>> we are here to talk about the request. the secretary is accompanied by a the under secretary for memorial fierce -- memorial affairs and an under secretary for health and we also have an executive in charge of the office and management of chief financial officers and the assistant secretary for information technology. thank youthank you all for joins today. we welcome your opening statement. >> thank you. ranking member, distinguished members of the senate committee on veterans affairs, thank you again. i look forward to these. this is an opportunity to extend the dialogue we have in other forums. thank you for this opportunity to present. the president's 2013 budget and

2014 advanced appropriations request for va. this committee has a long history of strong support for our nation's veterans, and i can speak of that first came, having worked personally on the past three budgets with you. the president has a demonstrated his own respect and sense of obligation for our 20 two million veterans by signing the congress once again another strong budget request for a va, and i thank the members for your unwavering commitment, and i am here to answer your questions and seek your support on this budget request. i would also like to acknowledge the representatives from our veterans service organizations or here today. as we develop our budget, their insights, their experience is helpful as we put together our arguments for resources and as we strive to continuously improve our programs. madam chairman, thank you for

introducing members of the panel. i have a statement which i asked to be submitted for the record. this hearing occurs at an important moment in our nation's history. not the only one. there have been others that i could refer to. so old enough to have experienced our return from vietnam and to have witnessed personally the end of the cold war. we are again in another time of transition. an important one. our troops have returned home from iraq and their numbers in afghanistan are likely to decline over time. history suggests, as the chair indicated, va's requirements from these two operational missions will continue to grow for some time, long after the last combatant leaves afghanistan, maybe as much as a decade, maybe even more. we must provide access to quality care, timely benefits

and services, and a job opportunities for every generation of veterans. and the generation at hand is the one that comes home today from iraq and afghanistan. in the next five years, more than a million veterans are expected to leave military service. this generation it relies on va at unprecedented levels. through september 2011 of approximately 1.4 billion veterans to deployed in return from operations enduring freedom and iraqi freedom, 67% have used some of va benefit of service in some way. at far higher percentage than those from previous wars. the 2013 budget request would allow us to fulfil the requirements of our mission. health care for 8.8 million enrolled veterans, compensation and pension benefits for nearly 4.2 eat -- a million veterans to

a life insurance covering 7.1 million active-duty service members and enrolled veterans at a 95% customer satisfaction rating. educational assistance for over a million veterans and family members on over 6500 campuses. home mortgages and a veteran loans with the leash -- the nation's lowest foreclosure rates. burial honors for nearly one under 20,000 he rose and eligible family members, and our 131 national cemeteries befitting their service to our nation. this 2013 budget request continues the momentum in our three priorities you have heard me speak about our last three years. increasing access to care, benefits and services, eliminating claims with claims backlog, and ending veterans homelessness 3 effective, efficient, accountable use of the resources you provide. access encompasses the va's facilities, programs, and

technologies. it is a broad term, but there is a lot that it encompasses. this 2013 budget request allows va to continue improving access by opening new or improved facilities closer to where veterans live and providing telehealth and telemedicine linkages, can activity, including, in some cases, where it is needed, in a veterans' homes. also by fundamentally transforming access to a new electronic tool to other veterans relationship management system, and efforts to get at our telephones. by collaborating with dod to turn the current transition assistance program that we both share into and outcomes-based training and education program that fully prepares departing service members for the next days of their lives. and by establishing a national cemetery presence in eight rural areas and a better-serving rural and women veterans, and i am happy to provide details later. we expect that more than 1

billion veterans will leave the military in the next five years. potentially all will enroll in va. over 600 and thousand of them, based on our historical trend. -- over 600,000 of them, based on our trend over 600,000 will receive services from the va in the out-years. regarding the backlog from what we know now, fy 2013 will be the first year in which to my first year in a long time, in which our claims production going out the door will exceed the number of incoming claims. and the paperless initiative we have been building for the past two years on a nation tool becomes critical to reversing backlog growth and increasing quality. we must not hesitate. stability and john isakson funding -- stability and i.t. funding is critical to our

success. hamas has, the estimated number, some veterans declined by 12% -- homelessness. we have created momentum in the homeless program. much remains to be done to end veterans homelessness by 2015, and the 2013 budget is a presentation of how we continue to do that. we're now developing a dynamic homeless veterans registry. i think you appreciate that much of what we understand about homelessness is an estimate of real numbers. we're not able to count everyone out there, but it is a valid, statistically valid process. in the meantime, over the past three years, we have been building a registry of former and current veterans by name so we know who they are, what their issues are, the individual level of concern that has been expressed their. with their issues are, where they reside, and whether their

migratory and move from one of the footprint to the next. so as we think about adjusting footprint based on what we see day to day, we want to be careful we are not doing something that ignores may be an issue that is going to require help. so building a veteran's bridge street today, over 4,0,000 -- over 400,000 names of current homeless veterans, we want to find the real causes of veterans homelessness. in the years ahead, we think this information will not only help us more effectively prevented. that is where we're headed. not just for veterans but perhaps for other communities as well where we have partnered in taking on the homeless issue. we look to develop more visibility of the at-risk population to proven veterans from falling into lawlessness. and this budget supports that plan. madam chairman and members of the committee, we are committed

to the responsible use of resources you provide and resources we seek in the 2013 budget. and i know that has been a question some of you have posed. but for both the 2013 budget and 2014 advanced appropriations request, we're committed to responsible use. again, thank you for this opportunity to appear before this committee. >> thank you very much. let me begin the questions by getting this one off the table, on the issue of sequestration and cuts to spending as i said, i believe that all the programs, including medical care, that there is some ambiguity between the budget act and the existing law. when i asked the acting omb director to address this during a budget hearing two weeks ago, he said omb has yet to make a final determination but i am concerned that by not selling this issue now, we're failing to

provide our veterans with the clarity they deserve to have. while you're here, wanted to ask you, do you believe that all the programs, including medical care, are exempt from future cuts? >> i think that, madam chairman, the answer that the omb director provided you is the same one that i understand. they're still addressing the issue. for my purposes, i would tell you i am not planning on sequestration. i am addressing my requirements and presenting a budget as you would expect me to do. i think sequestration on part or on the whole is not necessarily a good policy, and i think the president will argue that the best approach here is a balanced deficit, and he believes the budget he presented does that

and ask that the congress look at that budget and favorably consider it. >> i think we all hope that is the outcome. we want to provide clarity to veterans who are very concerned about this issue. mr. secretary, last year we talked a lot about mental health care, and i think we together uncovered a lot of serious issues. best summed up by a veteran i heard from recently he uses the and harbor medical center had to wait months and months to get into counselee, but then he had coen things to say about mental health care providers once he got in. in order to address those types of issues, va has to be certain it has enough resources to not only keep up with the increasing number of veterans who are seeking mental health care, but also to bring down that unacceptably long wait time. over the course of the last fiscal year, the number of iraq and afghanistan veterans who are looking for mental health care went up by about 5%. that is about 18,000 veterans a

recorder. i wanted to ask you this morning if you believe the increase in mental health funding in the budget request is sufficient to accomplish the goals and keep up with this increasing demand? >> i believe that the budget, if you look at the 2013 budget request, i think it is adequate for us to meet what we understand our requirements. are there issues out there that we will discover between now and execution on budget? i would say if we do, madam chairman, i would be the first to tell you. you asked us to do a survey and we did. it was a very hastily done. senator byrd referred to some of the output and conclusions out of that survey -- senator burr refer to some of the conclusions. out of 20,000 mental health providers, 319 were surveyed.

and of the results were as described. my question of vha was, did you go to the places we thought there would be problems, and the answer was yes because we were asked to figure this out. i would say we got a pretty pure response. i think we need to make sure we're going to take another broad look here and make sure that we understand, across the larger population, when our issues are and where there are opportunities for relocation or, you know, as it becomes clear, to hire more people. i would offer to the chair, i took a look at what we have done in mental-health over the last four budgets. if we look at 2012 to 2013, it is rather unimpressive. i mean, 5%, and it matches the increase in the medical budget. but between 2009 and 2013, our

increase is 39% in mental health. if you include the 2014 advance to purge, it will go up 45%. >> a result of the number of soldiers coming home needing services, which has dramatically increased. >> it is true, but we're trying to anticipate that there is going to be larger requirement here in the count years, even if we do not have clarity. we are trying to prepare for that. we want to do a larger survey here, as i indicated. and then into the outcomes are. but let me turn to dr. petzel for any details. >> thank you, mr. secretary to the madam chairman, as a result of the hearing we had early in the year, we have not done two things that are important and on point with regard to your question. one is that we developed a staffing model. it is the only staffing model that i know is available about

mental health. it is and the beginning stages, the it is giving us some information about what the need might be. more importantly, we are side visiting all 152 of our medical centers -- site visiting them at the access to medical services, both the initial appointment and subsequent appointments for pst in-patient program, a group program, or individual psychotherapy. what we're finding is we do meet the criteria for the first appointment in most every instance. we're having some difficulty in some parts of the country making the next appointment in a timely fashion. getting them, as you mentioned earlier, into the specialty services. this could be the result of three things. one is, do we have enough staff out there? have we given enough positions and resources?

two, are those positions filled? and are we getting the appropriate level of activity out of each of those people? if we do discover that we do have additional needs that are on that -- a better on that, i guarantee we will be in commission with the committee about those needs and in for discussion. >> i appreciate that this is a top priority for us this year. >> i will just sure that in fy 2011, we hired about 897 additional mental health professionals, bringing us up to about 20,000 -- 20,500 mental health professionals. so the interest does -- is there. it has not been about increasing those numbers. >> ok, thank you very much. senator burr? >> thank you.

since the chair asked about mental health, let me ask if my information is correct. in december, the a poled their facilities and found that there were 1500 -- a va polled their facilities and found that there were 1500 open mental health physicians -- positions. is that accurate? december 2011, va poled their facilities and found that there were 1500 mental health slots that were unfilled. >> after 20,500, that is true, yes. >> i wanted to make sure my information was correct. mr. secretary, i want to thank you for sending and related to this budget hearing. march 31 in north carolina, we will have the first in the country will come home to vietnam veterans day, an all-day event. i want to thank you for the va's cooperation of making sure that the va presence is there to make sure that we're able to catch those who have fallen through the cracks, work with those who have problems, and we will have

a va mobile presence there as we will from dod and a lot of private sector entities who are working on employment placement. i think this is a very, very special event that is long overdue, and hopefully will be a first of a total of 50 that are held around this country. thank you for the va participation. i am going to ask for chart number one to go up. earlier i mentioned a number of performance matrix's that seemed to be heading in the wrong direction. i want to start by talking about the quality of va's decisions on disability claims. your goal is 98% accuracy. but for the past three years, accuracy nationwide has been about 84%. as of december 2011, the accuracy rate at regional offices around the country vary from 94% to 61%. in total, how much is at the va

requesting for 2013 budget to carry out all of this quality initiatives, including the quality review teams at each of the regional offices? >> thank you. let me turn to secretary hickey to answer that. >> [inaudible] thank you. senator, thank you for your question. i am glad you're asking about quality, because we're focused on both production and quality. i cannot give you the very specific for each one of those costs, but i can tell you we expect the impact to be significant in our ability to produce a higher accurate and more consistent response across the board. it is not just the quality review team, but they are a critical part of this. " -- for those of you that are not aware what those are, we have taken what is nationally recognized, even by you all and members of this committee and your staff, our star accuracy team.

we have replicated their skill level, their training, and what they do every single day now inside every single regional office across the nation. their responsibility will be not just to check quality at the end of the process or inspect quality at the end, but to do any part of the process that works closely with our employees in the training environment to check different parts in our process where we make the most errors and correct those early. >> at what point on the calendar would you make a determination as to were those quality initiatives are going to work, and what indicators would you look at to make that decision? >> thank you for your follow-up question. we have already done that. no initiatives that we have in our transformation plan of the 40 + initiatives in the people category, how we're organized and trained to do our work, the process environment, how we have suggested, or in our technology solutions have not been tried,

tested, measured for impact before being implemented. on it -- >> but as some point, you have got to say we're going to look at it and see if this is working. >> we did, sir. absolutely did. we did in local pilots. we just announced this week, in fact -- >> so year from now when we get together for the 2014 budget, it the quality has not improved or the timeliness and down, it will have failed? >> no, sir, i do not expect the quality not to have improved. we have significant decisions a new initiatives -- >> my point is, what davitt does not? >> search, then we will adjust if necessary to find the reasons why. we will tackle that hard. but i do not expect that to be the answer. and i expect to see improvement in both quality and production. >> thank you. >> quality is the function of trained people with the right tools, and we're working on both items right now.

>> my question was simple, mr. secretary. at what point will we determine whether what we have plummeted is working? >> fair. we will be happy to provide that. we set a target of ending this issue with a backlog in 2015. we begin filming the automation tool we have been building for two years -- we began fielding the automation tool had been building for two years. it will be rolled out nationally throughout 2013. as we do that, we expect both speed and quality to go up. >> i would like to ask the chair for one additional question. i would call up the second slide. va made this projection last year and a budget hearing. productivity due to the impact of the year brawl transformation plan -- of the overall transformation plan, which will rise from 89 annual claims for direct labor in 2012 to 129 in

2015. as you can see from the chart, we talk about productivity per fte last year at 79.5%. this year we're looking at 73.5%. what percentage increase in individual productivity to expect from the veterans' benefit management system, and a person to expect from other initiatives that are under way? >> well, i will turn to secretary hickey for the details. what these charts to not reflect is that in the last three years we have taken on some other projects that are unaccounted for here. the gi bill requirement to get the program up and running. today, we have over 600,000 youngsters in college under an automated system that did not exist in 2009. i think we all recall that first

semester we had to do everything manually, and it was not the prettiest processing event. but we did that manually, got 173,000 youngsters into school and on their path to the future. at the same time, we began building this automation tool for the gi bill. by april we had the first part of that to allow and fielded, and we have added four or five more programs to make it more productive. we will get better over time. it is hard for me to give you a day and a month when this quality factor will meet any of our expectations. but we set 2015 as the day die in which we would have the backlog solved and the quality -- as the date in which we would have the backlog solved. i will give you the best weight points we can figure out, but that will be a product of what

we're doing to train our work force and what we're doing to give them the right tools. we're talking about the right tools now. but in the same time, your question about the growth in our human resources investments for the department, we have trained nearly 300,000 of our workers, many of them who have never been trained, on their job so they can produce what we expect and that they can leverage these tools when they arrive. >> thank you, senator burr. i would like to start by saying thank you to you at the two chairmen married and your leadership and the members of this team for an unprecedented level of increased budget increases that has been enjoyed in the last three years. i think we need to put that into a little context. that 36% was used to tackle a

48% increase in claims over the same time span. that was to support nearly 12 million service members, veterans, families, and survivors. that is including a net increase in the last year of half a million new veterans to our roles that did not exist and are using our benefits and services. also, for the second year in a row we completed more than a million claims using those resources. that is 16% more claims per year than we had done in 2008, before that chart started doing some of those things. i will tell you and put friendly on the table, we have put more than $3.3 billion, and to what is celebrating our vietnam veterans, we put more than $3.3 billion into the hands of 117,000 of those vietnam veterans in the last year. that had an impact. that impact was through 260,000 other: backlog we did not get

to. that also had an impact on fte. to do those red and well, we put two times the ft associated with each one of those claims, the difficult complex 50-year-old claims. in addition, we step in this same time span and a four times the level of fte to our most windy, ill, and injured in our integrated disability evaluation system to get those folks taking care of right and will the first time. so that also had an impact on the line that you laid out in front of us. the positive is about all of that is we are done. we're down to the tens of tens levels, a kind of double-digit levels of the agent orange cases. 99.9% done through those 250,000 cases. we are now capable of shifting of those 13 resource centers we had across the nation that were hunkered down in doing the agent

orange cases. tomorrow, we're shifting back back into normal backlog caseload that will be focused on our benefits that discharge veterans. it will be focused on our quick start veterans. and it will be focused, frankly, on our oldest cases we have on the books during the much of march. >> ok, senator carper. >> thank you. general shinseki, as you know, we often face challenges in treating our veterans who live in many rural and remote areas. this is especially true in places like alaska and hawaii, where you just cannot get to some places by jumping in a car and driving there. i know that you're working on an mour with the indian -- mou to

find solutions to help provide services to our native american veterans, and i commend you and all your involvement in these efforts. mr. secretary, can i get your commitment to look into possible ways of working with the native hawaii in health care systems and the native american veteran systems to provide services for native and hawaiian veterans whom -- who live in many of the rural parts of the state of hawaii? >> senator, you have my assurance that we will do our utmost to provide for any of our veterans wherever they live, the most rural and remote areas. the same access and quality to health care and services has we

provide to someone living in a more urban area. there is a challenge with that, but we're not in sensitive to that challenge, and we're working hard to provide va- provided services. and where we cannot, to make arrangements for -- of quality services exist in those areas, making arrangements for veterans to be able to participate in this local opportunities. we are -- i think you know, working and have been now for some time on signing an mou with the indian health service. wherever there are facilities and we have a vested interest, an eligible veteran going to an indian health service facility will be covered by va's payments. we are in stages of trying to bring that mou to a conclusion.

we intend to do that. and where tribes approached us prior to the signing of that mou and want to establish from a tribal nation with a va a direct relationship because they have a medical facility and would like us to provide the same coverage, we are willing to do that, but that would be on a case by case basis. >> thank you. secretary shinseki, staffing shortages continue to be a problem, although there has been progress. some clinics are seeing staffing levels below 50%, causing excess of waiting times for veterans that need care. understand this is an issue you have been working on. as you know, the number of veterans needing services is growing yearly, and it shows

that you have been making progress. can you provide an update on the department's progress to address staffing levels? >> mr. secretary, thank you. senator akaka, thank you for the question. we have talked about mental health earlier and the efforts we're making to try and assess whether there is adequate staffing there. i think you're probably talking about primary care, which is our largest outpatient clinic operation. we treat 4.2 million veterans in our primary care system, and it accounts for the lion's share of our budget expenditures. we assessed staffing three years ago when we began the implementation of what we call the patient alive care team, or

pac program, and have done it again recently. we have been able to bring up the support staffing and the physician staffing to reasonable levels associated with the standards around the country. i would like to take off record, off line any information you have about specific places where there is a 50% vacancy rate. i am not aware of the fact that we have this around the country. i would be delighted to meet and talk to your staff to find out where these areas might be so we can address them specifically. >> my time has expired, the secretary shinseki, as we face budget strain, let's work to improve our efficiencies and redouble efforts, look for ways to get the most from our budgeted resources. my question to you is, can you

talk about any steps you're taking to improve the acquisition process at va and any efficiencies you have been able to realize in this area? >> senator, i will tell you that we have been working for several years now on restructuring our acquisition business practices. three years ago, acquisition was spread throughout the organization. now it is consolidated in two centers. one comes directly under dr. petzel, and that is for all medical acquisition. gloves, masks, aprons, we need to get a bulk purchase and a good price on those types of things. for everything else, we have an office of acquisition logistics and construction. we have a director who is head of that office, and everything

else governing acquisition is consolidated under his review. both offices -- the work of both offices then come up to my level, to the deputy secretary, as part of our monthly oversight review process. >> thank you very much. senator johanns? >> thank you. mr. secretary, let me, if i might, visit with you about the national call center. this is something that i think we had high hopes for. you might have had high hopes for it. but i have to tell you, it is not working well. here is what we're running into. the complaints kind of fall into two separate categories. the first category would be people that called the call center and no one answers.

i mean, it just brings and rings and no one is there. i would tell you, in my own senate office, my staff has run into this problem, where we just cannot get a live person on the other end of the line. the second area is you finally get a live person to answer the phone and you get connected with them and they do not have information. you know, the veteran is -- or isare calling in som, somebody calling in, what is going on with my claim or whenever it is, and you're just not getting that responsive human being on the other end of the line. i am guessing they just do not have access to the information that we are seeking. so it seems to me that we are creating an expectation of service when really there is not much service there.

i would like to hear your thoughts or whoever spots on your team about the call center, what is the prospect for that? are you hearing these problems? and if we're still committed to the call center, what is in place or what will be in place to try to solve the issues that i have raised? >> thank you, senator. i have tested the system myself. sometimes been pleasantly surprised. other times disappointed. but that has been something i have done for three years now. and then demanded that we go out and fix it. so we are in the process of putting a fix in place called the veterans relationship management system. if the concerns you are expressing our anything six months -- the experience

occurred six months ago and older, i would offer that we have put this tool in place and changes are occurring weekly. i will ask the secretary hickey to provide some details. but i, like you, i think when a veteran picks up the phone and calls the va, there should be someone there that answers. or if he or she chooses to come in online, that it should have information that is useful to them, that is easily discovered so they do not have to run through a series of tracts to find what they're looking for. we owe them and that is the first step in any service organization that is our intent here. so let me call on secretary hickey. >> senator, thank you for your question. i appreciate your question about events. that is part and parcel of our multi pronged approach in our

management capability, about being able to converse with that veteran by the time and method that they choose. we have surveyed our veterans. 73% want to meet us online. so e-benefits is partly the solution. let me first talk about no one answered, no live person. let me tell you but the two new pieces of functionality is that we have that we have measured out comes on. the first of which is a virtual halt. and means of the veteran calls us and there's a long waiting time, they can elect this hold option, hang up the phone, continue feeding the baby, getting ready for work, doing whatever it is then need to do, and it will call them back on key. 92% of our veterans have elected that option, and we have connected with them as well. the second one is our scheduled call back. meaning i cannot wait on the line with you know, but can i schedule a time that i can talk to you and you will guarantee to call me back?

we implemented that one in in december. between those two, 1 million veterans have elected those options. as a result, we have seen clear, demonstrated, measurable performance we have a 15% improvement in our overall satisfaction on the ability of our veterans to get through. we have seen a drop call rate reduction of 30%. those are both part and parcel of the new technology and new ways we are working in our veteran relationship management capability. in terms of another vrm initiative, not having the right information. yesterday, not today, yesterday, they would have had to cycle through 13 different databases to get to that veteran or family member survivor, the affirmation you needed. today, as we deploy this end it is critical for our i.t. budget, unified desktop pushed all 13 databases worth of the critical information you want to know on

one screen, making them much more effective in delivering a good outcome. also built into this is world class call recording, call tracking, data analytics into this package that we're using every day to improve our service in that environment. >> i am out of time, but if i can just ask, as these things are being implemented as we're going down the road here, it periodically you to give us on the committee and update as to the progress you are seeing, because i do think there is real hope -- hope with the call center. the veteran at least and get somebody who can answer their question. i would is like to stay abreast of how we're doing. >> i would be very happy to do that, sir. >> thank you very much. senator chester. >> thank you, madam chairman. i appreciate seeing secretary shinseki and all the folks on the panel today.

a special thank you to the general for coming to montana last summer. the veterans are very appreciative of that. and you, too, bob, thank you very much for being there. listening and hearing. so thank you very, very much. i want to talk more about what was talked about already very quickly. that is the kind of strategies that the va is using to recruit folks. this is in an area that is much more difficult. that is the need for mental health professionals. we have, as you know, you were there when we opened up the facility in helena. we need -- a it is a great facility. we do not have staffing at this point in time, as far as from a psychiatric standpoint. the you have the adequate amount of flexibility to be able to go out and recruit? it can go to the secretary or

to dr. petzel, to recruit and be able to get folks in? i am not sure we're there yet. >> thank you, mr. secretary. thank you, senator tester. i am aware of the issues in -- at fort harrison. we have four psychiatric psychiatrist vacancies. in general we can recruit around the country very successfully for psychiatric social workers, for psychiatric nurse clinicians, and for clinical psychologists. the most difficult recruitment for us is the m.d. psychiatrist. we are not unique. this is an issue that all health systems around the country face. we are very competitive, however, in terms of wages, in terms of working conditions, and the other kinds of things that are appropriate, needed for recruitment. i think we are in a position to

do the best job we can of recruiting. i don't know what we could add right now to the basket, if you will, of things that we have people who want to come to places like helena, which is beautiful by the way, in an environment where there just aren't that many of them. >> it's been an ongoing problem, particularly in rural areas like montana. it's not a problem that bodes well for the veteran who has issues that revolve around mental health. i want to talk about health i.t. for a second. we can all agree that advance approps have allowed the va to be more efficient and effective to deliver health care for our veterans. it is my understanding exclusion of health care related i.t. funds puts us in a bind.

carehard to give quality when you can't make investments in electronic health records, and others, can you speak about this issue and how the inclusion of health care related i.t. funds and advance appropriations could improve the quality of health for our veterans? >> thank you, senator. i would just begin by saying congress provided us a very unique mechanism called the advance appropriation. it's a gift to the va because it gives us opportunity for continuous budgeting every year, submitting two budgets. it gives us two looks at our budget so we submit what we understand our best estimate is as a defense appropriation, then we come back a year later and we submit the actual budget. and we can make adjustments. the advance appropriation applies primarily, solely to health care. so dr. petzel has his

continuous budget. everyone else is on annual budgeting. under advance approps we have the budget for medical services, medical compliance and reporting, medical facilities. and what happens is when we have a delay, a c.r., the rest of the budget where i.t. resides, he has his authorization to start building facilities and standing them up, then we have to wait as sometimes happens or more than sometimes a delay until the i.t. budget gets released so that now it can catch up to him. in a case last year i think the budget c.r. lasted until april. so pretty significant period. we are a bit off stride here. i'm trying to figure out how we can get this together and link up the authorities you provide

along with the budget to do his business and get him the tools that allow him to see patients. there is no separation between medical i.t. and medicine. that's all one treatment discussion. >> i just want to let us know how we can help you be more effective in the i.t. area. i think it's really important in this day and age. and just -- >> can i just very quickly, madam chair, i just adhere. -- add here. what sometimes happens as happened last year, the i.t. budget is now released in april. and it's a big number because it's all i.t. well, really in it you have the paperless system that goes with secretary hickey's operation, and you have medical i.t. that goes with dr. petzel's. i'm just trying to be clear

here. the piece i'm concerned about is the medical i.t. so we like -- link decision to do things for veterans in a medical sense along with the tools to be able to do that. what happened last year as sometimes happens, this large i.t. budget gets identified in april and we can now go forward. and assessment is made they can't possibly spend that before the end of the year. so we lose $300 million in the process at a time when we really needed to marry these two things up. he can now not deliver what we have already approved a year before. and we are delaying that. i think -- >> timing issue. >> i think there is a mechanism here on both ideas. and would be happy to work with you on it. >> thank you. i want to thank everybody for being here. i will get into the rural

cemetery thing, but we'll propose those questions in writing. >> thank you very much. senator moran. >> thank you very much. mr. secretary, in 2008, congress passed the rural veterans access to care act. this is a piece of legislation i was involved with in my days in the house. it was signed into law. the program is now referred to as project arch, access received closer to home. that legislation set certain criteria if a veteran lived a certain number of miles from an outpatient clinic or from a va hospital, the va would provide those services locally using a local physician, local hospital. my legislation was broad in its initial form. it was narrowed by congress to create pilot programs, and the division kansas was in was the

visn that kansas is in was included as one of those pilots. i expressed my complaint to the va before because when the va then implemented its pilot program, it didn't choose a vision, it chose a community. -- it did not choose a visn, it chose a community. you took a legislation that created a pilot program and create add pilot program within a pilot program. we have a project ongoing in kansas to demonstrate whether or not this idea works. i would love to hear the report of progress being made but also use this moment as an opportunity to, again, encourage the department to expand this pilot so that you can take more than one community. what happens in pratt kansas, which is less than an hour from wichita, is significantly different than what happens in atwood, kansas which is five hours from wichita. the access to providers is totally different between those

kinds of communities. while i'm concerned pleased a -- while i am certainly pleased that a pilot program is ongoing, i'm not certain -- in fact, i'm completely uncertain, say it differently, i'm completely certain the va has not chosen wisely as it has narrowed the project to a very small scope to determine how it works. in that regard, along the same topic of cboc, we have an ongoing problem similar to mental health mentioned by senator tester. i understand the doctor's testimony about the inability to retain professionals. it's becoming clear to me we have that same problem outside mental health. our ability to retain physicians in cbocs across rural kansas and across the country is a huge problem, and more and more we have nurse practitioners, physician assistants that the availability of a physician has become very limited and we have many cbocs now that no physician is generally present.

i understand the secretary's testimony about i.t. as a potential solution. we certainly have offered to make certain we do everything as a senate now to provide the va with the resources to provide the necessary personnel. and my assumption is my answer will be very similar to what you told senator tester, it's the same one i hear from vizn folks -- from the visn folks in kansas. it's not a resource issue. we can pay sufficient amounts of money to attract medical professionals, but we are struggling like everyone else to attract those professionals. i heard that answer for a long time. you said it again today, dr. petzel. in some fashion that can't be the final answer. because everybody else is struggling to attract professionals to take care of patients, we cannot afford to allow the va to have the same -- i understand the problem. don't mean to be critical in that sense. there has to be something more

than everybody's experiencing this problem. there has to be a path to a solution. >> i'm going to ask dr. petzel to address your question. i would say, senator, we -- rural areas are particularly challenged because of availability. dr. petzel said that. and our tools are really reaching out to -- we want highly qualified, we want talent. and our tools are what we are able to compensate, what we are able to award, recognize, and performance of good people doing outstanding work and retaining through bonuses the high quality ones. our tools are limited. but we owe you the best efforts we can to go after that talent and the biggest challenges are in the rural communities.

>> mr. secretary, i appreciate your sentence that you owe us that. we understand we owe our veterans that. but i will also tell you that congress, i owe you every tool possible to help you meet that criteria. and the complaint or concern i have is that i'm not being asked to do something to solve the problem. so what i'm asking for is tell us what we can do to provide the assistance so that when we have a hearing six months from now or we are back here next year talking about the budget the answer to whether or not there is a doctor at a cboc is not that -- or that we are meeting the mental health needs of veterans particularly in rural areas is not every health care provider, every community, every rural state is having the same struggle we are. help us help you solve this problem. thank you. >> you want to respond quickly?

a i'll try to be quick. -- >> i will try to be quick. thank you, senator moran. the m.d. issue first. you are absolutely right. we all have this difficulty in certain rural parts of the country. i would say if you look at our m.d. situation across the whole system, we don't have a recruitment problem. it's very important that we focus on the fact this is rural america. two things we would like to do, one is that we need to expand our tuition reimbursement program to be able to provide a incentive for people to go to rural areas by reimbursing them for their tuition from medical school. the second one was an idea that the secretary had and i don't want to get into the details of it, but to do something like the military does with their uniform services medical school, and that is recruit people, pay for their medical education with an obligation to follow to work with us in particular parts of the country.

those are two areas that we are trying to explore. >> thank you, senator. i'd just put a little finer point on what dr. petzel said. i thought that if we went into areas, rural areas, and found a highly talented youngster, great potential, and targeted that individual and got them through the college and medical process, that they would be going home. so in the long run we would not be facing the retention bonuses and this kind of thing. you have provided someone for the long term as a solution to that requirement, that community. that's part of the discussion here. >> i appreciate your thoughts. please consider me an ally. we can follow up with the arch question at a later time, thank you. >> thank you very much. i also want to echo the same comments that senator moran. i like some of these ideas you just mentioned. i would be anxious to participate. i know one of our hospitals in alaska they actually give a

bonus to employees, pretty significant, up to $10,000 to recruit and retain nurses because of the high capacity and need. thank you for offering those ideas. let me also say thank you, secretary, for the two staff you sent up to alaska, i think it was last week or the week before. and chairwoman murray for sending committee staff also. it's important to come up to alaska to understand what rural is all about. i know you have been there. thank you for your visit and your team's visit. it makes a difference to the people there, but also i think opens the eyes to a lot of folks how we have to deliver health care in the most remote rural areas of this country. thank you for that commitment. let me, if i can, and i know we have had some conversations, mr. secretary, in regards to the idea of the alaska card and idea of tried to weed through this access issue in parts of the country that have limited

access to veterans' care. alaska specifically as you know we talk about the road less areas. those areas of 80% of the communities of alaska do not have access by road. when we -- i noted your testimony about internet connect and get the mobile van out there. there's no mobile van possible. the mobile van is an error. that's the only way to get it. that's the -- i know we have talked very positive way about how to create this access. i just want to check in with you on kind of update of that. i know we have kind of talked about the quality of care through our indian health services which is -- it's superior to so much care that's being given today across the country. it is high quality care. tell me kind of what -- where you think we are at at this point. you have been very responsive. i know we have been badgering you and your team on a pretty regular basis because, as you

have seen the veterans, all they want to do is go across the street to an indian service clinic to get their regular checkups as a choice not requirement. if they choose to go to a va hospital clinic, so be it. if it's across the street, let's make that happen because the quality of care is equal or in some cases we would argue better in certain specialties of the va what's your latest on that? >> i think as you and i discussed i think you will recall that we have put in a policy that would allow veterans from alaska to go locally and reduce the amount of veterans having to travel to the lower 48. there's a rather robust program under way there. as i describe working with the indian health service to establish the system that would open a lot of processes for -- especially for alaska native veterans.

but in the meantime based on my visit to alaska, the alaskan native consortium, medical consortium, we have also established discussions with them and trying to ensure that however the ihs-mou progresses that we are ready to provide health to veterans who are being seen now. >> and you feel that's going in the right direction? >> let me turn to the doctor, since his people were in negotiations and discussions. >> thank you, mr. secretary, senator, i really do sympathize with what you talk about in terms of the ruralness of alaska as well as other parts of the country. while we're waiting for the m.o.u. to be finished, alaska is one of two places where we are proceeding with tribal interactions.

i hesitate to use the word "pilot," but to get specific agreements within a tribal unit in alaska, i believe it's the southeast alaskan tribal association. and we are progressing in getting some arrangements made. it would be wonderful from my perspective if a veteran could make a choice and access tribal clinics, if indeed the quality and the care was successful and we could work out the reimbursement arrangements. and that's what we're trying to do in alaska and we have another effort going on in south dakota. >> and you feel it's going in the right direction? >> absolutely. >> excellent. i've got two quick questions. one is senate bill 914, it authorizes a waiver that i've introduced on collection of co-payments for telehealth, telemedicine. the general comment is, i know we have about 200 veterans -- i think 100 or so are already in

the program in alaska. i know others across the country. the idea is -- telehealth is a huge winner in a lot of ways. it actually works very successfully. we've asked that it be waived through this legislation, the co-pay, so it increases the capacity of telehealth. can either one of you give me a thought of supportive -- i know any time you take dollars away -- but my view is telehealth is a money saver and especially with the shortages, this is a potential way to meld the two problems and create a solution. >> senator, neither the doctor or i are familiar with this legislation. so if i may -- >> absolutely. >> -- i'll provide that for the record. >> that's on senate bill 914 and we'll get you some information on it. the last comment, madam chair, if i can just add to my concern , someone couldn't get through

on the 800 number, so it's not old, it's new. i know when i was chair of the student loan corporation, one of the things we did -- because we had a call center. as you can imagine a lot of people upset when their loan rate changed or whatever it might be. we had to go through a whole revamping of the system. but the metrics were reported so we could see where the possibilities are. you had mentioned that you are going to have or you have a system that you can see the metrics of success, wait time, call time, hold time, response, all those. i would echo what my colleague on the other side said, that i would anxiously want to see that. this is our number one caseload work is virginia issues. second to virginia is the 800 number, lack of response or inadequate response, i should say, and that's current, not six months ago or a year ago, this is very current, and customer service is the name of

the game, how to make sure these veterans have the services they need. is that something you can provide sooner or later, so i can get a better understanding? >> i'm going to dive into those numbers today. >> thank you. i think the only solution to your issue on the i.t. is your whole department should be a two-year budget process instead of a one-year, two-year. that's my personal opinion. that would solve a lot of problems. >> thank you very much. >> thank you, madam chair. i just have a couple of concerns. the budget request includes operational efficiencies that are estimated could save $1.2 billion. that's been done in the past by various administrations. last year's budget requests also included operational efficiencies of just over a billion. in the past, g.a.o. has really questioned whether or not those savings have come about. i guess if they don't come about, how are you planning for

the risk? what's your contingency plan if we don't see a billion dollars in savings? >> i'm going to call on the doctor to respond to this, since they looked at his budget for the savings, anticipated savings. but i can tell you that right off the top, $362 million saved because of dialysis using a medicare standard pay rate instead of paying the rates we were being charged previously. $200 million in improper payments, because we reduced those through the program management accountability program office in i.t. about $200 million in savings because we terminated projects

that were not going to deliver. and then about another $100 million first notice of death in which we stopped payment on veterans' accounts when they transpired in the past. this has been an issue, sometimes as much as $100 million in overpayments. and for the future, we are agreeing to provide as a minimum $173 million in savings , reducing waste in 2012 and 2013. so that's part of our effort to get at the savings and efficiencies. and let me just ask the doctor to provide more detail. >> thank you, mr. secretary, senator boozman. the savings -- let's just go through a little bit of what went on in 2011. we saved a large amount of money. the g.a.o. reviewed that, and

we're still actually negotiating with them about what they actually found. the essence is going to be that we indeed can validate the savings that we've claimed from the various operational efficiencies. they do have a legitimate criticism about the way we measured things and the gran layer tee of the measurement -- granular tee of the measurement, which we're going to be improving. in 2013, we are going to save a large amount of money in dialysis. we've got contracts now for blanket purchase agreements with virtually every dialysis center that we use that are going to save us hundreds of millions of dollars over what we would have expended had we not been able to do that. the medicare rate payment changes that occurred with the regulations, allowing us to charge medicare rates for both the professional fee and the facility fee is going to save us about $300 million. and that's absolute money that

we know we would have spent otherwise, had we not been able to do that. and in the efficiencies with fee care, again, something we can measure easily, it's going to be over $200 million. acquisition fees, about $355 million in savings. there's a long list, and i'm not going to take the time to go through that, but i am absolutely confident that we will be able to save this money in v.h.a. >> madam chair, if i may, i had just one last comment here. we're going to look at all of this and work it hard. i've cautioned us that in the end we have to focus on what makes sense for veterans. and i'll use dialysis as an example. we're after the best prices we can get. you know, if you just look at that, you may be encouraged to outsource all of it. i've argued that dialysis is something we have to retain a handle on. we should do a certain amount, a certain portion of it

in-house. why do i say that? i'm just concerned that if we provide funds and let somebody else take care of dialysis, we ignore what a medical profession is supposed to do, and that is, as long as we're doing dialysis, we'll have to ask ourselves what causes it, why do we have to do this? what are the things on the front end that allow us to deal with preventing diabetes so that dialysis doesn't become a fact that we have to live with? and i think the medical profession is the best at asking those questions, and that's why i think within v.a. we need to retain a piece of that operation. >> and we go to the white house coverage now from ohio. we're in dayton for a mitt romney town meeting at an aerospace and defense manufacturer in dayton. [applause] >> thank you, senator.

thank you. thank you, senator. thank you for your leadership in columbus and thank you for being here today to welcome mitt romney. i had the opportunity to walk neighborhoods throughout our community today, knocking on doors, talking to people, and i want you to know that encouraging people to get out and vote on tuesday, people are excited. they're exciteed that ohio is important on tuesday and they're excited that they get to make a difference, and they are excited because starting tuesday we get to pick a new president. [applause] i want to thank you all for being here today, because this is incredibly important. we get to pick the republican candidate who's going to face-off with barack obama, and we get to pick mitt romney, a guy who has experience, experience in creating jobs, experience in balancing budgets. we know that as we look in ohio, people are hurting. we need jobs in ohio, we need our economy moving forward, and

we know that mitt romney has the experience to create jobs. he knows what's wrong in washington. he knows how to balance the budget, and he knows how to get the out-of-control spending under control in washington. [applause] in addition to being here today, you've got a really important job to do, and that is we've got just a few days until tuesday. you need to tell all of your friends and all of your neighbors they need to get out and vote on tuesday and they need to vote for mitt romney. [cheers and applause] well, thank you for being here, and it is my honor to introduce nick mangold, and the next president of the united states, mitt romney! ♪ i was born free ♪ i was born free

♪ born free ♪ the tree like a river rages is strong ♪ the wind faces dreams and faces father time ♪ ♪ >> wow! what a turnout. all right, hold on, hold on. i've got a question for this crowd. due agree with me that we can't afford another four years of barack obama? [cheers and applause] well, that must mean we're going to do everything in our

power over the next three days to be sure that mitt romney wins ohio and goes on in the fall to beat barack obama! [cheers and applause] with are we going to do it, folks? three more days, and we are. look, it's great to be here with mike turner. he did a terrific job as mayor of dayton and he's doing a great job as a champion for this area in the united states congress. we've also got state senator chris weidner here, who's straightening things out in columbus. pretty good team, don't you think? [applause] and the big guy behind me here, nick mangold, centreville, ohio. you can probably tell from looking at him he plays a sport. can you guess which one it is? a great buckeye star and now

playing in someplace called new york. we've got to get him back to ohio, folks. thank you for being here, nick. ladies and gentlemen, some of you know -- i've worked for a couple of presidents and i've seen the kind of steady leadership you need in the oval office. and here in ohio, i've seen the kind of leadership we need to turn things around and get this economy going again, don't we? [applause] well, guess what? there's somebody running for president who has that kind of leadership, ha knows how to get things done, who focuses on solutions, who can turn this economy around, because he knows how to create jobs, and that's mitt romney. [cheers and applause] he's got the midas touch. everything he has done, he has done superbly. think about it.

during the olympics, we had just gone through a 9/11. we needed something to give us a little shot in the arm, for american patriotism, to get us back onboard. you know what? he took over the olympics when it was heading toward inoff vency and he turned it -- insolvency and he turned it around. as the governor of the state of massachusetts, he inherited a budget that was $3 billion in deficit. when he left office, they had a $2 billion surplus. how about that! [applause] and he cut taxes more than 10 times in the process to bring back jocks. that's a pretty good lesson for washington, d.c., isn't it? [applause] and we're fortunate to have somebody running for president as a republican who can and will beat president barack obama in the fall. ladies and gentlemen -- [cheers and applause]

we need his leadership, we need to win this race. once again, are we going to do everything in our power over the next three days to be sure mitt romney wins ohio? [cheers and applause] the heart of it all, the buckeye state. folks, i now am going to ask you to welcome centreville native, buckeye great, one of the great football players in america and also happens to be a great supporter of mitt romney. >> i want to thank you all for coming out. i think it's an amazing crowd here. you know, i was very honored to have the opportunity to come. i'm a big fan of mitt and what he's going to do for us as the next president of the united states. the biggest thing for me as a proud son of ohio is to welcome mitt to our area and give him the support that he needs to get that victory tuesday.

so to the next president of the united states, mitt romney. [cheers and applause] >> thank you, please. thank you. thank you. thank you. you know -- you know -- [crowd chanting "mitt"] >> thank you, thank you so much. you know, if i were as big and strong as nick, this race would already be over. you know that? [laughter] quite a guy. quite a champion of the ohio state university. [cheers and applause] i'm excited by the response, by the number of people here, by your enthusiasm and passion. before i offer my remarks, though, i want to think about those that are hurting today.

you know, with tornadoes that have touched down across this great land, we've had people lose everything that they own, we've had people lose their lives and their loved ones. and so in respect for those that have great sorrow today, i wonder if we might take a moment just to collect our thoughts, a moment of silence, and offer a word of prayer in our own ways to ask our father in heaven to bless those that are troubled and sorrowful today. >> thank you so much. now, i'm honored to be in this place. this is quite a spot. [applause] i don't know if i can pronounce it right. he's the owner and the entrepreneur that built this enterprise. did i get it close enough? yeah, he said ok.

it's a great -- the great thrill i have of going around the country meeting americans who have done extraordinary and ordinary things. it makes you come away with a greater confidence in the future of this country. he's someone who came to this country as a young man. he had been in india. he made a living in india, by the way, an interesting thing. at the end of the school year he'd buy books from students who wanted to get rid of them, and then he'd sell them to new students and make a nice profit. so he decided he wanted to get a degree, he got an advanced degree. my idea, by the way, is if you go to an institution of higher learning somewhere around the world, an accredited institution, let's staple a green card to their diploma and let them come to the u.s.a. we want those brains to come here. and he was one of those brains. he came here and has begun businesses, an entrepreneur, an innovator. he began a business, a software business. this is a business that makes

parts for aerospace. he's been in automotive parts. he's made over hundreds of jobs possible. this is something about america that's so unusual and so unique. he did not have the government tell him to come here. he did not have the government tell him where to build or how much he could keep. he didn't go to washington and say can i please have permission to build this enterprise. he came here on his own, because this is the land of opportunity. people all over the world seeking opportunity come here, and those that are successful don't make us poorer. they make us better off. we celebrate people who come here for freedom and opportunity. [cheers and applause] i was in michigan a couple of days ago. you've got a border security problem here in ohio. you let me in from that state. [laughter] and i met bill.

bill is a guy who -- he was a doctor, and he said that all of the malpractice insurance and all the government interaction was troublesome. he and his dad decided to start a business of their own. they make casters. now, i'm not talking about fishing rod casters, i mean the wheels that go on the bottom of things that are heavy to move. he makes casters and he employs dozens of people making casters. met another guy named norm, norm byrne. he doesn't have a college degree or an advanced degree, but he's an engineer with over 100 -- he employs people. a marvelous country we live in. and i just hoff the american spirit. you see, -- love the american spirit. you see, when the founders created this country, they made a choice that has made all the difference. they said that we as individuals of this land were given our rights not by

government, but by god, and -- [cheers and applause] and among those rights were life and liberty and the pursuit of happiness. and those rights, that freedom and the ability to pursue happiness as we choose is what brought people like suhas here and our ancestors. they came here seeking opportunity. as they became successful, they built the strongest nation in the history of the earth. i love the fact that we can pursue opportunity as we choose and pursue happiness as we dream, rather than as president obama or his friends would tell us. we need to have freedom in this country to make it strong! [cheers and applause] now, sometimes i don't think the president understands the power of america's economy and what makes it work. i think it helps to have

actually been in the economy, to have had a job in the private sector, to be able to create those jobs. [cheers and applause] you see, politicians sometimes learn to make a lot of promises, but they don't know what it takes to deliver. so this president, by the way, when he was running for office, said he would cut the deficit in half. he's doubled it. he's doubled it, all right? and then he said he'd have a middle-class tax cut. if you consider obama care, he's raised taxes of middle-income families. and then, by the way, he also told the american people that if we let him borrow $787 billion for his so-called stimulus, that he would keep unemployment below 8%. it has not been below 8% since. this is a president who is out of ideas, he's out of excuses, and in 2012 we'll make sure

he's out of office, all right? [cheers and applause] you guys are great! this is like an ohio state football game. this is amazing. this is great. now, let me tell you, in this election we're going to have a choice as to the direction of america. we have a president who's comfortable with trillion dollar deficits. even as europe is suffering near calamity because of their deficits, he's comfortable adding a trillion upon trillion. if i'm president of the united states, i will cut out programs, i will return programs to states, and i will finally balance our budget. [cheers and applause]

you see, i happen to think these kind of deficits -- i think these deficits are dangerous, i think they're bad for the economy. i also think they're immoral. i think it is wrong for my generation year after year to heap benefits upon ourselves, and to pass on the obligations to the next generation. and, therefore, i take it as a moral responsibility to balance our budget and get america strong again by having a fiscal sanity re-installed in our nation. [cheers and applause] now, there's some other differences. this is a president who said he was going to help us get jobs, and, of course, he reminds us all the time that he didn't cause the recession, he inherited it. he doesn't want to remind us, by the way, that he also inherited a democrat house and a democrat senate, and he was

free to do whatever the heck he wanted. and he put in place these plans and now three years later we're still suffering. people here in ohio are still suffering. he went on the "today" show shortly after being inaugurated, and he said if i can't turn around the economy in three years, i'll be looking at a one-term proposition. we're here to collect, we're here to collect. [cheers and applause] you just try and think of something he's done that helped create jobs, that made it more likely for small businesses to open their doors. by the way, the number of start-ups per year in america has dropped by 100,000 under this president. you ask yourself, did obama care create more jobs? no. did putting in place dodd frank make it easier for loans? no. did the small business person thinking about hiring people when they saw the boeing decision that said that you

can't build a factory in a place that's a right-to-work state? no. the list goes on and on. his actions made it harder for this economy to get going. what i'll do if i'm president is take the action that is i've seen in my private-sector life, 25 years in business. i want to take those less ons to make america the most attractive place in the world for jobs, to make it such that innovators want to come here, that people from all over the world make this their ohm, invest here, start companies here, hire people here. how do you do that? you make sure regulations are up to date and modern, minimized. you make sure that we take advantage of our energy resources, to use our coal and oil and gas. [cheers and applause] and by the way -- and by the way, you make sure that you pass the easiest test of all as a president. you say yes to the keystone pipeline from canada.

[cheers and applause] you also want to have tax policies that encourage small businesses and big businesses to grow and invest. let me make a mention of a couple of things. this president should understand that most americans work in businesses that are taxed not as corporations, but as individuals. they call them flow-through businesses, where there's not a corporate-level tax. it goes right to the individual. his plan is to raise the taxes from 35% on those entities to 40%. if he does that, he will kill jobs. my plan is to cut taxes across the board by 20%, get more jobs in america! [cheers and applause] when it comes to jobs -- when it comes to jobs, we also have

to recognize that trade is a good thing. my guess is that you're selling some of your parts around the world. i'm seeing a nodded head. you should never ask someone a question unless you know the answer, but i took a chance there. so what's manufactured here is sold around the world. that's true for a number of reasons. one is because of the quality of our workmanship and our engineering and talents and designs and materials. it all comes together to have america as the most productive of the major economies in the world. that term "productive," by the way, you wonder, what does that mean? productive means how much does the average american produce in a year in goods and services? they add that up and they divide the total production of our economy by the total population, and they say, ok, here's the productivity of america's workers, of our workforce. they compare that with other nations. we're number one. and so it's good for us to be able to sell to other places, because we're so productive. we want to be able to sell

these things elsewhere. by the way, over the last three years china and the european nations, having figured that out, have established some 44 different trade agreements with different nations around the world, trying to increase their trade. guess how many agreements this president's put in place? zero, zero, all right? so that's got to change. and something else has got to change. if, when we trade with other people, someone cheats, you cheating. the president said hipped take china to the mat. instead he let them walk all over us. if elected president, i'll make sure that china can no longer steal our intelligence, manipulate against us. we have to play by the rules and make sure schoin taught a lesson! [applause]

let me talk about where we're headed under this president as compared to where we would be headed if i were president and that relates to our military and our capacity to defend ourselves this president is comfortable with the idea of cutting $500 billion out of our commitment. reducing our number of of shims, active personnel and aircraft and reducing the benefits veterans receive under tricare. yeah, boo. by the way, the state of our military -- let me summarize -- we have fewer ships in our navy than anytime since 1917. we have fewer and older aircraft in our air force fleet than any anytime -- any time since 1947 when it was formed.

and you know how stretched our personnel was in our conflicts in afghanistan and aaron and he wants to -- iran and he wants to cut those things. wished keep a strong and vibrant military! and so rather -- [applause] and so rather than cut our shipbuilding from the current level of nine per year i'm going to raise to it 15 and rather than cut back on f-35s i'm going to increase it and i'm going to add 100,000 troops to our active duty personnel and i'm going to give our veterans the care they

deserve! [applause] what an honor it is to be here with you. my goal, if i become president is pretty straightforward. i want more jobs for the people of ohio and for the people of america. and for me, talking about jobs is not something academic, not something i've detectived in a congressional committee. it's something i've done. i've been in business. i know what it's like to worry about whether you're going to be able to meet payroll. i've looked the prospect of bankruptcy in the eye. i know having been in business what it takes to make business successful. i want to use that experience to help get america working again. we have good people in offers but they've spent their life in

office. nothing wrong with that but with jobs down and income having gone down, we need a president who knows the economy to fix the economy. [applause] now, i'm told that you get a chance to ask me some questions and that's always the most exciting part. so we're going to take a moment and let you raise a question or two. right here in the front row. ok, i'll hand you a microphone. >> now, you mentioned that you were going to repeal obama care when you got into office and i just heard you mention frank -- what was it? dodd frank, thank you very much. i didn't hear you mention anything about sarbanes-oxley. would you plan to basically repeal those two majors, which are choking off our ability to innovate and create jobs and so

forth? >> yes. [applause] there's a direct answer. but let me tell you, one of the challenges we have is again, we have in washington people who have spent their life in washington in many cases and don't understand that when they write a piece of legislation what kind of impact that's going to have in the private sector, how many people's lives will be affected by it. i don't think the president understands that the pieces of legislation he has put in place have made it harder for our economy to recover. by the way, that little phrase, harder for the economy to recover. let's translate that it means millions of people out of work. it means people suffering. i go across the country, i don't just meet successful interpret nurs. i meet men and women who can't find work. i was with one gentleman over 70. he said i thought i would be retired by now but i can't

afford to given this economy, what happened to his investments. four years ago, when i ran for office, goiled to universities and ask kids what's the biggest question on your mind. it was always about iraq back then. today it's about jobs. they wonder if they can find a job when they come out. soldiers coming home, number one question, will i find work when i come home? these legislative monsters that have been created kill jobs and anytime someone says they have a 2,000-page bill, all right? it's like ok, that automatically ought to send up some red flags. can't we find a way to get a bill maybe 10, 20 organization 30 pages so we can all understand that and how it's going to affect the economy rather than these huge omnibus bills? by the way, when i get rid of obama care and dodd-frank and

sarbanes-oxley, it doesn't mean i don't want to have law or regulation. it means it's updated, goes after the bad guys and encourages the good guys. i was with a man who said we have hundreds of lawyers that are working on dodd frank. understanding it, implementing it. hundreds. guess how many community banks have hundreds of lawyers? none of them. they can't possibly have that kind of legal help and so they struggle along, they pull back from making loans. so after dodd-frank, bigger banks are getting bigger, smaller banks are pulling back. look, i understand business well enough that i'm going to look at this legislation -- by the way, o bill:-era regulation, i'm going to put a hold on all of it and get rid of those that kill jobs. thank you for the question.

[applause] >> governor, my name is tom green. i'm one of over 20,000 delphi salaried retirees who have lost our health care, our life skins up to 70% of our pensions. i think you're well-aware of this issue. it happened when we got into the bankruptcy of general motors and delphi. washington picked winners and losers using our tax dollars and we were chosing -- chosen as losers and our union counterparts were chosen as winners and they're still going 100%. if you're elected president, what can you do to help other people like us and us in particular to get our pensions restored? >> thank you, thank you. it's known as crony captain little, where politicians in

power decide to use their power to take care of their friends and they sort of brush aside the law. we have in this country provisions for bankruptcy so that when enterprises get over their head, when there's huge, if you will, bleeding going on. you can stop the bleeding, get them back on their feet. in those provisions we follow the law and provide for the various people who have had to take a severe haircut to make sure that what happens is fair. what happened in this case is the president decided, first of all, to send money to the auto companies without first stopping the bleeding. he should have let them go through managed bankruptcy first, not just sending money in there first -- [applause] and secondly, they finally went to the managed bankruptcy process, which they needed to do and then they got help coming out of bankruptcy, and that was

needed. but because he put that money up front, he put his hands on the scales of justice in the bankruptcy process and instead of the law being followed, certain favorites were given a special deal. those who worked for the a.u. -- u.a.w. got the special deal. those who followed him, golf to -- got the deep. people will only take risks if they believe the law is going to be followed. i will follow the law and do my best to make sure this never happens again. thank you. [applause] yes, ma'am? >> when you are president -- [applause] >> how will you approach healing the ever growing great divide congress so that your wonderful plans can come to fruition?

>> thank you. you know, it's got to be frustrating. as i listen to a man from delphi and he talks about his pension. i mean, this is a human life. this is a family affected by government. you want to see government work together because you're a human being. you are got kids. have any grandkids yet? yeah, you got grandkids. you worry about their future. we're human beings. it's not too much to ask, we expect washington to try and solve problems, make things better. not to get this the -- in the way but to open up america so american people can have a brighter future and when they can't get the job done or seem mow to get out of our way we ask why that is. it's hard for a lot of us to understand. i didn't spend my life in politics. i spent my life in business and if we had problems we found a

way to solve the problems. there was no option. people ask me is it harder to work in business or government? the answer is in business. in business if you make a mistake you'll go out of business, lose your job. in government they just keep raising your taxes and blaming the other party, borrowing more money. we need to have people that get the job done. i had the disadvantage of being elected in a state where my slur was 85 -- legislature was 85% democrat. it did not take a rocket scientist for me to figure out that to get anything done i had to work with the opposition party. now, we disagreed on almost every issue but we respected each other and flime we could find common ground. so, for instance, we agreed to cut taxes time and again. we agreed to balance the budget, not expand our borrowing.

we agreed to have english immersion in our schools. the decisions of our predecessors helped drive the schools of our state to be number one of all 50 states. we can work together. early on in my administration i said i'm not going to attack the speaker of the house and the senate administration on a personal basis. halfway through i sent a brochure which described the great accomplishments of my administration. this was a campaign kind of thing. i paid for it so my picture is on the cover. but so is the picture of the senate president and the speaker of the house. you open it up, it talks about our accomplishments together. you have to work with people. this is a critical time for america. i care about america. i'm not going to washington because it's the next step in my political career. i don't have a political career. i'm going to washington because i want my kids and grandkids to continue to live in the nation

that's the hope of the earth with prosperity and security. [applause] it will turn out all by itself. >> i have two questions. our country is literally bleeding money due to poor decisions lawmakers have made over the years. the blood loss is rapidly increasing. the patient is going to die soon if the lawyers don't stop arguing and act soon. what would you do to jump-start congress to get their heads out of the sand and actually stand up be -- and be leaders and take real action? >> thank you. good question. and we have some of those leaders here who are battling in the senate and in congress and here in the state house. i'm going to send nick there to bang some heads. no -- [laughter]

i'll let you come back. i'll start off by saying this -- i think a president typically has about 100 days or so to really get things going and to change the course of the country. and with regards, for instance, to the fact that we are bleeding -- we're spending a trillion dollars more than we take in every year. we have to change that right away. i can't wait for my second term to start thinking about that. i have to get that started right away and so from the very beginning we're going to go through every single line of the federal budget and i'm going to look at a program and say is this program so critical that we should borrow money from china to pay for it? if it doesn't pass that task i'll get rid of that i will ask you to agree not to be too upset when i cut out some programs. for instance, i like pbs, big

bert and -- but i don't think we should fund it without selling some commercials. we're going to cut programs, all right? we're going to cut programs. i'm also going to take programs like medicare -- excuse me, medicaid, which is the health care program for the poor and food stamps and housing vouchers and training programs. i'm going to take those -- there are 47 different government work force training programs in washington. think of all the bureaucracy. i'm going to take the money from them, send it to ohio and give each state their fair share and say you run the programs as you think best and grow them with inflation, no faster. [applause] and i'll find those democrats who recognize how critical this is, those democrats and those republicans and we'll do that

within the first few days of making sure we get america on track and that will lead us to finally have a balanced bunt and assure to our kids a nation that's prosperous and free. thank you. another question? >> my husband and i currently have a daughter serving with the 82nd airborne in afghanistan. [applause] >> thank you. >> i appreciate the vision you have for our military as a mother. in is her second deployment. her first deployment she never once said i want to come home. this deployment has been extremely hard, not only for her but for my husband and i. every email, every time we skype we hear i want to come home now. there is no mission here. we have no definition of a mission. she's a first lieutenant.

no definition of a mission and there's nothing for us to do here. what would your plans be to expedite getting our troops home now and possibly bringing them in and putting them on our boarders to secure them for the future? [applause] >> thank you. well, as you could hear from the response of people in this room, we appreciate and honor the sacrifice that she's making and that your family is making for the greatest nation on earth. thank you. [applause] one of the things i've found most disturbing and be hard to explain is how we can have our sons and daughters in conflict risking their lives and not have the president on a regular basis addressing the american people describing what's happening,

describing what our mission is, describing what the goals will be, describing how much progress we're making or whether there are setbacks and informing the people of america that there are other americans making enormous sack files for our purposes and for our liberty. the president needs to do that and in your daughter is not familiar with the mission that she's on, how in the world can the commander in chief sleep at night knowing that we have soldiers in harm's way that don't know exactly, precisely what it is that they're doing there. i know why we're involved in afghanistan and i know what it's going to take for us to be successful and to bring our troops home. i want that to happen as soon as possible. the mission is to pass on to afghanistan a security force there that's capable of maintaining the sovereignty of that nation such that we can get out, they have the capacity to build their own nation.

we will not be able to hand on a silver platter their free. they will have to fight for that earn it. keep the taliban from taking it away from them. but we've given them that opportunity. we're going to pass it on to them and bring our troops home as soon as humanly possible. thank you, [applause] >> governor, months ago they were attacking you for the bane capital type of thing. they've been running ads. thank you -- can you talk about the ad, the gentleman, your business partner from new york, you flew 50 people to rescue his daughter. can you tell his story? >> yes, i haven't thought about that for a while so let me see if i can get the facts straight. i haven't seen the ad for a number of years. i did what you all would do. i was responsible for a business. the business i started called

bane capital invested in starting businesses and in some instances acquiring existing businesses. one day one of my partners came to the office -- i think it was a tuesday. his name was bob. he said my daughter, without permission, went into new york city. they lived in connecticut -- went into new york city, went to a party and that she did, i think it was on sunday. now it's tuesday and she hasn't been home. we don't know where she is she's lost. and i think she was 15 or so at the time that occurred. and so i said let's close the firm. let's close the company. we're in boston and let's all of us fly down to new york and try and find her. so we closed the business. we went home and packed our things. we got a hotel near the airport where we all went to. we set up a headquarters, met with the detectives from the new york city police department, we hired a private investigating

firm to help guide us through this process. we happened at that time to be an investor in a drugstore company in new york city called dwayne reed. they had i think 100 stores in manhattan. we printed out flyers with her picture and we had the store stuff them in every bag for every customer and then we contactsed our law firm in new york, said we need some lawyers to go out with us and walk the streets and look for her. then we account -- contacted our accounting firm. ebbs we need some account tonight's walk with streets with us. so there we were, a bunch of folks in suits walking around in the park of new york and in the streets, showing pictures, have you seen this girl? we heard people say yeah, we saw her. she was at a party. and we got reports of that nature. interestingly, after a day or two of that it made the news. there are all these guys walking

around asking kids if they'd seen a picture of this young lady. guys in suits and briefcases. and we got a call into our hotline where someone called and said is there a reward for the return of this young lady? the person said hold on a