans waiting an additional 196 days to receive about 88 million in benefits payments. by 2013, the same type of processing delays were reduced but still caused veterans to wait about 99 days to receive approximately 20 million in benefits payments. unfortunately, processing delays also impact other entitlement decisions, such as veterans preferences and delayed care at va medical centers and participation in vocational rehabilitation efforts. the claims processing errors

have a direct financial impact on the amount of benefits a veteran receives in monthly entitlement payments. we projected claims processing errors resulting in veterans being underpaid about $2.8 million. projected overpayments for valued at approximately 463,000 for the same period. additionally claims processing errors that do not affect current monthly benefits, have the potential to affect future benefits if left uncorrected. they are making incremental progress in areas specifically targeted through this initiative, much more work needs to be done. we will continue to look for ways to promote improvements in benefits delivery operations during our future national audits and our inspections. mr. chairman, that concludes my

statement and we would be happy to answer any questions your committee has. >> thank you, mrs. halladay. we will begin a round of questions. first question, as you know while vba are reporting the timeliness and equal if not greater concern is the accuracy of the outcome for each veteran. vba is looking at hundreds and thousands of claims and veteran is looking at one and only one. accuracy is highlighted as a serious area of concern, i'd like to also ask the question about vba's quality components the star program has several classification errors such as benefit entitlement and decision documentation/notification and administrative. mr. murphy responded to an inquiry as to star's failure to count error for incidents with potential to affect veterans benefits such as when a claims

folder lacked required evidence including medical examination or opinion needed to make an accurate decision. can you comment on that? >> yes, i would appreciate that. the oig uses a broader definition of what constitutes an error. we report errors that affect veterans benefits as well as those that have the potential to affect veterans benefits in the future if left uncorrected. we think this is important. it's a veteran centric approach. we do not feel that the star program counts all of its errors. there is a disagreement between what oig considers an error and how vba calculates its accuracy rating. i have a couple of examples here that we think might help you understand. vba does not consider an incorrect disability evaluation to be a benefit entitlement

error unless it impacted the veteran's overall combined disability evaluation. however oig would identify this we see a significant financial impact associated with not managing those claims appropriately. >> thank you. >> next question is va working

with the oig to make the improvements identified in the audit process? >> this past year there have been significant challenges to us to address the oversight and we're expected and charged with to look in the benefits inspections and perform national audits. i finally raised this issue to hicky, to ensure that we do not have these obstacles or have this resistance and that we work towards a facilitated process to so that oig is help vba, get it right. this is important to spend so much time dealing with a nuance of a technically how you say something versus trying to fix the big picture is not the way to go.

you need to look at what are we saying, why are we saying it? how does it affect veterans? and then go make the changes you need in these programs. >> last question, in your view, given the challenges the va faces addressing the longstanding backlog of claims, do you feel the va has control over its remaining workload? >> at this time, we see vba's pending backlog in compensation claims is dropping, however i have significant concerns that they do not have a good handle on some of the workload in other areas. for example, in the area of dependency issues, as of may 15, 2004, their own vor report, the vets net operations report,

shows almost 253,000 disability claims that will impact benefits on average the claims are pending over 315 days. for eligibility determinations the same report shows approximately 110,000 adjudication decisions relating to benefits that have been pending on average 361 days. in predeterminant notice we see approximately just over 81,000 predeterminated notice s affecting benefits that have been pending for 177 days. there are definitely problems in managing the workload. the priorities we hear time and time again the priority is to bring down the pending backlog and compensation at the expense of not addressing the other issues.

the quick start program is a perfect example within our audit where resources were redirected away from that program and you can see in the audit there is a table that the workload, the time limit is spiked in 2012. and i know vba is working hard now and put resources back in the program, but you have to keep resources dedicated to significant transformational initiatives if you want to achieve success. >> thank you for that answer. i had that precise discussion with chairman miller this morning. so thank you. with that i'll recognize ranking member miss titus. >> i was going to ask that question too, if you think the programs are being hurt by the focus on just reducing the backlog no matter what? and the people who are in these -- veterans in these programs don't count as part of those figures that are used to show the backlog even though

they are waiting these long periods of time, is that accurate? >> that is my understanding, yes. >> another thing that doesn't seem to count and you mentioned that the va doesn't count the processing time that occurs prior to leaving the service when they are talking about the amount of time it takes to process one of these claims, would you expand on why that would be an important aspect of this whole backlog? >> in the simplest of terms, if i'm a veteran and i file a claim, i start counting from that day. now, i understand that vba is very concerned that they have upfront processing at a point where the vet, where the active service member has not become entitled to the benefit. but when you're looking at a process, you must look at the process throughout the entire processing cycle so that you can understand where you've

dedicated your resources and to what extent you're getting the appropriate outcomes from that resource. so, in my field, if you can go with a veteran centric approach you would count that time. you would not start the payments for entitlement until they were released from active duty and came into va care. >> that would help you to understand the whole process and procedure and make needed adjustments. >> absolutely. i think that -- in the many discussions i've had with miss rubbens and mr. murphy, i know that resources are needed and you have to make good decisions on where those resources are. so, i think it's very important to measure all of your resources and track those. it's obviously an area where the undersecretary had not concurred

with us in our report and we're going to stand pat with what we've said. >> thank you. going back to the first point about these programs failing because so much or doing less well than expected because so much emphasis is put on the backlog it's a matter of paying -- robbing peter to pay paul, isn't it? >> i've said that a number of times. >> okay. great minds think alike. thank you, mr. chair haan. >> chair recognizes mr. cook. >> thank you very much, and i won't say too much more about acronyms. maybe. your report, very sensitive because i used to be an ig. and i looked at your recommendations -- by the way, ig that's a thankless job.

how to lose friends and not influence people i used to say. but it's one that you have to have in an organization. and your job is not to make friends. you already know that. it bothered me a little bit and maybe if you can help me out where in two cases it had the, the vba, which is -- help me here -- that's the veterans benefits administration? >> yes. >> they disagreed with your opinion and then you had -- the other one where it was actually the undersecretary, undersecretary. that the same individual for all intents and purposes? >> i would consider it the same. >> you know, these are -- i was

looking at it. you know, particularly one where the undersecretary nonconcurred but basically went along with it anyway. did this go all the way up to the secretary, or is this something -- is that a command decision that an undersecretary -- because we're getting into some dicey stuff in the last few days on this and i'm trying to figure out who is going to make these command decisions. these are pretty important. and maybe it's just my sensitivity with ig reports, but 26 years in the marine corps, what have you, everybody kind of gets a little nervous about ig reports and they pay attention to them, at least i used to, maybe because i used to write them. any comment on that at all. i don't mean to put you on-the-spot. you know what i'm saying i thi >> it is the responsibility of the undersecretary for benefits to provide the official signed

comments to an ig report. i believe that the secretary does get copies, it gets copies at the point when we issue the draft report for review and to obtain those comments and then gets copies of the final reports, if that report is significant, we certainly brief, i think we follow traditional audit processes that has an exit briefing where we have a discussion with the vba officials that are charged with the governance of the specific program. i've had many briefings with that team and they feed up to their usb. >> this is an important point at least to me. in the military you used to have two things, one was you would have by direction authority, in other words, commanding officer but somebody in the command could sign their signature by direction. that means that, you know, by signing by direction that the commander approves this. the other wale